WALTHAM, Mass. — Global Partners LP is seeing the benefits of the integration of retail fuel and convenience store assets acquired from Consumers Petroleum of Connecticut Inc. and Miller Oil Co. in the company's Gasoline Distribution Station Operations (GSDO) segment during the second quarter of 2022.
"We believe our strategy of building integrated supply, storage, marketing and retail assets creates a competitive advantage that enables us to drive results, as evidenced by our strong second quarter performance," Eric Slifka, president and CEO of the master limited partnership, said during a second quarter earnings call on Aug. 5.
"On that note, we continue to deliver our strategy to grow our GDSO business. We are pleased with the contribution in Q2 of our two recent acquisitions: Consumers Petroleum of Connecticut and Miller's Neighborhood Market," he said.
Global Partners completed its acquisitions of Consumers Petroleum and Miller Oil earlier this year. The Consumers Petroleum transaction included 26 company-operated Wheels convenience stores, and the Miller's purchase involved 21 Miller's Neighborhood Market c-stores.
Bolstered by the addition of the recent acquisitions, GDSO product margin was up $36.5 million to $198.9 million. Product margin from gasoline distribution increased to $129.9 million from $101.3 million during the second quarter of 2021.
Station operations product margin — which includes convenience store and prepared food sales, sundries and rental income — was up $7.9 million to $69 million year over year, reflecting an increase in activity in the company's c-stores.
The Miller's transaction additionally provides Global Partners with the partnership's first company-operated locations in Virginia. Global Partners plans to expand its presence in the state this quarter by signing an agreement to purchase a portfolio of 13 owned and two leased gas stations and c-stores, as well as six adjacent pieces of real estate. The acquisition is expected to be completed by the end of the third quarter, Slifka reported.
At the end of the second quarter, Global Partners' portfolio consisted of 1,683 sites, comprised of 343 company-operated sites, 292 commission agents, 196 leasing dealers and 852 contract dealers.
During the quarter, Global Partners also completed the sale of its Revere terminal on Boston Harbor in Massachusetts for a purchase price of $150 million. In conjunction with the closing, the company entered into a leaseback agreement with the buyer, retaining the use of certain tanks, dock access rights and loading rack infrastructure that allow Global Partners to continue its operations at the terminal.
Q2 2022 Financial Highlights
For the period ending June 30, net income was $162.8 million for Q2 2022 vs. $12.1 million during Q2 2021. Adjusted EBITDA was $134.9 million vs. $58.7 million for the second quarter of 2021.
Gross profit in the second quarter of 2022 was $281.5 million vs. $178 million in the same period of 2021, driven primarily by the GDSO segment.
Fuel margins came in at 31 cents per gallon, compared to 26 cents per gallon during 2021's second quarter.
Operating expenses also increased $20.3 million for the quarter to $108.5 million. The rise was primarily in the GDSO segment and due in part to increased credit card fees related to the rises in volume and gas price, higher salary expenses and higher rent expenses.
"We enter the second half of 2022 with solid momentum and believe we are well positioned to continue to deliver value for unitholders, customers and guests," Slifka concluded.
Waltham-based Global Partners is one of the region's largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global Partners also owns, controls or has access to one of the largest terminal networks in New England and New York, through which it distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers.