Parkland Fuel Corporation Continues Strong Growth with Record First Quarter Adjusted EBITDA of $70.0M
RESULTS DRIVEN BY 44% GROWTH IN SUPPLY AND WHOLESALE AND 28% GROWTH IN COMMERCIAL FUELS SEGMENTS
CALGARY, Alberta, May 2, 2017 (BUSINESS WIRE) -- Parkland Fuel Corporation (“Parkland”) (TSX:PKI) Canada's largest and one of North America's fastest growing independent marketers of fuel and petroleum products, announced today the financial and operating results for the three months ended March 31, 2017. All financial figures are expressed in Canadian dollars.
“Parkland continues to deliver strong results by executing on our strategy to grow organically, provide a supply advantage and acquire prudently,” said Bob Espey, President and Chief Executive Officer at Parkland. “Our record Q1 results are a testament to our continued success in driving organic growth. This quarter was driven by strong results in our Commercial Fuels and Supply and Wholesale segments. The results continue to demonstrate the benefits of our diversification across multiple channels and geographies.”
KEY COMPONENTS OF PARKLAND'S STRATEGY – Q1 2017 HIGHLIGHTS
GROW
- Parkland achieved a record first quarter Adjusted EBITDA of $70.0 million, which is a growth rate of 17% compared to the same period last year. The record first quarter was driven by an exceptional 44% growth in the Supply and Wholesale segment and 28% growth in the Commercial Fuels segment.
- We achieved 13% growth in volume, delivering approximately 2.8 billion litres of fuel and petroleum products in the first quarter of 2017.
- Commercial fuels delivered 57% more propane than in the first quarter of 2016 due to strong organic growth efforts, the impact of recent customer wins, and contributions from strategic business acquisitions completed in 2016.
- Retail Fuels Company C-Store sales growth continued its trend of positive quarter-on-quarter growth. This was offset by results not yet reflecting the benefits of a number of investments made in the quarter to drive organic growth, as well as higher variable costs due to additional larger format Company site locations compared to the first quarter of 2016.
SUPPLY
- Parkland's Supply and Wholesale team continued to benefit from improvements made to our supply economics that were initiated in the beginning of the second quarter of 2016, which partially contributed to the 44% growth in Supply and Wholesale's Adjusted EBITDA in the first quarter of 2017.
- The Supply and Wholesale segment also benefitted from higher than normal propane sales this quarter, which also contributed to the growth in Adjusted EBITDA. Supply and Wholesale delivered an additional 217.5 million litres of propane in the first quarter of 2017 as compared to the first quarter of 2016.
ACQUIRE
- Parkland continued to deliver on its strategy to acquire prudently by announcing that it had entered into an agreement with Chevron Canada Limited to acquire all of the outstanding shares of Chevron Canada R&M ULC (the “Chevron Acquisition”). This transformational acquisition further strengthens Parkland’s supply-focused business model and adds significant scale with the premier Chevron retail brand and network in British Columbia.
- Parkland is actively working towards closing the previously-announced agreement with Alimentation Couche-Tard Inc. to acquire the majority of the Canadian business and assets of CST Brands, Inc. (the “CST Acquisition”). We expect to close the CST Acquisition in the second quarter of 2017.
CONSOLIDATED FINANCIAL OVERVIEW
MD&A AND FINANCIAL STATEMENTS
The Q1 2017 Management’s Discussion and Analysis (“MD&A”) and the interim condensed consolidated financial statements provide a detailed explanation of Parkland’s operating results for the three months ended March 31, 2017. These documents are available online at www.parkland.ca and SEDAR immediately after the results are released by newswire under Parkland’s profile at www.sedar.com.
CONFERENCE CALL AND WEBCAST INFORMATION
Parkland will host a webcast and conference call at 6:30 a.m. MST (8:30 a.m. EST) on Wednesday, May 3, 2017, to discuss the results for the three months ended March 31, 2017.
To access the conference call by telephone, dial toll-free 1-844-889-7784 [Conference ID: 8505306]. The webcast slide presentation can be accessed at http://edge.media-server.com/m/p/oj8wewd8. 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. It will remain available at the link above for one year and will also be posted to www.parkland.ca.
English Financial Statements and Management's Discussion and Analysis will be posted to www.parkland.ca and SEDAR immediately after the results are released by newswire. French Financial Statements and Management’s Discussion and Analysis will be posted to www.parkland.ca and SEDAR as soon as they become available.
FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES
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, signs of growth, business objectives and growth strategies; the strength of Parkland’s operations and financial condition; sources of growth; the closing of the CST Acquisition and/or the Chevron Acquisition; announced and/or future acquisitions; 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; failure to close the CST Acquisition and/or the Chevron Acquisition on the terms negotiated or at all, the ability of suppliers to meet commitments; actions by governmental authorities and other regulators including increases in taxes; 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 Statements” and “Risk Factors” included in Parkland’s Annual Information Form dated March 31, 2017, as filed on SEDAR and available on the Parkland website at www.parkland.ca.
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, Dividend Payout Ratio, Adjusted Dividend Payout Ratio and Adjusted Marketing, General and Administrative expenses 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 its industries. See Section 12 of the Q1 2017 MD&A for a discussion of non-GAAP measures and their reconciliations.
Adjusted EBITDA and Adjusted Gross Profit are measures of segment profit. See Section 12 of the Q1 2017 MD&A and Note 10 of the Interim Condensed Consolidated Financial Statements for a reconciliation of these measures of segment profit. Investors are encouraged to evaluate each adjustment and the reasons Parkland considers it appropriate for supplemental analysis.
Investors are cautioned, however, 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.
ABOUT PARKLAND FUEL CORPORATION
Parkland Fuel Corporation delivers gasoline, diesel, propane, lubricants, heating oil and other high-quality petroleum products to motorists, businesses, households and wholesale customers in Canada and the United States. Our mission is to be the partner of choice for our customers and suppliers, and we do this by building lasting relationships through outstanding service, reliability, safety and professionalism.
We are unique in our ability to provide customers with dependable access to fuel and petroleum products, utilizing a portfolio of supply relationships, storage infrastructure, and third-party rail and highway carriers to rapidly respond to supply disruptions in order to protect our customers.
FOR FURTHER INFORMATION
Investor Inquiries
Ben Brooks
Vice President, Treasury & Investor Relations
403-567-2534
Ben.Brooks@parkland.ca
Media Inquiries
Annie Cuerrier
Director, Corporate Communications
403-567-2579
Annie.Cuerrier@parkland.ca
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