WALTHAM, Mass.--(BUSINESS WIRE)--Global Partners LP (NYSE: GLP) today reported financial results for the quarter ended June 30, 2020.

“We delivered strong results in the second quarter, reflecting the extreme contango market structure,” said Eric Slifka, the Partnership’s President and Chief Executive Officer. “Our terminal network enabled us to benefit from a dramatic shift in the forward product pricing curve in Q2, leading to a $73.5 million increase in Wholesale product margin from the same period last year. The Q2 increase sharply contrasts with the nearly $30 million decline in Wholesale segment product margin in the first quarter this year, which reflected less favorable market conditions due in part to the steepening forward curve. In our Gasoline Distribution and Station Operations (GDSO) segment, our second-quarter 2020 results benefited from higher fuel margins that more than offset a year-over-year decline in volume related to COVID-19. Business activity remains below pre-pandemic levels. In comparison with July 2019, in July 2020 retail gas volume was down mid-teens on a percentage basis and convenience store sales were down less than 10%. That said, the extent to which the COVID-19 pandemic may affect our operating results remains uncertain.

“I’m extremely proud of our entire team, which continues to provide essential products and services while ensuring the safety of our guests, customers, suppliers and one another,” Slifka said. “Our office staff has adapted to working remotely and our retail stations and terminals are fully operational.”

Financial Highlights

Net income attributable to the Partnership was $76.3 million, or $2.17 per diluted common limited partner unit, for the second quarter of 2020 compared with net income attributable to the Partnership of $14.5 million, or $0.36 per diluted common limited partner unit, for the same period of 2019.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was $125.7 million in the second quarter of 2020 compared with $64.0 million in the comparable period of 2019.

Adjusted EBITDA was $126.6 million in the second quarter of 2020 versus $62.8 million in the year-earlier period.

Distributable cash flow (DCF) was $95.8 million in the second quarter of 2020 compared with $28.1 million in the same period of 2019.

Gross profit in the second quarter of 2020 was $239.9 million compared with $167.1 million in the second quarter of 2019, primarily due to more favorable market conditions in the Wholesale segment.

Combined product margin, which is gross profit adjusted for depreciation allocated to cost of sales, was $260.1 million in the second quarter of 2020 compared with $188.0 million in the second quarter of 2019.

Combined product margin, EBITDA, Adjusted EBITDA, and DCF are non-GAAP (Generally Accepted Accounting Principles) financial measures, which are explained in greater detail below under “Use of Non-GAAP Financial Measures.” Please refer to Financial Reconciliations included in this news release for reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures for the three and six months ended June 30, 2020 and 2019.

GDSO segment product margin was $145.6 million in the second quarter of 2020 compared with $145.4 million in the same period of 2019, reflecting higher fuel margins largely offset by lower station operations product margins due primarily to the reduction in in-store traffic.

Wholesale segment product margin was $111.5 million in the second quarter of 2020 compared with $38.0 million in the same period of 2019, due to a significant recovery in the supply/demand imbalance at the end of the first quarter and resultant flattening of the forward product pricing curve.

Commercial segment product margin was $3.0 million in the second quarter of 2020 compared with $4.5 million in the second quarter of 2019, primarily reflecting a decrease in bunkering activity.

Sales were $1.5 billion in the second quarter of 2020 compared with $3.5 billion in the second quarter of 2019, due to lower volume and a decrease in prices. Wholesale segment sales were $0.8 billion in the second quarter of 2020 compared with $2.0 billion in the second quarter of 2019. GDSO segment sales were $0.6 billion in the second quarter of 2020 compared with $1.1 billion in the second quarter of 2019. Commercial segment sales were $133.0 million in the second quarter of 2020 compared with $356.8 million in the second quarter of 2019.

Volume in the second quarter of 2020 was 1.2 billion gallons compared with 1.6 billion gallons in the same period of 2019. Wholesale segment volume was 794.4 million gallons in the second quarter of 2020 compared with 1.0 billion gallons in the same period of 2019. GDSO volume was 278.6 million gallons in the second quarter of 2020 compared with 411.0 million gallons in the second quarter of 2019. Commercial segment volume was 125.2 million gallons in the second quarter of 2020 compared with 183.3million gallons in the second quarter of 2019.

Recent Developments

• Global’s Board of Directors announced a quarterly cash distribution of $0.45875 per unit, or $1.835 per unit on an annualized basis, on all of its outstanding common units for the period from April 1 to June 30, 2020. The distribution will be paid August 14, 2020 to unitholders of record as of the close of business on August 10, 2020.

Business Outlook

“There is a continuing uncertainty surrounding the short- and long-term impact of COVID-19 to our businesses. While we believe that our integrated business model, diversified product portfolio and versatile asset base provide us with operating and financial flexibility, our performance in the quarters ahead will be affected by the extent and duration of the pandemic,” Slifka said.

Any COVID-19 related events or conditions, or other unforeseen consequences of COVID-19 could significantly adversely affect our business and financial condition and the business and financial condition of our customers, suppliers and counterparties. The ultimate extent of the impact of COVID-19 on our business, financial condition and results of operations depends in large part on future developments which are uncertain and cannot be predicted at this time. That uncertainty includes the duration (including its potential return) of the COVID-19 pandemic, the geographic regions so impacted, the extent of said impact within specific boundaries of those areas and, lastly, the impact to the local, state and national economies.

About Global Partners LP

With approximately 1,550 locations primarily in the Northeast, Global Partners is one of the region’s largest independent owners, suppliers and operators of gasoline stations and convenience stores. Global Partners also owns, controls or has access to one of the largest terminal networks in New England and New York, through which it distributes gasoline, distillates, residual oil and renewable fuels to wholesalers, retailers and commercial customers. In addition, Global Partners engages in the transportation of petroleum products and renewable fuels by rail from the mid-continental U.S. and Canada. Global Partners LP, a master limited partnership, trades on the New York Stock Exchange under the ticker symbol “GLP.” For additional information, visit www.globalp.com.