Global Partners Sees Opportunity in Wholesale Segment
WALTHAM, Mass. — The results Global Partners LP delivered in the second quarter of 2024 reinforces the strength of the company's business model and its integrated portfolio of liquid energy terminals, fueling stations and convenience markets, President and CEO Eric Slifka said during the partnership's second quarter 2024 earnings call on Aug. 7.
Looking at the partnership's overall performance for the quarter, Global Partners posted gains in operating income, net income, distributable cash flow (DCF) and adjusted EBITDA driven by strong results in both the wholesale and gasoline distribution and station operations (GDSO) segments.
[Read more: Global Partners' Brand Identity Shifts With Energy Landscape]
For the quarter ended June 30, the partnership reported:
- Net income was $46.1 million vs. $41.4 million for Q2 2023.
- Adjusted EBITDA was $121.1 million vs. $90.4 million for the year-ago period.
- DCF was $73.1 million vs. $54.8 million in Q2 2023.
- Gross profit was $287.9 million compared with $242.7 million in last year's comparable quarter.
- GDSO segment product margin was $221.5 million in the second quarter of 2024 compared with $199.1 million in the second quarter of 2023.
Wholesale Segment Highlights
Turning to the wholesale segment, over the past nine months the partnership has invested more than $500 million to significantly expand the segment's footprint through the strategic acquisition of a combined 29 terminals from Motiva Enterprises and Gulf Oil, more than doubling Global Partners' storage capacity to 21.4 million barrels.
The terminals expand the partnership's geographic reach within New England, along the Eastern Seaboard and into Florida, the Gulf Coast and Texas.
Wholesale segment product margin increased $32.2 million to $91.9 million. Product margin from gasoline and gasoline blendstocks increased $31.4 million to $70.4 million, largely due to the acquisition of the Motiva terminals.
"We're pleased with the performance of these assets. Our expanded network bolsters our terminal operations and opens new avenues for growth, further enhancing our earnings power and driving sustained value for our unitholders," Slifka said.
GDSO Segment Highlights
The GDSO segment continues to benefit from healthy retail fuel margins and successful merchandising initiatives in Global Partners' convenience stores, Slifka commented.
GDSO product margin increased $22.4 million in the quarter to $221.5 million. Product margin from gasoline distribution increased $19.4 million to $147.3 million, primarily reflecting higher fuel margins year over year. Fuel margins increased 5 cents to 36 cents for Q2 2024 vs. 31 cents for Q2 2023.
Station operations product margin — which includes convenience store and prepared food sales, sundries and rental income — increased $3 million to $74.2 million.
At the end of the second quarter, Global Partners' portfolio of fueling stations and c-store sites totaled 1,595. Additionally, the partnership operates 64 sites under the Spring Partners Retail LLC joint venture.
Waltham-based Global Partners operates or maintains dedicated storage at 54 liquid energy terminals — with connectivity to strategic rail, pipeline and marine assets — spanning from Maine to Florida and into the U.S. Gulf States. Through its network, the company distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global Partners owns, supplies and operates more than 1,700 retail locations across the Northeast states, the Mid-Atlantic and Texas.
