Suburban Propane's Q3 2025: Navigating Contradictions in Regulatory Uncertainties, Market Volatility, and Tax Credits

Regulatory uncertainties and RNG projects, future sourcing strategy and propane market volatility, RNG and production tax credits, inflation and operational expenses, regulatory uncertainties and tax credits are the key contradictions discussed in Suburban Propane Partners, L.P. Common Units' latest 2025Q3 earnings call.



Solid Financial Performance:
- Suburban Propane Partners reported a net loss of $10.8 million or $0.17 per common unit, slightly higher than the prior year's $8 million or $0.12 per common unit.
- This increase was due to unseasonably warm temperatures affecting propane demand and commodity price volatility.

Propane Volumes and Demand:
- Propane volumes for the third quarter were up slightly compared to the prior year, despite customer tank inventories being higher due to strong weather-driven volume performance in the second quarter.
- The growth was attributed to customer base growth in residential and national account segments, despite softness in resale activities in the Agricultural segment due to unusually wet conditions.

Renewable Natural Gas (RNG) Production:
- Average daily RNG injection for the third quarter declined slightly compared to the prior year, primarily due to operational improvement projects and multiple power outages.
- The company is implementing operational improvements at its Stanfield facility and advancing capital projects in Columbus, Ohio and Upstate New York to enhance RNG production and injection.

Debt Reduction and Leverage:
- During the quarter, Suburban Propane reduced outstanding debt by $69 million, improving its consolidated leverage ratio to 4.33x.
- This was achieved by utilizing excess cash flows and proceeds from the issuance of common units under its ATM equity sales program.

Strategic Investments and M&A:
- The company continues to focus on fostering the growth of its core propane business and making strategic investments in lower carbon renewable energy alternatives.
- Suburban Propane is also actively evaluating M&A opportunities to strategically grow its business, with a pipeline of potential acquisitions under consideration.