Parkland Fuel Corp.’s first quarter net earnings dipped to $22.3 million from $30.5 million, despite a big jump in fuel sales volumes.
The Red Deer-based company (TSX:PKI) said in a report to its shareholders that the 27 per cent decrease in net earnings was due primarily to a $5.7-million increase in amortization and depreciation, and a $1 million increase in unrealized losses related to changes in the fair value of forward contracts, future contracts and U.S. dollar-forward exchange contracts.
Parkland also pointed out that it no longer benefits from refiner’s margins, following the end of its contract with Suncor Energy Inc. effective December 2013. Meanwhile, the company’s acquisition of Elbow River Marketing in February 2013, Sparlings Propane and TransMontaigne Marketing Canada Inc. in April 2013, and SPF Energy Inc. this January also impacted earnings.
Parkland’s total fuel volumes for the three months ended March 31 was 2.3 billion litres, up 62 per cent from 1.4 billion litres for the same period last year.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) was $61.2 million, up slightly from $61 million.
“The fact that we were able to establish a new adjusted EBITDA record this quarter is a testament to the health of our business, and demonstrates our team’s ability to execute against our five-year plan to double 2011 EBITDA by 2016,” said Bob Espey, president and CEO of Parkland. “Our team has been successful in offsetting the loss of refiner’s margins which, if you recall from the first quarter of 2013, were unusually strong.”
Parkland is North America’s fastest-growing independent marketer of fuel and petroleum products. Those products include gasoline, diesel, propane, lubricants and heating oil.