SunocoCorp (NYSE:SUNC) reported second-quarter adjusted EBITDA of $996 million, excluding approximately $14 million of one-time transaction expenses, and raised its full-year 2026 adjusted EBITDA guidance by $400 million to a range of $3.5 billion to $3.7 billion.
Senior Vice President of Finance Scott Grischow said the higher outlook reflects portfolio strength and the value being realized from recent acquisitions. Second-quarter distributable cash flow as adjusted was $608 million. The company declared a distribution of just over $1 per common unit and share on July 27, representing a 1.25% sequential increase and an increase of more than 10% from the second quarter of 2025.
Segment results supported by higher volumes
Chief Operating Officer Karl Fails said all four operating segments contributed to the quarter’s results.
- Fuel Distribution: Adjusted EBITDA was $516 million, excluding $12 million in transaction expenses, compared with $538 million in the first quarter and $214 million in the prior-year period. Fuel volumes totaled 4.1 billion gallons, up 9% sequentially and 89% year over year. Reported margin was 17.1 cents per gallon, compared with 17 cents in the first quarter and 10.5 cents a year earlier.
- Pipeline Systems: Adjusted EBITDA rose to $190 million from $179 million in the first quarter and $177 million a year earlier. Throughput was 1.3 million barrels per day, up 4% sequentially and 9% year over year.
- Terminals: Adjusted EBITDA reached $115 million, excluding $2 million in transaction expenses, compared with $107 million in the first quarter and $73 million a year earlier. Throughput increased to 1.1 million barrels per day, supported by a full quarter of contributions from the TanQuid acquisition.
- Refinery: Adjusted EBITDA was $175 million, compared with $43 million in the first quarter. Throughput rose to 57,000 barrels per day from 22,000 barrels per day following a planned turnaround. Fails said refining margin exceeded $40 per barrel while operating expenses were below $10 per barrel.
Fails said the Fuel Distribution segment benefited from the company’s larger and more diverse portfolio, gross-profit optimization efforts and growth investments. He also cited commodity-price volatility and higher break-even margins as favorable conditions for the business.
Management expects continued growth and acquisition activity
President and Chief Executive Officer Joe Kim said the company expects to materially exceed its initial 2026 EBITDA guidance and deliver its eighth consecutive year of EBITDA growth. He said Sunoco expects its Fuel Distribution business to perform in the second half at a level comparable to its first-half performance, while Pipeline Systems and Terminals continue to provide reliability and stability.
Kim said the company’s refining exposure provides additional upside when crack spreads are strong, while its broader portfolio diversity can support performance when refining conditions are less favorable. He said the company’s leverage below 4x provides flexibility to increase distributions and pursue accretive growth investments.
Management reiterated a multiyear target of at least $500 million annually in bolt-on acquisitions, with Kim describing that target as a “modest bar.” He said Sunoco expects to exceed it in 2026 and in future years, citing opportunities across fuel distribution and midstream operations in the U.S., Canada, the Caribbean and Europe.
Fails said the company is also pursuing smaller organic projects, including adding fuel-distribution customers, constructing terminal tanks in markets such as South America, the Caribbean and Europe, and making new pipeline connections. He said these investments generally include projects in the $20 million to $30 million range.
Burnaby refinery and fuel-demand trends
Management said the Burnaby refinery, acquired through the Parkland transaction, has benefited from stronger-than-anticipated refining economics since it joined the portfolio. Fails said the company evaluated the acquisition using mid-cycle economics and remains focused on improving reliability and lowering operating costs per barrel.
He said the refinery’s nameplate capacity of 55,000 barrels per day was established based on crude operations, while actual throughput can vary depending on crude inputs and low-carbon feedstocks processed. The refinery ran above nameplate capacity on a combined basis during the quarter, though Fails emphasized that Sunoco will not sacrifice long-term reliability for short-term production gains.
Chief Commercial Officer Austin Harkness said U.S. refined-product demand has remained roughly flat year over year despite fuel-price volatility, while Canadian gasoline demand was down low- to mid-single digits and ultra-low sulfur diesel demand was roughly flat. Caribbean demand was up low- to mid-single digits overall, though conditions vary among the region’s markets.
Harkness said Sunoco’s volumes have outpaced broader demand trends because of growth capital deployment, organic investments and acquisition-related synergies. He also said the company has not seen indications that product disruptions related to the Middle East conflict will have lasting effects on its business. Instead, Sunoco has used its expanded assets and geography to respond to market dislocations, including moving diesel by rail from the Midwest to Mid-Atlantic markets and supplying Hawaii from the Burnaby refinery.
Kim said cash flow from strong refining conditions could support a combination of higher distributions, additional balance-sheet improvement and further growth investments. He said the company intends to continue allocating a material portion of free cash flow toward acquisitions while retaining capacity for distribution growth.
About SunocoCorp (NYSE:SUNC)
Sunoco LP is an energy infrastructure and fuel distribution master limited partnership. Sunoco LP is based in DALLAS.
