Ferrellgas Partners (FGPR) Q2 2025 earnings summary

Executive summary

• Net earnings for Q2 FY2025 were $98.8M, up from $95.8M in Q2 FY2024, driven by a $19.1M increase in gross margin, effective expense management, and robust execution during the heating season.

• Adjusted EBITDA for Q2 FY2025 was $157.0M, a 7% increase year-over-year, reflecting higher gross profit and lower G&A expenses, offset by higher operating costs.

• Blue Rhino wholesale business achieved record January sales, with organic sales up 14% and gallons sold up 9% year-over-year, driven by an expanded customer base.

• For the six months ended January 31, 2025, a net loss of $47.8M was recorded, mainly due to a $125M legal accrual related to a litigation settlement.

• Supported disaster relief efforts and energy grid failures, highlighting propane's critical role in emergency response.

Financial highlights

• Q2 FY2025 revenues were $669.8M, up 10% year-over-year, with gross profit rising $19.1M (6%) to $347.4M.

• Operating income for Q2 FY2025 was $127.6M, up $7.2M; net earnings per Class A Unit were $2.40, compared to $2.31 a year ago.

• Adjusted EBITDA margin for Q2 FY2025 was 23.4%.

• Operating expenses increased by $11.1M, mainly from higher personnel and one-time workers' compensation costs.

• Interest expense increased $3.5M in Q2, mainly from higher debt issuance costs and letter of credit fees.

Outlook and guidance

• Management expects continued seasonality in propane demand, with colder January weather anticipated to drive further demand into February.

• Maintenance capital expenditures are expected to remain stable, with growth capex fluctuating based on opportunities.

• Ongoing evaluation of capital structure and refinancing options, with no immediate announcements on debt or equity restructuring.

• The company plans to adopt new FASB segment and tax disclosure standards in future filings, with no material impact expected.

• Focus on gaining weather-agnostic customers and operational efficiency, including new autogas customer expected to provide 100,000 gallons annually.