Parkland Fuel Corp. (TSX: PKI) has reported net earnings of $6.9 million for the three months ended June 30, a 66 per cent drop from the $20.3 million earned in the same quarter of 2013.
The Red Deer-based company, which distributes and markets fuels and lubricants, said the decrease was due primarily to a $4.4 million decline in adjusted gross profit, a $16.8 million increase in operating costs and a $5.6 million increase in depreciation and amortization. These figures were partially offset by an income tax expense decrease of $7.2 million.
“Excluding the impact of refiner’s margins, every division in Parkland delivered year over year EBITDA (earnings before interest, taxes, depreciation and amortization) growth this quarter,” said Bob Espey, president and chief executive officer of Parkland Fuels.
The company had been sharing in refiner’s margins under a contract with Suncor. That agreement came to an end in December 2013.
Parkland Fuel’s adjusted EBITDA for the second quarter was $35.7 million, a decrease of $22.4 million from $58.1 million in the second quarter of 2013.
Its fuel and petroleum products volumes increased by 22 per cent to 1.9 billion litres from 1.6 billion litres in the quarter — due primarily to the acquisitions of SPF Energy Inc. on Jan. 8 and TransMontaigne Marketing Canada Inc. on May 13, 2013. Sales and operating revenue increased by 46 per cent to $1.9 billion, as compared with $1.3 billion, for the same period of 2013. The acquisitions of SPF Energy and TransMontaigne Marketing also contributed to this increase.