First quarter Adjusted EBITDA1 of $327 million
Safely restarted the
Progressing
"The team continues to deliver on our strategy and optimize our portfolio," said
"I have full confidence in our team's ability to execute our operational plan that leverages our customer advantage and unique supply benefits, despite headwinds in some of the markets where we operate," added Espey. "We expect to deliver our 2024 Adjusted EBITDA Guidance range of
Q1 2024 Highlights
- Adjusted EBITDA of
$327 million , a decrease of 17 percent as compared to the first quarter of 2023, driven by an unplanned shutdown of theBurnaby Refinery , which began as a result of extreme cold weather and was extended by technical issues during the subsequent start-up.The Burnaby Refinery safely returned to normal operations onMarch 29, 2024 . - Net loss of
$5 million ($0.03 per share, basic), a decrease of$82 million as compared to the first quarter of 2023, and Adjusted earnings2 of$43 million ($0.25 per share, basic), a decrease of$71 million from the first quarter of 2023. - TTM Available cash flow2 of
$770 million , an increase of 23 percent from 2023, and TTM Cash generated from (used in) operating activities3 of$1,683 million , consistent with 2023. - TTM Available cash flow per share2 of
$4.38 , an increase of 16 percent from 2023, and TTM Cash generated from (used in) operating activities per share3 of$9.56 , a decrease of 7 percent from 2023. - Leverage Ratio4 of 3.1 times (2.8 times at Q4 2023), reflecting the impact of the unplanned shutdown of the
Burnaby Refinery . - Purchased for cancellation approximately 1.8 million common shares for
$82 million under our normal course issuer bid ("NCIB") program in Q1 2024. - Parkland's quarterly dividend increased from
$0.34 to$0.35 per common share, or$1.40 per common share annualized, representing a 3 percent increase from the prior year. Dividends are expected to be declared and paid on a quarterly basis.
Q1 2024 Segment Highlights
-
Canada delivered Adjusted EBITDA of$191 million , up 14 percent from Q1 2023 ($167 million ). This increase was primarily driven by stronger fuel unit margins, partially offset by lower commercial volumes due to unseasonably warm weather. Company same-store volume growth ("Company SSVG"5) was 5.9 percent, demonstrating the improved productivity of our company-owned network. - International delivered Adjusted EBITDA of
$149 million , down 19 percent from Q1 2023 ($183 million ). The decrease was primarily driven by lower fuel unit margins and wholesale volumes as compared to Q1 2023, partially offset by successful cost controls. -
USA delivered Adjusted EBITDA of$33 million , up 57 percent from Q1 2023 ($21 million ). Performance reflects ongoing integration efforts, including C-store improvements and On the Run rebrands. Lower fuel unit margins and volumes reflect broader industry trends. - Refining reported an Adjusted EBITDA loss of
$32 million , compared to Adjusted EBITDA of$38 million in Q1 2023. Composite utilization5 at theBurnaby Refinery was 20 percent, reflecting the unplanned shutdown, compared to 34 percent in Q1 2023, reflecting a scheduled turnaround. During the quarter, we accelerated maintenance and refining optimization work previously scheduled for the third quarter of 2024. As a result, we expect to enhance theBurnaby Refinery's utilization and profitability for the remainder of the year. - Parkland's total recordable injury frequency rate5 on a trailing-twelve-months basis was 1.07, compared to 0.97 at
March 31, 2023 .
