Sunoco Ready to Break Out in 2015

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Sunoco Ready to Break Out in 2015


HOUSTON — Sunoco LP had a "terrific" 2014 and is "on a clear path to transform into one of the leading wholesale and retail companies" in the country in 2015, President and CEO Bob Owens stated Thursday during the company's 2014 fiscal third-quarter earnings call.

The Houston-based company, formerly known as Susser Petroleum Partners LP, certainly has had a busy 2014. In addition to changing its name on Oct. 27 to what Owens called an "iconic brand around for 125 years," it has fully integrated the dropdown of Mid-Atlantic Convenience Stores LLC from Energy Transfer Partners LP and is currently in the process of closing its acquisition of Honolulu-based Aloha Petroleum Ltd. This deal is expected to close by year-end.

"Aloha has a very attractive set of assets," noted Owens. "Hawaii is experiencing much stronger growth than the continental United States."

He also confirmed that Energy Transfer Partners will dropdown the remainder of its retail assets to Sunoco LP in the next few years. These assets consist of approximately 5,600 convenience stores, both company-operated and operated by third parties under the Sunoco, Stripes and Sac-N-Pac banners.

In the meantime, Sunoco LP has already begun the process of changing Stripes-branded locations to the Sunoco name. The first such transformation took place a few weeks ago at a Stripes location in Cleveland, Texas, the CEO revealed. 

Despite the massive transition underway, Owens reported that Sunoco LP will be on the hunt for additional acquisitions in the near future.

"We will continue to look at opportunities as they present themselves. We will look at a lot more than we execute," he cautioned. "We are always open to growing distributable cash flow."

As for cash flow in its third quarter ended Sept. 30, Sunoco LP earned a net profit of $1 million, compared to $9.6 million in its 2013 third quarter. More than $5 million in its most recent quarter was spent on a one-time charge related to its merger with Energy Transfer Partners.

Revenues rose 11.8 percent to $1.3 billion. Fuel gallons sold increased 17.2 percent to a total of 468 million gallons when combining sales at both company-operated and third-party gas stations.

Owens concluded that lower fuel prices could provide a boost to its retail business in the short term. "Consumers have more money [due to lower gas prices]," he said. "That should be good for our convenience store business."