Cold weather boosts DCC operating profit ahead of budget

DCC expects
operating profits ahead of target due to high energy demand

ENERGY DEMAND during the severe winter boosted revenues at
DCC, which now expects operating profits for its current financial year to come
in ahead of target.

The industrial holding group said in a third-quarter interim
statement yesterday that the exceptionally cold weather during the final six
weeks of 2010 boosted customer demand in its biggest division, energy, which
operates a number of oil distribution businesses. The energy business accounted
for 44 per cent of operating profits at the half year stage.

Cold weather boosts   DCCoperating profit ahead of budget

Extreme weather conditions helped DCC achieve strong results
in the third quarter, as icy conditions throughout northern Europe drove demand
at its energy division.

In an interim management statement this morning, the company
said it achieved very strong growth in revenue and operating profit in the
quarter ended December 31st 2010.

"With the
exceptionally cold weather conditions throughout northern Europe, particularly
in the last six weeks of the quarter, customer demand in DCC Energy, DCC’s
largest division, increased significantly," it said

Despite poor road
conditions and constraints on supply, volumes at DCC Energy rose by 22 per
cent, the group said.

DCC last month defended itself from claims that it had
inflated bills and “ripped off” oil customers in Britain.

The claims against
DCC’s British oil distribution business GB Oils were made by the Sunday Times ,
which alleged the company had billed customers more than they were originally
quoted, and had built up a “stranglehold” on the British home heating oil
market.

DCC described the

allegations as “misleading”. The company blamed rises in the price of heating
oil on constrained supply due to severe weather, increased demand and higher
costs. It denied deliberately overcharging customers.

However, it acknowledged that Carmarthenshire County Council
in Wales is looking into complaints concerning GB Oils’ business in south Wales
that arise from January last year. DCC has denied any fraudulent activity or
unfair trading concerning pricing.