Net income was $41.4 million for the 2023 second quarter at Global Partners LP, compared with $162.8 million in the same period of 2022, as the Waltham, Massachusetts-based company posted what it called “solid” results.
“We are very pleased with our second-quarter results,” Gregory Hanson, chief financial officer, said during the earnings call Aug. 4. “However, I will note that the year-over-year comparison is challenging given the exceptionally strong results of our wholesale segment in the second quarter of 2022, which were driven by the historically steep backwardation of the forward product pricing curves in that period.”
- Global Partners is No. 24 on CSP’s 2023 Top 202 ranking of U.S. convenience-store chains by store count.
“Also, in comparing our year-over-year performance, keep in mind that net income, EBITDA (earnings before interest, taxes, depreciation and amortization) and DCF (distributable cash flow) for the second quarter of 2022 included a net gain on sale and disposition of assets of $76.8 million, primarily related to the sale of our Revere [Massachusetts] terminal in June of last year.”
EBITDA was $90.7 million in second-quarter 2023 compared with $211.8 million a year ago.
Total sales were $3.8 billion in second-quarter 2023—which ended June 30—compared with $5.3 billion in the same period of 2022, the company said. Total volume was 1.3 billion gallons in second-quarter 2023 and 2022. Gross profit in second-quarter 2023 was $242.7 million compared with $281.5 million in the same period of 2022. Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $265.6 million in second-quarter 2023 compared with $301.9 million in the same period of 2022.
Wholesale segment sales were $2.1 billion in second-quarter 2023 compared with $3 billion in the same period of 2022. Wholesale segment volume was 809.6 million gallons in second-quarter 2023 compared with 792.6 million gallons in the same period of 2022. Wholesale segment product margin was $59.7 million in second-quarter 2023 compared with $90.5 million in the same period of 2022, primarily due to less favorable market conditions in distillates and residual oil, Global Partners said.
The gasoline distribution and station operations (GDSO) segment sales were $1.5 billion in second-quarter 2023 versus $1.9 billion a year ago. GDSO volume was 417.4 million gallons in second-quarter 2023 compared with 422.3 million gallons in the same period of 2022. The GDSO segment product margin was $199.1 million in second-quarter 2023 compared with $198.9 million in the same period of 2022. Product margin from gasoline distribution decreased to $127.9 million from $129.9 million in the year-earlier period, reflecting a slight decrease in volume sold. Product margin from station operations increased to $71.2 million from $69.0 million in second-quarter 2022, in part due to the acquisition of Tidewater Convenience in third-quarter 2022.
“We delivered solid second-quarter results with wholesale and GDSO performing above our expectations,” said Eric Slifka, the partnership’s president and CEO. “In June, we began operating the 64 Houston-area convenience and fueling facilities acquired in our previously disclosed joint venture with ExxonMobil, expanding our presence into Texas. The expansion of our retail footprint reflects the continued execution of our overall growth strategy: to acquire, invest and optimize.”
“With our wholesale and GDSO segments performing above our expectations, from our fueling stations and convenience markets to our liquid energy terminals, the relationships created by our team members with customers and guests everyday is a key differentiator that allows us to maintain a competitive advantage across our businesses,” Slifka said on the call. “From an operating perspective, we bring an exceptionally high level of technical, marketing and M&A expertise amassed over decades in the energy industry.”
Meanwhile, Global Partners also recently brought in its first cargo of renewable diesel to its Albany terminal, where it can be distributed throughout the Northeast, Slifka said.
“New York’s ambitious climate goals, coupled with sustainability-oriented customers eager to decarbonize their footprint, made Albany the perfect location to test the product,” he said. “We are encouraged by the early demand and interest from customers both existing and new. Our infrastructure is positioned to play a vital role in storing and distributing fuels that will help our country decarbonize.”
Global Partners owns 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.