Retail Strength Offsets Wholesale Weakness for Global Partners
WALTHAM, Mass. — Global Partners LP saw its net income fall during the third quarter — from $42.5 million a year ago to $8.2 million — but its gasoline distribution and station operations (GDSO) segment proved to be a bright spot as the company successfully completed its acquisition of Warren Equities, executives reported Thursday during its 2015 third-quarter earnings call.
The Warren Equities acquisition included 147 company-operated Xtra Mart convenience stores and related fuel operations, 53 commission agent locations, and fuel supply rights for approximately 320 dealers. The properties are spread throughout Massachusetts, Connecticut, Maine, New Hampshire, New York, Rhode Island, New Jersey, Pennsylvania, Maryland and Virginia.
The acquisition played a major role in the positive results the company saw for its gasoline distribution and station operations segment. The segment offset weakness in its wholesale segment this quarter, the company noted.
GDSO product margin grew by $57.1 million to $137.3 million due to the acquisition completion, as well as the retail portfolio from Capitol Petroleum and declining wholesale gasoline prices.
The company’s product margin in the wholesale segment was down $49.6 million from the third quarter of 2014, “reflecting less favorable conditions in the wholesale gasoline and gasoline blendstocks markets, as well as tighter differentials in the crude oil market,” said Eric Slifka, president and CEO of Global Partners.
Comparatively, combined product margin for the third quarter was $178.7 million, up slightly from $170.3 million in Q3 2014.
Slifka also confirmed the successful completion of 23 raze-and-rebuild convenience stores it operates along the Connecticut Turnpike.
When asked about merger and acquisition activity, Slifka commented that the market is extremely active right now, with a large spectrum of companies for sale.
Global Partners is constantly on the lookout for potential deals. “We look at the ones out there that are for us; the ones that will be competitive later on,” he said.
Slifka also shared that the company remains in line with its original expectations for 2015.
“We are affirming full-year 2015 EBITDA guidance in the range of $214 million to $234 million,” Slifka said. “We are pleased with the integration of Warren and Capitol, which is now substantially complete, and we expect them to contribute to our performance for the balance of the year.”