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RED DEER, ALBERTA -- (Marketwired) -- 05/07/13 -- Parkland Fuel Corporation ("Parkland" or the "Corporation") (TSX: PKI), Canada's largest independent supplier and reseller of fuels and petroleum products, today announced the financial and operating results for the three months ended March 31, 2013.
Q1 2013 Operational Highlights: ------------------------------ For the three months ended March 31, 2013 2012 % Change---------------------------------------------------------------------------(in millions of litres)Total fuel volume 1,400 1,085 29Retail fuel volume 400 415 (3.6)Commercial fuel volume 433 462 (6.4)(in millions of Canadian dollars)Net earnings 30.5 17.5 74Adjusted EBITDA (1) 61.3 43.1 42Distributable cash flow (2) 44.9 26.0 73Dividend to distributable cash flow payout ratio 39% 64%---------------------------------------------------------------------------(1) Please see Adjusted EBITDA in the Non-GAAP Measures section in the MD&A and the reconciliation later in this press release.(2) Please see Distributable Cash Flow reconciliation table and definition in Non-GAAP Measures, both of which can be found in the MD&A.----------------------------------------------------------------------------
Grow
-- Volumes increased 29% or 314.6 million litres year over year primarily due to the acquisition of Elbow River Marketing;-- Base volumes (volumes prior to acquisitions) decreased by 12.7 million litres or 1% year over year due to planned retail site closures, lower Commercial volumes, partially offset by increased wholesale volumes;
Supply
-- Acquisition of Elbow River Marketing enhances Parkland's ability to take advantage of North American supply and demand imbalances and extends relationships with refiners, fuel suppliers, and fuel customers; and-- Strong refiners' margins continued into the first quarter of 2013.
Operate
-- Reduced costs help offset challenging Commercial Fuels business environment in Western Canada;-- MG&A costs increase due to $1.5 million in acquisition and restructuring costs and the addition of Elbow River Marketing;-- All strategic cost reduction programs remain on track; and-- Operating costs on base business decrease $3.8 million or 8% year over year due to savings from the simplified operating model in retail and the response in Commercial Fuels to lower volumes. Operating costs decreased $2.1 million or 5% year over year despite the addition of Elbow River Marketing.
"Refiners margins were strong year over year and Elbow River Marketing's earnings surpassed our expectations in the first quarter with a stronger than expected Adjusted EBITDA of $5.2 million," said Bob Espey, President and Chief Executive Officer of Parkland. "Lower costs throughout our business also helped to offset continued weakness in Parkland Commercial Fuels' business environment during the first quarter, which was especially pronounced in the West as drilling completions for natural gas were down 50% compared to a year ago. We have responded appropriately to these conditions, and continue to position ourselves to consolidate our share of the commercial marketplace through concerted sales efforts and business diversification to offset diminished consumption in the oil and gas sector."
Consolidated Highlights:---------------------------------------------------------------------------- Three months ended March 31,----------------------------------------------------------------------------(in millions of Canadian dollars, except volume and per Share amounts) 2013 2012 % Change----------------------------------------------------------------------------Income Statement Summary:Sales and operating revenues 1,212.8 1,064.4 14Adjusted gross profit 127.6 111.0 15----------------------------------------------------------------------------Operating costs 42.2 44.4 5Marketing, general and administrative 24.9 19.8 (26)Depreciation and amortization expense 13.2 13.5 2---------------------------------------------------------------------------- 47.3 33.3 42----------------------------------------------------------------------------Customer finance income (0.5) (0.5) -Finance costs 5.3 5.4 2Loss on disposal of property, plant and equipment 0.3 0.6 50Loss on risk management activities 2.7 4.2 36----------------------------------------------------------------------------Earnings before income taxes 39.5 23.6 67Income tax expense 9.0 6.1 (48)----------------------------------------------------------------------------Net earnings 30.5 17.5 74Net earnings per share - Basic 0.44 0.27 64 - Diluted (1) 0.42 0.26 62Non-GAAP Financial Measures:Adjusted EBITDA (2)(3) 61.3 43.1 42Distributable cash flow (2)(4) 44.9 26.0 73Distributable cash flow per share (2)(4) 0.65 0.41 59Dividends 17.7 16.6 7Dividend to distributable cash flow payout ratio (2)(4) 39% 64%Key Metrics:Fuel volume (millions of litres) 1,400.0 1,085.0 29Return on capital employed (ROCE)(2)(5) 27.0% 13.5%Employees 1,167 1,226 (5)Fuel Key Metrics - Cents per litre:Average Retail fuel adjusted gross profit (6) 4.53 4.46 2Average Commercial fuel adjusted gross profit (6) 11.69 11.23 4Operating costs 3.01 4.09 26Marketing, general and administrative 1.78 1.82 3Depreciation and amortization expense 0.94 1.24 24Liquidity and bank ratios:Net debt:adjusted EBITDA (2)(7) 1.41 1.93Senior debt:adjusted EBITDA (2)(7) 0.83 0.99Interest coverage (2)(6) 8.86 3.67----------------------------------------------------------------------------(1) Diluted earnings (loss) per share can be impacted by an anti-dilutive impact of conversion of the debentures. Quarterly diluted earnings (loss) per share may therefore not accumulate to the same per share value as the year-to-date calculation.(2) Please refer to the Non-GAAP Measures section in the MD&A for definitions.(3) Please see Adjusted EBITDA discussion in the MD&A.(4) Please see Distributable Cash Flow reconciliation table in the MD&A.(5) Please see ROCE discussion in the MD&A.(6) Please see Segmented Results discussion in the MD&A(7) Please refer to the Non-GAAP Measures section in the MD&A for reconciliations.
