Suburban Propane Partners (SPH) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 was impacted by unseasonably warm weather and a shorter fiscal year, reducing propane demand and net income, but operational excellence and customer growth initiatives helped offset some of the impact.

• Adjusted EBITDA for fiscal 2024 was $250 million, down from $275 million in the prior year; net income was $107.7 million or $1.68 per unit, compared to $138.4 million or $2.17 per unit last year, with another source reporting net income at $74.2 million ($1.15 per unit).

• Strategic investments advanced in renewable natural gas (RNG) and propane acquisitions, including a major acquisition in New Mexico and Arizona, expanding the customer base by over 14,000.

• The company maintained a strong balance sheet, with a modest $19 million increase in debt to fund growth projects.

• Recognition received for diversity, veteran support, and renewable energy leadership.

Financial highlights

• Retail propane gallons sold in fiscal 2024 were 378.3 million, down 4.6% year-over-year, mainly due to warmer weather and one less week of operations.

• Total gross margin (excluding mark-to-market adjustments) was $819.6 million, a 2.7% decrease from the prior year; another source reported total gross margin at $805 million, down 4.1%.

• Propane unit margins increased 1.3% year-over-year due to effective price management.

• Combined operating and G&A expenses rose just 0.2% year-over-year, with another source reporting a 0.5% decrease to $566.8 million.

• Net interest expense increased $1.2 million to $74.6 million due to higher average borrowings.

Outlook and guidance

• Capital spending for propane operations in fiscal 2025 expected to be $40–$45 million; RNG project CapEx projected at $35–$45 million, with potential investment tax credits offsetting costs.

• RNG facilities in Ohio and New York expected to be operational in the second half of 2025, with anticipated revenue from multiple streams including tax credits.

• The company remains focused on strategic propane growth, operational excellence in RNG, and innovation in renewable energy, with ample borrowing capacity to support expansion.