SUN
Sunoco Lp
NYSE
8-K: Sunoco LP Reports Record Full-Year 2024 Results, Announces Distribution Increase and Positive 2025 Outlook
Sentiment:
Earnings Release
11 February 2025 7:21 AM
Sunoco LP announces record full-year 2024 financial results, highlighted by a net income of $874 million and adjusted EBITDA of $1.56 billion, and forecasts continued growth with a distribution increase and a strong 2025 outlook.
Better than expected
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.
Summary
- Sunoco LP reported a net income of $141 million for Q4 2024, compared to a net loss of $106 million in Q4 2023.
- Adjusted EBITDA for Q4 2024 was $439 million, up from $236 million in Q4 2023, including $7 million in one-time transaction-related expenses.
- Distributable Cash Flow, as adjusted, for Q4 2024 was $261 million, compared to $148 million in Q4 2023.
- For the full year 2024, net income reached $874 million, a significant increase from $394 million in 2023.
- Full-year 2024 Adjusted EBITDA was $1.46 billion, compared to $964 million in 2023, including $106 million in one-time transaction-related expenses.
- Distributable Cash Flow, as adjusted, for the full year 2024 was $1.08 billion, compared to $664 million in 2023.
- The company declared a distribution of $0.8865 per unit for Q4 2024, or $3.5460 per unit on an annualized basis, payable on February 19, 2025.
- Sunoco LP is targeting a distribution growth rate of at least 5% for 2025.
- As of December 31, 2024, Sunoco LP had approximately $7.5 billion in long-term debt and $1.3 billion of liquidity remaining on its $1.5 billion revolving credit facility.
- The leverage ratio of net debt to Adjusted EBITDA was 4.1 times at the end of Q4 2024.
- Total capital expenditures in Q4 2024 were $132 million, including $74 million of growth capital and $58 million of maintenance capital.
- For the full year 2024, growth capital expenditures were $220 million and maintenance capital expenditures were $124 million.
- Sunoco LP expects full-year 2025 Adjusted EBITDA to be in the range of $1.90 billion to $1.95 billion.
- Total operating expenses for 2025 are projected to be between $900 million and $925 million.
- Growth capital expenditures for 2025 are expected to be at least $400 million, with maintenance capital expenditures of approximately $150 million.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with record financial results, increased distributions, and strong growth projections for the coming year. The company's strategic acquisitions and operational improvements have contributed to its success, and management expresses confidence in its future performance.
Positives
- Net income increased significantly in both Q4 2024 and full-year 2024 compared to the previous year.
- Adjusted EBITDA showed substantial growth in both Q4 2024 and full-year 2024.
- Distributable Cash Flow, as adjusted, increased significantly in both Q4 2024 and full-year 2024.
- The company is targeting a distribution growth rate of at least 5% for 2025, indicating confidence in future performance.
- The company has a significant amount of liquidity remaining on its revolving credit facility.
- The company anticipates strong Adjusted EBITDA growth in 2025.
Negatives
- The Fuel Distribution segment experienced a decrease in Adjusted EBITDA in Q4 2024 compared to Q4 2023.
- Fuel margin for all gallons sold was 10.6 cents per gallon for the fourth quarter of 2024, which may be viewed as low.
- The company has a substantial amount of long-term debt, approximately $7.5 billion as of December 31, 2024.
Risks
- The forward-looking statements are subject to various known and unknown risks, uncertainties, and other factors that are difficult to predict and beyond management's control.
- Commodity price movements and future charges or reversals outside the normal course of business could impact the ability to achieve the projected Adjusted EBITDA.
- The company's ability to achieve its targeted distribution growth rate depends on its future financial performance and other factors.
Future Outlook
Sunoco LP expects full-year 2025 Adjusted EBITDA to be in a range of $1.90 billion to $1.95 billion, with growth capital expenditures of at least $400 million and maintenance capital expenditures of approximately $150 million.
Industry Context
Sunoco LP's strong performance reflects the ongoing demand for fuel distribution and midstream services. The company's strategic acquisitions, such as NuStar and Zenith European terminals, have contributed to its growth in the Pipeline Systems and Terminals segments. The company's focus on distribution growth aligns with the broader trend of energy infrastructure companies seeking to reward investors with consistent returns.
Comparison to Industry Standards
- Sunoco's leverage ratio of 4.1 times net debt to Adjusted EBITDA is within a typical range for master limited partnerships (MLPs) in the energy infrastructure sector.
- Companies like Energy Transfer LP (ET), which owns Sunoco's general partner, and MPLX LP (MPLX) also operate with similar leverage ratios.
- Sunoco's targeted distribution growth rate of at least 5% for 2025 is competitive with other MLPs, which often aim for stable and growing distributions to attract investors.
- The projected Adjusted EBITDA range of $1.90 billion to $1.95 billion for 2025 indicates strong growth compared to 2024, reflecting the positive impact of recent acquisitions and operational improvements.
Stakeholder Impact
- Shareholders will benefit from increased distributions and potential share price appreciation.
- Employees may experience increased job security and potential for career advancement.
- Customers can expect continued reliable service and access to fuel products.
- Suppliers may see increased demand for their products and services.
- Creditors can be reassured by the company's strong financial performance and ability to meet its debt obligations.
Next Steps
- Sunoco LP management will hold a conference call on February 11, 2025, to discuss results and recent developments.
- The company will announce future distribution increases quarterly, targeting a growth rate of at least 5% for 2025.
Key Dates
- January 27, 2025: Board of Directors declared a distribution for the fourth quarter of 2024 of $0.8865 per unit.
- February 7, 2025: Record date for common unitholders to receive the Q4 2024 distribution.
- February 11, 2025: Date of the news release and conference call to discuss results and recent developments.
- February 19, 2025: Payment date for the Q4 2024 distribution.
Keywords
Sunoco LP, Adjusted EBITDA, Fuel Distribution, Pipeline Systems, Terminals, Financial Results, Distribution, Net Income, Fuel Volume
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.
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).
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
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.
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.
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
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.