Operational performance highlights the strength of our business, brands and customer proposition
Financial results primarily impacted by lower global refining margins
Demonstrating progress toward 2028 ambitions
Parkland Corporation ("Parkland", "we", the "Company", or "our") announced its financial and operating results for the three and nine months ended September 30, 2024.
"The Parkland Team remains focused on executing our strategic plan and achieving strong operational metrics across the business relative to industry. Although our third quarter 2024 financial results fell short of expectations, this was primarily driven by a challenging refining margin environment," said Bob Espey, President and Chief Executive Officer. "Our business continues to show strength through increased market share in a soft economic environment. Adjusted EBITDA from our Retail and Commercial lines of business grew by two percent over the last twelve months, demonstrating progress on the organic growth initiatives required to deliver on our 2028 ambitions."
Q3 2024 Highlights
Adjusted EBITDA1 of $431 million, a decrease of 26 percent as compared to Q3 2023, largely due to lower refinery margins in the third quarter of 2024, despite strong operational execution.
Net earnings of $91 million ($0.52 per share, basic), a decrease of 60 percent as compared to Q3 2023, and Adjusted earnings2 of $106 million ($0.61 per share, basic2), a decrease of 54 percent from Q3 2023, largely due to lower refinery margins in the third quarter of 2024.
Trailing-twelve-month ("TTM") Available cash flow2 of $627 million ($3.58 per share2), a decrease of 16 percent from the same period in 2023, and TTM Cash generated from (used in) operating activities3 of $1,490 million ($8.51 per share3), a decrease of 25 percent from the same period in 2023, largely due to the unplanned shutdown of the Burnaby Refinery in the first quarter of 2024 and lower refining margins in the third quarter of 2024.
TTM Adjusted EBITDA from our Retail and Commercial lines of business4 of $1,568 million, an increase of two percent from the same period in 2023, reflecting organic growth, synergy capture and cost reductions.
Purchased and cancelled approximately 382,000 Parkland common shares for $14 million, in line with our disciplined capital allocation.
Liquidity available3 increased to $2 billion ($1,246 million in Q2 2024), reflecting the senior unsecured note issuance used to repay drawings under the Company's credit facilities during the quarter, and Leverage Ratio5 increased to 3.4 times (3.1 times in Q2 2024), reflecting debt repayments being more than offset by lower TTM Adjusted EBITDA.
Return on invested capital2 ("ROIC") decreased to 7.8 percent from 9.5 percent for the trailing twelve months ended September 30, 2024, as compared to the same period in 2023.
Announced intention to divest our Florida-based retail and commercial businesses, reflecting our commitment to disciplined capital allocation and redirecting capital towards our highest return opportunities that maximize shareholder value.
Q3 2024 Segment Highlights
Canada delivered Adjusted EBITDA of $200 million, in line with Q3 2023 ($206 million). Performance was underpinned by strong fuel unit margins from continued price and supply optimization despite lower consumer demand. Company same-store volume growth ("Company SSVG")6 was 1.4 percent, compared to 4.2 percent in Q3 2023. Food and Company C-Store SSSG (excluding cigarettes)2 was (1.1) percent, compared to 3.6 percent, in Q3 2023.
These decreases 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 Q3 2023 ($81 million).
International delivered Adjusted EBITDA of $152 million, down 11 percent from Q3 2023 ($170 million). The decrease was primarily driven by lower wholesale volumes, partially offset by continued growth in our retail, commercial and aviation base businesses.
USA delivered Adjusted EBITDA of $54 million, in line with Q3 2023 ($52 million). Performance was underpinned by improved supply optimization despite lower consumer demand.
Refining delivered Adjusted EBITDA of $49 million, compared to $188 million in Q3 2023. This decrease was primarily driven by lower refining margins. Strong composite utilization6 at the Burnaby Refinery of 102 percent, compared to 103 percent in Q3 2023.
Parkland's total recordable injury frequency rate6 on a TTM basis was 1.04, compared to 0.95 at September 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 for the first nine months of 2024, primarily due to lower refining margins in the third quarter of 2024, which are expected to persist for the remainder of the year, Parkland has further revised its 2024 Adjusted EBITDA Guidance3 to $1,700 million - $1,750 million(the "Updated 2024 Adjusted EBITDA Guidance Range"). This represents a $200 million - $250 million decrease in guidance range from our previous guidance range of $1,900 million - $2,000 million.
Furthermore, Parkland has revised its 2024 Available cash flow per share Guidance and 2024 ROIC Guidance, as a result of the factors outlined above, as follows:
2024 ROIC Guidance2 is revised to approximately 8 percent, from more than 11 percent (the "Revised 2024 ROIC Guidance");
2024 Available cash flow per share Guidance2 is revised to approximately $3.75 per share, from $5.00 per share (the "Revised 2024 Available cash flow per share Guidance").
Q3 2024 Conference Call and Webcast Details
Parkland will host a webcast and conference call on Thursday, October 31, 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/01ap5P1mzRe
Analysts and investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-510-2154 (toll-free) (Conference ID: 03367). International participants may call 1-437-900-0527 (toll-free) (Conference ID: 03367).
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 nine months ended September 30, 2024 (the "Q3 2024 MD&A") and Interim Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2024 (the "Q3 2024 Interim Condensed Consolidated Financial Statements") provide a detailed explanation of Parkland's operating results for the three and nine months ended September 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 Q3 2024 MD&A and the Q3 2024 Interim Condensed Consolidated Financial Statements will be posted to www.parkland.ca and SEDAR+ as soon as they become available.