|
_______________________ |
1 |
Total of segments measure. See "Total of Segments Measures" section of this news release. |
2 |
Non-GAAP financial measure or non-GAAP financial ratio. See "Non-GAAP Financial Measures and Ratios" section of this news release. |
3
|
Supplementary financial measure. See "Supplementary Financial Measures" section of this news release. |
4
|
Capital management measure. See "Capital Management Measures" section of this news release. |
5 |
Non-financial measure. See "Non-Financial Measures" section of this news release. |
Consolidated Financial Overview
($ millions, unless otherwise noted) |
Three months ended |
|
Financial Summary |
2024 |
2023 |
Sales and operating revenue |
6,939 |
8,156 |
Adjusted EBITDA(1) |
327 |
395 |
|
191 |
167 |
International(2) |
149 |
183 |
|
33 |
21 |
Refining(2) |
(32) |
38 |
Corporate(2) |
(14) |
(14) |
Net earnings (loss) |
(5) |
77 |
Net earnings (loss) per share – basic ($ per share) |
(0.03) |
0.44 |
Net earnings (loss) per share – diluted ($ per share) |
(0.03) |
0.43 |
Trailing-twelve-month ("TTM") Cash generated from (used in) operating activities(3) |
1,683 |
1,688 |
TTM Cash generated from (used in) operating activities per share(3) |
9.56 |
10.23 |
TTM available cash flow(4) |
770 |
625 |
TTM available cash flow per share(4) |
4.38 |
3.79 |
1 |
Total of segments measure. See "Total of Segments Measures" section of this news release. |
2 |
Measure of segment profit (loss). See "Total of Segments Measures" section of this news release. |
3 |
Supplementary financial measure. See "Supplementary Financial Measures" section of this news release. |
4 |
Non-GAAP financial measure or non-GAAP financial ratio. See "Non-GAAP Financial Measures and Ratios" section of this news release. |
Q1 2024 Conference Call and Webcast Details
Parkland will host a webcast and conference call on
Analysts and investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-390-0546 (toll-free) (Conference ID: 10413873). International participants may call 1-800-389-0704 (toll-free) (Conference ID: 10413873).
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 at www.parkland.ca.
MD&A and Interim Condensed Consolidated Financial Statements
The Management's Discussion and Analysis for the three months ended
About
Parkland is an international fuel distributor, marketer, and convenience retailer with operations in 26 countries across the
Our strategy is focused on two pillars: our Customer Advantage and our Supply Advantage. Through our Customer Advantage, we aim to be the first choice of our customers, cultivating their loyalty through proprietary brands, differentiated offers, our extensive network, competitive pricing, reliable service, and our compelling loyalty program. Our Supply Advantage is based on achieving the lowest cost to serve among independent fuel marketers and distributors in the hard-to-serve markets in which we operate, through our well-positioned assets, significant scale, and deep supply and logistics capabilities. Our business is underpinned by our people and our values of safety, integrity, community and respect, which are deeply embedded across our organization.
Forward-Looking Statements
Certain statements contained herein 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: business strategies, objectives and initiatives; Parkland's 2024 Adjusted EBITDA Guidance range and goal of achieving a Leverage Ratio at the low end of our 2-3x target range by the end of 2025; Parkland's expectation to enhance the
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 obligation 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, many of which are beyond the control of Parkland, including, but not limited to: general economic, market and business conditions; Parkland's ability to execute its business strategies, objectives, and initiatives, including the completion, financing and timing thereof, realizing the benefits therefrom, and meeting our targets and commitments relating thereto; Parkland's ability to pay future dividends and complete share repurchases, if any, using its NCIB program; realization of the expected impact of the maintenance and refining optimization work completed on the
Specified Financial Measures
This news release contains total of segments measures, non-GAAP financial measures and non-GAAP financial ratios, supplementary financial measures and capital management measures (collectively, "specified financial measures"). Parkland's management uses certain specified financial measures to analyze the operating and financial performance, leverage, and liquidity of the business. These specified financial measures do not have any standardized meaning under International Financial Reporting Standards ("IFRS") and are therefore unlikely to be comparable to similar measures presented by other companies. The specified financial measures should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for further details regarding specified financial measures used by Parkland.
Non-GAAP Financial Measures and Ratios
Adjusted earnings (loss) is a non-GAAP financial measure and Adjusted earnings (loss) per share is a non-GAAP financial ratio, each representing the underlying core operating performance of business activities of Parkland at a consolidated level. The most directly comparable financial measure to Adjusted earnings (loss) and Adjusted earnings (loss) per share is Net earnings (loss).
Adjusted earnings (loss) and Adjusted earnings (loss) per share represent how well Parkland's operational business is performing, while considering depreciation and amortization, interest on leases and long-term debt, accretion and other finance costs, and income taxes. The Company uses these measures because it believes that Adjusted earnings (loss) and Adjusted earnings (loss) per share are useful for management and investors in assessing the Company's overall performance, as they exclude certain significant items that are not reflective of the Company's underlying business operations.
