Parkland Reports Fourth Quarter and Year-End 2024 Results; Initiates Review of Strategic Alternatives

CALGARY, AB, March 5, 2025 /PRNewswire-HISPANIC PR WIRE/ — Parkland Corporation (“Parkland”, “we”, the “Company”, or “our”) (TSX:PKI), today announced its financial and operating results for the three months and year ended December 31, 2024. The Company further announced that its Board of Directors (the “Board”) has initiated a review of strategic alternatives (the “Strategic Review”) to identify opportunities to maximize value for all shareholders.

The Strategic Review will be led by a Special Committee of the Board which is comprised solely of independent directors (the “Special Committee”). During this process, the Company will analyze and evaluate its business strategy and optimization opportunities, while also considering value maximization alternatives which are in the best interests of all shareholders. This may include, but is not limited to, asset divestments, acquisitions, transformative business combinations and a sale of the Company. Parkland has engaged Goldman Sachs Canada Inc. and BofA Securities as its financial advisors for the Strategic Review.

“Parkland’s Board remains committed to acting in the best interests of all shareholders,” said Michael Jennings, Chair of Parkland’s Board of Directors. “While we are confident in the tremendous value creating potential of our business, strategic plan, and management’s ability to execute, the current share price does not fully reflect the intrinsic value of the Company. As a result, our Board believes the Strategic Review is a necessary step to explore opportunities to maximize value creation for all shareholders. We are openly inviting Simpson Oil to rejoin the Company’s Board and participate on the Special Committee.”

Parkland cautions that there are no guarantees that the strategic review process will result in a transaction or if a transaction is undertaken, as to its terms or timing. The Company will continue to actively engage with its shareholders throughout the process and provide periodic updates on its progress.

Fourth Quarter and Year-End 2024 Results

“As the Company initiates a Strategic Review, I want to thank the Parkland team for their dedication in 2024 and their continued focus on serving our customers. The team made great progress executing our priorities and building a platform for growth during the year,” said Bob Espey, President and Chief Executive Officer. “In 2024, our combined retail and commercial businesses demonstrated resilience in a challenging environment. While the Refinery and USA segments fell short of our expectations, partly due to unfavourable external market factors, our continued focus on operational excellence and serving our customers, combined with higher expected composite utilization of the Burnaby Refinery, gives me confidence in our 2025 Guidance.”

___________

(1)

Total of segments measure. See “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release.

Q4 2024 Highlights

Adjusted EBITDA of $428 million, as compared to $463 million in Q4 2023. Resilient underlying performance in our combined retail and commercial lines of business was more than offset by a lower refining margin environment.

Net loss of $29 million ($0.17 per share, basic), as compared to net earnings of $86 million ($0.49 per share, basic) in Q4 2023, and Adjusted earnings2 of $100 million ($0.58 per share, basic2), as compared to $151 million ($0.86 per share, basic) in Q4 2023.

Canada delivered Adjusted EBITDA of $190 million, as compared to $190 million in Q4 2023. Stronger fuel unit margins from continued price and supply optimization and lower operating costs were offset by lower commercial volumes due to unseasonably warm weather and the divestment of the commercial propane business.

International delivered Adjusted EBITDA of $171 million, as compared to $157 million in Q4 2023. Strong performance in the retail business, particularly in Guyana and Suriname, and the marine business were partially offset by the impact of lower wholesale volumes.

USA delivered Adjusted EBITDA of $32 million, as compared to $39 million in Q4 2023. The timing of certain expenses and a challenging volume environment were partially offset by stronger fuel unit margins.

Refining delivered Adjusted EBITDA of $60 million, as compared to $106 million in Q4 2023. The decrease was primarily driven by lower refining margins. Composite utilization3 at the Burnaby Refinery was approximately 89 percent in Q4 2024, as compared to approximately 90 percent in Q4 2023.

Full Year 2024 Highlights

Adjusted EBITDA of $1,690 million, as compared to $1,913 million in 2023. Resilient performance in the combined retail and commercial lines of business was more than offset by a lower refining margin environment in the second half of 2024 and the unplanned shutdown of the Burnaby Refinery in the first quarter of 2024.

