SCOTTSDALE, Ariz. -- Giant Industries Inc. has added 25 new sites with its purchase of Amigo Petroleum in New Mexico and has entered into a supply agreement with Shell Oil Products US that it hopes will open up some new supply opportunities in the Southwest.
[This] is an opportunity for us to diversify our brands, Giant spokesperson Mark Cox told CSP Daily News. We're working on a relationship with [Shell] in which we would supply them some of the volume directly out of our refineries at this location as well as, potentially, some others.
Shell will brand more than 20 stations in northern New Mexico and the Four Corners area to the Shell brand over the next several months. Currently the Giant and Mustang sites are unbranded, Cox said.
Hugh Cooley, Shell's general manager of national wholesale, said about the deal, Shell's vision of becoming the best fuels retailer in the world is further validated by Giant's decision to brand its sites with Shell. We look forward to supplying Giant with quality Shell-branded fuels now and in the future."
Meanwhile, Scottsdale, Ariz.-based Giant is also expanding it reach with the purchase of Amigo Petroleum's assets, which includes 25 stores and a wholesale arm, which includes two bulk petroleum distribution plants and a transportation fleet.
Attempts to contact Amigo representatives for comment were unsuccessful; however, the Amigo sitesvariously branded Conoco, Exxon and Mobilin New Mexico and Colorado saw annual sales of $66 million in 2005, according to Chain Store Guide's most recent Directory of Supermarket, Grocery & Convenience Store Chains.
While Giant has already taken over operation of the 25 Amigo Marts, Cox said the company has not decided if or when a rebranding may take place there. We haven't made a decision as to how those will be rebranded yet, he said.
In other Giant Industries news, the company announced net earnings of $49.2 million or $3.35 per diluted share for the second quarter ended June 30, 2006, vs. $20.6 million or $1.51 per diluted share, for the second quarter of the prior year. For the first half of 2006, the company reported net earnings of $36.9 million or $2.51 per diluted share versus net earnings of $30.6 million or $2.34 per diluted share for the first six months of 2005.
Fred Holliger, Giant's chairman and CEO, said, The first six months of this year have certainly been strong from an earnings perspective. Our net earnings for the second quarter and year-to-date exceeded our financial performance for the same period last year.
He added, Our retail group has performed well financially and operationally in the first half of 2006 as same-store fuel sales are up approximately 3.7% over the prior year level and our same-store merchandise sales are up approximately 6.2% over the prior year level. Year-to-date operating income was also positively impacted by higher fuel margins in comparison to the first six months of 2005 and the addition of 12 new convenience stores as a result of an acquisition completed in July 2005.
Giant is a refiner and marketer of petroleum products. It owns, among other assets, a chain of retail gas station/c-stores in New Mexico, Colorado and Arizona.
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