Suburban Propane Partners (SPH) reported results for the fiscal quarter ending December 24, 2016, on February 2, 2017. The company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose $17.1 million over fiscal 1Q16 to $84.3 million in fiscal 1Q17. Colder winter temperatures in December 2016 contributed to an increase in propane demand and thus Suburban Propane Partners’ earnings.
The above graph shows Suburban Propane Partners’ adjusted EBITDA over the last 11 quarters.
A colder winter contributed to EBITDA growth
SPH’s president and CEO, Michael Stivala, said, “We are very pleased with our results for the first quarter of fiscal 2017 — an increase of $17.1 million, or 25%, in Adjusted EBITDA compared to the prior year first quarter.”
“The record warm temperatures from the fiscal 2016 heating season carried over into the first two months of the quarter, which created a slow start to the winter. However, when more seasonable and, in some areas, colder than normal, temperatures arrived throughout much of our service territories in mid- December, customer demand increased and our volumes responded strongly,” added Stivala.
According to the NOAA (National Oceanic and Atmospheric Administration), average temperatures across all of SPH’s service territories for fiscal 1Q17 were 14% warmer than normal, but 11% cooler than in the first quarter of 2016.
Cost saving efforts taken by SPH during fiscal 2016 also contributed to the company’s EBITDA in fiscal 1Q17.
The company’s 1Q17 retail propane sales rose 8.1% to 118.6 million gallons, and sales of fuel oil and other refined fuels rose 5.2% compared to the first quarter last year.