Parkland noted in its latest earnings report that its board of directors has initiated a review of strategic alternatives to “identify opportunities to maximize value for shareholders,” the report read.
The strategic review is being led by a special committee of the company’s board, which is comprised of independent directors. During the process, Parkland will consider options to maximize value, which may include asset divestments, acquisitions, transformative business combinations and a sale of the company, according to Parkland.
Parkland has teamed up with Goldman Sachs Canada Inc. and BofA Securities, which will serve as financial advisors for the strategic review.
“Parkland’s board remains committed to acting in the best interests of all shareholders,” said Michael Jennings, chair of Parkland’s board of directors. “While we are confident in the tremendous value creating potential of our business, strategic plan and management’s ability to execute, the current share price does not fully reflect the intrinsic value of the company. As a result, our board believes the strategic review is a necessary step to explore opportunities to maximize value creation for all shareholders. We are openly inviting Simpson Oil to rejoin the company’s board and participate on the special committee.”
Parkland also cautioned that there is no guarantee that the strategic process will result in a transaction, however it will continue to provide periodic updates on its progress.
2024 Financial Results
In 2024, Parkland reported net earnings of $127 million, compared to $471 million in 2023. The company’s available cash flow currently sits at $556 million, down from $812 million last year.
Parkland attributes this dip to “lower refinery segment results, restructuring activities and the ongoing implementation of enterprise-wide systems designed to improve operational efficiency, provide long-term cost savings and support future growth.”
“As the company initiates a strategic review, I want to thank the Parkland team for their dedication in 2024 and their continued focus on serving our customers. The team made great progress executing our priorities and building a platform for growth during the year,” said Bob Espey, president and CEO. “In 2024, our combined retail and commercial businesses demonstrated resilience in a challenging environment. While the Refinery and USA segments fell short of our expectations, partly due to unfavorable external market factors, our continued focus on operational excellence and serving our customers, combined with higher expected composite utilization of the Burnaby Refinery, gives me confidence in our 2025 Guidance.”
Going forward, the report read, Parkland will focus on balancing the need to maintain financial strength and flexibility, funding its organic growth capital program and returning capital to shareholders. An acquisition, however, is very much on the table.
