Parkland Reviews Strategic Alternatives After Swinging to 4Q Loss

Parkland Corporation (TSX: PKI) has announced that its Board of Directors has initiated a review of strategic alternatives to maximize value for all shareholders. This move comes after the company reported a net loss of $29 million ($0.17 per share, basic) for the fourth quarter of 2024, compared to net earnings of $86 million ($0.49 per share, basic) in the same period of 2023. The company's Adjusted EBITDA for the quarter was $428 million, down from $463 million in the fourth quarter of 2023.

The Strategic Review will be led by a Special Committee of the Board, comprised solely of independent directors. During this process, the Company will analyze and evaluate its business strategy and optimization opportunities, while also considering value maximization alternatives which are in the best interests of all shareholders. This may include, but is not limited to, asset divestments, acquisitions, transformative business combinations, and a sale of the Company. Parkland has engaged Goldman Sachs Canada Inc. and BofA Securities as its financial advisors for the Strategic Review.

"Parkland's Board remains committed to acting in the best interests of all shareholders," said Michael Jennings, Chair of Parkland's Board of Directors. "While we are confident in the tremendous value creating potential of our business, strategic plan, and management's ability to execute, the current share price does not fully reflect the intrinsic value of the Company. As a result, our Board believes the Strategic Review is a necessary step to explore opportunities to maximize value creation for all shareholders. We are openly inviting Simpson Oil to rejoin the Company's Board and participate on the Special Committee."

Parkland cautions that there are no guarantees that the strategic review process will result in a transaction or if a transaction is undertaken, as to its terms or timing. The Company will continue to actively engage with its shareholders throughout the process and provide periodic updates on its progress.

Fourth Quarter and Year-End 2024 Results
"As the Company initiates a Strategic Review, I want to thank the Parkland team for their dedication in 2024 and their continued focus on serving our customers. The team made great progress executing our priorities and building a platform for growth during the year," said Bob Espey, President and Chief Executive Officer. "In 2024, our combined retail and commercial businesses demonstrated resilience in a challenging environment. While the Refinery and USA segments fell short of our expectations, partly due to unfavourable external market factors, our continued focus on operational excellence and serving our customers, combined with higher expected composite utilization of the Burnaby Refinery, gives me confidence in our 2025 Guidance."

Q4 2024 Highlights
Adjusted EBITDA of $428 million, as compared to $463 million in Q4 2023. Resilient underlying performance in our combined retail and commercial lines of business was more than offset by a lower refining margin environment.
Net loss of $29 million ($0.17 per share, basic), as compared to net earnings of $86 million ($0.49 per share, basic) in Q4 2023, and Adjusted earnings2 of $100 million ($0.58 per share, basic2), as compared to $151 million ($0.86 per share, basic) in Q4 2023.
Canada delivered Adjusted EBITDA of $190 million, as compared to $190 million in Q4 2023. Stronger fuel unit margins from continued price and supply optimization and lower operating costs were offset by lower commercial volumes due to unseasonably warm weather and the divestment of the commercial propane business.
International delivered Adjusted EBITDA of $171 million, as compared to $157 million in Q4 2023. Strong performance in the retail business, particularly in Guyana and Suriname, and the marine business were partially offset by the impact of lower wholesale volumes.
USA delivered Adjusted EBITDA of $32 million, as compared to $39 million in Q4 2023. The timing of certain expenses and a challenging volume environment were partially offset by stronger fuel unit margins.
Refining delivered Adjusted EBITDA of $60 million, as compared to $106 million in Q4 2023. The decrease was primarily driven by lower refining margins. Composite utilization3 at the Burnaby Refinery was approximately 89 percent in Q4 2024, as compared to approximately 90 percent in Q4 2023.
Full Year 2024 Highlights
Adjusted EBITDA of $1,690 million, as compared to $1,913 million in 2023. Resilient performance in the combined retail and commercial lines of business was more than offset by a lower refining margin environment.

Parkland's strategic review process is a significant development for the company and its shareholders. By exploring various strategic alternatives, the company aims to maximize value for all stakeholders. The invitation to Simpson Oil to rejoin the Company's Board and participate on the Special Committee leading the Strategic Review suggests that Parkland is committed to transparency and accountability in the decision-making process. As the company continues to engage with its shareholders throughout the process, investors can expect periodic updates on the progress of the Strategic Review.