Second quarter Adjusted EBITDA1 of $504 million
Performance demonstrates success of ongoing initiatives and run rate of the business
Board elects Michael Jennings as the Chair of the Board
Published Annual Sustainability Report
Parkland Corporation ("Parkland", "we", the "Company", or "our") announced its financial and operating results for the three and six months ended June 30, 2024.
"I would like to thank the Parkland team for delivering record second quarter results," said Bob Espey President and Chief Executive Officer. "Our focus remains steadfast on improving returns by investing in our customer and supply advantages, and strengthening our robust platform for future growth to deliver shareholder value. I have confidence in the rest of the year and our longer term ambitions."
Q2 2024 Highlights
Adjusted EBITDA of $504 million, an increase of 7 percent as compared to Q2 2023.
Net earnings of $70 million ($0.40 per share, basic), a decrease of 10 percent as compared to Q2 2023, and Adjusted earnings2 of $156 million ($0.89 per share, basic), an increase of 20 percent from Q2 2023.
TTM Available cash flow2 of $831 million ($4.75 per share), an increase of 60 percent from the same period in 2023, and TTM Cash generated from (used in) operating activities3 of $1,612 million ($9.21 per share), a decrease of 13 percent from the same period in 2023, due to favourable non-cash working capital movements in the prior period.
Purchased for cancellation approximately 700,000 Parkland common shares for $29 million and maintained Leverage Ratio4 of 3.1 times (3.1 times in Q1 2024).
Return on invested capital2 ("ROIC") increased to 9 percent from 7.7 percent for the trailing twelve months ended June 30, 2024, as compared to the same period in 2023.
Q2 2024 Segment Highlights
Canada delivered Adjusted EBITDA of $172 million, up 15 percent from Q2 2023 ($150 million). This increase was primarily driven by stronger fuel unit margins and the benefits of our supply advantage, partially offset by the impact of softening industry demand in our retail business. Company same-store volume growth ("Company SSVG)5 was (1.0) percent , compared to 9.3 percent in Q2 2023. Food and Company C-Store SSSG (excluding cigarettes)2 was (0.7) percent, for the second quarter of 2024, compared to 3.1 percent, in Q2 2023. These were primarily driven by economic conditions that have reduced discretionary spending for consumers. Canada delivered Food and Company C-store revenue of $82 million, consistent with Q2 2023 ($79 million).
International delivered Adjusted EBITDA of $182 million, up 8 percent from Q2 2023 ($168 million). The increase was primarily driven by improved unit fuel margins in the wholesale business, partially offset by lower volumes, and continued strength in the base retail business and the addition of new sites.
USA delivered Adjusted EBITDA of $49 million, down 34 percent from Q2 2023 ($74 million). Results reflect lower diesel and gasoline market demand and lower unit fuel margins due to unfavorable commodity price movements.
Refining delivered Adjusted EBITDA of $121 million, compared to $109 million in Q2 2023. Composite utilization5 at the Burnaby Refinery was 98 percent, including record co-processing volumes of 3,000 barrels per day, compared to 91 percent in Q2 2023.
Consolidated Operating costs and Marketing, general and administrative expenses decreased $5 million compared to Q2 2023, reflecting ongoing cost-reduction initiatives that have successfully offset the impact of inflationary pressures across the business.
Parkland's total recordable injury frequency rate5 on a trailing-twelve-months basis was 1.21, compared to 0.87 at June 30, 2023.
2024 Guidance
As a result of the unplanned shutdown at the Burnaby Refinery in the first quarter of 2024, and unfavorable market conditions experienced in the first six months of 2024 that may persist for the rest of the year, Parkland has revised its 2024 Adjusted EBITDA Guidance to $1,900 million to $2,000 million.
Governance Update
Parkland's Board of Directors has elected Michael Jennings as the Chair of the Board effective July 31, 2024, replacing Steven Richardson who is retiring. Mr. Jennings joined Parkland's Board in February 2024 and is a highly experienced executive and board member with over three decades of international integrated energy experience.
"It has been a privilege to serve on Parkland's Board for the past seven years, including my tenure as Chair," said Mr. Richardson. "During this time, we have significantly grown the Company and implemented a strategic board renewal process, recruiting highly experienced and qualified directors, including bringing in Mike as a successor. I would like to thank the Board, management and the broader Parkland team for their support; it has been a pleasure working with such a committed and talented group."
"I am honoured to be elected as Chair of the Board and I look forward to building on the strong foundation that has been established," said Mr. Jennings. "I would like to thank Steve for his leadership and contributions to Parkland's Board. I have the utmost confidence in the Parkland business strategy and the management team, led by Bob Espey. Together, we will work in the interest of all shareholders to deliver sustainable long-term value."
2023 Sustainability Report
Today, Parkland published its fifth Sustainability Report, which outlines our refreshed strategy to better reflect the strong connection between environment, social and governance ("ESG") considerations and our corporate strategy. The report highlights the sustainability initiatives underway and our ESG performance for 2023. Among these initiatives are efforts on co-processing low-carbon fuels made from renewable feedstocks, including our plans to grow co-processing to 7,500 barrels per day by 2028; building safer, more diverse, and inclusive work environments; and projects to improve energy efficiency within Parkland's marketing operations.
Parkland's 2023 Sustainability Report can be viewed here : https://www.parkland.ca/sustainability/sustainability-reporting
Q2 2024 Conference Call and Webcast Details
Parkland will host a webcast and conference call on Thursday, August 1, 2024 at 6:30 am MT (8:30 am ET) to discuss the results. To listen to the live webcast and watch the presentation, please use the following link: https://app.webinar.net/gaV9np4n75j
Analysts and investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-390-0546 (toll-free) (Conference ID: 41672249). International participants may call 1-800-389-0704 (toll-free) (Conference ID: 41672249).
Please connect and log in approximately 10 minutes before the beginning of the call. The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted at www.parkland.ca.
MD&A and Interim Condensed Consolidated Financial Statements
The Management's Discussion and Analysis for the three and six months ended June 30, 2024 (the "Q2 2024 MD&A") and Interim Condensed Consolidated Financial Statements for the three and six months ended June 30, 2024 (the "Q2 2024 Interim Condensed Consolidated Financial Statements") provide a detailed explanation of Parkland's operating results for the three and six months ended June 30, 2024. An English version of these documents will be available online at www.parkland.ca and the System for Electronic Data Analysis and Retrieval + ("SEDAR+") after the results are released by newswire under Parkland's profile at www.sedarplus.ca. The French versions of the Q2 2024 MD&A and the Q2 2024 Interim Condensed Consolidated Financial Statements will be posted to www.parkland.ca and SEDAR+ as soon as they become available.
