Parkland Corporation announced its financial and operating results for the three and nine months ended September 30, 2023.
According to the Calgary-based Parkland reported net earnings of $230 million, up from $105 million in the same period of 2022. On an adjusted basis, Parkland earned $231 million, nearly five times its third-quarter 2022 adjusted earnings.
“I want to congratulate the Parkland team for delivering an exceptional quarter,” says Bob Espey, president and chief executive officer, during an investor analysts conference call announcing the results for the quarter. “The results demonstrate the quality of the business we have created, the ability to drive shareholder value and we are doing exactly what we said we would do, that is advancing our strategy, serving our customers, and executing consistently on organic growth and synergies. Each part of our business has contributed to our record performance. This gives me unwavering confidence that we will continue to deliver the targets we have set for ourselves.”
Fuel unit margins were also higher than the comparable period according to Parkland because of continued optimization of supply and integrated logistic capabilities, and favourable market conditions.
“We continue to make progress on our synergies, and a good example are the terminals we acquired from Volpak,” adds Espey.
Parkland acquired Vopak Terminals of Canada and Vopak Terminals of Eastern Canada from Koninklijke Vopak N.V. in 2022. That acquisition four product terminals strategically located in east and west Montreal, Quebec, and Hamilton. This acquisition came a year after Parkland announced the acquisition of some 156 retail locations, from Cenovus Energy addling locations for the company in Greater Vancouver, Vancouver Island, Calgary, and the Greater Toronto area.
“As you know, we have a strong retail and commercial presence in Eastern Canada where we acquired these terminals, and the acquisition has provided us with significant ways to source and receive [fuel] and this flexibility allows us to provide product more reliably to commercial and retail customers,” Espey says.
Marcel Teunissen, chief financial officer with Parkland also points to the strong organic growth in the c-store segment for the company. “We grew company-owned same-store fuel volumes by 4.2% and our Journey Rewards program continues to drive customers into our forecourt and convenience stores,” he continues. “Food and company same-store sales growth, excluding cigarettes, was 3.5% and gross margins of over 34%. Our c-store performance was driven by sales of packaged beverages and central store products such as candies and salty snacks that grew at over 10%. As noted in Q2, cigarette sales have normalized and while they are lower margin products, they remain an important traffic driver for our stores.”
During a Q&A session , Espey was asked about the company’s EV by and analyst who pointed to the news that General Motors and Ford are pulling back on their EV ambitions and Exon and Chevron have double down on oil exploration and production, and in North America, unsold EVs are at a record high.
Espey says that Parkland will continue to invest in its EV charging infrastructure, as well as its traditional petroleum business. “We will continue to invest in our base business so that our customers have the cheap energy they are used to getting from us. With respect to EVs, we do see them continuing to penetrate market, but at different paces in different markets, depending on the regulatory environment and the degree of subsidies.”
He adds that the EV charging infrastructure already in place from Parkland is providing the company with valuable information about how people interact with the chargers and the sites, information that will be helpful for the company’s ongoing EV plans.
Parkland has EV charging operational at 33 sites, including 63 chargers, and is on track to meet our plan for 50 charging sites by early 2024.