Net earnings of $127 million ($0.73 per share, basic), as compared to $471 million ($2.68 per share, basic) in 2023, and Adjusted earnings of $405 million ($2.32 per share, basic) as compared to $626 million in 2023 ($3.56 per share, basic).

Available cash flow2 of $556 million ($3.19 per share2), as compared to $812 million ($4.61 per share) in 2023. Cash generated from (used in) operating activities of $1,535 million ($8.80 per share4) in 2024 as compared to $1,780 million ($10.13 per share) in 2023. These decreases were largely due to lower refinery segment results, restructuring activities and the ongoing implementation of enterprise-wide systems designed to improve operational efficiency, provide long-term cost savings and support future growth.

Year-end 2024 Liquidity available4 increased to $2,045 million from $1,339 million at year-end 2023, reflecting the senior unsecured note issuance used to repay a portion of the outstanding drawings under the Company’s credit facilities.

Year-end 2024 Leverage Ratio5 was 3.6 times, as compared to 2.8 times at year-end 2023. The increase reflects lower 2024 Adjusted EBITDA and unfavourable translation of USD-denominated debt balances.

Return on invested capital2 (“ROIC”) was 7.4 percent in 2024, as compared to 9.8 percent in 2023.

Parkland delivered a strong safety performance in 2024, with a total recordable injury frequency rate3 of 1.01, approximately a 6 percent improvement from prior year.

Canada Company same-store volume growth (“Company SSVG”)3 was 1.2 percent, demonstrating strength in our company-owned network and benefits from our loyalty program.

USA results fell below expectations as unfavourable market conditions negatively impacted industry volumes and margins, overshadowing Parkland’s integration and optimization efforts.

___________

(2)

Non-GAAP financial measure or non-GAAP financial ratio. See “Non-GAAP Financial Measures and Ratios” section of this news release.

(3)

Non-financial measure. See “Non-Financial Measures” section of this news release.

(4)

Supplementary financial measure. See “Supplementary Financial Measures” section of this news release.

(5)

Capital management measure. See “Capital Management Measures” section of this news release.

Enhancing Shareholder Returns

Parkland maintains a disciplined approach to capital allocation designed to deliver sustainable dividend growth and capital appreciation for long-term shareholders. The Company’s framework balances the need to maintain financial strength and flexibility, fund Parkland’s organic growth capital program and return capital to shareholders.

Parkland’s quarterly dividend will increase approximately 3 percent, from $0.35 to $0.36 per common share, effective with the quarterly dividend payable on April 15, 2025, to shareholders of record at the close of business on March 21, 2025.

In 2024, Parkland purchased and cancelled approximately 2.9 million common shares for $125 million under its normal course issuer bid program.

Consolidated Financial Overview

($ millions, unless otherwise noted)

Three months ended
December 31,

Year ended
December 31,

Financial Summary

2024

2023

2024

2023

Sales and operating revenue

6,734

7,746

28,303

32,452

Adjusted EBITDA(1)

428

463

1,690

1,913

Canada(2)

190

190

753

713

International(2)

171

157

654

678

USA(2)

32

39

168

186

Refining(2)

60

106

198

441

Corporate(2)

(25)

(29)

(83)

(105)

Net earnings (loss)

(29)

86

127

471

Net earnings (loss) per share – basic ($ per share)

(0.17)

0.49

0.73

2.68

Net earnings (loss) per share – diluted ($ per share)

(0.17)

0.48

0.72

2.63

Cash generated from (used in) operating activities

462

417

1,535

1,780

Trailing-twelve-month (“TTM”) Cash generated from (used in) operating activities per share(3)

8.80

10.13

8.80

10.13

TTM Available cash flow(4)

556

812

556

812

TTM Available cash flow per share(4)

3.19

4.61

3.19

4.61

TTM ROIC (4)

7.4 %

9.8 %

7.4 %

9.8 %

(1)

Total of segments measure. See “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release.

(
2)

Measure of segment profit (loss). See “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release.

(3)

Supplementary financial measure. See “Supplementary Financial Measures” section of this news release.

(4)

Non-GAAP financial measure or non-GAAP financial ratio. See “Non-GAAP Financial Measures and Ratios” section of this news release.

