DALLAS - Sunoco LP (NYSE: SUN), a master limited partnership, has announced the completion of two significant transactions, the acquisition of liquid fuels terminals from Zenith Energy and the sale of 204 convenience stores to 7-Eleven, Inc. These strategic moves are part of the company's efforts to optimize its portfolio and are expected to immediately benefit unitholders.
The acquisition involved Zenith Energy's terminals in Amsterdam, which holds a key position in the Port of Amsterdam, and the Bantry Bay terminal in Ireland, crucial for the nation's oil reserves. Completed on March 13, 2024, for €170 million, this move aims to enhance supply chain efficiencies, particularly for Sunoco's operations on the U.S. East Coast, while adding stable midstream income.
On the divestiture front, Sunoco sold 204 convenience stores located in West Texas, New Mexico, and Oklahoma to 7-Eleven, Inc. for approximately $1.0 billion, a transaction that was finalized on Monday. This sale demonstrates Sunoco's ability to execute asset optimization and positions the company for potential growth. Additionally, Sunoco revised its take-or-pay fuel supply agreement with 7-Eleven, Inc., which is expected to contribute to fuel gross profit.
Despite the restructuring, Sunoco continues to project its full-year 2024 Adjusted EBITDA to be between $975 million and $1 billion. Adjusted EBITDA, a non-GAAP financial measure, reflects earnings before certain expenses and adjustments, providing a view of the company's operational performance.
Sunoco LP operates a network distributing motor fuel to thousands of locations across the U.S. and territories, along with transportation and terminalling assets in the U.S. and Europe. Its general partner is owned by Energy Transfer LP (NYSE: NYSE:ET).
The completion of these transactions is based on a press release statement.
InvestingPro Insights
As Sunoco LP (NYSE: SUN) navigates through its strategic portfolio optimization, the company's financial health and market performance remain a focal point for investors. With a market capitalization of $4.32 billion, Sunoco's size in the energy sector is considerable, reflecting its robust presence in fuel distribution and terminalling operations.
InvestingPro data indicates a Price/Earnings (P/E) ratio of 13.82, which slightly increases to 15.88 when adjusted for the last twelve months as of Q4 2023. This adjustment suggests a modest valuation change over the recent period. The company's Price to Book ratio stands at 4.97, which may influence investors' perceptions of the company's asset value compared to its market price. Despite a revenue decline of 10.34% in the last twelve months as of Q4 2023, Sunoco boasts a significant revenue base of $23.07 billion, underscoring its scale and reach in the market.
InvestingPro Tips suggest that Sunoco's negative PEG ratio of -0.63 could indicate that the market expects slower future earnings growth relative to the company's current P/E ratio. Additionally, the company's dividend yield of 5.85% as of the latest data point, combined with a recent dividend growth of 2.0%, may appeal to income-focused investors seeking stable returns.
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