NGL Energy Partners (NGL) posted a $1.99 per share loss for its latest quarter on 26% lower sales of $2.35 billion, a worse performance than analysts anticipated.
Analyst consensus called for earnings of 54 cents per share on revenue of $2.64 billion.
The Tulsa, Okla., limited partnership posted earnings per share of 97 cents in the same period last year on $3.2 billion in sales.
NGL said the $207 million net loss for the quarter included $252.9 million in net non-cash charges, noting that adjusted Ebitda came in at a positive $154 million for the quarter versus $185 million in the same period last year. It blamed the 17% year-over-year Ebitda decrease on the decline in commodity prices and warmer weather.
The limited partnership booked distributable cash flow for the quarter of $128.3 million versus $153.5 million in the same period last year.
NGL shares were down 3.57% in pre-market trading to $12.96 per unit after falling 4.6% to $13.44 apiece at Thursday's close. As of yesterday shares were up nearly 22% year-to-date and 66% over the past three months.
NGL CEO Mike Krimbill said in the statement that management was very pleased with its Ebitda performance over the last year and recent delevering events given the challenging energy environment.
"Our fourth quarter results were impacted by the continued decline in commodity prices compounded by a continuing unseasonably warm winter," he said. "We were able to offset those impacts by increasing volumes in our refined products business, optimizing our operations and taking advantage of a contango commodities market. This is a testament to our strategy of having an integrated and diversified portfolio of midstream businesses which serve as natural hedges against commodity price declines."
Krimbill added that the partnership had made progress over the past six months to improve its balance sheet, enhance its liquidity and continue to focus on opportunities to expand its five business segments.
The partnership still expects to earn adjusted Ebitda of $500 million for this next fiscal year and anticipates distribution coverage of about two times. It also plans to spend between $200 million and $300 million on capital expenditures over the next year, including about $110 million related to the completion of the Grand Mesa pipeline.
Seaport Global Securities has noted that NGL is among a group of master limited partnerships that is mostly insulated from commodity price swings.
NGL's business model consists of refined products/renewables (17%), propane (19%), crude logistics (15%), water solutions (27%) and liquids (20%).
In terms of potential catalysts, Seaport analysts said earlier this quarter that NGL is expected to benefit from the Grand Mesa pipeline coming on-line later this year (it stretches from Colorado to its crude oil storage facility in Cushing, Okla.). The firm also implied the company may be looking to do bolt-on acquisitions.
Last month NGL cut its distribution by almost 40% and received a $200 million cash infusion from Oaktree Capital Management LP through the sale of convertible preferred units and warrants. It said it was going to use the proceeds to pay down its revolving credit facility.
The partnership also sold its interest in the general partner of TransMontaigne Partners (TLP) to ArcLight Capital Partners LP in February for $350 million, a move that lifted some concerns about its leverage. Two months later it shed all of its TLP common units for $112.4 million.
-- Tom Terrarosa contributed to this report