Parkland Sets Ambitious Goals Following Record Year
CALGARY, Alberta — Parkland Corp. leadership expressed confidence in the company's long-term strategy following "an excellent year" across the board that provided record yearend results.
"The entire team did exactly what we said we would do. We advanced our strategy, served our customers, delivered organic growth and captured synergies," President and CEO Bob Espey said during Parkland's recent fourth quarter and yearend earnings call. "Each part of our business contributed to our record year. And this gives me confidence in the quality of our strategy and our ability to deliver the ambitious targets we have set for ourselves."
[Read more: Investor Pushes Parkland to Shake Up Board]
Adjusted EBITDA for the fourth quarter of 2023 was $463 million, consistent with the same quarter the previous year, and Parkland's adjusted EBITDA for the full year was $1.9 billion, up 18% from 2022. The full year included $112 million of adjusted EBITDA from Parkland's renewables business, which nearly doubled from 2022.
During 2023, the company invested $200 million of growth capital in conversions and rebrands; expansions of co-processing capacity at Parkland's refinery in Burnaby, British Columbia; strategic supply infrastructure; and the JOURNIE Rewards program, including a partnership with Aeroplan.
Parkland also implemented streamlined processes that resulted in increased efficiency and cost savings, the benefits of which are being seen in the turnaround of the company's U.S. business, according to Espey.
"Through these investments, we expanded our On the Run brand to more than 700 stores, grew our JOURNIE Rewards loyalty program to nearly 6 million members, and have seen significant organic growth in our international and Canada segments," he said.
Net earnings were $86 million for Q4 2023, up 25% from Q4 2022, while net earnings for the year were $471 million, up 18% from 2022.
Parkland saw the benefits of its 2022 acquisitions of Husky branded retail locations and oil and gas company Pétroles Crevier come through last year, according to Chief Financial Officer Marcel Teunissen. While the company observed some weakness in the frozen food channel through its M&M Food Market chain because of customers being cautious with discretionary spending, Parkland is adjusting its offers accordingly.
In Canada, same-store sales growth of food and convenience items, excluding cigarettes, both grew, with convenience alone up 4% during the fourth quarter, demonstrating the compact of strong center-of-store and packaged beverage sales, Teunissen added.
In the United States, Parkland's industry retail fuel volumes were down as the company failed to adjust its pricing fast enough in a dynamic environment, he pointed out, but it has taken action to correct this and bring volumes back in line with industry trends.
"We are confident in the future of our USA segment and in 2024, we expect to deliver between $230 million to $250 million of adjusted EBITDA," the CFO said. "Our refining segment generated adjusted EBITDA of $106 million, which is down $22 million from last year."
Q4 2024 Highlights
For the fourth quarter of the year, Parkland's results by segment were:
United States: Adjusted EBITDA was $39 million, down 15% from $46 million during the fourth quarter of 2022. The decrease was primarily driven by lower fuel unit margins in Parkland's commercial business, partially offset by reduced operating costs and strong c-store margins.
Canada: Adjusted EBITDA was $190 million, consistent with Q4 2022. Company volume same-store sales growth was 6.9%.
International: Adjusted EBITDA was $157 million, up 43% from $46 million in Q4 2022. Performance was primarily driven by lower fuel unit margins in Parkland's commercial business and strong fuel unit margins, due to organic growth and synergy capture.
Refining: Adjusted EBITDA was $106 million, down 17% from $128 million in Q4 2022. The decrease was primarily driven by a third-party power outage.
Calgary-based Parkland Corp. is an independent supplier and marketer of fuel and petroleum products and a convenience store operator. Parkland currently services customers across Canada, the United States, the Caribbean region and the Americas through three channels: retail, commercial and wholesale.
About the Author
