The year 2023 was “transformational” for Global Partners, as the company completed the first acquisition in its retail joint venture with ExxonMobil and finished its strategic acquisition of 25 liquid energy terminals from Motiva Enterprises, the company’s president and CEO, Eric Slifka, said last week during its earnings call for the fourth quarter and full year that ended Dec. 31.
Global Partners’ joint venture acquisition with ExxonMobil of 64 convenience and fueling facilities in greater Houston also enables it to apply its operational and management expertise in one of the nation’s largest cities, Slifka said. Along with the Motiva deal, “Our market diversification and growth potential have never been stronger,” he said.
The Motiva transaction, Slifka said, “creates an exciting opportunity for our supply, storage, terminaling and retail networks in some of the fastest-growing regions of the country. The acquisition nearly doubles our terminal storage capacity, supported by a 25-year take-or-pay throughput agreement with Motiva that includes minimum annual revenue commitments.”
- Global Partners is No. 24 on CSP’s 2023 Top 202 ranking of U.S. convenience-store chains by store count.
Gross profit in 2023’s fourth quarter was $280.4 million compared with $281.6 million in the same period of 2022.
“We capped the year with a solid fourth-quarter performance, highlighted by higher retail fuel margins compared with the fourth quarter of 2022,” Slifka said. “Our ability to deliver strong performance in a less volatile market environment demonstrates the value of our integrated asset base, diverse portfolio of liquid energy products and the operational skill of our exceptional team.”
The gasoline distribution and station operations (GDSO) segment product margin was $245.4 million in fourth-quarter of 2023 compared with $223.2 million in the same period of 2022. Product margin from gasoline distribution increased to $177.8 million from about $156 million in the year-earlier period, primarily due to higher fuel margins (cents per gallon).
Wholesale segment product margin was $51.9 million in fourth-quarter 2023 compared with $70.7 million in the same period of 2022. The decrease is primarily due to less favorable market conditions in distillates, partially offset by more favorable market conditions in gasoline and residual oil.
Other Fourth-Quarter Highlights:
- Net income was $55.3 million for fourth-quarter 2023 compared with net income of $57.5 million in the same period of 2022.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) was $110.9 million in fourth-quarter 2023 compared with $105.3 million in the same period of 2022.
- Adjusted EBITDA was $112.1 million in fourth-quarter 2023 versus $106.9 million in the same period of 2022.
- Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $305.7 million in fourth-quarter 2023 compared with $303.8 million in the same period of 2022.
- Total sales were $4.4 billion in fourth-quarter 2023 and fourth-quarter 2022. Wholesale segment sales were $2.7 billion in fourth-quarter 2023 compared with $2.6 billion in the same period of 2022.
- Total volume was 1.6 billion gallons in fourth-quarter of 2023 compared with 1.4 billion gallons in the same period of 2022.
“We begin 2024 with a strong balance sheet and cash flows that position us to continue to execute on our strategic priorities,” Slifka said.
Waltham, Mssachusetts-based Global Partners has about 1,700 locations across the Northeast and Mid-Atlantic, of which 353 are company owned. Brands include Alltown Fresh, Honey Farms and XtraMart, among others.
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