Superior Plus (SPB) Q2 2024 earnings summary

Executive summary

• Achieved solid growth in Canadian propane and mitigated weather impacts in both Canada and US through customer acquisition and cost management.

• Certarus volumes increased 15% year-over-year, maintaining strong margins despite regional pricing pressure and increased competition in West Texas.

• Certarus acquisition positioned the company as the largest over-the-road CNG and RNG distributor in North America.

• Q2 2024 Adjusted EBITDA rose 47% year-over-year to $43.3 million, driven by a full quarter from Certarus.

• Continued focus on organic growth, operational effectiveness, and expansion into new segments and geographies.

Financial highlights

• Q2 2024 Adjusted EBITDA was $43.3 million, up $14 million and 47% year-over-year, mainly due to the Certarus acquisition.

• Adjusted EBITDA per share rose to $0.16 for Q2, up $0.04 year-over-year.

• Net loss for Q2 was $45.3 million, compared to $29.2 million in Q2 2023, mainly due to the absence of prior year unrealized derivative gains.

• Q2 2024 revenue was $422.9 million, down from $432.9 million in Q2 2023.

• Gross profit increased to $235.2 million from $200.4 million year-over-year.

Outlook and guidance

• Confirmed 2024 Adjusted EBITDA guidance of approximately $500 million and ~5% growth over 2023 Pro Forma Adjusted EBITDA.

• Certarus expected to finish slightly below the low end of the 15%-20% growth range for the year, but propane and corporate cost initiatives are expected to offset this.

• Certarus expected to see robust market conditions in Q4 and Q1 as demand for heating and other applications returns.

• Leverage ratio target of 3.7x by year-end 2024 and 3.0x longer-term.

• Board approved a quarterly dividend of CAD 0.18 per share.