Recent Acquisitions Bolster Results for Global Partners' 2023 First Quarter

The partnership added more than 60 company-operated convenience markets and related fuel operations in 2022.
Danielle Romano
Managing Editor
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Global Partners

WALTHAM, Mass. — Consistent with Global Partners LP's focus on strategic transactions that strengthen its long-term earnings power, the partnership benefitted from the three acquisitions it completed during 2022, boosting the Gasoline Distribution and Station Operations (GDSO) segment and portfolio for the first quarter of 2023.

With the purchases of Consumers Petroleum of Connecticut Inc.Miller Oil Co. and Tidewater Convenience, Global Partners added more than 60 company-operated convenience markets and related fuel operations in 2022, as well as fuel supply arrangements at more than 55 additional sites.

These acquisitions, combined with the diversification of the partnership's business model, resulted in another strong quarter for the company's GDSO segment, which posted a 6.1 percent higher product margin, Global Partners LP President and CEO Eric Slifka reported during the partnership's first quarter 2023 earnings call on May 5.

"The Global team executed well in the first quarter, posting results in line with our expectations," said Slifka. "Continued momentum in our GDSO segment helped to more than offset the effects of warmer-than-normal temperatures on our winter-sensitive products. Our performance underscores the strength of our diversified business model, which focuses on creating value for unitholders and delivering quality products and superior service to our customers and guests across our network of liquid energy terminals and convenience markets."

[Read more: Global Partners Credits Business Model for Record 2022 Performance]

Bolstered by the addition of the recent acquisitions, GDSO product margin was up $10.5 million to $183.5 million in Q1 2023 vs. $173 million in the same period of 2022. Product margin from gasoline distribution increased $5.9 million to $120.8 million from $114.9 million in the year-earlier period, primarily due to higher fuel margins (cents per gallon) and an increase in volume sold.

Station operations product margin — which includes convenience store and prepared food sales, sundries and rental income — increased $4.6 million to $62.7 million, up from $58.1 million during the same quarter of 2022, primarily due to increased convenience store sales in part as a result of the 2022 acquisitions.

At the end of the first quarter, Global Partners' portfolio consisted of 1,656 sites, comprised of 343 company-operated sites, 297 commission agents, 188 leasing dealers and 828 contract dealers.

By the Numbers

For the period ended March 31, Global Partners' adjusted EBITDA was $76 million in the first quarter of 2023 vs. $74.9 million in the same period of 2022. Net income was $29 million compared to $30.5 million year over year.

Other financial results included:

  • Gross profit in the first quarter of 2023 was $222.1 million compared with $206.2 million in the first quarter of 2022.
  • Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $244.8 million in Q1 of 2023 vs. $228.2 million in Q1 of 2022.
  • Wholesale segment product margin was $53.1 million in the first quarter of 2023 compared with $47.1 million in the same quarter of 2022.
  • Commercial segment product margin remained flat year over year at $8.1 million.
  • Total sales for the partnership were $4 billion vs. $4.5 billion year over year.

2023 M&A Pipeline

In March, Global Partners and ExxonMobil signed a joint venture (JV) agreement to acquire 64 Houston-area convenience and fueling facilities from the Landmark Group. If approved, the assets will be purchased under the joint venture Spring Partners Retail LLC, with the partnership acting as the management company and operator.

The deal is subject to regulatory clearance and the satisfaction of closing conditions. It is expected to be completed in the second quarter of 2023. Global Partners holds a 49.9 percent interest in the JV.

"We are excited about the opportunity to expand our footprint into the fast-growing Texas market and look forward to operating these sites on behalf of the joint venture," Slifka said.

The executive also provided an update on the partnership's agreement to acquire five refined product terminals from Gulf Oil in Connecticut, Maine, Massachusetts and New Jersey, noting that the companies are continuing to work through the regulatory process.

[Read more: Global Partners Makes Strides in Sustainability Journey]

"We remain focused on driving returns for our stakeholders through a combination of organic growth, operational efficiency and M&A. We're off to a solid start in 2023 and are well positioned to deliver on our strategic objectives," Slifka concluded.

With approximately 1,700 locations primarily in the Northeast, Waltham-based Global Partners is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global also owns, controls or has access to one of the largest terminal networks in New England and New York, through which it distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global engages in the transportation of petroleum products and renewable fuels by rail from the mid-continental United States and Canada.