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Parkland Corporation's Financial Highlights for Q4 and Year-End 2024

Parkland Corporation, a leading fuel distributor and convenience retailer, recently disclosed its financial performance for the fourth quarter and the entire year of 2024. The results reflect both challenges and resilient strategies that characterize the company's operations amongst fluctuating market conditions.

Key Financial Metrics

For the fourth quarter of 2024, Parkland reported an Adjusted EBITDA of $428 million, reflecting a decrease from $463 million in the same quarter of the previous year. Over the complete year, the Adjusted EBITDA totaled $1,690 million, down from $1,913 million in 2023. The company reported a net loss of $29 million for Q4, translating to $0.17 per share, compared to a net profit of $86 million or $0.49 per share in Q4 2023. For the full year, net earnings stood at $127 million (or $0.73 per share), significantly lower than last year's $471 million (or $2.68 per share).

Strategic Review Initiation

In light of these results, Parkland's Board of Directors has initiated a Strategic Review aimed at maximizing value for its shareholders. This review will be spearheaded by a Special Committee comprising independent directors. The committee will explore various alternatives, including potential asset divestments, acquisitions, or even the possibility of a sale of the company. Financial advisors Goldman Sachs Canada and BofA Securities have been engaged to lend their expertise during this review.

Michael Jennings, Chair of Parksland's Board, conveyed optimistic sentiments, stating, "Although we believe in the substantial value our company can create, the current share price doesn't accurately represent its intrinsic worth. Hence, this Strategic Review is essential for identifying value enhancement opportunities." The company has extended an invitation to Simpson Oil to rejoin the Board and participate in the Strategic Review process.

Performance Overview

Despite the overall decline in financial metrics, there have been areas where the company has shown resilience:

• - Retail and Commercial Businesses: The combined retail and commercial sectors showcased strength, aided by effective price and supply management, although some losses in commercial volumes were noted.
• - International Operations: Particularly in Guyana and Suriname, the international segment achieved strong retail performance, contributing to an Adjusted EBITDA of $171 million for Q4.
• - USA Operations: The USA segment recorded an Adjusted EBITDA of $32 million, albeit falling short of previous expectations due to unfavorable market conditions.
• - Refining Segment: The refining sector contributed $60 million in Adjusted EBITDA, but this reflected a considerable drop from $106 million in Q4 2023 due to lower refining margins.

Annual Insights

For the year overall, the company's financial indicators reflected a combination of difficulties and achievements. The available cash flow was $556 million, compared to $812 million in 2023. Additionally, despite a decrease in cash generated from operating activities to $1,535 million, Parkland’s liquidity increased to $2,045 million largely due to a senior unsecured note issuance aimed at repaying a portion of existing credit facilities. 2014's Leverage Ratio also increased to 3.6x, signaling a shift in the capital structure and operational performance.

With a focus on operational excellence, Parkland aims to enhance shareholder returns through disciplined capital allocation, ensuring both dividend growth and investment in organic expansion. Noteworthy is the planned quarterly dividend increase from $0.35 to $0.36 per share, effective from April 15, 2025.

Conclusion

As Parkland Corporation navigates through these challenging times, its commitment to optimizing operations and reviewing strategic options signals a proactive approach to enhance shareholder value. The upcoming year will be critical as the company progresses through its Strategic Review, while also looking to adjust its operations to meet market demands and capitalize on growth opportunities. Further updates on the company's strategic initiatives and financial standing will be shared, reflecting Parkland's commitment to transparency and value maximization.