SUN
Sunoco Lp
NYSE
8-K: Sunoco LP Reports Record First Quarter Net Income, Raises Full-Year Guidance After NuStar Acquisition
Sentiment:
Quarterly Report
8 May 2024 7:27 AM
Sunoco LP announced a record first quarter net income of $230 million and increased its full-year Adjusted EBITDA guidance to $1.46 billion to $1.52 billion, which includes the acquisition of NuStar Energy L.P.
Better than expected
The company reported a record first quarter net income of $230 million, significantly higher than the $141 million reported in the same period last year.
Adjusted EBITDA for the quarter was $242 million, up from $221 million in the first quarter of 2023.
The company increased its full-year Adjusted EBITDA guidance to $1.46 billion to $1.52 billion.
Capital raise
The company issued $1.5 billion in unsecured notes on April 30, 2024.
The proceeds from this offering will be used to fund the repayment of NuStar's credit and receivables facilities, and redeem NuStar's preferred equity and subordinated notes.
Summary
- Sunoco LP reported a net income of $230 million for the first quarter of 2024, a significant increase from $141 million in the same period last year.
- Adjusted EBITDA for the quarter was $242 million, up from $221 million in the first quarter of 2023.
- Distributable Cash Flow, as adjusted, reached $176 million, compared to $160 million in the prior year's first quarter.
- The company sold over 2.1 billion gallons of fuel, a 9% increase year-over-year, although fuel margin decreased to 11.7 cents per gallon from 12.9 cents per gallon.
- Sunoco increased its quarterly distribution by 4% to $0.8756 per unit, or $3.5024 per unit on an annualized basis.
- The company's long-term debt stood at $3.8 billion, with liquidity of approximately $870 million under its $1.5 billion revolving credit facility.
- The leverage ratio of net debt to Adjusted EBITDA was 3.7 times at the end of the quarter.
- Sunoco completed several key transactions, including the acquisition of liquid fuels terminals in Amsterdam and Bantry Bay for $170 million, the divestiture of 204 convenience stores for $1.0 billion, and the acquisition of NuStar Energy L.P.
- The company issued $1.5 billion in unsecured notes to fund the NuStar acquisition and amended its revolving credit facility to $1.5 billion, maturing in May 2029.
- Full-year 2024 Adjusted EBITDA guidance has been increased to a range of $1.46 billion to $1.52 billion, including the impact of the NuStar acquisition.
Sentiment
Score: 8
Explanation: The document presents a very positive outlook with record net income, increased Adjusted EBITDA, raised full-year guidance, and a distribution increase. The successful acquisition of NuStar and other strategic moves further boost the positive sentiment.
Positives
- Net income significantly increased to $230 million in Q1 2024 from $141 million in Q1 2023.
- Adjusted EBITDA rose to $242 million in Q1 2024 from $221 million in Q1 2023.
- Distributable Cash Flow, as adjusted, increased to $176 million in Q1 2024 from $160 million in Q1 2023.
- Fuel sales volume increased by 9% year-over-year.
- The quarterly distribution was increased by 4%.
- The company successfully completed the acquisition of NuStar Energy L.P.
- Sunoco secured a new $1.5 billion revolving credit facility maturing in May 2029.
- S&P Global Ratings raised the Partnership's issuer credit rating to BB+ and Moody's raised the Partnership's Corporate Family Rating to Ba1.
Negatives
- Fuel margin decreased to 11.7 cents per gallon in Q1 2024 from 12.9 cents per gallon in Q1 2023.
- The company has a long-term debt of $3.8 billion.
Risks
- The company's performance is subject to various risks and uncertainties, including commodity price movements.
- The company's forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that are difficult to predict.
- The company's leverage ratio of net debt to Adjusted EBITDA was 3.7 times at the end of the first quarter.
Future Outlook
The Partnership has increased its full-year 2024 Adjusted EBITDA guidance to a range of $1.46 billion to $1.52 billion, which includes the impact of the NuStar acquisition. A more comprehensive update to its 2024 outlook will be provided on or before its second quarter earnings call.
Management Comments
- The 4% increase in distribution demonstrates the Partnership's continued confidence in the business.
- The Partnership will provide a more comprehensive update to its 2024 outlook on or before its second quarter earnings call.
Industry Context
This announcement reflects Sunoco's strategic moves to expand its infrastructure and fuel distribution network through acquisitions and divestitures, aligning with industry trends of consolidation and optimization of assets. The acquisition of NuStar Energy L.P. is a significant step in this direction, enhancing Sunoco's midstream operations and market presence.
