Parkland Corp., based in Calgary, Alberta, recently announced its financial and operating results for the first quarter of 2021, which ended March 31.
“We delivered a strong start to the year and have high confidence in our 2021 outlook,” said Bob Espey, Parkland president and CEO. “In addition to strong underlying business performance, we progressed our enterprise-wide organic growth initiatives, announced or closed five transactions, significantly enhanced our financial flexibility and lowered annual interest costs. We are well-positioned to advance our ambitious growth strategy and sustainability journey.”
- Adjusted EBITDA attributable to Parkland of $314 million, up 64% year-over-year. Despite continued COVID-19 impacts, the company benefited from lower costs, continued strong per unit fuel margins and Company C-store same-store sales growth (SSSG) in Canada, U.S. acquisition growth, solid performance in International and higher utilization at the Burnaby refinery.
- Net earnings attributable to Parkland of $31 million, or $0.21 per share, basic, an increase of $110 million relative to prior year.
- Cash flow from operations fully funded capital expenditures, acquisitions and net dividend payments in the quarter.
- Combined Operating and Marketing, General and Administrative costs of $331 million, $52 million lower than prior year, reflecting disciplined cost management and the variability in our cost structure.
- Total Funded Debt to Credit Facility EBITDA ratio of 3.0 times as of March 31, 2021.
- Further enhanced financial flexibility through an amended credit facility agreement (maturing 2026) and refinanced senior notes maturing in 2024, 2025 and 2026 with new senior notes maturing in 2029. These actions reduce average annual interest costs by approximately $20 million and extend our nearest senior note maturity to 2027.
Q1 2021 Segment Highlights
- In Canada, fuel margins, convenience store sales and lower costs in our retail and commercial business lines drove Adjusted EBITDA of $116 million, up $14 million relative to Q1 2020. Company C-Store SSSG was 5.5 percent, our 21st consecutive quarter of growth. We maintained retail market share, benefited from enhanced digital pricing capabilities and surpassed 1.8 million JOURNIE™ Rewards members.
- In International, enhanced logistics, shipping optimization and the continued benefit of cost control initiatives supported Adjusted EBITDA of $67 million, in-line with Q1 2020. This strong operational execution offset lower tourist activity and an approximate $4 million negative impact from a weakened U.S. dollar.
- In USA, Adjusted EBITDA of $20 million was up $4 million relative to Q1 2020, benefiting from acquisitions announced during the fourth quarter of 2020, our growing supply advantage and national accounts growth. This was partially offset by reduced oil and gas activity in our Northern ROC, lower marine activity in the Southeast ROC and a weaker U.S. dollar.
- In Supply, Adjusted EBITDA of $136 million was up $94 million relative to Q1 2020, primarily driven by Burnaby composite refinery utilization of 91 percent, (31 percent in Q1 2020 due to the scheduled turnaround). Supply benefited from co-processing initiatives and blending optimization at the Burnaby refinery coupled with solid performance from our integrated logistics business.
- Corporate Adjusted EBITDA expense of $25 million, down $11 million relative to Q1 2020, driven by lower realized foreign exchange impacts and disciplined cost management.
$2 billion ambition
Parkland said its growth platform is stronger than ever and that it has a proven track record of value creation. Underpinned by a disciplined approach to capital allocation, the key pillars of its strategy remain fundamental to its ambition for $2 billion of run-rate Adjusted EBITDA by the end of 2025:
Grow Organically – Robust pipeline of organic growth opportunities in retail, commercial and supply, across all geographies. Organic growth is supported by strong brands, customer value proposition, loyalty programs and digital insights.
Acquire Prudently & Integrate – Depth of high-quality consolidation opportunities across all geographies. Together with a disciplined approach, established integration capabilities and synergy capture, Parkland is well-positioned to add incremental value to acquisitions.
Strong Supply Advantage – Leverage growing scale, product diversity and capital light infrastructure to enhance margins. Continue to invest in safe and reliable operations and renewable fuel manufacturing at its Burnaby refinery.
One Parkland – Powering journeys and energizing communities through common values and behaviors. Safe, reliable and local customer service underpinned by organizational capability and a performance driven culture.
“As we continue to meet our customers’ mobility needs, we see growth opportunities across multiple business lines and geographies,” said Espey. “In addition to what has made us successful over the past decade, we see opportunity to grow our renewable fuel business while harnessing our existing network to provide electric vehicle charging options.”
2021 Investor Day
Parkland will host an investor day the morning of Nov. 16, 2021. The event will be held in Toronto (level of in-person attendance to be determined) and simultaneously webcast with video, for those unable to attend in-person. Members of Parkland’s leadership team will provide updates on our long-term growth initiatives, renewable fuel and electric vehicle charging opportunities, capital allocation and financial outlook. Registration and other details will be provided closer to the date.
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.