Parkland (PKI) Q3 2024 earnings summary

Executive summary

• Q3 2024 results were impacted by lower global refining margins and an unplanned refinery shutdown, with net earnings down 60% year-over-year to $91 million and Adjusted EBITDA down 26% to $431 million; retail and commercial segments showed 2% adjusted EBITDA growth and market share gains, offsetting refining headwinds.

• Sales and operating revenue for Q3 2024 was $7,126 million, down 18% year-over-year, mainly due to lower commodity prices and volumes across all segments.

• Announced intention to divest Florida-based retail and commercial businesses and Canadian commercial propane business to focus on higher-return opportunities and support capital allocation priorities.

• Organic growth initiatives, operational execution, and loyalty program expansions continue to drive resilience and performance.

Financial highlights

• Q3 2024 Adjusted EBITDA was $431 million, down from $585 million in Q3 2023; Canada segment delivered $200 million, International $152 million, USA $54 million, and Refining $49 million.

• Net earnings for Q3 2024 were $91 million ($0.52 per share), down from $230 million ($1.31 per share) in Q3 2023.

• Trailing twelve-month available cash flow was $627 million ($3.58/share), down 16% from the prior year.

• Leverage Ratio increased to 3.4x from 2.8 at year-end 2023, driven by lower EBITDA and increased USD-denominated debt.

• Liquidity available as of September 30, 2024, was $2 billion, including cash and unused credit facilities.

Outlook and guidance

• 2024 Adjusted EBITDA guidance was revised down to $1,700–$1,750 million, a $200–$250 million reduction, due to persistent low refining margins and the refinery shutdown.

• 2024 ROIC guidance lowered to approximately 8% from over 11%, and available cash flow per share guidance reduced to ~$3.75 from $5.00.

• Leverage ratio expected to return to the 2–3x target range by end of 2025, aided by divestments and improved EBITDA.

• Long-term strategy and 2028 targets remain on track, with expectations for crack spread recovery and continued organic growth.

• Lower refining margins expected to persist for the remainder of 2024.