Net income nearly tripled from fourth-quarter 2021 to fourth-quarter 2022 at Global Partners LP, capping a successful year for the Waltham, Massachusetts-based company.
Net income was $57.5 million for fourth-quarter 2022 compared with net income of $19.3 million in the same period of 2021, the company said during its fourth-quarter earnings call Feb. 27.
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.
- Global Partners is No. 24 on CSP’s 2023 Top 40 updateto the 2022 Top 202 ranking of U.S. c-store chains by number of company-owned retail outlets.
“For the fourth quarter, our wholesale segment product margin more than doubled from the same period in 2021, as market conditions and effective management of our inventories amid sustained backwardation in the distillates markets combined to drive strong margin capture,” said Eric Slifka, the partnership’s president and CEO. “In our gasoline distribution and station operations segment, we continued to benefit from higher retail fuel margins and increased activity at our convenience stores, in part as a result of our recent acquisitions. Our commercial segment also capped 2022 with a strong fourth quarter, as bunkering activity remained robust.”
The strong fourth-quarter and full-year 2022 performance reflects the resilience of Global Partners’ business model, the strength of its assets and the value its team delivers for customers at its gas stations, convenience stores and liquid energy terminals, Slifka said.
“We navigated a constrained supply chain and steep commodity price volatility throughout the year,” Slifka said. “Diligent planning, effective fuel inventory management and solid execution by the entire team allowed us to drive increased profitability, highlighted by healthy margin contributions from all three segments of our business.
Total fourth-quarter sales were $4.4 billion compared with $4.1 billion in the same period of 2021.
In addition:
- Wholesale segment sales were $2.6 billion in fourth-quarter 2022 compared with $2.5 billion in the same period of 2021.
- Gasoline distribution and station operations sales were $1.5 billion in fourth-quarter 2022 versus $1.3 billion in the same period of 2021.
- Commercial segment sales were $3oo,000 in each of the fourth quarters of 2022 and 2021.
Other financial highlights include:
- Earnings before interest, taxes, depreciation and amortization (EBITDA) was $105.3 million in fourth-quarter 2022 compared with $65.7 million in the same period of 2021.
- Adjusted EBITDA was $106.9 million in fourth-quarter 2022 versus $66 million in the same period of 2021.
- Distributable cash flow was $57.3 million in the fourth quarter of 2022 compared with $30.5 million in the same period of 2021.
- Gross profit in fourth-quarter 2022 was $281.6 million compared with $193.1 million in the same period of 2021, driven primarily by increases in the gasoline distribution and station operations and wholesale segments.
- Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $303.8 million in fourth-quarter 2022 compared with $214.4 million in the same period of 2021
“Our vertically integrated assets, adaptable operating model and strong balance sheet position us well for 2023,” Slifka said. “While macroeconomic uncertainty remains, we continue to focus on driving returns for unitholders through a combination of organic growth, strategic acquisitions and operational efficiency.”
The product margin in the gasoline distribution and station operations segment was $223.2 million in fourth-quarter 2022 compared with $177 million in the same period of 2021. Product margin from gasoline distribution increased to about $156.0 million from $119.7 million in the year earlier period, primarily due to higher fuel margins (cents per gallon) and an increase in volume sold due to recent acquisitions, Global Partners said.
Wholesale segment product margin was $70.7 million in fourth-quarter 2022 compared with $32.6 million in the same period of 2021. The increase was primarily driven by more favorable market conditions in other oils and related products, primarily in distillates, partly offset by less favorable market conditions in gasoline and gasoline blendstocks, largely ethanol, the company said.
Total volume was 1.4 billion gallons in fourth-quarter 2022 compared with 1.5 billion gallons in the same period of 2021. Wholesale segment volume was 860.1 million gallons in fourth-quarter 2022 compared with 1.0 billion gallons in the same period of 2021.
One highlight from 2022 was Globlal Partners entering into a purchase agreement with Gulf Oil Ltd. Partnership where Global will acquire five refined-products terminals for $273 million in cash, the company said. The terminals, in Connecticut, Maine, Massachusetts and New Jersey, have an aggregate storage capacity of abou7t 3.9 million barrels. The transaction is expected to close in the first half of 2023.
In addition, the partnership donated $2 million to provide heating oil for communities in need across seven Northeast states. The donation, distributed to local nonprofit entities serving low-income households, will provide heating fuel for an estimated 4,000 households this winter.
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