DCC expects 15% rise in earnings

DCC EXPECTS full-year earnings growth of up to 15 per cent on a constant currency basis but said exchange rate fluctuations mean overall earnings were likely to be in line with last year’s.

The industrial holdings group, which has a heavy exposure to sterling’s weakness against the euro, said if exchange rate movements were excluded earnings were expected to show growth of 13 per cent to 15 per cent in the year to March 31st.

However, the sterling area accounts for 72 per cent of total profits and DCC highlighted that the pound had weakened significantly towards the end of the year. An average exchange rate of 83 pence would see full-year earnings “approximately in line with those for 2007”, the company said in an interim statement yesterday.

In 2007, the company reported pre-tax profits of €181.7 million.

Should the exchange rate remain at its current level of 90 pence for the year until March 2010, operating profit would be reduced by about €10 million.

The “increasingly difficult” trading conditions, particularly for its Irish businesses, will also impact on its results the company added. The group’s performance was driven by its energy division, DCC Energy, which generated a substantial operating profit in the quarter due to the recent cold weather in Britain and Ireland and the integration of acquisitions.

The group’s second largest unit DCC Sercom, which is involved in technology and telecoms services, achieved “double-digit operating profit growth on a constant currency basis”. DCC shares were 1 per cent higher in Dublin at 5pm yesterday at €11.35. The company is due to publish its annual results on May 19th.