Superior Plus Corp.: A Strategic Infrastructure Play for Energy Transition Profits

The energy transition is reshaping global infrastructure, and few companies are positioned as nimbly as Superior Plus Corp. (TSX: SPB). Q1 2025 results confirm that the company’s Superior Delivers initiative—designed to transform its propane distribution and compressed natural gas (CNG) operations—is delivering on its ambitious EBITDA growth roadmap. Combined with a deleveraging balance sheet and shareholder-friendly capital returns, SPB is emerging as a rare high-potential, low-risk play in the energy infrastructure sector. Here’s why investors should act now.

1. EBITDA Growth Catalysts: A $70M Runway Powered by Execution

The Superior Delivers program, launched in 2023, is already proving its worth. In Q1, it contributed $2.3 million to Adjusted EBITDA, with management reaffirming its $20 million 2025 target and a $70 million incremental EBITDA goal by 2027. This is no pipe dream: the initiative’s three pillars—cost-to-serve improvements, customer growth, and wholesale business expansion—are advancing on schedule.

• Cost Efficiency: Route and schedule optimizations are reducing operational drag, with 35% of the $70M target tied to long-term savings.
• Revenue Growth: Pricing analytics and sales efforts are driving contract term extensions, contributing $30 million of the total by 2027.
• CNG Momentum: The company’s CNG segment posted a 7% EBITDA rise to $55.1 million in Q1, fueled by a 16% expansion in Mobile Storage Units (MSUs) to 863 units. This infrastructure build-out supports 10% higher delivered volumes (8.8 million MMBTU) and positions SPB as a leader in low-carbon energy distribution.

The Q1 results underscore a critical point: execution visibility is high. Over 20 initiatives are already in pilot or full rollout, with benefits compounding through 2025. This contrasts sharply with peers still grappling with operational volatility.

2. Financial Fortitude: Deleveraging + Free Cash Flow = Shareholder Gold

SPB’s balance sheet is strengthening at a critical time. Its leverage ratio fell to 3.7x in Q1, down from 4.1x at year-end 2024, and management targets a 3.0x ratio by 2027. This deleveraging, combined with a 54% YoY jump in Free Cash Flow per share ($0.94), creates a virtuous cycle:

• Capital Returns: The company repurchased $40 million of shares in Q1 alone, with a $140 million annual buyback target reaffirmed. Add a C$0.045 quarterly dividend, and investors are seeing $180 million+ returned annually.
• Currency Tailwinds: A stronger U.S. dollar is aiding debt translation, further easing pressure on metrics.

This financial discipline is unmatched in the sector. With 2.6% of shares repurchased in Q1 and a 2025 guidance range that’s 95% covered by current initiatives, SPB is a cash-generating machine with room to grow.

3. Risk-Adjusted Opportunity: Low Volatility, High Upside

Critics might question whether SPB’s targets are over-ambitious, but the data suggests caution is unwarranted:

• De-Risked Guidance: The $20M 2025 Superior Delivers target is already 11.5% achieved in Q1, with 20 initiatives in motion.
• CNG Resilience: MSU utilization remains stable (excluding standby units), and CNG’s low-carbon profile aligns with $300 billion in global energy infrastructure spending through 2030.
• Weatherproofing: Propane demand risks are mitigated by SPB’s diversified customer base and CNG’s utility partnerships.

In a sector where peers face commodity price swings and regulatory uncertainty, SPB’s operational control and low execution risk are its moats.

Why Buy SPB Now?

The case for SPB is clear: it’s a best-of-both-worlds investment. The company is:
1. Growing EBITDA sustainably through a proven playbook.
2. Deleveraging aggressively to unlock equity value.
3. Returning capital relentlessly, rewarding shareholders in a low-interest-rate environment.

With shares trading at 8.5x 2025E EBITDA (vs. a 5-year average of 10x), there’s room for re-rating as Superior Delivers hits its milestones. The $70M EBITDA target by 2027 implies a 20%+ CAGR, making SPB a must-own name for energy transition portfolios.

Investors shouldn’t wait. Q1 results aren’t just a checkpoint—they’re a roadmap to outsized returns.

Act now before the market catches up.