Sunoco (SUN) Q1 2025 earnings summary

Executive summary

• Announced acquisition of Parkland Corporation for $9.1 billion and TanQuid for €500 million, both expected to close in H2 2025, expanding North American and European reach and expected to be accretive in the first year.

• Net income for Q1 2025 was $207 million, down from $230 million in Q1 2024, primarily due to higher operating expenses, depreciation, and interest expense, partially offset by increased segment profit and equity in earnings from unconsolidated affiliates.

• Adjusted EBITDA for Q1 2025 rose to $458 million from $242 million year-over-year, driven by acquisitions and higher segment profit, especially from NuStar and Zenith European terminals.

• Distributable Cash Flow, as adjusted, increased to $310 million from $176 million year-over-year.

• Increased quarterly distribution by 1.25%, maintaining a target of at least 5% annual growth for 2025.

Financial highlights

• Q1 2025 revenue was $5.18 billion, down from $5.50 billion year-over-year, mainly due to lower fuel sales volumes.

• Adjusted EBITDA for Q1 2025 was $458 million; distributable cash flow as adjusted was $310 million.

• Net income per common unit was $1.22 basic and $1.21 diluted, compared to $2.29 and $2.26, respectively, in Q1 2024.

• Growth capital expenditures totaled $75 million; maintenance capital was $26 million; total capital expenditures $101 million.

• Declared Q1 distribution of $0.8976 per common unit ($3.59 annualized), up 1.25% from prior quarter; trailing 12-month coverage ratio of 1.9x.

Outlook and guidance

• On track to achieve or exceed full-year 2025 financial and distribution growth guidance, targeting at least 5% annual distribution growth.

• Both Parkland and TanQuid acquisitions expected to close in H2 2025 and be immediately accretive, subject to regulatory and shareholder approvals.

• Full-year 2025 maintenance capital expected at $150 million and growth capital at least $400 million, including joint venture shares.

• Management expects to fund growth capital and working capital needs through cash from operations and available credit, with potential for additional debt or equity issuance.