Comparison to Industry Standards
- Sunoco's Adjusted EBITDA of $242 million for the quarter is a strong result, indicating solid operational performance compared to other midstream energy companies.
- The 9% increase in fuel sales volume demonstrates robust demand, which is a positive sign compared to industry averages.
- The 4% increase in quarterly distribution is a positive signal for investors, indicating confidence in future cash flows.
- The acquisition of NuStar Energy L.P. is a significant strategic move, similar to other large-scale consolidations seen in the energy sector, such as the merger of Energy Transfer and Enable Midstream.
- The divestiture of convenience stores for $1.0 billion is a strategic move to focus on core midstream and fuel distribution operations, similar to other companies streamlining their portfolios.
Stakeholder Impact
- Shareholders will benefit from the increased distribution and positive financial results.
- Employees may see increased job security and opportunities due to the company's growth.
- Customers will continue to be served by the company's extensive fuel distribution network.
- Suppliers will benefit from the company's increased business activity.
- Creditors will be reassured by the company's strong financial performance and liquidity.
Next Steps
- The Partnership will provide a more comprehensive update to its 2024 outlook on or before its second quarter earnings call.
- The company will continue to integrate the NuStar acquisition into its operations.
Key Dates
- March 13, 2024: Completed the acquisition of liquid fuels terminals in Amsterdam, Netherlands and Bantry Bay, Ireland from Zenith Energy.
- March 31, 2024: End of the first fiscal quarter.
- April 16, 2024: Completed the divestiture of 204 convenience stores to 7-Eleven, Inc.
- April 30, 2024: Issued $1.5 billion in unsecured notes.
- May 3, 2024: The Board of Directors declared a distribution for the first quarter of 2024 and completed the acquisition of NuStar Energy L.P. and amended and extended the Partnership's revolving credit facility.
- May 6, 2024: Moody's Ratings raised the Partnership's Corporate Family Rating to Ba1.
- May 8, 2024: Date of the earnings release and conference call.
- May 13, 2024: Record date for the first quarter distribution.
- May 20, 2024: Payment date for the first quarter distribution.
Keywords
Sunoco LP, Adjusted EBITDA, Net Income, Distributable Cash Flow, Fuel Distribution, NuStar Energy, Acquisition, Divestiture, Credit Facility, Financial Results
SUN
Sunoco Lp
NYSE
Sector: Energy
Filings with Classifications
Capital raise
29 May 2025 7:00 AM
Merger Announcement
- Committed bridge financing is in place for the cash portion of the acquisition.
Better than expected
29 May 2025 7:00 AM
Merger Announcement
- The transaction offers a 25% premium to Parkland shareholders based on recent trading prices.
- It provides flexible consideration options, including immediate cash liquidity and participation in future upside via SunocoCorp units.
- The deal is expected to generate significant annual run-rate synergies of US$250 million, indicating improved financial performance for the combined entity.
- The creation of SunocoCorp offers a more tax-efficient structure for non-U.S. and institutional investors, enhancing shareholder value.
Capital raise
28 May 2025 9:29 PM
Acquisition Update
- Sunoco has secured a $2.65 billion 364-day bridge term loan to fund the cash consideration for the Parkland Acquisition.
- In connection with the Parkland Acquisition, Sunoco would issue $1 billion in preferred units.
- Sunoco would issue $1.7 billion in aggregate principal amount of senior notes for the Parkland Acquisition.
- SunocoCorp (a wholly-owned subsidiary of SunocoCorp) is expected to issue 51,442,494 common units to Parkland shareholders as part of the acquisition consideration.
Worse than expected
28 May 2025 9:29 PM
Acquisition Update
- The unaudited pro forma net income attributable to limited partners for the full year ended December 31, 2024, shows a loss of $(262) million, which is a negative financial outcome for the combined entity.
Capital raise
28 May 2025 9:25 PM
Acquisition Update
- Sunoco has secured a $2.65 billion 364-day bridge term loan to fund the proposed cash consideration for the Parkland Acquisition.
- In connection with the Parkland Acquisition, Sunoco would issue $1 billion in preferred units.
- In connection with the Parkland Acquisition, Sunoco would issue $1.7 billion aggregate principal amount of senior notes.
Worse than expected
28 May 2025 9:25 PM
Acquisition Update
- The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2024, shows a net loss attributable to limited partners of $(262) million, which is a negative financial outcome for the combined entity on a pro forma basis.
- The pro forma basic net income (loss) per limited partner unit for the year ended December 31, 2024, is also negative at $(1.40).
Worse than expected
8 May 2025 4:25 PM
Quarterly Report
- Net income decreased compared to the same period last year, primarily due to increased operating expenses, depreciation, and interest expense.
