Volatile oil sector hits EG Group annual earnings

Zuber and Mohsin Issa

Global forecourts and food service operator, Blackburn-based EG Group, suffered a fall in annual earnings, due to the volatility of fuel prices, it has revealed.

Underlying EBITDA in the year to December 31, 2023, fell by seven per cent to $1.1bn, due to the stronger fuel performance in 2022.

Capital expenditure during the year was $243m, a reduction of 37%, as the group focused on maximising liquidity.

Total gross profit for grocery and merchandise grew 2.6% over the year, while continued growth in foodservice drove an increase in profit of 15% for the segment.

Reported EBITDA for the fourth quarter of the year was $231m, which EG said is consistent with the previous year on an underlying basis after adjusting for the disposal of the majority of the UK business to Asda.

The group’s debt burden has been reduced by the sale to Asda and the disposal, announced in December last year, of all its KFC franchise restaurants in the UK and Ireland to Yum Brands.

It said its remaining 2025 debt maturities have been fully addressed through the successful completion of a refinancing programme consisting of refinancing of the group’s senior secured notes, as well as an amend and extend of the group’s term loans.

At December 31, 2023, the group’s debt stood at $6bn, down from $10bn in January 2023.

EG Group said it has delivered a “resilient performance” across the year.

Co-founders and co-CEOs, Zuber Issa and Mohin Issa, said: “2023 saw the group action a number of significant strategic and refinancing objections.

“We have strengthened the group’s balance sheet and moved forward with our deleveraging programme and remain committed to further deleveraging in the near to mid term.

“In addition to our leverage reduction and the refinancing of our 2025 maturities, the group delivered a resilient performance, underpinned by our well balanced and diversified international business.”

They added: “We are focused on maximising the future earnings potential of the group and have identified a number of local initiatives to grow and enhance performance across all of our markets.

“Looking ahead, we are confident that EG Group is well positioned for future growth and success. We are focused on ensuring that the group executes on its compelling strategy.”