Warmer weather and sluggish demand for heating fuel has seen one of the nation’s retail propane giants post lower first-quarter sales figures.
AmeriGas Propane Inc, general partner of AmeriGas Partners LP, reported net income of $42.5 million for the first fiscal quarter of 2012 – compared with $74.9 million for the same period last year, eon.businesswire.com reported.
For the three months ended December 31, 2011 the company sold 220.9 million gallons of retail propane compared with 256.4 million gallons in the prior year period.
The weather played a big factor. Temperatures were 11.9 percent warmer than normal and 9.9 percent warmer than in the prior-year period, according to the National Oceanic and Atmospheric Administration.
AmeriGas chief executive office Eugene V. N. Bissell attributed the company’s lower trading volumes primarily to the mild winter temperatures – particularly during the month of December.
“The heating season got off to an exceptionally slow start,” Bissell said. “The very warm weather nationwide was the most significant contributor to the lower sales volumes experienced during the quarter. Although our operations team is accustomed to managing the business through a variety of weather challenges, it is impossible to fully offset the lack of demand brought about by such significantly warm weather.”
The Energy Information Administration announced last month that the mild start to winter could result in lower winter heating bills for homeowners.
Bissell said the most significant strategic event of the quarter was the October announcement that AmeriGas had reached a $2.8 billion agreement to acquire Heritage Propane from Energy Transfer Partners. The deal, which doubles AmeriGas’ customer base, won approval from the Federal Trade Commission this month.
“We were very pleased to complete the acquisition in mid-January, enabling us to benefit from the addition of the Heritage business for most of the key winter quarter ending March 31.”
AmeriGas is the nation’s largest retail propane marketer, serving over two million customers in all 50 states from over 1200 locations.