On August 7, 2024, Global Partners LP (GLP, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Global Partners LP is a U.S.-based limited partnership that acts as a midstream logistics and marketing company, primarily engaged in the purchasing, selling, storing, and logistics of transporting petroleum and related products. The company operates through three segments: Wholesale, Gasoline Distribution and Station Operations (GDSO), and Commercial, with the Wholesale segment generating the maximum revenue.
Performance Overview
Global Partners LP reported a net income of $46.1 million, or $1.10 per diluted common limited partner unit, for Q2 2024, compared to $41.4 million, or $1.05 per diluted common limited partner unit, in Q2 2023. The company achieved earnings before interest, taxes, depreciation, and amortization (EBITDA) of $118.8 million, up from $90.7 million in the same period last year. Adjusted EBITDA also saw a significant increase to $121.1 million from $90.4 million in Q2 2023.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income | $46.1 million | $41.4 million |
| EBITDA | $118.8 million | $90.7 million |
| Adjusted EBITDA | $121.1 million | $90.4 million |
| Distributable Cash Flow (DCF) | $73.1 million | $54.8 million |
| Gross Profit | $287.9 million | $242.7 million |
| Total Sales | $4.4 billion | $3.8 billion |
Segment Performance
The Wholesale segment's product margin increased to $91.9 million in Q2 2024 from $59.7 million in Q2 2023, driven primarily by the acquisition of liquid energy terminals from Motiva Enterprises LLC and favorable market conditions in gasoline. The GDSO segment's product margin rose to $221.5 million from $199.1 million, with gasoline distribution contributing $147.3 million and station operations adding $74.2 million. The Commercial segment's product margin was slightly down to $6.2 million from $6.8 million due to less favorable market conditions.
CEO Commentary
“Global Partners achieved year-over-year growth across all key financial metrics in the second quarter,” said Eric Slifka, the Partnership’s President and Chief Executive Officer. “These results underscore the effectiveness of our integrated business model and the strategic advantages of our diversified portfolio of liquid energy terminals, fueling stations, and convenience markets.”
Financial Achievements and Analysis
Global Partners LP's financial achievements are significant, particularly in the context of the oil and gas industry, which is highly sensitive to market conditions and regulatory changes. The company's ability to increase its net income, EBITDA, and adjusted EBITDA demonstrates its operational efficiency and strategic acquisitions' effectiveness. The increase in distributable cash flow (DCF) to $73.1 million from $54.8 million is crucial for maintaining and potentially increasing distributions to unitholders.
The company's balance sheet shows total assets of $3.83 billion as of June 30, 2024, up from $3.45 billion at the end of 2023. This increase is primarily due to the strategic acquisitions and investments in expanding the Wholesale segment. The total liabilities also increased to $3.12 billion from $2.65 billion, reflecting the financing of these acquisitions.
Conclusion
Global Partners LP's Q2 2024 financial results highlight the company's robust performance and strategic growth initiatives. The significant year-over-year increases in net income, EBITDA, and adjusted EBITDA, along with the expansion of the Wholesale segment, position the company well for sustained growth. Investors and stakeholders will likely view these results positively, given the company's ability to navigate market conditions effectively and generate substantial returns.
Explore the complete 8-K earnings release (here) from Global Partners LP for further details.
