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Highlights

  • In the first quarter of 2024, SPB’s gross profit surged by ~16.2% mainly due to the contribution from Certarus
  • The company’s net earnings declined by around 22%
  • The company has declared a quarterly dividend of CAD 0.18 per common share, slated for payment on July 15

Superior Plus Corp. (TSX: SPB) specializes in distributing energy and specialty chemicals. It is a leading distributor of compressed natural gas, propane, renewable energy, and related products and services in North America.

SPB showcased improving financials in consecutive periods, marked by steady revenue growth and net income. Moreover, the company demonstrated greater liquidity ratios and managed to reduce average inventory days, offering notable advantages. Looking ahead, SPB sets its sight on boosting both its MSU fleet count and volume throughout fiscal year 2024.

In the first quarter of 2024, SPB’s net revenue declined by around 3.3%, primarily due to lower revenue in the wholesale propane, Canadian and US propane segments. However, gross profit surged by ~16.2% mainly due to the contribution from Certarus. Earnings before taxes declined by ~20% due to higher operating expenses and finance cost. Overall, a lower EBIT and a loss of derivatives and foreign currency resulted in 22% decline in net earnings for the quarter.

Recent business update

SPB is focused on controlling both net debt and its leverage ratio. Its leverage ratio was 3.8x as on March 31, 2024, compared to 3.9x as on March 31, 2023. The company aims to lower its leverage ratio by approximately 0.2x in 2024, with a long-term goal of ~3.0x.

The company's board of directors recently approved a quarterly dividend of CAD 0.18 per common share. It is slated for payment on July 15, 2024, to shareholders recorded at the close of business on June 28, 2024.

Company outlook

SPB has a higher EBITDA guidance for FY24. The company reaffirms its 5% Adjusted EBITDA growth target for FY 2024, compared to the 2023 Pro Forma Adjusted EBITDA. This EBITDA growth is expected to be driven by organic growth initiatives.

Top 10 shareholders

The top 10 shareholders of SPB collectively form around ~24.77% of the total shareholdings in the company. Marquard & Bahls AG holds maximum number of shares with ~9.57% shareholding, followed by Brookfield Asset Management, Inc. with ~2.69% shareholding, as depicted in the chart below:

Stock performance

The stock price of SPB has witnessed an upside of ~1.17% and ~1.49% over the last 1 week and 1 month, respectively. The stock has a 52-week high and 52-week low of CAD 10.90 and CAD 9.05, respectively. It is currently trading lower than the average of its 52-week high low.

 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 27, 2024. The reference data in this report has been partly sourced from EODHD/Others.