Superior Plus (SPB) Q2 2024 earnings summary

Executive summary

• Q2 2024 Adjusted EBITDA rose 47% year-over-year to $43.3 million, driven by a full quarter from Certarus and Canadian propane growth, despite unseasonably warm weather and regional pricing pressure.

• Net loss widened to $45.3 million from $29.2 million, mainly due to the absence of prior-year unrealized derivative gains.

• Certarus delivered over 15% volume growth, maintaining strong margins despite increased competition in West Texas.

• Certarus acquisition positioned the company as the largest over-the-road CNG and RNG distributor in North America, supporting expansion into new low-carbon energy segments.

• 2024 Adjusted EBITDA growth expectation of ~5% over 2023 Pro Forma Adjusted EBITDA reaffirmed.

Financial highlights

• Q2 2024 revenue was $422.9 million, down from $432.9 million in Q2 2023; gross profit increased to $235.2 million from $200.4 million.

• Q2 2024 Adjusted EBITDA was $43.3 million, up $14 million year-over-year, mainly due to the Certarus acquisition.

• Adjusted EBITDA per share was $0.16 for Q2 and $1.00 YTD, up 33% and 2% respectively.

• Net cash flows from operating activities were $98.9 million, up from $79.9 million in Q2 2023.

• Cash dividends declared per share remained at CAD $0.18.

Outlook and guidance

• 2024 Adjusted EBITDA guidance is confirmed at approximately $500 million, representing ~5% growth over 2023 Pro Forma Adjusted EBITDA.

• Certarus is expected to finish slightly below the low end of the 15%-20% growth range for the year, but propane and corporate cost initiatives are expected to offset this.

• U.S. Propane Adjusted EBITDA for 2024 anticipated to exceed 2023, assuming normal weather and continued pricing/cost discipline.

• Certarus expected to see robust market conditions in Q4 and Q1 as demand for heating and other applications returns.

• Leverage ratio target is 3.7x by year-end 2024, with a longer-term goal of 3.0x.