Parkland (PKI) Q4 2024 earnings summary

Executive summary

• Initiated a board-led strategic review to maximize value, considering options like mergers, divestitures, acquisitions, or sale of the company, with ongoing engagement with shareholders and an open invitation for Simpson Oil to participate, led by a Special Committee of independent directors and supported by Goldman Sachs Canada and BofA Securities.

• 2024 performance showed resilience in retail and commercial businesses, but refining and USA segments underperformed due to unfavorable market conditions and an unplanned refinery shutdown, while the business maintained focus on organic growth and operational improvements.

• Management changes include the promotion of Marcel Teunissen to President of North America and Brad Monaco as Interim CFO, ensuring leadership continuity.

• Annualized dividend increased by 3% to $1.44 per share, with a quarterly dividend of $0.36 per share effective April 2025, marking the 13th consecutive annual increase.

Financial highlights

• Q4 2024 Adjusted EBITDA was $428M (down from $463M in Q4 2023); full-year Adjusted EBITDA was $1,690M (down from $1,913M in 2023).

• Q4 net loss of $29M ($0.17/share) vs. net earnings of $86M ($0.49/share) in Q4 2023; full-year net earnings of $127M ($0.73/share) vs. $471M ($2.68/share) in 2023.

• Available cash flow for 2024 was $556M ($3.19/share), fully funding organic growth and dividends, but down from $812M ($4.61/share) in 2023.

• Year-end 2024 liquidity increased to $2,045M from $1,339M at year-end 2023, aided by a senior unsecured note issuance.

Outlook and guidance

• Q1 2025 results are tracking to plan and expected to significantly exceed prior year, with management confident in achieving 2025 guidance and long-term 2028 ambitions, supported by cost structure improvements and organic growth investments.

• 2025 guidance includes refinery utilization of 90%-95% and a constructive margin environment.

• Strategic review process may result in significant changes, but no guarantees on timing or outcome.