Holly Energy Partners, L.P. (HEP) Tops Q4 EPS by 1c, Revenues Beat

Holly Energy Partners, L.P. (NYSE: HEP) reported Q4 EPS of $0.45, $0.01 better than the analyst estimate of $0.44. Revenue for the quarter came in at $132.8 million versus the consensus estimate of $128.27 million.

Revenues Highlights

• Revenues for the quarter were $132.8 million, an increase of $3.6 million compared to the fourth quarter of 2017. The increase was primarily attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines and higher crude oil volumes in the Permian Basin, offset by a decrease in revenue on our Woods Cross refinery processing units due to an operational outage. Compared to the fourth quarter of 2017, our overall pipeline volumes increased for the quarter by 8%.
• Revenues from our refined product pipelines were $39.6 million, an increase of $0.1 million, on shipments averaging 209.1 thousand barrels per day ("mbpd") compared to 231.2 mbpd for the fourth quarter of 2017. The volume decrease was mainly due to lower volumes on pipelines servicing HollyFrontier's Woods Cross refinery, which had lower throughput due to operational issues at the refinery during the quarter, lower volumes on pipelines servicing HFC's Navajo refinery and lower volumes from Delek. Revenue remained relatively consistent due to contractual minimum revenue commitments and tariff escalators.
• Revenues from our intermediate pipelines were $7.1 million, a decrease of $1.2 million compared to the fourth quarter of 2017, on shipments averaging 151.0 mbpd compared to 158.1 mbpd for the fourth quarter of 2017. The decreases were mainly attributable to lower throughput at HFC's Navajo refinery and a decrease in deferred revenue recognized.
• Revenues from our crude pipelines were $29.4 million, an increase of $4.0 million, on shipments averaging 495.4 mbpd compared to 404.4 mbpd for the fourth quarter of 2017. The increases were mainly attributable to our acquisition of the remaining interests in the SLC and Frontier pipelines in the fourth quarter of 2017 as well as increased volumes on our crude pipeline systems in New Mexico and Texas.
• Revenues from terminal, tankage and loading rack fees were $38.5 million, an increase of $1.9 million compared to the fourth quarter of 2017. Refined products and crude oil terminalled in the facilities averaged 451.9 mbpd compared to 516.9 mbpd for the fourth quarter of 2017. The volume decrease was mainly due to the planned turnaround at HFC's El Dorado refinery as well as the cessation of HEP's operations at the Tucson terminal in April 2018. Despite the decrease in volume, revenue increased primarily due to tariff escalators on minimum revenue commitments.
• Revenues from refinery processing units were $18.2 million, a decrease of $1.2 million, on throughputs averaging 47.7 mbpd compared to 62.7 mbpd for the fourth quarter of 2017. The decreases were due to an unplanned outage on our fluid catalytic cracking unit at HFC's Woods Cross refinery in the fourth quarter of 2018.
• Revenues for the fourth quarter of 2018 included $4.1 million for recognition of shortfalls billed to shippers in prior quarters. As of December 31, 2018, deferred revenue reflected in our consolidated balance sheet related to shortfalls billed was $1.8 million.

“Looking to 2019, we expect to grow HEP\'s quarterly distribution by $0.0025 per limited partner unit while maintaining an annual distribution coverage ratio of 1.0x.”

For earnings history and earnings-related data on Holly Energy Partners, L.P. (HEP) click here.

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