Murphy USA saw a net income of $61 million in the fourth quarter of 2020, a substantial increase over the same period in 2019, despite an ongoing pandemic that has impacted the oil and gas industry.
The El Dorado-based company reported its preliminary financial reports, indicating that its fourth quarter returns were $13.4 million higher in 2020 than the same time last year, when Murphy USA netted $47.6 million. During the fourth quarter of 2020, Murphy USA opened 15 news and had 20 raze-and-rebuild-stores reopened, compared to 10 each in 2019.
Overall, Murphy USA comes out of 2020 stronger, in terms of net income, than in 2019. Murphy USA estimates approximately $386.1 million in net income for 2020, while in 2019, the company netted $154.8 million.
In 2020, Murphy USA raised its fuel contribution from $704.6 million to $982.1 million. However, its retail fuel volume per chain actually dropped from 4.374 billion gallons to 3.90 billion gallons. In addition, the retail fuel volume per site dropped to 216.2 K gallons from 243.8 K gallons in 2019.
“As we exit 2020, we are excited to embark upon a new chapter in our value creation strategy as outlined in our October 2020 Capital Allocation update, which included a higher rate of planned organic growth, continuing to return capital through share repurchases, a newly announced $0.25 per share quarterly dividend, and the potential for select M&A activity, including to accelerate development of food and beverage capabilities,” Murphy USA president and CEO Andrew Clyde said in a statement “In December 2020, we took an important first step in executing the M&A element of our strategy, announcing the planned acquisition of QuickChek, and its distinctive brand and customer value proposition, for $645 million. The acquisition will transform existing organic growth plans in attractive markets and accelerate and de-risk the roll-out of Food and Beverage platforms across the network. We plan to update the market with our combined performance expectations for the two firms when we provide 2021 guidance, which we expect to announce in conjunction with our fourth quarter and full-year earnings release on February 3, 2021.”
The acquisition of QuckChek in December 2020 is a $645 million all-cash transaction, which is expected to close in the first quarter of 2021.
Despite the increase in net revenue, Murphy USA ended 2020 with lower cash and cash equivalents compared to 2019. At the end of 2020, Murphy USA reported $163.6 million in cash and cash equivalents, while the company had $280.3 million the previous year.
The company’s EBITDA (Earns Before Interest, Taxes, Depreciation and Amortization) for 2020 was up significantly over last year’s. Murphy USA had an EBITDA of $720.3 million and an adjusted EBITDA OF $722.7 million for 2020. This is a $300-plus million increase from 2019 when the company reported an EBITDA of $406.3 million and an adjusted EBITDA of $422.6 million.