and Increases its 2019 Adjusted EBITDA Guidance Range to $1.165 Billion ± 5%
Adjusted EBITDA Guidance Range Increased on Strength of Supply, International, USA and Synergy Capture
CALGARY, Alberta, Aug. 01, 2019 (GLOBE NEWSWIRE) -- Parkland Fuel Corporation ("Parkland", "We", the "Company", or "Our") (TSX:PKI) announced today the financial and operating results for the three and six months ended June 30, 2019. All financial figures are expressed in Canadian dollars unless otherwise noted.
"The strength of Parkland's diverse portfolio and integrated assets was on full display in the second quarter, driving outstanding results" said Bob Espey, President and Chief Executive Officer. "Our International, USA and Supply segments underpinned our performance, and we also benefited from further synergy capture including early wins within Sol. Our Canadian Retail business exhibited another quarter of strong volume and convenience store KPI's, demonstrating the strength of our marketing program and operational execution. Our first half performance and outlook for the base business give us confidence to increase our full-year 2019 Adjusted EBITDA Guidance Range from $1,065 million to $1,165 million (± 5%). Thanks to the entire Parkland team for their hard work and continued focus on safety to deliver another strong quarter.”
Q2 2019 Highlights
Canada Retail Highlights
Canada Commercial Highlights
Corporate Segment Highlights
Consolidated Financial Overview
|($ millions, unless otherwise noted)||Three months ended June 30,||Six months ended June 30,|
|Sales and operating revenue||4,854||3,783||1,806||9,069||7,125||3,591|
|Adjusted gross profit(1)||728||513||168||1,425||943||359|
|Adjusted EBITDA including non-controlling interest ("NCI")||370||249||54||709||402||124|
|Adjusted EBITDA attributable to NCI||24||—||—||48||—||—|
|Adjusted EBITDA attributable to Parkland ("Adjusted EBITDA")(1)||346||249||54||661||402||124|
|Net earnings (loss)||111||60||(1||)||202||80||21|
|Net earnings (loss) attributable to:|
|Net earnings (loss) per share ($ per share)|
|Per share – basic||0.72||0.45||(0.01||)||1.25||0.61||0.20|
|Per share – diluted||0.70||0.45||(0.01||)||1.22||0.60||0.20|
|Distributable cash flow(2)||168||118||23||293||147||61|
|Adjusted distributable cash flow(2)||156||139||39||293||249||85|
|Dividends declared per share outstanding||0.2985||0.2934||0.2886||0.5936||0.5836||0.5738|
|Dividend payout ratio(2)||27||%||35||%||146||%||30||%||54||%||99||%|
|Adjusted dividend payout ratio(2)||29||%||29||%||84||%||30||%||32||%||71||%|
|Total long-term liabilities||4,958||2,533||2,075||4,958||2,533||2,075|
|Shares outstanding (millions)||147||132||130||147||132||130|
|Weighted average number of common shares (millions)||147||132||111||146||132||104|
|Fuel and petroleum product volume (million litres)(4)||5,525||4,202||2,588||10,861||8,413||5,344|
|Fuel and petroleum product adjusted gross profit(2) (cpl)(5)(7)|
(1) Measure of segment profit. See Section 13 of the Q2 2019 MD&A.
(2) Non-GAAP financial measure. See Section 13 of the Q2 2019 MD&A.
(3) Calculated using the weighted average number of common shares.
(4) Fuel and petroleum product volume represents external volumes only. Intersegment volumes, including volumes produced by the Burnaby Refinery and transferred to the Canada Retail and Canada Commercial segments, are excluded from this reported volume.
(5) "cpl" stands for cents-per-litre and is a key performance indicator. See Section 13 of the Q2 2019 MD&A.
(6) For comparative purposes, fuel and petroleum product volume, and sales and operating revenue for the three and six months ended June 30, 2018 were restated due to a change in segment presentation, resulting from a reclassification of the wholesale business from the Canada Commercial segment to the Supply segment, reflecting a change in organizational structure in the second quarter of 2019.
(7) Key performance indicator. See Sections 4 and 13 of the Q2 2019 MD&A.
The following table outlines the impact of IFRS 16 on Adjusted EBITDA as reported for the three and six months ended June 30, 2019:
|Three months ended June 30,||Six months ended June 30,|
|Adjusted EBITDA as reported||IFRS 16 Impact||Pre-IFRS 16 Amount(1)||Adjusted EBITDA as reported||Adjusted EBITDA as reported||IFRS 16 Impact||Pre-IFRS 16 Amount(1)||Adjusted EBITDA as reported|
(1) Pre-IFRS 16 amounts are comparable to the reported information for the respective prior periods which was calculated under IAS 17.
Updated 2019 Outlook & Guidance Range
Parkland will remain focused on its key strategies of organic growth, building a strong supply advantage and acquiring prudently.
Our 2019 Guidance for Adjusted EBITDA attributable to Parkland, which includes the impact of IFRS 16, is increased by $100 million to $1,165 million with an anticipated variance of up to 5% (the "2019 Guidance Range"). The increase in our 2019 Guidance Range reflects our strong performance in the Supply, International and USA segments, continued synergy capture across the portfolio, a conservative outlook for retail fuel margins and lower activity levels for the Commercial segment.
