$PKIUF issues what appears to be a warning regarding Q3 results, while expressing confidence in Q4 performance.
Does this really warrant an 8% crash? You be the judge.
Expected Adjusted EBITDA attributable to Parkland should be approximately $325 million in the third quarter. Primary drivers include:
- USA: Rapidly declining market prices resulted in non-recurring wholesale inventory and risk management losses of approximately $65 million. These more than offset expected contributions from our retail and commercial businesses.
- Refining: Composite utilization of approximately 95 percent was dampened by higher operating, natural gas, transportation and compliance costs, as well as higher trailing crude prices in a declining market. This temporarily lowered our capture of the record refining crack spreads to approximately 55 percent.
- Canada: Falling product prices lowered fuel unit margins compared to the prior quarter. This partially offset steady retail fuel demand and strong non-fuel margins.
Parkland remains confident in it's Q4 outlook due to:
- Reduction of third-party wholesale operations in the US
- A return to higher realized refining crack spreads (more consistent with historical rates)
- A strong tourist season in Florida and international markets
- Traditionally higher seasonal heating demand in it's Canadian commercial business.
- Integration and synergy capture from recent acquisitions
Should be interesting to see full Q3 results from Parkland who is bound to benefit from improved crack spreads.
DYODD!