Q4 2024
Conference Call and Webcast Details

Parkland will host a webcast and conference call on Thursday, March 6, 2025, at 6:30 am MT (8:30 am ET) to discuss the results. To listen to the live webcast and watch the presentation, please use the following link: https://app.webinar.net/o5PNjYomM2w

Analysts and investors interested in participating in the question and answer session of the conference call may do so by calling 1-888-510-2154 (toll-free) (Conference ID: 19397). International participants may call 1-437-900-0527, 1-800-389-0704 (toll-free) (Conference ID: 19397).

Please connect and log in approximately 10 minutes before the beginning of the call. The webcast will be available for replay two hours after the conference call ends at the link above. It will remain available for one year and will also be posted at www.parkland.ca.

MD&A and Annual Consolidated Financial Statements

The Management’s Discussion and Analysis for the year ended December 31, 2024 (the “Q4 2024 MD&A”) and Annual Consolidated Financial Statements for the year ended December 31, 2024 (the “2024 Annual Consolidated Financial Statements”) provide a detailed explanation of Parkland’s operating results for the year ended December 31, 2024. An English version of these documents will be available online at www.parkland.ca and the System for Electronic Data Analysis and Retrieval+ (“SEDAR+”) after the results are released by newswire under Parkland’s profile at www.sedarplus.ca. The French versions of the Q4 2024 MD&A and the 2024 Annual Consolidated Financial Statements will be posted to www.parkland.ca and SEDAR+ as soon as they become available.

About Parkland Corporation

Parkland is a leading international fuel distributor, marketer, and convenience retailer with safe and reliable operations in 26 countries across the Americas. Our retail network meets the fuel and convenience needs of everyday consumers. Our commercial operations provide businesses with fuel to operate, complete projects and better serve their customers. In addition to meeting our customers’ needs for essential fuels, Parkland provides a range of choices to help them lower their environmental impact, including manufacturing and blending renewable fuels, ultra-fast EV charging, a variety of solutions for carbon credits and renewables, and solar power. With approximately 4,000 retail and commercial locations across Canada, the United States and the Caribbean region, we have developed supply, distribution and trading capabilities to accelerate growth and business performance.

Our strategy is focused on two interconnected pillars: our Customer Advantage and our Supply Advantage. Through our Customer Advantage, we aim to be the first choice of our customers through our proprietary brands, differentiated offers, extensive network, competitive pricing, reliable service, and compelling loyalty program. Our Supply Advantage is based on achieving the lowest cost to serve among independent fuel marketers and distributors in the hard-to-serve markets in which we operate, through our well-positioned assets, significant scale, and deep supply and logistics capabilities. Our business is underpinned by our people and our values of safety, integrity, community and respect, which are embedded across our organization.

Forward-Looking
Statements

Certain statements contained herein constitute forward-looking information and statements (collectively, “forward-looking statements”). When used the words “expect”, “will”, “could”, “would”, “believe”, “continue”, “pursue” and similar expressions are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things: the Strategic Review, the process and details relating thereto, including with respect to Parkland considering value maximization alternatives and evaluating its existing business strategies and optimization opportunities, and the expectation resulting therefrom to maximize value for all shareholders; the Board’s commitment to Parkland shareholders and the Board’s beliefs with respect to Parkland’s business, strategic plan, management and current share price as well as the Strategic Review and expectations relating thereto; business strategies, objectives and initiatives; continued focus on operational excellence and serving Parkland’s customers; expectations for composition utilization at the Burnaby Refinery; confidence in Parkland’s 2025 Guidance; Parkland’s enterprise-wide systems, the implementation thereof and expected benefits therefrom; Parkland’s disciplined capital allocation framework and the impact thereof on shareholder returns, maintaining financial strength and flexibility and funding Parkland’s organic growth capital program; and Parkland’s expectations regarding future dividend amounts and the timing and frequency of payments.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. No assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These forward-looking statements speak only as of the date of this news release. Parkland does not undertake any obligation to publicly update or revise any forward-looking statements except as required by securities law. Actual results could differ materially from those anticipated in these forward-looking statements as a result of numerous risks and uncertainties including, but not limited to: the Strategic Review process and the timing thereof, whether the Strategic Review will result in Parkland undertaking a transaction, and if so, the terms and timing relating thereto, the completion thereof and realizing benefits resulting therefrom; general economic, market and business conditions; micro and macroeconomic trends and conditions, including increases in interest rates, inflation, imposition of tariffs and fluctuating commodity prices; Parkland’s ability to execute its business objectives, projects and strategies, including the completion, financing and timing thereof, realizing the benefits therefrom and meeting our targets and commitments relating thereto; the operations of the Burnaby Refinery, including continuing to operate as expected and the ability of suppliers to meet commitments; Parkland’s ability to meet its 2025 Guidance and the assumptions relating thereto; Parkland’s ability to execute on its disciplined capital allocation framework; Parkland’s ability to pay future dividends; and other factors, many of which are beyond the control of Parkland and the assumptions and risks described in “Cautionary Statement Regarding Forward-Looking Information” and “Risk Factors” included in Parkland’s most recently filed Annual Information Form, and in “Forward-Looking Information” and “Risk Factors” in the Q4 2024 MD&A, each as filed on SEDAR+ and available on the Parkland website at www.parkland.ca. The forward-looking statements contained in this news release as expressly qualified by these cautionary statements.