Capital raise
8 May 2025 4:25 PM
Quarterly Report
- Sunoco has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration of the Parkland acquisition.
- The transaction is expected to be funded using cash on hand and amounts available under the Partnership's Credit Facility.
Capital raise
6 May 2025 8:50 AM
Merger Announcement
- The $2.6 billion cash consideration is supported by a fully committed bridge facility.
- Sunoco expects to permanently finance this through a combination of senior notes and preferred equity prior to close.
- The transaction includes the creation of SUNCorp, a new publicly traded vehicle, to support growth and attract a new investor base.
Better than expected
6 May 2025 7:12 AM
Earnings Release
- Adjusted EBITDA and Distributable Cash Flow were significantly higher than the same quarter last year.
Capital raise
5 May 2025 9:45 PM
Merger Announcement
- Sunoco has secured debt financing commitments of $7.55 billion to fund the acquisition.
- The transaction involves the issuance of new SUNCorp Units to Parkland shareholders.
Delay expected
5 May 2025 9:43 PM
Merger Announcement
- The Effective Time does not occur on or prior to February 4, 2026, or such later date as may be agreed to in writing by the parties (the Outside Date ) (provided that the Outside Date may be extended by either party for 90 days following February 4, 2026 if certain required regulatory approvals have not yet been obtained).
Capital raise
5 May 2025 9:21 AM
Merger Announcement
- Sunoco has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration.
- The bridge loan is expected to be permanently financed through a combination of senior notes and a preferred equity offering prior to closing.
Capital raise
5 May 2025 8:36 AM
Merger Announcement
- Sunoco has secured a $2.65 billion 364-day bridge term loan for the proposed cash consideration.
- The bridge facility is expected to be permanently financed through a combination of senior notes and a preferred equity offering prior to closing.
Capital raise
20 March 2025 5:03 PM
Debt Offering Announcement
- Sunoco LP is conducting a private offering of $1 billion in senior notes due 2033.
- The offering was upsized from an initial $750 million.
- The proceeds will be used to repay existing indebtedness.
Capital raise
20 March 2025 8:06 AM
Current Report on Form 8-K
- Sunoco LP announced a private offering of $750 million in senior notes due 2033.
- The company intends to use the net proceeds from the offering to repay indebtedness, including redeeming in full NuStar Logistics, L.P.'s 5.750% senior notes due 2025 and repaying a portion of the outstanding borrowings under Sunoco's revolving credit facility.
- The Notes Offering is not conditioned on the consummation of the acquisition of the German and Polish terminalling assets.
Capital raise
14 February 2025 1:59 PM
Annual Results
- The company has the ability to further incur additional debt under its Credit Facility and the indentures governing its senior notes.
- The company may issue debt or equity securities prior to that time as it deems prudent to provide liquidity for new capital projects or other partnership purposes.
Better than expected
11 February 2025 7:21 AM
Earnings Release
- The company's net income, Adjusted EBITDA, and Distributable Cash Flow all significantly increased compared to the previous year.
- The company is targeting a distribution growth rate of at least 5% for 2025, indicating confidence in future performance.
- The company anticipates strong Adjusted EBITDA growth in 2025.
Better than expected
27 January 2025 7:18 AM
Distribution Announcement
- The company announced a 1.25% increase in the quarterly distribution, which is better than the previous quarter.
- The company also announced a target of at least 5% distribution growth for 2025, which is a positive outlook for investors.
Worse than expected
7 November 2024 12:04 PM
Quarterly Report
- The company's net income decreased significantly due to unfavorable inventory valuation adjustments and increased expenses, indicating worse than expected results.
Worse than expected
6 November 2024 8:04 AM
Quarterly Report
- The net income decreased significantly from $272 million to $2 million year-over-year, indicating a substantial decline in profitability despite improvements in other areas.
Capital raise
8 August 2024 11:59 AM
Quarterly Report
- Sunoco issued $1.5 billion in senior notes in April 2024 to fund the NuStar acquisition and related transactions.
- The company may issue debt or equity securities prior to the end of 2024 as deemed prudent to provide liquidity for new capital projects or other partnership purposes.
Better than expected
8 August 2024 11:59 AM
Quarterly Report
- The company's net income and adjusted EBITDA were significantly better than the same period last year due to the gain on the West Texas sale and the positive impact of acquisitions.
Better than expected
7 August 2024 7:36 AM
Quarterly Report
- The company reported a record net income of $501 million, significantly higher than the $87 million reported in the same quarter last year.
- Adjusted EBITDA, excluding transaction-related expenses, was $400 million, exceeding the $250 million reported in the same quarter last year.
