May 6, 2016 [OPIS] - TransMontaigne said on Thursday that it has secured remaining commitments to support a 2-million-bbl expansion plan for its Collins/Purvis, Miss., bulk storage terminal.
TransMontaigne has begun the process of permitting 5 million bbl of additional capacity at that terminal and is discussing this future capacity with several potential customers.
With a current active storage capacity of approximately 3.4 million bbl, it is the only independent terminal capable of receiving, delivering, and transferring refined petroleum products between the Colonial and Plantation pipeline systems.
The revenue associated with these agreements will come on-line upon completion of the construction of the new tank capacity, which the company expects to occur during the fourth quarter of 2016 through the second quarter of 2017.
The anticipated cost of the new storage capacity is approximately $75 million, with expected annual cash returns in the high-teens.
During the first quarter of 2016, TransMontaigne began construction and has spent approximately $8.1 million on the project as of March 31, 2016.
Meanwhile, TransMontaigne’s consolidated EBITDA was $24.1 million and Distributable Cash Flow was $19.1 million for the first quarter of 2016, compared to Consolidated EBITDA of $21.3 million and Distributable Cash Flow of $18.1 million for the first quarter of 2015.
Operating income for the quarter ended March 31, 2016 was $11.7 million compared to $12.4 million for the quarter ended March 31, 2015.
Revenue was $40.6 million compared to $37.9 million due to increases in revenue at the Gulf Coast, Midwest, Brownsville and Southeast terminals of approximately $0.9 million, $0.2 million, $0.7 million and $1.1 million, respectively, offset by a decrease in revenue at the River terminals of approximately $0.2 million.
Quarterly net earnings were $8.7 million compared to $10.1 million for the quarter ended March 31, 2015, principally due to the changes in quarterly operating income discussed above and an increase in interest expense of approximately $0.9 million. The increase in interest expense is primarily attributable to the recognition of unrealized losses in determining the fair value of interest rate swap agreements.
As of March 31, 2016, the notional amount of interest rate swaps was equal to approximately 47% of our variable rate debt.
