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August 3, 2022 3:26 PM, EDT

TA Reports Strong Q2 Net Income, Revenue

TravelCentersA TA sign. (Hillary Hartley/Flickr)

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TravelCenters of America Inc. reported second-quarter net income more than doubled and revenue soared amid favorable fuel purchasing conditions.

Net income for the period ended June 30 rose to $64 million, or $4.31 per share, compared with $29 million, $2.02, a year earlier.

Revenue jumped to $3 billion from $1.8 billion a year earlier.

Fuel gross margins increased by 56% to $156 million compared with $100 million a year earlier, according to the company.

“Operational highlights for the quarter included the fuel team successfully managing extraordinary volatility in supply markets, growth in truck service and the reopening of some full service restaurants,” Jonathan Pertchik, TA’s chief executive officer, said in a release. “The company has proven once again that it can overcome challenging macroeconomic circumstances while maximizing market opportunities through operational excellence and a resilient business model.”

Jonathan Pertchik, CEO of TravelCenters of America Inc.

Pertchik

He said investing in growth remains a key pillar in the company’s transformation plan, with a focus on site refreshes, technology improvements and network expansion. “We continue to evaluate opportunities to acquire high quality travel centers, with two full service travel centers and a truck service location added during the second quarter and a third full service travel center location added in early July.”

Fuel revenue hit $2.5 billion compared with $1.3 billion a year earlier.

In the quarter, diesel fuel sales dipped to 511,209 gallons compared with 512,943 a year earlier. Gasoline sales fell to 63,111 gallons compared with 70,687 gallons in the 2021 period.

Non-fuel revenue climbed to $553 million compared with $501 million a year earlier. In this segment, year-over-year revenue from sales of diesel exhaust fluid rose 44.7% to $48 million compared with $33 million a year earlier. Truck service revenue rose 12.4% to $218 million compared with $194 million.

Pertchik said its new fuel discount program for small fleets is off to a good start.

“We’ve had something in the 300-plus range of active new fleet signed up with this,” he said during the earnings call. “Remember, these are smaller fleets, you’re not going to get massive gallons, but because they are smaller fleets, they’re very meaningful margin CPG (cents per gallon). We have had over 1,000 applications submitted just working our way through that process.”

TA noted it is committed to embracing environmentally friendly energy sources through its eTA division, which seeks to deliver sustainable and alternative energy to the marketplace.

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Recent accomplishments include expanding TA’s biodiesel blending capabilities, increasing the availability of diesel exhaust fluid at all diesel pumps nationwide and installing electric vehicle charging stations, according to the company.

TA is also exploring ultra-high power truck charging and hydrogen fuel dispensing in parallel with traditional fossil fuels to provide energy alternatives as the transportation sector transitions to a lighter carbon footprint. TA believes its large, well-located sites will allow it to make both fossil and, eventually, non-fossil fuels available throughout its nationwide network.

For the six-month period, net income was $80 million, $5.41, on revenue of $5.3 billion compared with net income of $23 million, $1.62, on revenue of $3.3 billion.

Looking ahead, TA reported its capital expenditures for 2022 are expected to be in the range of $175 million to $200 million and include projects to improve the guest experience through significant upgrades at TA’s travel centers, the expansion of restaurants and food offerings and improvements to TA’s technology systems infrastructure.