SGU — Star Group, L.P.

SGU Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Adjusted EBITDA: $139 million, up $10.5 million year-over-year.
• Net Income: $108 million, an increase of $22 million from the prior year.
• Home Heating Oil and Propane Volume: Increased by 600,000 gallons to 144.5 million gallons for the quarter; first half volume rose by 12 million gallons (5.3%) to 238 million gallons.
• Product Gross Profit: Increased by $19 million (7%) to $277 million for the quarter; up $48 million (12%) to $457 million for the first half.
• Net Customer Attrition: Maintained at 0.6%.

2. Strategic Updates and Business Highlights:

• The company completed a small heating oil acquisition during the quarter and is exploring additional acquisition opportunities.
• Effective inventory controls and supply chain initiatives are being employed to manage the impact of rising wholesale product costs.
• Employee performance was highlighted, particularly in managing service demands during extreme weather conditions.

3. Forward Guidance and Outlook:

• The company is optimistic about the remainder of fiscal 2026, anticipating opportunities for business development and investment in personnel.
• A $12.5 million weather hedge has been established for fiscal 2027 to mitigate future weather-related risks.

4. Bad News, Challenges, or Points of Concern:

• Severe weather conditions led to increased operating expenses, including a $3.4 million rise in service losses and a $5.4 million increase in delivery, branch, and G&A expenses.
• Insurance expenses rose by $4 million due to claims related to severe weather.
• The company did not recognize any benefit from its weather hedge in Q2 2026, contrasting with a $3.1 million expense in the previous year.

5. Notable Q&A Insights:

• There were no questions from participants during the Q&A session, indicating a possible lack of immediate investor concerns or engagement at this time.

Overall, SGU demonstrated solid financial performance amidst challenging weather conditions, with strategic initiatives in place to address rising costs and future growth opportunities. However, the impact of extreme weather on operational efficiency and rising expenses remains a concern.