See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for the detailed definition and composition of Adjusted earnings (loss).
Please see below for the reconciliation of Adjusted earnings (loss) to net earnings (loss) and calculation of Adjusted earnings (loss) per share.
|
Three months ended |
|
($ millions, unless otherwise stated) |
2024 |
2023 |
Net earnings (loss) |
(5) |
77 |
Add: |
|
|
Acquisition, integration and other costs |
30 |
27 |
(Gain) loss on foreign exchange – unrealized |
3 |
7 |
(Gain) loss on risk management and other – unrealized |
11 |
(32) |
Other (gains) and losses |
10 |
21 |
Other adjusting items(1) |
10 |
21 |
Tax normalization(2) |
(16) |
(7) |
Adjusted earnings (loss) |
43 |
114 |
Weighted average number of common shares (million shares)(3) |
175 |
175 |
Weighted average number of common shares adjusted for the effects of dilution (million shares)(3) |
175 |
177 |
Adjusted earnings (loss) per share ($ per share) |
|
|
Basic |
0.25 |
0.65 |
Diluted |
0.25 |
0.64 |
1 |
Other adjusting items for the three months ended |
|
|
2 |
The tax normalization adjustment was applied to net earnings (loss) adjusting items that were considered temporary differences, such as acquisition, integration and other costs, unrealized foreign exchange gains and losses, unrealized gains and losses on risk management and other, gains and losses on asset disposals, changes in fair value of redemption options, changes in estimates of environmental provisions, loss on inventory write-downs for which there are offsetting associated risk management derivatives with unrealized gains, impairments of non-current assets and debt modifications. The tax impact was estimated using the effective tax rates applicable to jurisdictions where the related items occur. |
|
|
3 |
Weighted average number of common shares is calculated in accordance with Parkland's accounting policy contained in Note 2 of the Annual Consolidated Financial Statements. |
Available cash flow is a non-GAAP financial measure and Available cash flow per share is a non-GAAP financial ratio. The most directly comparable financial measure for Available cash flow and Available cash flow per share is cash generated from (used in) operating activities. Parkland uses these measures to monitor its ability to generate cash flow for capital allocation, including distributions to shareholders, investment in the growth of the business, and deleveraging. Available cash flow is calculated as cash generated from (used in) operating activities adjusted for items such as (i) net change in (a) non-cash working capital and (b) other assets and other liabilities, (ii) maintenance capital expenditures, (iii) dividends received from investments in associates and joint ventures, (iv) interest on leases and long-term debt, and (v) payments on principal amounts on leases. Available cash flow per share is calculated as Available cash flow divided by the weighted average number of outstanding common shares. See following table for a calculation of historical Available cash flow and Available cash flow per share and a reconciliation to cash generated from (used in) operating activities.
|
Three months ended |
Trailing twelve
|
|||
($ millions, unless otherwise noted) |
|
|
|
|
|
Cash generated from (used in) operating activities |
521 |
528 |
417 |
217 |
1,683 |
Reverse: Change in other assets and other liabilities |
(11) |
7 |
(4) |
28 |
20 |
Reverse: Net change in non-cash working capital(1) |
(145) |
(14) |
17 |
63 |
(79) |
Include: Maintenance capital expenditures |
(61) |
(52) |
(93) |
(59) |
(265) |
Include: Dividends received from investments in associates and joint ventures |
2 |
4 |
3 |
2 |
11 |
Include: Interest on leases and long-term debt |
(89) |
(83) |
(88) |
(85) |
(345) |
Include: Payments of principal amount on leases |
(56) |
(57) |
(71) |
(71) |
(255) |
Available cash flow |
161 |
333 |
181 |
95 |
770 |
Weighted average number of common shares (millions)(3) |
|
|
|
|
176 |
TTM Available cash flow per share |
|
|
|
|
4.38 |
|
Three months ended |
Trailing twelve months |
|||
($ millions, unless otherwise noted) |
|
|
|
|
|
Cash generated from (used in) operating activities |
341 |
404 |
629 |
314 |
1,688 |
Exclude: Adjusted EBITDA attributable to NCI, net of tax |
(27) |
(11) |
— |
— |
(38) |
|
314 |
