Global Partners' Strategic Projects Align With Long-Term Goals
WALTHAM, Mass. — Recent acquisitions continue to bolster Global Partners LP's strategic advantage.
The partnership delivered year-over-year gains across key financial metrics, demonstrating the effectiveness of Global Partners' strategy to acquire, invest in and optimize assets that drive operating returns, Eric Slifka, Global Partners president and CEO, said during the company's recent third quarter 2024 earnings call on Nov. 8.
"Our retail assets are exceeding expectations in our wholesale and commercial segments. Supply market dynamics enabled us to capitalize on favorable conditions in the quarter," he commented. "Our integrated business model provides the potential to enhance our market leadership and long-term growth."
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.
For the quarter ended Sept. 30, the partnership reported:
- Net income was $45.9 million vs. $26.8 million for Q3 2023.
- Adjusted EBITDA was $114 million vs. $77.7 million for the year-ago period.
- DCF was $71.1 million vs. $42.2 million for Q3 2023.
- Gross profit was $286 million compared with $228.5 million in the same period of 2023.
Wholesale Segment Highlights
Global Partners continues to integrate recently acquired liquid energy terminals that provide a platform for new strategic projects that align with the company's long-term goals, expanding product offering, enhancing operational efficiency and market reach, Slifka pointed out.
Global Partners 2024 Earnings
First Quarter: Recent Acquisitions Bolster Global Partners' Strategic Advantage
Second Quarter: Global Partners Sees Opportunity in Wholesale Segment
Most recently, on Nov. 5, the partnership completed the acquisition of a 730-acre liquid energy terminal in East Providence, R.I., from the ExxonMobil Oil Corp. The terminal — which features 10 product tanks with 959,730-barrel shell capacity — serves as a strategic storage facility for various products, including gasoline, additives, distillates and ethanol.
Global Partners also continues to integrate the 29 liquid energy terminals it acquired over the past 11 months from Motiva Enterprises and Gulf Oil.
"We're excited about the opportunity to unlock the full value these assets bring to our network," he said.
By the numbers, wholesale segment product margin increased $33.9 million to $71.1 million when compared to the year-ago period. Gasoline and gasoline blendstocks product margin increased to $43 million from $20.4 million in Q3 2023 driven primarily by the acquisition of liquid energy terminals from Motiva Enterprises and by more favorable market conditions.
Product margin from distillates and other oils was $28.1 million in the third quarter of 2024 compared with $16.8 million in the same period of 2023. The segment benefitted from the acquisition of the Gulf Oil terminals acquired in April, the company reported.
GDSO Segment Highlights
GDSO product margin increased $31.2 million in the quarter to $237.7 million. Product margin from gasoline distribution increased $32.1 million to $164.1 million, primarily reflecting higher fuel margins year over year. Fuel margins increased 9 cents to 40 cents for Q3 2024 vs. 31 cents for Q3 2023.
Station operations product margin — which includes convenience store and prepared food sales, sundries and rental income — decreased $0.9 million to $73.6 million partly due to the divestiture and conversions of certain company-operated sites at the end of the quarter.
At the end of third quarter of 2024, Global Partners' portfolio c-stores and fueling stations totaled 1,589, in addition to the 64 sites operating under the Spring Partners Retail LLC joint venture.
Acquired Opportunities
According to Slifka, additional nonfuel-use acreage from the acquired liquid terminal deals allows the company to further diversify its real estate portfolio in its retail business. Global Partners is one of three companies selected to work with Massachusetts Department of Transportation (MassDOT) to help build out electric vehicle (EV) charging in the state National Electric Vehicle Infrastructure (NEVI) funding. That program includes about $63 million in funding over five years.
This poses a unique opportunity for Global Partners to accelerate its own plans to install DC fast EV charging stations at strategic retail locations across its network and "to provide a safe, reliable and enjoyable charging experience for EV customers," Slifka explained.
"We're finalizing a list of our first tranche of sites to be included for development and we are proud to partner with MassDOT on this important initiative to increase the number of reliable DC fast charging locations in the Commonwealth," he commented.
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 12 Northeast states, the Mid-Atlantic and Texas.