March 31, 2016 [OPIS] - St. Louis-based World Point Terminals (WPT) LP speaks of 2015 as a challenging year, but it reported growing its business over 12 months both by returning tank capacity to service and in building relationships with new and existing customers.
Total storage capacity under contract at the end of 2015 was 88%, up from 82% one year earlier, the partnership said in an annual conference call Wednesday held to discuss its latest full-year financial performance. Continued efforts in 2016 have raised capacity under contract to 91% currently.
Dirty-product tankage in Galveston, Texas, has been particularly challenging, due “at least in part from significant build-out of the residual fuel storage infrastructure in the Gulf Coast over the last few years,” President and Chief Operating Officer Kenneth Fenton said.
At the end of the third quarter of 2015, storage at WPT’s Galveston terminal was only about 63% utilized. Over the final quarter of the year, the level of storage capacity under contract at Galveston was raised to 89%, the company said.
WPT noted that 518,000 bbl of tankage was under spot (month to month) contracts at the Galveston terminal at the end of 2015. While that’s lower than the 580,000-bbl level of end-2014, “there’s no certainty that contracts expiring in 2016 will be extended or that any extension or recontracting will result in the same level of revenue to the Partnership,” WPT said.
End-2015 utilization of Blakely Island storage at 45% has risen to 72% currently, and 33% utilization at the Chickasaw terminal as of Dec. 31, 2015, is 64%.
In contrast to WPT’s last conference call about company performance in March 2015, when storage rates were falling, those rates are now firm, with “a little bit more demand for tankage,” Fenton said. The company is getting “somewhere around 5% to 10% more than we were talking a year ago,” he added.
Asked about opportunities for export-related crude oil business since the late 2015 repeal of the U.S. ban, Fenton acknowledged that there had been some discussion of that with Galveston, as well as at WPT’s terminal in Albany, N.Y. WPT owns, operates, develops and acquires terminals and other assets relating to the storage of light refined products, heavy refined products and crude oil. The partnership owns 15.5 million bbl of storage capacity at 18 terminals in the East Coast, Gulf Coast and Midwest.
Net income for 2015 was $33.129 million, $611,000 higher compared with that of 2014. Adjusted EBITDA for the year, as defined by the partnership, increased $5.834 million versus 2014, to $62.692 million.
WPT management noted that construction of two tanks at its North Little Rock terminal that will add 180,000 bbl of storage is near completion. The tankage is expected to be under contract in the second quarter of 2016.