393 |
629 |
314 |
1,650 |
Reverse: Change in other assets and other liabilities |
(1) |
23 |
(23) |
11 |
10 |
Reverse: Net change in non-cash working capital |
88 |
(132) |
(232) |
18 |
(258) |
Include: Maintenance capital expenditures(2) |
(44) |
(62) |
(118) |
(79) |
(303) |
Include: Dividends received from investments in associates and joint ventures |
12 |
5 |
— |
16 |
33 |
Include: Interest on leases and long-term debt |
(69) |
(76) |
(86) |
(92) |
(323) |
Exclude: Interest on leases and long-term debt attributable to NCI |
1 |
— |
— |
— |
1 |
Include: Payments on principal amount on leases |
(38) |
(50) |
(52) |
(51) |
(191) |
Exclude: Payments on principal amount on leases attributable to NCI |
4 |
2 |
— |
— |
6 |
Available cash flow |
267 |
103 |
118 |
137 |
625 |
Weighted average number of common shares (millions)(3) |
|
|
|
|
165 |
TTM Available cash flow per share |
|
|
|
|
3.79 |
1 |
For comparative purposes, certain amounts within net change in non-cash working capital for the three months ended |
|
|
2 |
For the three months ended |
|
|
3 |
Weighted average number of common shares is calculated in accordance with Parkland's accounting policy contained in Note 2 of the Annual Consolidated Financial Statements. |
The non-GAAP financial measures and ratios should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Except as otherwise indicated, these non-GAAP measures and ratios are calculated and disclosed on a consistent basis from period to period. See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for further details regarding Parkland's non-GAAP financial measures and ratios.
Capital Management Measures
Parkland's primary capital management measure is the Leverage Ratio, which is used internally by key management personnel to monitor Parkland's overall financial strength, capital structure flexibility, and ability to service debt and meet current and future commitments. In order to manage its financing requirements, Parkland may adjust capital spending or dividends paid to shareholders, or issue new shares or new debt. The Leverage Ratio is calculated as a ratio of Leverage Debt to Leverage EBITDA and does not have any standardized meaning prescribed under IFRS Accounting Standards. It is therefore unlikely to be comparable to similar measures presented by other companies. The detailed calculation of Leverage Ratio is as follows:
($ millions, unless otherwise noted) |
|
|
Leverage Debt |
5,208 |
4,976 |
Leverage EBITDA |
1,657 |
1,780 |
Leverage Ratio |
3.1 |
2.8 |
($ millions, unless otherwise noted) |
|
|
Long-term debt |
6,630 |
6,358 |
Less: |
|
|
Lease obligations |
(1,084) |
(1,048) |
Cash and cash equivalents |
(393) |
(387) |
Non-recourse debt(1) |
(3) |
— |
Add: |
|
|
Non-recourse cash(1) |
5 |
— |
Letters of credit |
53 |
53 |
Leverage Debt |
5,208 |
4,976 |
|
Three months ended |
Trailing twelve months |
|||
($ millions, unless otherwise noted) |
|
|
|
|
|
Adjusted EBITDA |
470 |
585 |
463 |
327 |
1,845 |
Share incentive compensation |
6 |
5 |
11 |
6 |
28 |
Reverse: IFRS 16 impact(2) |
(68) |
(71) |
(82) |
(83) |
(304) |
|
408 |
519 |
392 |
250 |
1,569 |
Other adjustments(3) |
|
|
|
|
88 |
Leverage EBITDA |
|
|
|
|
1,657 |
|
Three months ended |
Trailing twelve months |
|||
($ millions, unless otherwise noted) |
|
|
|
|
|
Adjusted EBITDA |
395 |
470 |
585 |
463 |
1,913 |
Share incentive compensation |
8 |
6 |
5 |
11 |
30 |
Reverse: IFRS 16 impact(2) |
(61) |
(68) |
(71) |
(82) |
(282) |
|
342 |
408 |
519 |
392 |
1,661 |
Other adjustments(3) |
|
|
|
|
119 |
Leverage EBITDA |
|
|
|
|
1,780 |
(1) |
Represents Non-recourse debt and Non-recourse cash balances related to project financing. |
|
|
(2) |
Includes the impact of operating leases prior to the adoption of IFRS 16, previously recognized under operating costs, which aligns with management's view of the impact to earnings. |
|
|
(3) |
Includes adjustments to normalize Adjusted EBITDA for non-recurring events including the completion of turnarounds, the unplanned shutdown resulting from an extreme cold weather event, a third-party power outage and the EBITDA attributable to EV charging operations financed through non-recourse project financing. |
Total of Segments Measures
