Suburban Propane Partners LP reported a solid first quarter for fiscal 2025, characterized by resilient Adjusted EBITDA and favorable volume dynamics offsetting a warm November. Adjusted EBITDA was $75.3 million, essentially flat versus the prior year, while GAAP net income stood at $19.4 million (EPS $0.30). Revenue reached $373.3 million with gross margin of 27.6% (gross profit of $103.0 million). Retail propane gallons sold totaled 105.7 million, down 0.8% year-over-year, as unseasonably warm weather and a softer crop-drying season weighed on demand, but Southeast strength post-Hurricane Helene and Milton, plus a Southwest acquisition closed in November 2024, helped offset the weather impact. Management highlighted ongoing pricing discipline in a higher commodity price environment and cost efficiency in operations. Colder temperatures late in December and into January supported heating-season momentum entering Q2, suggesting the quarter’s weather sensitivity may shift to a more favorable demand backdrop in the near term.
Strategically, SPH continues to advance its RNG platform with the StanfieldArizona shutdown completed for routine maintenance and regulatory upgrades, and ongoing capex in Upstate New York and Columbus, Ohio, targeted to lift RNG production later in 2025. The company is pursuing Production Tax Credits (PTCs) under the IRA, with Stanfield already earning PTCs from January 1, 2025, and with monetization plans for NY and OH facilities. Balance-sheet discipline remains a priority: leverage was 4.99x trailing twelve months, below the covenant ceiling of 5.75x, with substantial revolver availability and a growing free cash flow profile as RNG monetization progresses. The quarterly distribution was $0.325 per unit ($1.30 annualized) with a coverage ratio of 1.87x.
Looking ahead, management reiterated a disciplined capital plan with 2025 Propane capex guidance of $40–$45 million and RNG capex guidance of $35–$45 million, plus ongoing strategic acquisitions to expand core propane markets and scale renewable energy assets. The near-term investment thesis hinges on RNG ramp, PTC monetization, and continued operating leverage from a weather-driven business, balanced by the need to manage higher leverage and regulatory risks inherent in early-stage renewables investments.