Specified Financial Measures

This news release contains total of segments measures, non-GAAP financial measures and non-GAAP financial ratios, supplementary financial measures and capital management measures (collectively, “specified financial measures”). Parkland’s management uses certain specified financial measures to analyze the operating and financial performance, leverage, and liquidity of the business. These specified financial measures do not have any standardized meaning under International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS Accounting Standards”) and are therefore unlikely to be comparable to similar measures presented by other companies. The specified financial measures should not be considered in isolation or used in substitute for measures of performance prepared in accordance with the IFRS Accounting Standards. See Section 16 of the Q4 2024 MD&A, which is incorporated by reference into this news release, for further details regarding specified financial measures used by Parkland.

Non-GAAP Financial Measures and Ratios

Adjusted earnings (loss) is a non-GAAP financial measure and Adjusted earnings (loss) per share is a non-GAAP financial ratio, each representing the underlying core operating performance of business activities of Parkland at a consolidated level. The most directly comparable financial measure to Adjusted earnings (loss) and Adjusted earnings (loss) per share is Net earnings (loss).

Adjusted earnings (loss) and Adjusted earnings (loss) per share represent how well Parkland’s operational business is performing, while considering depreciation and amortization, interest on leases and long-term debt, accretion and other finance costs, and income taxes. The Company uses these measures because it believes that Adjusted earnings (loss) and Adjusted earnings (loss) per share are useful for management and investors in assessing the Company’s overall performance, as they exclude certain items that are not reflective of the Company’s underlying business operations.

See Section 16 of the Q4 2024 MD&A, which is incorporated by reference into this news release, for the detailed definition and composition of Adjusted earnings (loss) and Adjusted earnings (loss) per share.

Please see below for the reconciliation of Adjusted earnings (loss) to net earnings (loss) and the calculation of Adjusted earnings (loss) per share.

Three months ended
December 31,

Year ended
December 31,

($ millions, unless otherwise stated)

2024

2023

2024

2023

Net earnings (loss)

(29)

86

127

471

Add: | | | |

Acquisition, integration and other costs

81

42

218

146

(Gain) loss on foreign exchange – unrealized

(2)

—

6

35

(Gain) loss on risk management and other – unrealized

34

28

45

(34)

Other (gains) and losses

30

5

38

3

Other adjusting items(1)

20

6

53

48

Tax normalization(2)

(34)

(16)

(82)

(43)

Adjusted earnings (loss)

100

151

405

626

Weighted average number of common shares (million shares)(3)

174

176

174

176

Weighted average number of common shares adjusted for the effects of dilution (million shares)(3)

174

180

177

179

Adjusted earnings (loss) per share ($ per share) | | | |

Basic

0.58

0.86

2.32

3.56

Diluted

0.57

0.84

2.29

3.50

(1)

