Red Deer-based Parkland Income Fund (TSX: PKI.UN) experienced a year-over-year drop in earnings for the second quarter, despite increased fuel volumes and operating revenues.
The fuel distributor and marketer reported late Friday that it earned $13.5 million for the three-month period ended June 30, down from $14.3 million. Earnings per share were 25 cents, down from 28 cents.
A release issued by the Parkland said fuels sales volumes were up 28 per cent to 802 million litres, and net sales and operating revenues climbed 26 per cent to $605.8 million.
Net sales of convenience store merchandise segment decreased by 54 per cent to $6.4 million as corporate-operated sites were converted to commission-based, dealer operated sites.
Parkland’s non-fuel commercial segment, consisting of agricultural, lubricant and other products, saw net sales increase by 15 per cent to $35.5 million, primarily due to recent corporate acquisitions.
Profits were adversely affected by refiners’ margins, in which Parkland shares, being lower than normal.
“Parkland’s performance in the second quarter was solid and there are a number of positive developments to report,” said Mike Chorlton, Parkland’s president and CEO. “We saw strong results from our fuel distribution and marketing business this quarter as fuel sales volumes grew due to the companies we’ve acquired.
“While refiners’ margins improved compared to the first quarter, they continue to be at the low end of their normal range and were lower than they were for the same quarter in 2009.”
In May, Parkland unitholders approved plans to convert the trust into a corporation by January 2011.
Parkland Income Fund is Canada’s largest independent fuel distribution and marketing company, suppling 620 retail locations, 77 commercial branches and 70 cardlock locations.
Its brands include Fas Gas Plus, Fas Gas and Race Trac, and it also supplies fuel through distribution agreements to 290 Esso locations.
Parkland also supplies propane, bulk fuel, heating oil, lubricants, industrial fluids and associated services under various brands.