RALEIGH, N.C. -- According to preliminary figures from Sageworks, a financial analysis provider specializing in privately held businesses, 2013 was a strong year for fuel profits at privately held gas stations.
The research, reported by Forbes magazine, showed that net profit margins rose almost 3% on average in 2013, vs. a 1.6% bump in 2012. Meanwhile, sales rose only 1%. According to Sageworks' analysis of financial statements, part of the reason behind the better margins was lower costs of goods sold (COGS), which averaged around 87% of sales.
Fuel expense--the largest portion of COGS--fluctuated throughout 2013, according to EIA data cited by Forbes, with rack prices for regular unleaded swinging from $2.587 to $2.989 per gallon, but ending the year slightly lower than at its beginning.
Regan Camp, an analyst at Sageworks, told Forbes that these privately held gas-station owners still enjoyed little profit from each gallon of gasoline after factoring in the original wholesale cost, taxes and swipe fees, among other expenses.
"If you consider the fact that gas stations' margins are so thin to begin with, any fluctuation in COGS--even if it's not significant--can have a pretty dramatic impact on stations' ultimate margins," he told the magazine. "If they had big margins, a small fluctuation in costs may not impact them so much."
In fact, regardless the better margins in 2013, privately held gas stations still see lower net profit margins on average than most retailers, said the report. According to Sageworks, the average net profit margin for privately held companies across all industries was more than 8% in 2013.
Raleigh, N.C.-based Sageworks owns a proprietary database of privately held company financial statements aggregated by industry. Each day, the firm collects approximately 1,000 of these financial statements from accounting firms, banks and credit unions through a cooperative data model with its clients. It separates the financial data from any firm-identifiable information, and then aggregates it by industry according to the North American Industry Classification System (NAICS). The database includes more than 1,400 different industries.
Click here to view the full Forbes report.
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