Other adjusting items for the three months ended December 31, 2024 include: (i) the share of depreciation, income taxes and other adjustments for investments in joint ventures and associates of $18 million (2023 – $9 million); (ii) the impact of hyperinflation accounting of $4 million (2023 – $2 million); (iii) other income of $1 million (2023 – $2 million); (iv) realized gains and losses on risk management and other assets and liabilities related to underlying physical sales activity in another period of $1 million gain (2023 – $2 million); (v) adjustment to foreign exchange losses related to cash pooling arrangements of $1 million gain (2023 – $1 million); and (vi) adjustment to realized risk management gains related to interest rate swaps, as these gains do not relate to commodity sale and purchase transactions, of $1 million (2023 – nil). Other adjusting items for the year ended December 31, 2024 include: (i) the share of depreciation, income taxes and other adjustments for investments in joint ventures and associates of $29 million (2023 – $20 million); (ii) realized gains and losses on risk management and other assets and liabilities related to underlying physical sales activity in another period of $11 million loss (2023 – $6 million gain); (iii) other income of $9 million (2023 – $23 million); (iv) the impact of hyperinflation accounting of $4 million (2023 – $2 million); (v) adjustment to foreign exchange losses related to cash pooling arrangements of $3 million (2023 – nil); (vi) adjustment to realized risk management gains related to interest rate swaps, as these gains do not relate to commodity sale and purchase transactions, of $3 million (2023 – nil); and (vii) the effect of market-based performance conditions for equity-settled share-based award settlements of nil (2023 – $13 million).

(2)

The tax normalization adjustment was applied to net earnings (loss) adjusting items that were considered temporary differences, such as acquisition, integration and other costs, unrealized foreign exchange gains and losses, unrealized gains and losses on risk management and other, gains and losses on asset disposals, changes in fair value of redemption options, changes in estimates of environmental provisions, loss on inventory write-downs for which there are offsetting associated risk management derivatives with unrealized gains, impairments of non-current assets. The tax impact was estimated using the effective tax rates applicable to jurisdictions where the related items occur.

(3)

Weighted average number of common shares are calculated in accordance with Parkland’s accounting policy contained in Note 2 of the 2024 Annual Consolidated Financial Statements.

Available cash flow is a non-GAAP financial measure and Available cash flow per share is a non-GAAP financial ratio. The most directly comparable financial measure for Available cash flow and Available cash flow per share is cash generated from (used in) operating activities. Parkland uses these measures to monitor its ability to generate cash flow for capital allocation, including distributions to shareholders, investment in the growth of the business, and deleveraging. See Section 16 of the Q4 2024 MD&A, which is incorporated by reference into this news release, for the detailed definition and composition of Available cash flow and Available cash flow per share. See the following table for a calculation of historical Available cash flow and Available cash flow per share and a reconciliation to cash generated from (used in) operating activities.

Three months ended

Trailing twelve
months ended

December 31,
2024

($ millions, unless otherwise noted)

March 31,
2024 (1)

June 30,
2024

September 30,
2024

December 31,
2024

Cash generated from (used in) operating activities

217

450

406

462

1,535

Reverse: Change in other assets and other liabilities

28

3

(68)

80

43

Reverse: Net change in non-cash working capital related to operating activities(1)

55

(34)

21

(180)

(138)

Include: Maintenance capital expenditures

(59)

(53)

(71)

(96)

(279)

Include: Dividends received from investments in associates and joint ventures

2

8

3

7

20

Include: Interest on leases and long-term debt

(85)

(88)

(85)

(87)

(345)

Include: Payments of principal amount on leases

(71)

(64)

(69)

(76)

(280)

Available cash flow

87

222

137

110

556

Weighted average number of common shares (millions)(2)

174

TTM Available cash flow per share

3.19

Three months ended

Trailing twelve
months ended
December 31,
2023

($ millions, unless otherwise noted)

March 31,
2023

June 30,
2023(1)

September 30,
2023

December 31,
2023

Cash generated from (used in) operating activities | 314 | 521 | 528 | 417 | 1,780
Reverse: Change in other assets and other liabilities | 11 | (11) | 7 | (4) | 3
Reverse: Net change in non-cash working capital related to operating activities(1) | 18 | (145) | (14) | 17 | (124)
Include: Maintenance capital expenditures | (79) | (61) | (52) | (93) | (285)
Include: Dividends received from investments in associates and joint ventures | 16 | 2 | 4 | 3 | 25
Include: Interest on leases and long-term debt | (92) | (89) | (83) | (88) | (352)
Include: Payments on principal amount on leases | (51) | (56) | (57) | (71) | (235)
Available cash flow | 137 | 161 | 333 | 181 | 812
Weighted average number of common shares (millions)(2) | | | | | 176
TTM Available cash flow per share | | | | | 4.61

(1)

For comparative purposes, certain amounts within the net change in non-cash working capital related to operating activities for the three months ended March 31, 2024, and the three months ended June 30, 2023, were revised to conform to the current period presentation.

