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SemGroup Corporation Reports First Quarter 2013 Results

Stocks in this article: SEMG

Announces Initial Quarterly Dividend of $0.19 Per Share

TULSA, Okla., May 8, 2013 (GLOBE NEWSWIRE) -- SemGroup ® Corporation (NYSE:SEMG) (SemGroup) today announced its financial results for the three months ended March 31, 2013 and the board of directors of SemGroup has also declared a quarterly cash dividend to common shareholders of $0.19 per share. Initiated in the second quarter of 2013, this equates to $0.76 per share annually. The company is targeting a 10% increase in dividends paid in 2013 and anticipates a double-digit annual dividend growth rate for the next three years. The dividend will be paid on May 30, 2013 to all common shareholders of record on May 20, 2013.

"We're off to a solid start in 2013 and pleased to be offering a cash dividend to our shareholders. This dividend complements our continued growth story and is an important part of our commitment to shareholders," said Norm Szydlowski, president and chief executive officer of SemGroup. "We are excited about our growth opportunities, most notably our recently announced agreement to acquire Chesapeake's gas gathering and processing assets in the Mississippi Lime play. These new assets will increase our size and strategic position in the area and help us create additional value for our shareholders."

SemGroup's adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) was $35.5 million for the first quarter 2013, compared to $43.7 million for the fourth quarter 2012 and $28.1 million for the first quarter 2012, a decrease of 19% and an increase of 26%, respectively. Adjusted EBITDA, which is a non-GAAP measure, is reconciled to net income below.

First Quarter Highlights

  • On January 11, 2013, Rose Rock Midstream acquired a 33.3% interest in SemCrude Pipeline, L.L.C., which owns 51% of White Cliffs Pipeline, L.L.C.;
  • Crude marketing margins increased due to improved crude oil market conditions;
  • SemGas margins increased due to higher NGL prices, although volumes were down modestly;
  • SemCAMS saw a decrease in Adjusted EBITDA due primarily to timing of maintenance capital recovery fees as compared to the prior quarter and a decrease in volumes was driven by an unplanned shutdown at the K3 plant; and
  • SemMaterials Mexico experienced lower demand in the first quarter due to a decrease in government spending resulting from the change in administration.

SemGroup reported revenues for first quarter 2013 of $287.7 million with net income attributable to SemGroup of $43.4 million, or a $1.03 per diluted share, compared to revenues of $315.8 million with a net income attributable to SemGroup of $21.1 million, or $0.50 per diluted share, for the fourth quarter 2012. For the first quarter 2012, revenues totaled $312.0 million with net loss of $1.4 million, or a loss of $0.03 per diluted share. Net income for the first quarter of 2013 was positively impacted by an income tax benefit of $54 million due to the release of a valuation allowance on our deferred tax assets. Net income was negatively affected by a non-cash expense of $25.8 million related to a change in the fair value of warrants.

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