Par Petroleum Seeks New Retail Acquisitions
HOUSTON — Following its successful acquisition of 85 convenience stores from Mid Pac Petroleum LLC on April 1, as well as 31 locations from Tesoro Hawaii LLC in 2013, Par Petroleum Corp. is looking to expand its expand its retail division, President and CEO Joseph Israel said during the company's 2015 fiscal second-quarter earnings conference call Friday.
He did not speculate any further on what acquisitions Houston-based Par Petroleum may be looking for, including whether it wanted to operate any retail sites outside of Hawaii, where all of its 116 convenience stores are located.
Israel did note how pleased he is with the Mid Pac Petroleum acquisition, which provided the company with $4 million in EBITDA for the most recent quarter ended June 30.
Overall, Par Petroleum's retail division provided the parent company with $5.8 million in adjusted EBITDA for its second quarter. Retail gross margins came in at $16.64 million, double the slightly less than $8 million in gross margins the company achieved in its 2014 second quarter.
Same-store fuel gallons sold increased by a strong 5 percent year over year. Retail fuel sales volumes were 22.6 million gallons vs. 12.2 million gallons in the year-ago period.
But the shining star was same-store merchandise sales, which moved higher by a 14 percent year over year.
Most of this gain came from the 31 sites purchased from Tesoro, Israel noted. He added Par Petroleum really boosted its marketing efforts at these stores in the past quarter to drive traffic and in-store sales.
"We won't see a 14-percent increase every quarter," Israel acknowledged. "But we expect our retail division to remain strong."
Companywide, Par Petroleum, an integrated refiner and marketer of petroleum products, posted a net profit of $11.7 million in its most recent quarter, compared to a net loss of $24.7 million in the comparable quarter last year.
"Strong adjusted EBITDA in the second quarter was driven by favorable market conditions and solid performance across the board," concluded Israel.