Star Group Reports $32.9 Million Net Income, Driven by Derivative Gains

Star Group, L.P. reported a net income of $32.9 million for the three months ended December 31, 2024, a significant increase from $13.0 million in the same period last year. This growth was driven by a favorable change in the fair value of derivative instruments, which contributed $24.3 million to the results. Total sales for the quarter were $488.1 million, down from $528.1 million in the prior year, primarily due to a decrease in average selling prices for petroleum products, which fell by 18.4% compared to the previous year. The company’s operating income also rose to $49.2 million, compared to $21.6 million in the prior year.

In terms of operational metrics, Star Group's retail volume of home heating oil and propane sold increased by 2.8% to 82.4 million gallons, compared to 80.1 million gallons in the same quarter of 2023. The company served approximately 404,200 full-service residential and commercial heating oil and propane customer accounts, alongside 64,700 delivery-only accounts. The increase in volume was attributed to colder temperatures and recent acquisitions, which added to the customer base. However, the company experienced net customer attrition of 1,400 accounts, or 0.3% of its customer base, which was an increase from the 700 accounts lost in the prior year.

Star Group made strategic moves during the quarter, acquiring a heating oil business for approximately $0.7 million and selling certain assets for $0.3 million. The company also reported a capital expenditure of $4.0 million, focusing on investments in its fleet and other equipment. The company’s total assets increased to $986.8 million as of December 31, 2024, up from $939.6 million at the end of the previous quarter, driven by higher receivables and inventory levels.

The company’s financial position remains strong, with total current assets of $331.0 million and total current liabilities of $397.0 million, resulting in a current ratio of 0.83. Star Group's long-term debt stood at $182.7 million, down from $187.8 million in the previous quarter. The company has maintained compliance with its financial covenants, with availability under its credit agreement reported at $170.4 million. Looking ahead, Star Group anticipates continued challenges from market volatility and customer attrition but remains focused on strategic acquisitions and maintaining its market position in the heating oil and propane sectors.