Global Partners reports Q3 results, to acquire 25 energy terminals from Motiva

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Global Partners reports Q3 results, to acquire 25 energy terminals from Motiva
Credit: © Reuters.

Global Partners (NYSE: GLP ) LP, a leading operator in the Northeast, announced its plans to acquire 25 liquid energy terminals from Motiva Enterprises LLC for $305.8 million in cash. This strategic move is designed to expand its reach along the Atlantic Coast, Southeast, and Texas. The acquisition is backed by a 25-year take-or-pay throughput agreement with Motiva and is subject to regulatory approvals. It is expected to close by the end of the year.

The terminals, with a total shell capacity of 8.4 million barrels, are connected to key pipelines—Colonial, Plantation, Enterprise, Explorer, and Magellan. The deal will increase Global's storage capacity by approximately 85 percent to 18.3 million barrels.

This acquisition was announced alongside Global's financial results for the third quarter of 2023 in a normalized market, as highlighted by CEO Eric Slifka. The company reported a net income of $26.8 million or $0.60 per diluted common limited partner unit in Q3 2023 which was lower than the $111.4 million or $3.12 per unit reported in Q3 2022. Gross profit for Q3 2023 was reported at $228.5 million, down from the $328.4 million reported in Q3 2022.

The company's EBITDA for Q3 2023 was $76.7 million compared to $168.2 million in Q3 2022. Adjusted EBITDA was slightly higher at $77.7 million for Q3 2023 versus $168.5 million for Q3 2022. The Distributable Cash Flow (DCF) for Q3 2023 was reported at $42.2 million compared with $128.0 million in Q3 2022.

Global also reported that the product margin for its GDSO segment was negatively impacted due to excessive rainfall in the Northeast in July, resulting in a figure of $206.5 million in Q3 2023 compared with $261.6 million in Q3 2022. The wholesale segment product margin decreased to $37.2 million in the third quarter of 2023 compared with $79.3 million in 2022, primarily due to less favorable market conditions.

Despite lower Q3 results, Global remains committed to driving growth through strategic M&A, asset optimization, and balanced capital allocation to create long-term value for their unitholders. The company also announced a quarterly cash distribution of $0.6850 on all outstanding common units for Q3 2023.

The acquisition will enhance Global's presence across the Atlantic Coast and the US Gulf, extending its terminal network beyond the Northeast, New England, and New York where it operates around 1,700 locations. The purchase will be funded via Global's revolving credit facility.

Motiva Enterprises LLC is a Houston-based company owned by Aramco (TADAWUL: 2222 ) and operates across the Americas. It owns North America's largest refinery - Port Arthur Manufacturing Complex and operates more than 5,000 retail gasoline stations under exclusive long-term brand licenses with Shell (LON: SHEL ) and Phillips 66 (NYSE: PSX ) (for the 76 ® brand).

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