Global Partners to Hang For-Sale Sign at 125 C-stores
WALTHAM, Mass. — Global Partners LP plans to sell 125 non-strategic convenience stores, Eric Slifka, the master limited partnership’s (MLP) president and CEO said Monday during the company’s 2015 fiscal fourth-quarter earnings conference call. He did not cite where any of the stores are located, but did note he expects most or all of the stores to be sold within a year.
“We’re actively pulling information together,” he said. “… It’s the right thing to do.”
Global Partners’ chief executive added the company expects to receive approximately $100 million in gross proceeds once the 125 c-stores are sold.
Waltham-based Global Partners currently has 844 owned or leased c-stores, primarily in the Northeast, now that the Warren Equities and Capitol Petroleum acquisitions have been completed. Despite the sale of non-strategic c-stores, Slifka stressed the MLP will continue to spend significant money on its gasoline distribution and station operations (GDSO) division — under which its retail unit is housed — in an effort to build new c-stores and commence raze and rebuilds.
In fact, GDSO was Global Partners’ shining star in its 2015 fourth quarter, ended Dec. 31. Product margin in the GDSO segment increased 39 percent year over year to $121.3 million, thanks in large part to the Warren and Capitol acquisitions, said Slifka. This division also contributed $445 million of the MLP’s total $692 million in total company margins.
“Our GDSO division had another strong year,” relayed Slifka.
Companywide, Global Partners has a challenging 2015 fourth quarter, reporting a net loss of $2.3 million vs. a net profit of $27.9 million in 2014’s fourth quarter.
“As expected, our fourth-quarter 2015 performance reflected unfavorable crude-by-rail economics,” said Slifka. “Our wholesale segment results were negatively affected in the quarter by fixed costs associated primarily with our leased railcar fleet, which in this market environment remains substantially underutilized.”