Adjusted EBITDA is a total of segments measure used by the chief operating decision maker to make decisions about resource allocation to the segment and to assess its performance. In accordance with IFRS, adjustments and eliminations made in preparing an entity's financial statements and allocations of revenue, expenses, and gains or losses shall be included in determining reported segment profit or loss only if they are included in the measure of the segment's profit or loss that is used by the chief operating decision maker. As such, Parkland's Adjusted EBITDA is unlikely to be comparable to similarly named measures presented by other issuers, who may calculate these measures differently. Parkland views Adjusted EBITDA as the key measure for the underlying core operating performance of business segment activities at an operational level. Adjusted EBITDA is used by management to set targets for Parkland (including annual guidance and variable compensation targets) and is used to determine Parkland's ability to service debt, finance capital expenditures and provide for dividend payments to shareholders. See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for further details regarding total of segments measures used by Parkland. Refer to the table below for the reconciliation of Adjusted EBITDA to net earnings (loss) for the three months ended
|
Three months ended |
|
($ millions) |
2024 |
2023 |
Adjusted EBITDA |
327 |
395 |
Less/(add): |
|
|
Acquisition, integration and other costs |
30 |
27 |
Depreciation and amortization |
206 |
190 |
Finance costs |
91 |
104 |
(Gain) loss on foreign exchange – unrealized |
3 |
7 |
(Gain) loss on risk management and other – unrealized |
11 |
(32) |
Other (gains) and losses(1) |
10 |
21 |
Other adjusting items(2) |
10 |
21 |
Income tax expense (recovery) |
(29) |
(20) |
Net earnings (loss) |
(5) |
77 |
(1) |
Other (gains) and losses for the three months ended |
|
|
(2) |
Other adjusting items for the three months ended |
Parkland uses Adjusted gross margin as a measure of segment profit (loss) to analyze the performance of sale and purchase transactions and performance on margin. The most directly comparable financial measure is sales and operating revenue. See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for the detailed definition of Adjusted gross margin.
Refer to the table below for a detailed calculation of Adjusted gross margin for the three months and three months ended
|
Three months ended |
|
($ millions) |
2024 |
2023 |
Sales and operating revenue |
6,939 |
8,156 |
Cost of purchases |
(6,022) |
(7,267) |
Gain (loss) on risk management and other - realized |
(64) |
39 |
Gain (loss) on foreign exchange - realized |
(8) |
(3) |
Other adjusting items to Adjusted gross margin(1) |
4 |
2 |
Adjusted gross margin |
849 |
927 |
Fuel and petroleum product adjusted gross margin |
666 |
755 |
Food, convenience and other adjusted gross margin |
183 |
172 |
Adjusted gross margin |
849 |
927 |
1 |
Includes realized risk management loss related to underlying physical sales activity in another period of |
Supplementary Financial Measures
Parkland uses a number of supplementary financial measures, including Adjusted EBITDA Guidance, Leverage Ratio Guidance, TTM Cash generated from (used in) operating activities, and TTM Cash generated from (used in) operating activities per share, and these measures may not be comparable to similar measures presented by other issuers, as other issuers may calculate these measures differently. See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for further details regarding supplementary financial measures used by Parkland, including the composition of such measures.
Non-Financial Measures
Parkland uses a number of non-financial measures, including Company SSVG, composite utilization and total recordable injury frequency rate, in measuring the success of our strategic objectives and to set variable compensation targets for employees. These non-financial measures are not accounting measures, do not have comparable IFRS measures, and may not be comparable to similar measures presented by other issuers, as other issuers may calculate these metrics differently. See Section 16 of the Q1 2024 MD&A, which is incorporated by reference into this news release, for further details on the non-financial measures used by Parkland.
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