Sunoco LP Grows Stripes via New Builds, Acquisitions
HOUSTON — Sunoco LP is “very pleased” with its newly dropped-down Susser Holdings Corp. retail assets and plans to build 40 new large-format Stripes convenience stores in both 2015 and 2016, CEO Robert Owens reported Thursday during the company’s 2015 fiscal second-quarter earnings call.
On July 31, Energy Transfer Partners LP completed the dropdown of 679 convenience stores in Texas, New Mexico and Oklahoma to Sunoco LP for $1.94 billion.
“The Susser acquisition will be significantly accretive in 2016 and beyond,” Owens said.
He also reiterated a comment made by Energy Transfer Partners that an additional 440 convenience stores will be dropped down to Sunoco LP by the end of 2016.
In addition to the dropdowns, Owens stressed Sunoco LP will continue to seek other third-party acquisitions.
“We have not stopped looking for value creation in the form of M&A [mergers and acquisitions],” he said. “Nearly 60 percent of the convenience store industry remains run by independent operators, making it a continued good environment for acquisitions both small and large.”
The latest acquisition for Sunoco LP is its pending purchase of 28 Aziz Quick Stop convenience stores in southern Texas for $41.6 million. This transaction will close the week of Aug. 10 and the stores will be rebranded as Stripes locations in the near future, Owens confirmed Thursday.
As CSNews Online reported on July 28, despite EBITDA of $3 million, the operator of Aziz Quick Stop locations was forced to file a voluntary petition for Chapter 11 bankruptcy on Aug. 30, 2014 in the U.S. Bankruptcy Court for the Southern District of Texas, McAllen Division. Sunoco LP outbid Circle K and another unnamed bidder for the assets.
“The financial difficulties [at Aziz] are not related to the quality of the assets,” Owens pointed out.
Sunoco LP reported adjusted EBITDA of $55.5 million for the second quarter, a nearly $40-million increase vs. the same period last year. Net income came in at $34.9 million vs. $9.6 million in 2014’s second quarter. Revenues were $4.2 billion, up a massive 205 percent year over year. The second quarter ended June 30, so Susser Holdings’ results are not included in these totals.
Same-store merchandise sales — something Owens referred to as “nearly recession proof” — were quite strong, with its Mid-Atlantic Convenience Stores (MACS) locations generating a 7.1-percent increase year over year, and its Aloha Petroleum stores achieving an even greater 10.3-percent increase in same-store sales.
Merchandise sales from these locations totaled $57 million in the second quarter and contributed $14.8 million of gross profit.
At the forecourt, fuel margins for all gallons sold doubled to 7.6 cents per gallon. On a same-store basis, Sunoco LP achieved 1.3-percent growth in fuel gallons sold.
“Overall, we had a very solid performance in the last quarter,” Owens said.
Houston-based Sunoco LP operated 155 convenience stores as of June 30, primarily under the MACS, Aloha Petroleum and Tigermarket brand names.