Alliance Acquisition Affected Global Partners Q1 Results
Reported a net loss of $1.4 million for first-quarter 2012
WALTHAM, Mass. -- Global Partners LP has reported a net loss of $1.4 million for first-quarter 2012, compared with net income of $8.3 million for first-quarter 2011. First-quarter 2012 results included $4 million in one-time closing costs associated with the completion of the partnership's acquisition of Alliance Energy LLC on March 1, 2012.
"Consistent with the expectations we provided on our fourth-quarter conference call in March, first-quarter results were weak due to a combination of unseasonably warm weather and rapidly rising gasoline prices. The January-to-March period was the warmest quarter ever recorded in the Northeast, adversely affecting our volume of distillates, residual oil and natural gas. The mild winter temperatures were compounded by a steep increase in the price of gas, which negatively impacted our station-related margins," said Eric Slifka, the partnership's president and CEO.
"Despite a slow start to the year, we are encouraged about our prospects for the balance of 2012 and beyond," Slifka said. "In addition to strategic acquisitions that significantly broaden our gasoline operations, we are complementing our business with a portfolio of organic growth projects."
Based on its current business outlook and assumptions regarding market conditions, including demand for petroleum products and renewable fuels, weather, credit markets and the forward product pricing curve, the partnership expects to generate earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $110 million to $130 million for full-year 2012.
EBITDA for first-quarter 2012 was $18.5 million, compared with $24.8 million for the same period of 2011.
Beginning with first-quarter 2012, the partnership has modified its segment reporting to better reflect its business following the Alliance acquisition. These changes, which will be reflected in the partnership's quarterly report on Form 10-Q for the three months ended March 31, 2012, include the addition of a third reporting segment, "Gasoline Distribution & Station Operations," which encompasses the operations of the partnership's Alliance and Mobil gas stations.
Sales for first-quarter 2012 increased to $4 billion from $3.6 billion for the same period in 2011, due to a combination of higher refined petroleum product prices and volume increases. Wholesale segment sales increased 6.7% to $3.3 billion from $3.1 billion from first-quarter 2011. Sales from Gasoline Distribution &d Station Operations increased 68.4% to $486.1 million compared with $288.7 million for the same period in 2011, reflecting the Alliance acquisition as well as increases in branded gasoline distribution activity. Commercial segment sales grew 11.4% to $209.1 million from $187.7 million in first-quarter 2011.
Wholesale segment volume was 1.1 billion gallons for each of the first quarters of 2012 and 2011. Gasoline volume in the Gasoline Distribution & Station Operations segment was up 52% to 141.2 million gallons in first-quarter 2012 from 92.9 million gallons in the comparable period of 2011, reflecting the Alliance acquisition as well as increases in branded gasoline distribution activity. Commercial segment volume was 89.1 million, compared with 92.6 million gallons in first-quarter 2011.
Combined gross profit was $55.3 million in first-quarter 2012, compared with $56.3 million in first-quarter 2011. Total wholesale net product margin was $33.2 million in first-quarter 2012, compared with $38.5 million for the same period in 2011. In the Gasoline Distribution & Station Operations, net product margin increased 36% to $23.2 million from $17.1 million in the comparable period of 2011. Commercial segment net product margin was $6.2 million in first-quarter 2012 compared with $6.7 million in the same period of 2011.
Getty Realty recently announced that it had entered into an interim fuel supply and services agreement with Global Partners LP to provide gasoline supply and certain oversight services with respect to approximately 254 locations located in the New York City metropolitan area and New Jersey.
Global Partners, a publicly traded master limited partnership based in Waltham, Mass., owns, controls or has access to one of the largest terminal networks of refined petroleum products and renewable fuels in the Northeast. It is one of the largest wholesale distributors of gasoline (including blendstocks such as ethanol and naphtha), distillates (such as home heating oil, diesel and kerosene), residual oil and renewable fuels to wholesalers, retailers and commercial customers in the New England states and New York. In addition, the Partnership has a portfolio of approximately 800 gas stations in nine Northeastern states and is a distributor of natural gas and crude oil.