April 28, 2016 [OPIS] NuStar Energy LP's first-quarter results were a mix of lower financials compared to a year ago and bright spots including gains in storage operating income, the master limited partnership reported on Wednesday.
Net income was $57.4 million, down from $127.9 million in first quarter 2015. Net income applicable to limited partners was $44.8 million versus $114.5 million a year ago. Q1 EBITDA was $147.5 million, down from $214 million in the January-March 2015 period.
The company’s quarterly distribution remains at $1.095 per unit and will be paid on May 13 to holders of record as of May 9.
NuStar announced it recently signed a one-year 850,000-bbl storage contract at its formally mothballed Piney Point, Md., facility, “which should further contribute to our positive storage results for the year,” NuStar CEO Brad Barron said in a statement.
First-quarter storage throughputs were lower versus Q1 2015 but operating income for the segment at $57 million was 19% higher year on year. Operating income for the pipeline segment was $64.3 million, down 6.4% compared to Q1 2015, with crude oil throughput at 411,109 b/d off 19% year on year while refined product throughput was 3% higher at 521,272 b/d.
The fuels marketing segment sustained a loss of $773,000 in operating income versus Q1 2015 results of $9.9 million. Product sales and other revenue of $140.4 million were 51% lower year on year.
CEO Barron said NuStar Energy remains focused on disciplined capital spending. The company has reduced 2016 strategic capital spending by about half to $180 million to $200 million and is “moving forward with our best projects with the highest rates of return” and are being financed with excess cash on the balance sheet and borrowings from the company’s $1.5 million credit facility.
NuStar’s EBITDA expectations for 2016 are unchanged, Barron said. EBITDA guidance for the pipeline segment is $335 to $355 million; $310 to $330 million for storage and $15 to $35 million for the fuel marketing segment.
NuStar Energy LP is a publicly traded MLP based in San Antonio. It currently has approximately 8,700 miles of pipeline and 79 terminal and storage facilities that store and distribute crude oil, refined products and specialty liquids. The partnership’s combined system has approximately 93 million barrels of storage capacity, and NuStar has operations in the United States, Canada, Mexico, the Netherlands, including St. Eustatius in the Caribbean, and the United Kingdom.
