Sunoco LP next year plans to spend more than $200 million for organic growth, primarily targeting its fuel distribution business and its 94 octane gasoline offering, the company said Monday in financial guidance.
The report also said the funds would be used to penetrate new markets. A map of its distribution network indicates most of the opportunities for growth in the United States are in the Upper Midwest, Rockies and West Coast regions.
Sunoco now distributes about 8 billion gallons across more than 40 states and territories to about 10,000 retail and commercial accounts. It owns and operates 42 product terminals and distributes wholesale fuel through more than 200 terminals within its footprint.
In 2024, the company said it expects to distribute about 8.3 billion gallons with an average wholesale margin of 12.5cts/gal. Its guidance estimates adjusted EBITDA of $975 million to $1 billion next year.
Wholesale margins continue to be higher than before the pandemic, propped up by volatility and uncertainty and tightness in domestic supply from idled refineries and overseas exports, the report said.
Smaller operators also have higher break-even margins, giving larger, more efficient distributors like Sunoco an advantage, the company added.
Over the last three years, Sunoco said it has invested more than $1.3 billion in growth and anticipates more organic growth and expansion through acquisitions in the foreseeable future.
Total operating expenses are expected to range from $560 million to $570 million, and it has budgeted about $70 million in maintenance capital.
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–Reporting by Donna Harris, [email protected]; Editing by Steve Cronin, [email protected]
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