CrossAmerica Partners Delivers Solid Q4 2024 Results
CrossAmerica Partners LP Reports Fourth Quarter and Full Year Results
CrossAmerica Partners LP (NYSE: CAPL) has reported its financial results for the fourth quarter and full year ending December 31, 2024. The partnership, recognized for its role as a leading wholesaler of motor fuels and convenience store operator, has emphasized both growth and resilience in the face of changing market conditions.
Fourth Quarter Financial Overview
The fourth quarter showcased a net income of $16.9 million and adjusted EBITDA amounting to $35.5 million. While these figures represent a slight increase in net income from $16.7 million in the previous year, it's important to note a decline in adjusted EBITDA from $47.6 million in Q4 2023. Distributable cash flow reached $21.1 million, compared to $35.8 million during the same period last year.
Retail Segment Performance
The retail segment remained a key contributor, reporting a gross profit of $75.1 million, reflecting an increase from $69.0 million in Q4 2023. This was facilitated by a higher site count, enabling better merchandise gross profit. Despite these gains, the wholesale segment experienced challenges, recording a decrease to $25.9 million in gross profits, down from $33.0 million in the prior year.
Full Year Performance Insights
For the entire year of 2024, CrossAmerica Partners reported a full year net income of $22.5 million, down from $42.6 million in 2023. Adjusted EBITDA for the full year was $145.5 million compared to $165.8 million the previous year. This decline can be attributed to increased operating costs from the transition of some locations to company-operated sites alongside inflationary pressures affecting their retail customers.
Strategic Developments
Throughout the year, the company made substantial strides in its strategic initiatives, including successfully converting several sites to its retail class of trade while divesting select locations. Charles Nifong, the President & CEO, expressed confidence in the company's strategic direction and its foundational strength. He remarked, “While we faced challenges, our commitment to growth and operational efficiency remains steadfast.”
Challenges Faced
Throughout 2024, CrossAmerica faced adversities, prominently in the first quarter due to inflationary pressures affecting both fuel margins and operating expenses. Despite these hurdles, the partnership managed to generate growth in merchandise sales and gallons distributed.
Distribution and Capital Management
The company declared a quarterly distribution of $0.5250 per limited partner unit, reflecting its commitment to providing returns to its unitholders. As of year-end, leverage was reported at 4.36 times, slightly higher than the previous year, while maintaining compliance with financial covenants under its credit facility.
Future Outlook
Looking ahead, CrossAmerica Partners remains optimistic. The management is focused on enhancing efficiencies and leveraging its strategic position within the market. The company's adaptability in navigating market dynamics, coupled with its strong relationships with major oil brands, positions it well for future growth. Key to this success will be its ability to manage operational costs while maximizing profitability across both retail and wholesale segments.
Frequently Asked Questions
What were CrossAmerica's Q4 2024 net income results?
CrossAmerica Partners reported a net income of $16.9 million for Q4 2024.
How did adjusted EBITDA compare year on year?
Adjusted EBITDA for Q4 2024 was $35.5 million, a decrease from $47.6 million in Q4 2023.
What challenges did CrossAmerica face in 2024?
The company faced inflationary pressures and increased operating expenses due to site transitions.
What is the distribution declared for Q4 2024?
The declared distribution for Q4 2024 was $0.5250 per limited partner unit.
How does CrossAmerica plan to move forward?
CrossAmerica aims to enhance operational efficiency, manage costs, and ensure strong relationships with oil brands as part of its growth strategy.
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