In addition, the Company continues to expect approximately $200 million of growth capital expenditures and $200 million of maintenance capital expenditures in 2019. We have identified additional growth capital opportunities within the Sol business which will be evaluated for investment later in the year.
The 2019 Guidance Range includes some other key assumptions highlighted below:
In addition, the factors and assumptions which contribute to Parkland's assessment of the 2019 Guidance Range are consistent with existing Parkland disclosure and such guidance range is subject to risks and uncertainties inherent in Parkland's business. Readers are directed to the "Risk Factors" section in the Q2 2019 MD&A and the Annual Information Form for a description of such factors, assumptions, risks and uncertainties.
Conference Call and Webcast Details
Parkland will host a webcast and conference call on Friday, August 2, 2019 at 6:30am MST (8:30am EST) to discuss the results.
To listen to the live webcast and watch the presentation, please use the following link:
Analysts and institutional investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-390-0605 (toll-free) (Conference ID: 65159943). International participants can call 1-587-880-2175 (toll) (Conference ID: 65159943).
Please connect and log in approximately 10 minutes before the beginning of the call.
The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted to www.parkland.ca.
MD&A and Consolidated Financial Statements
The Q2 2019 MD&A and Q2 2019 FS provide a detailed explanation of Parkland's operating results for the three and six months ended June 30, 2019. An English version of these documents will be available online at www.parkland.ca and SEDAR immediately after the results are released by newswire under Parkland's profile at www.sedar.com. French Financial Statements and MD&A will be posted to www.parkland.ca and SEDAR as soon as they become available.
Certain statements contained in this news release constitute forward-looking information and statements (collectively, "forward-looking statements"). When used in this news release the words "expect", "will", "could", "would", "believe", "continue", "pursue" and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, cash flow growth, run-rate synergies, private label program expansion, fuel volume growth, new business objectives, organic growth initiatives, growth of supply and trading business in the U.S. and Caribbean, Adjusted EBITDA Guidance, capital and maintenance expenditure forecasts, contribution of the Sol business and other previous acquisitions, strategic marketing and operational efforts to increase fuel volume, expected launch of marketing and loyalty programs, U.S. growth opportunities, and supply improvement and optimization and plans and objectives of or involving Parkland.
These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligations to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to, general economic, market and business conditions; industry capacity; competitive action by other companies; refining and marketing margins; the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including but not limited to increases in taxes or restricted access to markets; changes and developments in environmental and other regulations; and other factors, many of which are beyond the control of Parkland. See also the risks and uncertainties described in "Forward-Looking Information" and "Risk Factors" included in Parkland's Annual Information Form dated March 27, 2019 and in "Forward-Looking Information" and "Risk Factors" in the Q2 2019 MD&A and annual MD&A dated February 28, 2019, each as filed on SEDAR and available on the Parkland website at www.parkland.ca.
Non-GAAP Financial Measures
This news release refers to certain non-GAAP financial measures that are not determined in accordance with International Financial Reporting Standards ("IFRS"). Distributable cash flow, distributable cash flow per share, adjusted distributable cash flow, adjusted distributable cash flow per share, total funded debt to credit facility EBITDA ratio, dividend payout ratio and adjusted dividend payout ratio are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS. Management considers these to be important supplemental measures of Parkland's performance and believes these measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. See Section 13 of the Q2 2019 MD&A for a discussion of non-GAAP measures and their reconciliations to the nearest applicable IFRS measure.
Adjusted EBITDA and adjusted gross profit are measures of segment profit. See Section 13 of the Q2 2019 MD&A and Note 20 of the Q2 2019 FS for a reconciliation of these measures of segment profit. Annual synergies is a forecasted annualized measure and is considered to be forward-looking information. See Section 13 of the Q2 2019 MD&A. Investors are encouraged to evaluate each measure and the reasons Parkland considers it appropriate for supplemental analysis.
Investors are cautioned that these measures should not be construed as an alternative to net earnings determined in accordance with IFRS as an indication of Parkland's performance. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.
Effective January 1, 2019, Parkland adopted the new accounting standard, IFRS 16 - Leases ("IFRS 16"). The adoption of IFRS 16 has a significant effect on Parkland's reported results. Due to Parkland's selected transition method, it has not restated its prior year comparatives. Certain financial statement measures are presented excluding the impact of IFRS 16 ("Pre-IFRS 16 measures"). Refer to the Q2 2019 FS and Q2 2019 MD&A for reconciliations of Pre-IFRS 16 measures.
About Parkland Fuel Corporation
Parkland is an independent supplier and marketer of fuel and petroleum products and a leading convenience store operator. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. Parkland optimizes its fuel supply across these three channels by operating and leveraging a growing portfolio of supply relationships and storage infrastructure. Parkland provides trusted and locally relevant fuel brands and convenience store offerings in the communities it serves.
Parkland creates value for shareholders by focusing on its proven strategy of growing organically, realizing a supply advantage and acquiring prudently and integrating successfully. At the core of our strategy are our people, as well as our values of safety, integrity, community and respect, which are embraced across our organization.
For Further Information
Director, Investor Relations
Senior Specialist, Corporate Communications
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