WALTHAM, Mass. -- Wholesaler-retailer Global Partners LP’s sale of 86 nonstrategic gas stations and convenience stores in the Northeast and Mid-Atlantic is receiving “significant interest from prospective buyers,” Eric Slifka, president and CEO of Global Partners LP, said during the company’s first-quarter 2016 earnings call May 9.
The company will continue to streamline its portfolio and assess its lines of business “by further optimizing” its assets, Slifka said. In retail, those assets are “specifically what we consider to be nonstrategic for our own internal purposes and where we want to have some consolidation and [a] different market presence,” he said.
The company will look at other assets “opportunistically,” he said.
As part of this strategy to optimize the cash flow from its portfolio of owned and leased retail sites, Global Partners in April retained NRC Realty & Capital Advisors LLC to coordinate the sale of the 86 stations and c-stores; 28 are located in Connecticut, 22 are in Massachusetts, 12 are in New York, eight each are in Maine and New Hampshire, five are in Rhode Island and three are in Maryland. Final bids on the sites are due in late June.
The sale of these sites is part of Global Partners’ previously announced strategy to sell 125 nonstrategic convenience stores within the next year.
“As we focus on further optimizing the cash flow from our retail portfolio of 844 owned or lease sites, we have identified approximately 125 nonstrategic sites for sale,” Slika said during the company’s previous earnings call in February. “We anticipate maintaining wholesale supply to some of these sites. We also have identified an additional 25 locations that warrant a change in mode of operation to maximize value.”
“We also continue to enhance our retail network,” he said this week. “Several razed-and-rebuilds and new-to-industry sites are slated for opening this year. In addition, we currently have expanded our portfolio in western Massachusetts with the addition of 22 leased sites.”
Global Partners acquired those 22 locations in in the Pittsfield and Springfield, Mass., areas, from Pittsfield-based O’Connell Oil Associates Inc. They are branded under the Convenience Plus banner and market Mobil- or Shell-branded gasoline.
Global Partners reported a net loss for first-quarter 2016 of $7.0 million, compared with net income of $30.4 million for first-quarter 2015.
Combined product margin for the quarter was $154.5 million, compared with $190.1 million for the same period last year.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $42.6 million for first-quarter 2016, compared with $71.8 million for the same period of 2015.
For first-quarter 2016, Global Partners’ gross profit was $130.1 million, compared with $168.6 million for first-quarter 2015.
Product margin in the gasoline distribution and station operations (GDSO) segment was $108.3 million vs. $98.4 million in first-quarter 2015, driven primarily by the acquisition of a retail portfolio from Capitol Petroleum Group in June 2015.
Sales for first-quarter 2016 were $1.8 billion, compared with $3.0 billion for the same period in 2015, attributable to lower commodity prices and to a decline in volume. Sales in the GDSO segment were $701.3 million, vs. $780.4 million for the same period in 2015.
Volume in the GDSO segment was 363.8 million gallons for first-quarter 2016, compared with 341.5 million gallons in first-quarter 2015, primarily attributable to the June 2015 acquisition of Capitol.
Waltham, Mass.-based Global Partners is a midstream logistics and marketing company that owns, controls or has access to one of the largest terminal networks of petroleum products and renewable fuels in the Northeast. It also is one of the largest distributors of gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers in New England and New York. The company is engaged in the transportation of crude oil and other products by rail from the mid-continental United States and Canada to the East and West coasts for distribution to refiners and others. With approximately 1,600 locations, primarily in the Northeast, Global Partners is one of the largest independent owners, suppliers and operators of gas stations and convenience stores.
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