Suburban Propane Steady in Q1 as Mild Weather Pressures Sales
Suburban Propane Partners reported fiscal first-quarter 2025 results that reflected the dual impact of unusually warm weather and disciplined operational performance. While top-line revenue declined year-over-year, the company preserved profitability through margin improvement and continued to advance its renewable energy strategy.
For the quarter ending December 30, 2024, Suburban generated revenue of $397.9 million, representing a 7.5% decrease from the $430 million reported in the same quarter last year. The decline was attributed to a reduction in propane volumes, driven by one of the warmest Novembers on record, which sharply curtailed seasonal heating demand.
Net income for the quarter came in at $38.0 million, slightly below the $40.4 million reported in the prior year’s first quarter.
President and CEO Mike Stivala emphasized the importance of operational consistency amid challenging weather conditions, stating, “We were able to deliver consistent earnings despite one of the warmest Novembers on record. This speaks to the strength of our core propane operations and our strategic focus on cost management and customer service.”
Total propane volumes sold during the quarter were 105.7 million gallons, representing a slight decline of 0.8% from 106.6 million gallons in the same period last year.
David Tameron, an energy analyst at Wells Fargo, remarked, “Suburban’s performance shows strong cost discipline and pricing power, especially in a volatile commodity environment. The RNG ramp remains a long-term lever, and their ability to maintain EBITDA is impressive given the 7.5% revenue decline.”
Beyond its core propane business, Suburban continued executing on its renewable energy strategy through its Suburban Renewables platform. The company completed a planned shutdown for equipment upgrades and regulatory compliance at its renewable natural gas (RNG) facility in Stanfield, Arizona. RNG development projects in New York and Ohio remain on track and are expected to become operational in late 2025. These projects are anticipated to benefit from production tax credits included in the Inflation Reduction Act beginning this year.
Capital expenditures for the quarter totaled $23.8 million, more than double the $11.1 million spent in the same period last year. The increase was driven by RNG project development and the previously announced $53 million acquisition of a propane distributor with operations in New Mexico and Arizona. Stivala described these moves as part of a deliberate strategy to invest in energy transition while enhancing Suburban’s market reach. “We are investing in the future of low-carbon energy while protecting near-term value for our unitholders,” he said.
The company also recorded a non-cash impairment charge of $19.8 million in the quarter, related to its early-stage clean energy investments in Oberon Fuels and Independence Hydrogen. These platforms have faced delays in securing third-party funding due to broader macroeconomic headwinds in the clean tech venture space. Nonetheless, Stivala expressed continued confidence in their long-term value, noting, “The underlying value proposition of each platform remains intact. We’re still bullish about their potential to contribute meaningfully over time.
On the capital front, Suburban drew $91.7 million from its revolving credit facility to support operations and acquisitions.
Looking ahead, analysts believe that more seasonally normal winter conditions in January and February will provide a lift to second-quarter volumes. Pavel Molchanov of Raymond James commented, “The January cold snap came at the right time. Suburban is poised for a bounce in volumes, and RNG project timelines remain on track, which supports long-term value.”
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