Acquisitions & Solid In-Store Performance Lead Global Partners to a Strong Q1
WALTHAM, Mass. — The successful integration of retail fuel and convenience store assets acquired from Consumers Petroleum of Connecticut Inc., its purchase of Miller Oil Co., and solid in-store performance led Global Partners LP to a strong first quarter of 2022.
"Our strategy to drive growth through mergers and acquisitions and organic investments continues to generate positive results for Global," Eric Slifka, president and CEO of the master limited partnership, said during an earnings call held earlier this month.
"Product margin in our Gasoline Distribution and Station Operations (GSDO) segment increased 33 percent to $173 million in the first quarter. The segment benefitted from our recently completed acquisition of a combined 105 sites from Consumers Petroleum of Connecticut and Miller's Neighborhood Market," Slifka contined.
The Consumers Petroleum transaction, which involved 26 Wheels convenience stores, and the Miller's purchase, which involved 21 Miller's Neighborhood Market c-stores, will continue to drive robust growth, according to the chief executive.
Global Partners also continues to seek out new M&A deals, Slifka reported. "The industry is ripe for consolidation. It's hard for small chains to compete at every level," he said. "Opportunities will present themselves and continue to be there."
In-Store Performance
Although not yet rebounding to pre-COVID-19 levels in terms of in-store demand due to changing driving habits, Global Partners stressed that its convenience stores — now totaling 1,389 locations — continue to perform well with strong sales and margins.
The company cited the following reasons why in-store performance is a company strength:
- Price optimization software;
- An expanded commissary;
- A wide selection of made-to-order foods;
- Bean-to-cup coffee; and
- A relaunched loyalty app.
Inflation has not been a material problem for the retailer, except in terms of increased wages, as it is difficult to find new employees. Some of the increased wages the company must pay are counteracted by rising fuel margins, however, Global Partners noted.
Q1 2022 Result Highlights
For the period ended March 31, 2022, sales at the company's convenience stores rose by $7.9 million year over year to $58.1 million. Fuel margins came in at 31 cents per gallon, compared to 24 cents per gallon during 2021's first quarter.
Companywide, Global Partners' earnings rose significantly, reaching $30.5 million in Q1, compared to a net loss of $4.3 million during the same three-month period in 2021. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $79.8 million in the first quarter of 2022, compared to $40.9 million in the same period of 2021.
Gross profit in the first quarter of 2022 was $206.2 million, vs. $145 million in the same period of 2021, driven primarily by the GDSO segment.
"We are off to a strong start in 2022," Slifka concluded. "We continue to identify new opportunities to further drive value through our integrated network and strategically located assets to enhance efficiencies, increase returns to unitholders, and deliver an outstanding experience for our customers and guests."
Waltham-based Global Partners is an independent owner, supplier and operator of gasoline stations and c-stores. Global also owns, controls or has access to one of the largest terminal networks in New England and New York, through which it distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global engages in the transportation of petroleum products and renewable fuels by rail from the mid-continental United States and Canada.