Global Partners Looks to Expand Its Retail Division
WALTHAM, Mass. -- Global Partners LP's retail division has performed so well recently that the master limited partnership (MLP) will look to expand the business, President and CEO Eric Slifka said during this morning's 2012 fourth-quarter earnings call.
Slifka did not elaborate on how Global Partners intends to go about expanding its retail division. However, when questioned by an analyst about whether Hess Corp.'s recent decision to spin off or sell its 1,631 retail locations could present Global Partners with opportunities, the CEO responded that the company "will look at any transaction" and purchasing retail locations from Hess could be a synergy considering the oil company is a competitor primarily operating in the same Northeastern region as Global Partners.
As for its current retail operations, Slifka noted that the 542 convenience stores and gas stations acquired by Global Partners in its November 2011 purchase of Alliance Energy are especially profitable.
"Gas stations have helped diversify the company's assets," the chief executive noted during the earnings call. "Fifty-six percent of the company's combined profit margin came from [that division in our latest quarter] vs. 38 percent last year."
Gasoline margins was one reason cited as to why Global Partners' retail division performed so well in its latest quarter, which ended Dec. 31. The company sold 2.7 million gallons of fuel per day at its gas stations. In addition, Global Partners signed a 15-year lease with Getty Realty Corp. in its latest quarter to provide petroleum to 90 Getty stations, primarily in the New York City area.
Overall, Global Partners' retail division achieved a net profit of $18 million in the fourth quarter, more than double the $8 million the company earned during the same period last year. Companywide, Global Partners generated a $22.7 million profit, compared to a $10 million profit in the year-ago period.
Waltham, Mass.-based Global Partners LP owns, leases or supplies fuel to approximately 800 locations.