Releases Q2 results, which includes the acquisition of CST Brands.
Parkland Fuel Corp. saw organic volume growth and increased same-store sales in Q2, according to its recently released financial and operating results for the three months ending June 30, 2017.
Parkland is Canada’s largest and one of North America’s fastest growing independent marketers of fuel and petroleum products. All financial figures are expressed in Canadian dollars.
“Parkland consistently continues to deliver against its strategic plan. Our second quarter results show organic volume growth across our entire business with year over year adjusted EBITDA improvements in the Parkland USA business and in our Retail Fuels business. Our Company convenience-store channel experienced strong same-store sales growth of 6%, as a result of our ongoing marketing programs to improve our offer. While volumes have been robust throughout the business we did see margins soften in the wholesale business in our LPG and crude product lines,” said Bob Espey, president and CEO at Parkland. “On the acquisition front, we closed one of our most significant acquisitions to date, the majority of the Canadian business and assets of CST Brands, Inc., providing a large scale expansion into Quebec and Atlantic Canada under the Ultramar brand, the most recognized retail fuel brand in this region.”
As a result of the closing of the acquisition of the majority of the Canadian business and assets of CST Brands Inc. from Alimentation Couche-Tard Inc. in the second quarter, Parkland has increased its 2017 Adjusted EBITDA guidance to $310 million to $340 million.
Q2 Highlights
Parkland achieved a 2.1% growth in volume, delivering approximately 2.6 billion litres of fuel and petroleum products in the second quarter of 2017, compared to 2.5 billion litres in the second quarter of 2016. The volume increase was driven by growth in gas, diesel and propane volumes in Commercial Fuels, and growth in gas and diesel volumes in Retail Fuels and Parkland USA.
Retail Fuels achieved a Company C-Store same-store sales growth of 6% during the second quarter of 2017 as compared to the second quarter of 2016, as a result of continued marketing efforts in Parkland’s convenience store offerings. The growth was observed across both Western Canada and Eastern Canada.
Commercial Fuels delivered 26% more propane than in the second quarter of 2016 primarily due to strong organic growth efforts, the impact of recent customer wins, and contributions from strategic business acquisitions completed in 2016.
Acquisitions
On June 28, 2017, Parkland completed the acquisition of the majority of the Canadian business and assets of CST Brands Canada from Couche-Tard. These businesses operate under a number of highly recognizable brands including Ultramar, Dépanneur du Coin / Corner Store, Dépan Express / ExpressMart and Pipeline Commercial.
On April 18, 2017, Parkland announced it had entered into an agreement with Chevron Canada Limited to acquire all of the outstanding shares of Chevron Canada R & M ULC for US$1.1 billion plus working capital.
Supply
Supply and Wholesale Adjusted EBITDA was $17.8 million compared to $23.1 million in the second quarter of 2016 primarily driven by narrower margins, particularly in the crude and propane business.
The Supply and Wholesale segment continued to drive higher propane sales this quarter. Supply and Wholesale sold an additional 24 million litres of propane in the second quarter of 2017 as compared to the second quarter of 2016.
Diesel and biodiesel volumes in the Supply and Wholesale segment increased by approximately 22% compared to the same quarter of 2016 as a result of strong market share gains and strategic initiatives to drive volume growth.