Star Group (SGU) Q3 2025 earnings summary

Executive summary

• Net income for the nine months ended June 30, 2025 increased by $31.9 million to $102.2 million, driven by higher Adjusted EBITDA and favorable derivative results, partially offset by higher tax, depreciation, and interest expenses.

• Third quarter results were impacted by warmer weather, lower volume, and net customer attrition, resulting in a net loss of $16.6 million, but service and installation performance improved and acquisitions contributed positively to Adjusted EBITDA.

• Strategic focus remains on expanding value-added services, growing the HVAC segment, and leveraging acquisitions to diversify and strengthen the business.

• Year-to-date revenue rose less than 1% to $1.54 billion, with higher volumes offsetting lower selling prices.

• Acquisitions contributed positively to revenue and Adjusted EBITDA, especially in propane operations.

Financial highlights

• Home heating oil and propane volume for Q3 decreased by 1.5 million gallons (3.8%) to 36 million gallons, mainly due to warmer weather and customer attrition; year-to-date volume increased by 28 million gallons (12%) to 263 million gallons.

• Q3 product gross profit fell by $3 million (4%) to $72 million, while year-to-date gross profit increased by $55 million (13%) to $480 million.

• Adjusted EBITDA for the first nine months rose by $28.2 million to $170 million, with $21 million from the base business and $17 million from acquisitions.

• Basic and diluted loss per limited partner unit for the quarter was $(0.48), compared to $(0.31) last year; year-to-date EPS was $2.45, up from $1.66.

• Cash provided by operating activities for the nine months was $56.5 million, down from $72.4 million in the prior year.

Outlook and guidance

• Management expects continued focus on growing the propane and heating oil customer base, improving service and installation profitability, and believes the company is on track for strong financial performance in fiscal 2025.

• Maintenance capital expenditures for the remainder of fiscal 2025 are estimated at $2.0 million–$3.0 million, with additional $0.1 million–$0.2 million planned for propane operations.

• Quarterly distribution of $0.1850 per unit declared for Q3 2025, annualized at $0.74 per unit.