8-K: Global Partners LP Reports Mixed Fourth-Quarter and Full-Year 2024 Results Amidst Expansion

Global Partners LP announces its fourth-quarter and full-year 2024 financial results, highlighting growth in terminal capacity but a decrease in net income compared to the previous year.

Summary

• Global Partners LP reported its financial results for the fourth quarter and full year ended December 31, 2024.
• Net income for the fourth quarter was $23.9 million, or $0.52 per diluted common limited partner unit, compared to $55.3 million, or $1.41 per unit, in the same period of 2023.
• Full-year net income was $110.3 million, or $2.41 per unit, compared to $152.5 million, or $3.76 per unit, in 2023.
• EBITDA for the fourth quarter was $94.6 million, compared to $110.9 million in the same period of 2023.
• Full-year EBITDA was $389.4 million, compared to $356.4 million in 2023.
• Distributable cash flow (DCF) for the fourth quarter was $45.7 million, compared to $59.4 million in the same period of 2023.
• Full-year DCF was $205.8 million, compared to $202.7 million in 2023.
• Gross profit for the fourth quarter was $268.8 million, compared to $280.4 million in the same period of 2023.
• Full-year gross profit was $1.1 billion, compared to $973.6 million in 2023.
• The company completed the integration of a 959,730-barrel liquid energy terminal in East Providence, Rhode Island.
• A cash distribution of $0.7400 per unit ($2.96 per unit on an annualized basis) was announced for the period from October 1, 2024, through December 31, 2024.
• Total sales were $4.2 billion in the fourth quarter of 2024 compared with $4.4 billion in the same period of 2023, primarily due to a decrease in prices, partially offset by an increase in volume sold.
• Total volume was 1.8 billion gallons in the fourth quarter of 2024 compared with 1.6 billion gallons in the same period of 2023.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While net income decreased, the company has shown significant growth in terminal capacity and strategic expansion, suggesting potential for future growth. The management's comments are optimistic, but the financial results present a mixed picture.

Positives

• Global Partners more than doubled its terminal count since late 2023, integrating 30 additional terminals.
• The company increased its total storage capacity by 12.1 million barrels, reaching 22 million barrels.
• Expansion into Maryland, the Carolinas, Georgia, Florida, and Texas broadened the company's operational footprint to 18 states.
• The acquisition included a significant 25-year take-or-pay contract with Motiva.
• Full-year EBITDA increased to $389.4 million in 2024 from $356.4 million in 2023.
• Full-year gross profit increased to $1.1 billion in 2024 from $973.6 million in 2023.
• Total volume was 1.8 billion gallons in the fourth quarter of 2024 compared with 1.6 billion gallons in the same period of 2023.

Negatives

• Net income for the fourth quarter decreased to $23.9 million from $55.3 million in the same period of 2023.
• Full-year net income decreased to $110.3 million in 2024 from $152.5 million in 2023.
• Distributable cash flow (DCF) for the fourth quarter was $45.7 million, compared to $59.4 million in the same period of 2023.
• GDSO segment product margin was $213.6 million in the fourth quarter of 2024 compared with $245.4 million in the same period of 2023.

Risks

• Uncertainty around the timing of an economic recovery in the United States could impact the demand for the products and services Global Partners provides.
• The company's assumptions and future performance are subject to a wide range of business risks, uncertainties, and factors described in their filings with the SEC.

Future Outlook

Global Partners is well-positioned to leverage its supply, terminaling, and marketing expertise to seize growth opportunities and create long-term value for its unitholders, with an expanded operating footprint and greater access to critical pipeline and marine networks.

Management Comments

• 2024 has been a transformative year of growth for Global Partners, strengthening our position in the U.S. liquid energy market and expanding our ability to serve our growing wholesale, retail, and commercial customer base, said Eric Slifka, President and Chief Executive Officer.
• Our diverse assets continue to perform well, Slifka added.

Industry Context

Global Partners' expansion and focus on liquid energy terminals align with the ongoing demand for energy distribution and storage infrastructure in the U.S. market. The acquisition of terminals and strategic partnerships, such as the one with Motiva, reflect a broader trend of companies seeking to secure supply chains and expand their market reach.

Comparison to Industry Standards

• Global Partners' expansion in terminal capacity to 22 million barrels places them among the significant players in the liquid energy storage sector.
• Companies like Buckeye Partners and Kinder Morgan also operate extensive terminal networks, but Global's focus on the Northeast and recent expansion into the Gulf States differentiates its strategy.
• The 25-year take-or-pay contract with Motiva is similar to long-term agreements seen in the energy industry, providing a stable revenue stream and demonstrating the strategic importance of Global's terminal network.

Stakeholder Impact

• Shareholders will receive a cash distribution of $0.7400 per unit.
• The company's expansion and strategic acquisitions could lead to long-term value creation for unitholders.
• The increased terminal capacity and expanded network benefit wholesalers, retailers, and commercial customers by providing greater access to energy products.

Key Dates