Parkland announces second quarter results for 2024
Parkland Corporation announced its financial and operating results for the three and six months ended June 30, 2024.
"I would like to thank the Parkland team for delivering record second quarter results,” said Bob Espey, president and chief executive officer. “Our focus remains steadfast on improving returns by investing in our customer and supply advantages and strengthening our robust platform for future growth to deliver long-term shareholder value. I have confidence in the rest of the year and our long-term ambitions."
According to Parkland, the company recorded an Adjusted EBITDA of $504 million, an increase of 7% as compared to the second quarter of 2023. Net earnings of $70 million, a decrease of 10% as compared to the second quarter of 2023, and Adjusted earnings of $156 million an increase of 20% from second quarter of 2023.
Canada delivered Adjusted EBITDA of $172 million, up 15% from the second quarter of 2023 ($150 million).
“As you know, the Parkland team likes to win,” Espey continued in an investor’s call upon the release of the results. “We are focused on executing our strategy and improving our returns specifically by growing our market share through investing in our brands and customer experience and building our supply [chain] across our business through a common supply platform, ensuring we can sustain future growth by investing in our core processes and systems. This gives me confidence in our ability to finish the year strong and be on route to achieving our targets.”
According to Parkland, this increase was driven by stronger fuel unit margins and the benefits of the company’s supply advantage, although it was noted that it was partially offset by the impact of softening industry demand in its retail business as consumers continue to watch their spending.
Company same-store volume growth (Company SSV) was 1%, compared to 9.3% in when compared to the second quarter of 2023. Food and Company C-Store SSSG (excluding cigarettes) was 0.7%, for the second quarter of 2024, compared to 3.1%, in the second quarter of 2023.
Again, this was primarily driven by economic conditions that have reduced discretionary spending for consumers. Canada delivered Food and Company C-store revenue of $82 million, consistent with the second quarter of 2023 that recorded $79 million.
Parkland’s executives did see new opportunities for later this year and into next with the Ontario government’s announcement that it would allow the sale of beverage alcohol in Ontario, starting in October 2024, at eligible convenience, grocery and big-box stores. It has already identified some 120 sites in the province where it will look to add or expand coolers to sell beer and wine, along with additional design changes.
“The Ontario government announced their plan to expand the sale of alcohol, inconvenience, grocery and big box stores by the end of October 2024,” said Marcel Teunissen, Parkland’s chief financial officer. “In addition to providing consumers with more convenience, this will create new revenue opportunities for our On the Run convenience stores driven by the work we have done to optimize our store design and merchandizing capabilities.”
And to help drive more sales in the convenience side of its business, Parkland is also looking to use its Journie loyalty program to offer Canadians more targeted promotions to drive spending at its fuel pumps and stores.
“Journie is critical part of our business platform and It has grown significantly since being launched in 2020,” said Espey. “It is one of the top loyalty programs in Canada. In addition to partnerships with CIBC and Aeroplan, we continued to expand our ecosystem in the second quarter through a pilot with Walmart Canada. Partnering with the super brands offers consumers tremendous choice and value and broadens our reach.”
Parkland’s Board of Directors also announced it has elected Michael Jennings as the chair of the Board effective July 31, 2024, replacing Steven Richardson who is retiring.
"I am honoured to be elected as chair of the Board and I look forward to building on the strong foundation that has been established," said Jennings upon his new role. “I would like to thank Steve for his leadership and contributions to Parkland’s Board. I have the utmost confidence in the Parkland business strategy and the management team, led by Bob Espey. Together, we will work in the interest of all shareholders to deliver sustainable long-term value.”
