Star Group (SGU) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 revenue declined 9.6% year-over-year to $1.77 billion, mainly due to lower volumes and selling prices, but adjusted EBITDA increased by $14.7 million to $111.6 million, driven by higher per-gallon margins and improved service profitability.

• Net income for fiscal 2024 increased by $3.3 million to $35.2 million, despite a $17.0 million unfavorable change in the fair value of derivative instruments.

• Net customer attrition rose slightly to 4.2%, impacted by low real estate activity and absence of major weather events, but internal customer satisfaction and loss rates improved.

• Five acquisitions were completed, adding over 20,000 customers and 23 million gallons of annual volume.

• Management remains focused on cost containment, acquisitions, and addressing net customer attrition.

Financial highlights

• Q4 2024 revenue fell 10.0% year-over-year to $240.3 million; full-year revenue was $1.77 billion, down from $1.95 billion.

• Q4 home heating oil and propane volume decreased by 1.5% to 18.5 million gallons, but product gross profit rose 10% to $42 million due to higher margins.

• Full-year product gross profit rose by $21 million (5%) to $468 million; net service and installation gross profit up $10 million to $34 million.

• Q4 net loss increased by $15.4 million to $35.1 million, mainly due to a $28.4 million unfavorable non-cash derivative change.

• Cash and cash equivalents at year-end were $117.3 million, up from $45.2 million a year earlier.

Outlook and guidance

• Management expects to be well prepared for the upcoming heating season and continues to focus on cost control, acquisitions, and customer retention.

• Acquisition pipeline remains strong, with several opportunities in late-stage review and optimism for further deals.

• Forward-looking statements highlight risks from product cost volatility, inflation, weather, customer attrition, and regulatory changes.