- Distributable Cash Flow, as adjusted, was $295 million, up from $175 million in the prior year's second quarter.
Capital raise
9 May 2024 11:56 AM
Quarterly Report
- The Partnership issued $750 million of 7.000% senior notes due 2029 and $750 million of 7.250% senior notes due 2032 in a private offering on April 30, 2024.
- The net proceeds from the offering were used to repay NuStar's debt, fund the redemption of NuStar's preferred units, and pay offering fees and expenses in connection with the merger.
Better than expected
9 May 2024 11:56 AM
Quarterly Report
- Net income and Adjusted EBITDA both increased year-over-year, indicating better than expected financial performance.
- The company's motor fuel sales volume increased by 9%, demonstrating strong operational performance.
Capital raise
8 May 2024 7:27 AM
Quarterly Report
- The company issued $1.5 billion in unsecured notes on April 30, 2024.
- The proceeds from this offering will be used to fund the repayment of NuStar's credit and receivables facilities, and redeem NuStar's preferred equity and subordinated notes.
Better than expected
8 May 2024 7:27 AM
Quarterly Report
- The company reported a record first quarter net income of $230 million, significantly higher than the $141 million reported in the same period last year.
- Adjusted EBITDA for the quarter was $242 million, up from $221 million in the first quarter of 2023.
- The company increased its full-year Adjusted EBITDA guidance to $1.46 billion to $1.52 billion.
Better than expected
3 May 2024 4:45 PM
Merger Announcement
- The acquisition is expected to be immediately accretive to distributable cash flow per LP unit, growing to greater than 10% accretion by the third year following close.
- The company also expects to realize at least $150 million of expense and commercial synergies and at least $50 million per year of additional cash flow from refinancing activity.
Capital raise
30 April 2024 4:47 PM
Debt Offering Announcement
- Sunoco LP completed a private offering of $1.5 billion in senior notes.
- The offering included $750 million in 7.000% Senior Notes due 2029 and $750 million in 7.250% Senior Notes due 2032.
- Net proceeds were approximately $1.485 billion after deducting discounts and commissions.
- The funds will be used to repay NuStar Energy debt, redeem NuStar's preferred units, and cover offering expenses related to the merger.
Capital raise
30 April 2024 4:45 PM
Debt Offering Announcement
- Sunoco LP completed a private offering of $1.5 billion in senior notes.
- The net proceeds will be used to repay NuStar's debt, redeem NuStar's preferred units, and cover offering expenses.
Capital raise
16 April 2024 7:06 PM
Debt Offering Announcement
- Sunoco LP has priced a private offering of $1.5 billion in senior notes.
- The offering includes $750 million of 7.000% senior notes due 2029 and $750 million of 7.250% senior notes due 2032.
- The proceeds will be used to refinance debt and redeem preferred units of NuStar Energy in connection with the pending merger.
Capital raise
16 April 2024 6:59 PM
Debt Offering Announcement
- Sunoco has priced a private offering of $1.5 billion in senior notes.
- The offering is split into $750 million of 7.000% notes due 2029 and $750 million of 7.250% notes due 2032.
- The proceeds will be used to refinance NuStar's debt and preferred units, and to fund the merger.
Capital raise
16 April 2024 8:36 AM
Current Report on Form 8-K
- Sunoco is conducting a private offering of $1.5 billion in senior notes due 2029 and 2032.
- The proceeds will be used to repay NuStar Energy's debt, fund the redemption of NuStar's preferred units, and pay offering fees and expenses related to the pending merger.
- The offering is not contingent on the completion of the NuStar Merger.
Capital raise
16 April 2024 8:34 AM
Debt Offering Announcement
- Sunoco is conducting a private offering of $1.5 billion in senior notes.
- The notes are split into $750 million due in 2029 and $750 million due in 2032.
Capital raise
16 February 2024 12:21 PM
Partnership Agreement Details
- The partnership agreement authorizes the issuance of an unlimited number of additional partnership interests without unitholder approval.
- The document mentions that the partnership may fund acquisitions through the issuance of additional common units or other partnership interests.
Worse than expected
14 February 2024 9:43 AM
Quarterly Report
- The company reported a net loss for the fourth quarter of 2023, compared to a net income in the same period of 2022.
- The company's net income for the full year 2023 decreased compared to 2022.
Capital raise
22 January 2024 5:26 PM
Merger Announcement
- Sunoco has secured a $1.6 billion 364-day bridge term loan to refinance NuStar's existing debt.
- The transaction is an all-equity deal, with NuStar unitholders receiving Sunoco units.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.