Superior Plus (TSE:SPB) executives told investors that 2025 marked a “significant transition” year as the company pushed forward with its “Superior Delivers” transformation in propane while its Certarus compressed natural gas (CNG) business faced a sharp pricing downturn in the wellsite market.
On the company’s fourth-quarter call, President and CEO Allan MacDonald said management is “staying the course” on its $75 million Superior Delivers target, but acknowledged the program will take longer than originally planned to fully deliver its intended benefits. Chief Financial Officer Grier Colter said the extended timeline, combined with lower CNG pricing, led the company to revise its multi-year outlook and reset expectations for 2027.
2025 results and per-share improvement
Per-share metrics improved more sharply, which management attributed largely to a lower share count from buybacks, as well as lower interest costs and higher propane EBITDA. Colter said full-year adjusted EBITDA per share was $1.46, up 15%, while adjusted net earnings per share rose 94% to $0.31 and free cash flow per share climbed to $0.87. In the fourth quarter, adjusted EBITDA per share was $0.55 (up 12%), adjusted net earnings per share were $0.27 (up 17%), and free cash flow per share was $0.37 (up 23%).
Propane: transformation progress tested by winter conditions
MacDonald said Superior Delivers is intended to build a lower-cost, more resilient propane platform that performs consistently through winter volatility. However, he described the 2025–2026 winter period as a stress test that exposed execution challenges while the company was still transitioning to a leaner operating model and new delivery methods.
He said sharp localized demand, difficult road conditions, and a delivery network that had not yet reached full optimization added complexity during peak demand periods. Management also acknowledged that early iterations of delivery tools “did not perform as intended,” contributing to lower-than-optimal customer tank levels heading into winter. MacDonald said those issues have been addressed with updated tools and delivery methodologies, and that performance and predictability have improved.
Colter quantified Superior Delivers’ contribution at $16.2 million for the full year and $11.2 million in the fourth quarter. For 2025, North American propane adjusted EBITDA increased 4% to $346.7 million. U.S. propane adjusted EBITDA rose 5% to $246.3 million for the year and increased 9% in the fourth quarter to $96.7 million, with Colter citing higher margins and lower costs from Superior Delivers, partly offset by a temporary reduction in capacity as delivery methodology changed. Canadian propane adjusted EBITDA increased about 2% to $100.4 million for the year; fourth-quarter Canadian adjusted EBITDA was $36.2 million, roughly in line with the prior year as lower carbon credit sales offset transformation and cost benefits.
In Q&A, MacDonald said a delayed rollout of a tool contributed to a backlog and lower tank inventories entering the winter, which he characterized as part of a “perfect storm.” He said management is focused on rebuilding customer inventory levels ahead of next winter, pulling certain once-a-year deliveries into slower seasons, and using flexible staffing—such as “propane specialists” who can pivot to support peak delivery periods.
MacDonald also addressed questions about negative press tied to tank rental fees, saying the company was “cleaning up contracts and customer agreements” that left assets placed at low- or no-volume customer sites, and that the company believes rental pricing is reasonable given regulatory maintenance responsibilities.
Certarus: wellsite pricing headwind and a reset outlook
Executives described 2025 as a challenging year for Certarus, driven primarily by wellsite pricing pressure. MacDonald said pricing pressure in wellsite created a $40 million gross margin headwind that was “largely, but not entirely” offset by internal actions.
Colter reported Certarus adjusted EBITDA of $142.5 million for the full year, down 4% from 2024, primarily due to lower realized wellsite prices, partially offset by industrial growth and higher volumes. Fourth-quarter CNG adjusted EBITDA was $34.3 million, down $4.9 million, or 13%, year over year.
Despite the pricing environment, management emphasized operating discipline. Colter said Certarus reduced operating costs per MMBtu by 6% in 2025 and cut CapEx by roughly 50% (nearly $50 million), contributing to a record year for free cash flow at Certarus.
Certarus President Dale Winger said pricing in the fourth quarter was flat with the third quarter, and management is assuming relatively stable pricing through 2026, with no near-term recovery embedded in guidance. He also said market pricing has declined materially over the last two years, describing a “price to win” dynamic that has pressured the market, while noting pricing has been stable for the past six months. Executives also discussed early indicators of supply and demand rebalancing, including fewer new trailers added to fleets in 2025 and some competitors shrinking geographic footprints rather than exiting entirely.
Management highlighted diversification efforts, including two new data center contracts that began in the fourth quarter. Winger said those jobs are scaling and are expected to reach roughly 30 to close to 40 trailers across the two contracts. The company also pointed to a new Florida hub—its 21st—which Winger said would represent less than 1% of volumes in the first quarter, and discussed progress toward a Houston location targeted to begin serving customers by midyear.
2026 guidance, capital allocation, and updated multi-year view
Colter said the company expects approximately 2% adjusted EBITDA growth in 2026, with propane growth offset by lower earnings at Certarus from a full year of reduced wellsite pricing. Propane adjusted EBITDA is expected to grow 3% to 8%, assuming weather in line with the five-year average and approximately $50 million of Superior Delivers contribution in 2026, up from 2025.
For Certarus, Colter guided to a 4% to 9% adjusted EBITDA decline in 2026, driven by lower realized prices across the full year and reduced ancillary revenue from utility winter standby services. He said the expected year-over-year decline in CNG EBITDA would occur entirely in the first quarter, with Certarus’ first-quarter EBITDA expected to be relatively flat with Q4 2025, or down about 30% to 35% versus Q1 2025, before improving in subsequent quarters.
Capital spending is expected to rise to approximately $160 million in 2026 (including lease additions), up from about $140 million in 2025, with planned investment to update the U.S. propane delivery fleet and a modest increase in CNG investment.
On capital allocation, Colter said Superior Plus repurchased 19.6 million shares in 2025—about 8% of shares outstanding—and about 32 million shares since November 2024, or roughly 13%. While management said it continues to view buybacks as attractive, Colter and MacDonald indicated the company may shift toward additional debt repayment as it prepares for the potential redemption of a $260 million convertible preferred share instrument in mid-2027 if the share price remains below the conversion price of approximately CAD 12.
The company also revised its multi-year outlook. Colter said Superior now expects a 2024-to-2027 EBITDA compound annual growth rate of about 2%, down from about 8% previously, reflecting lower Certarus pricing and a more gradual Superior Delivers progression. He said 2028 is now expected to be the first full year with $75 million in Superior Delivers benefits. Management also confirmed that a previously discussed free cash flow target range cited by an analyst has been “pushed back,” with executives pointing to the changed CNG environment and the longer transformation timeline.
About Superior Plus (TSE:SPB)
Superior is a leading North American distributor of propane, compressed natural gas, renewable energy and related products and services, servicing approximately 770,000 customer locations in the U.S. and Canada. Through its primary businesses, propane distribution and CNG, RNG and hydrogen distribution, Superior safely delivers clean burning fuels to residential, commercial, utility, agricultural and industrial customers not connected to a pipeline. By displacing more carbon intensive fuels, Superior is a leader in the energy transition and helping customers lower operating costs and improve environmental performance.
