An oil refinery company that is looking to add more storage tanks in Burnaby has been hit hard by COVID-19, according the company’s latest numbers.
Parkland Corp. says net income in the three months ended June 30 was $32 million on revenue of $2.7 billion, down from $105 million on revenue of $4.85 billion in the same period a year ago. It says overall fuel and petroleum product volumes decreased by 14 per cent in the second quarter compared with the year-earlier period but strong fuel margins and convenience store traffic, along with cost cutting, drove an over 30 per cent increase in adjusted earnings in Canada.
Parkland’s Burnaby refinery application calls for eight new storage tanks totalling 293,000 barrels of capacity, which Parkland said in an emailed statement was intended for improving its biofuel capacity.
Parkland noted the refinery is the only one in North America using its existing infrastructure to create low-carbon and renewable fuels, like biofuels.
“In order for us to modernize our facility to support the CleanBC goal of the production of 650 million litres of renewable fuels by 2030, our facility will undergo changes including removing out-of-service tanks and adding new tanks, increasing hydrogen production, enabling flexibility of rail and wharf to handle renewable feedstocks,” Parkland said in an email.
“We have been working with our regulators, engaging with our community advisory panel as well as our broader neighbourhood to communicate our low-carbon and modernization plans over the last two years.”
Of the eight tanks, two would have a combined capacity of 80,000 barrels of organic oils or fat (lipids), while four would have a combined capacity of 13,000 barrels of feedstock.
But the two largest tanks, combining for 200,000 barrels, would carry oil. Those two tanks could each see more than 18 million barrels of oil flow through them each year, according to Parkland’s application.
Parkland’s net earnings per diluted share were 21 cents, compared with 70 cents last year. Analysts had expected a loss of 38 cents, according to financial data firm Refinitiv.
Parkland, which purchased the Caribbean fuel retailer Sol early last year, says volumes in its international segment are trending about 20 per cent lower in July compared with last year because some markets have temporarily increased restrictions due to rising COVID-19 cases.
Parkland, which sells fuel through more than 2,600 service stations in Canada, the United States and Caribbean, cut its budget to $275 million in March, down from its earlier guidance of $575 million. It says it will restore $50 million to account for stronger cash flow than expected and higher maintenance spending.
"We delivered solid margins, won new business and successfully managed our cash flow by reducing costs and controlling capital expenditures," said CEO Bob Espey in a statement.
"Our financial and operating performance through the second quarter demonstrates the flexibility and resilience of our diversified business model. While we remain nimble in light of ongoing COVID-19 uncertainty, we are confident in our ability to advance our growth agenda."
- With files from Dustin Godfrey and the Canadian Press