Global Partners financial results reveal that positive results in certain areas offset certain weaknesses.
Global Partners LP has released its financial results for the third quarter ended Sept.30, 2015.
“Positive results in our Gasoline Distribution and Station Operations (GDSO) segment offset weakness in our Wholesale segment in the third quarter,” said Eric Slifka, the Partnership’s president and CEO. “GDSO product margin grew year-over-year by $57.1 million, or 71%, to $137.3 million, driven by the 2015 acquisitions of Warren Equities and a retail portfolio from Capitol Petroleum, as well as declining wholesale gasoline prices. Product margin in our wholesale segment was down $49.6 million, or 58% from the third quarter of last year, reflecting less favorable conditions in the wholesale gasoline and gasoline blendstocks markets as well as tighter differentials in the crude oil market.”
Third Quarter 2015 Financial Summary
Net income attributable to Global Partners for the third quarter of 2015 was $8.2 million, or 16 cents per diluted limited partner unit, compared with $42.5 million, or $1.50 per limited partner unit, for the third quarter of 2014.
Combined product margin for the third quarter of 2015 was $178.7 million, compared with $170.3 million for the third quarter of 2014.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2015 were $59.3 million, compared with $74.7 million for the same period of 2014.
Distributable cash flow (DCF) for the third quarter of 2015 was $29.6 million, compared with $51.5 million for the third quarter of 2014.
Gross profit was $152.3 million for the third quarter of 2015, compared with $155.4 million for the third quarter of 2014. Product margin in the GDSO segment was $137.3 million versus $80.2 million in the third quarter of 2014, driven primarily by the Warren and Capitol acquisitions. Wholesale segment product margin was $35.3 million, compared with $84.9 million in the third quarter of 2014, primarily due to tighter margins in crude oil as well as less favorable market conditions in gasoline and gasoline blendstocks. Commercial segment product margin was $6.1 million for the third quarter of 2015, compared with $5.2 million in the same period of 2014.
Sales for the third quarter of 2015 were $2.5 billion, compared with $4 billion for the same period in 2014, primarily attributable to lower commodity prices. Wholesale segment sales were $1.3 billion, compared with $2.9 billion for the third quarter of 2014. Sales in the GDSO segment were $1 billion versus $924.8 million for the same period in 2014, primarily reflecting the Warren and Capitol acquisitions. Commercial segment sales were $161.5 million, compared with $210.6 million for the third quarter of 2014.
Wholesale segment volume was 852.1 million gallons in the third quarter of 2015 compared with 1.1 billion gallons for the same period of 2014, primarily due to a change in supply logistics for a particular gasoline customer and discontinuation of a small discrete blendstocks distribution activity. Volume in the GDSO segment was 405.9 million gallons for the third quarter of 2015, compared with 268.9 million gallons in the third quarter of 2014, primarily attributable to the acquisitions of Warren and Capitol. Commercial segment volume was 103.3 million gallons, compared with 85 million gallons for the third quarter of 2014.
Combined product margin, EBITDA and DCF are non-GAAP (Generally Accepted Accounting Principles) financial measures.
Recent Highlights
- The Board of Directors of Global’s general partner, Global GP LLC, declared a quarterly cash distribution of $0.6975 per unit, or $2.79 per unit on an annualized basis, on all of its outstanding common units for the period from July 1 through September 30, 2015. The distribution will be paid November 13, 2015 to unitholders of record as of the close of business on November 4, 2015.
Business Outlook
“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. In our Wholesale segment, tighter crude differentials continue to negatively impact results.”
The Partnership’s full-year 2015 EBITDA guidance is based on assumptions regarding market conditions such as demand for petroleum products and renewable fuels, weather, credit markets, the regulatory and permitting environment and the forward product pricing curve, which could influence quarterly financial results.