(2)

Weighted average number of common shares is calculated in accordance with Parkland’s accounting policy contained in Note 2 of the 2024 Annual Consolidated Financial Statements.

ROIC is a non-GAAP financial ratio. The measure is calculated as a ratio of Net operating profit after tax (“NOPAT”) divided by average invested capital. NOPAT describes the profitability of Parkland’s base operations, excluding the impact of leverage and certain other items of income and expenditure that are not considered representative of Parkland’s underlying core operating performance. NOPAT is based on Adjusted EBITDA, defined in the “Measures of Segment Profit (Loss) and Total of Segments Measures” section of this news release, less depreciation and amortization expense, including pro-forma depreciation on assets classified as held for sale, and the estimated tax expense using the expected average tax rate estimated using statutory tax rates in each jurisdiction where Parkland operates. Average invested capital is the amount of capital deployed by Parkland that represents the average of opening and closing debt and shareholder’s equity, including equity reserves, net of cash and cash equivalents. We use this non-GAAP measure to assess Parkland’s efficiency in investing capital.

($ millions, unless otherwise noted)

Trailing twelve months

ended December 31,

ROIC

2024

2023

Net earnings (loss)

127

471

Add/(less): | |

Income tax expense (recovery)

—

37

Acquisition, integration and other costs

218

146

Depreciation and amortization

825

823

Finance cost

378

384

(Gain) loss on foreign exchange – unrealized

6

35

(Gain) loss on risk management and other – unrealized

45

(34)

Other (gains) and losses

38

3

Other adjusting items

53

48

Adjusted EBITDA

1,690

1,913

Less: Depreciation and amortization

(825)

(823)

Less: Pro-forma depreciation and amortization on assets classified as held for sale

(7)

—

Adjusted EBIT

858

1,090

Average effective tax rate

19.5 %

16.7 %

Less: Taxes

(167)

(182)

Net operating profit after tax

691

908

Opening invested capital

9,152

9,293

Closing invested capital

9,563

9,152

Average invested capital

9,356

9,223

Return on invested capital

7.4 %

9.8 %

Invested Capital

December 31,

($ millions, unless otherwise noted)

2024

2023

2022

Long-term debt – current portion

261

191

173

Long-term debt

6,380

6,167

6,799

Long-term debt in liabilities classified as held for sale

141

—

—

Shareholders’ equity

3,166

3,181

3,037

Exclude: Cash and cash equivalents

(385)

(387)

(716)

Total

9,563

9,152

9,293

These non-GAAP financial measures and ratios should not be considered in isolation or used in substitute for measures of performance prepared in accordance with IFRS Accounting Standards. Except as otherwise indicated, these non-GAAP financial measures and ratios are calculated and disclosed on a consistent basis from period to period. See Section 16 of the Q4 2024 MD&A, which is incorporated by reference into this news release, for further details regarding Parkland’s non-GAAP financial measures and ratios.

Capital Management Measures

Parkland’s primary capital management measure is the Leverage Ratio, which is used internally by key management personnel to monitor Parkland’s overall financial strength, capital structure flexibility, and ability to service debt and meet current and future commitments. In order to manage its financing requirements, Parkland may adjust capital spending or dividends paid to shareholders, or issue new shares or new debt. The Leverage Ratio is calculated as a ratio of Leverage Debt to Leverage EBITDA and does not have any standardized meaning prescribed under IFRS Accounting Standards. It is, therefore, unlikely to be comparable to similar measures presented by other companies. The detailed calculation of the Leverage Ratio is as follows:

($ millions, unless otherwise noted)

December 31, 2024

December 31, 2023