Genesis Energy (GEL) Misses Q4 EPS by 45c, Revenues Miss

Genesis Energy (NYSE: GEL) reported Q4 EPS of ($0.35), $0.45 worse than the analyst estimate of $0.10. Revenue for the quarter came in at $689.3 million versus the consensus estimate of $737.4 million.

• Net Loss Attributable to Genesis Energy, L.P. of $24.8 million for the fourth quarter of 2018 compared to Net Income Attributable to Genesis Energy, L.P. of $15.5 million for the same period in 2017.
• Cash Flows from Operating Activities of $82.5 million for the fourth quarter of 2018 compared to $117.2 million for the same period in 2017, a decrease of $34.8 million, principally due to an increase in working capital.
• Total Segment Margin in the fourth quarter of 2018 of $185.5 million.
• Available Cash before Reserves of $150.8 million for the fourth quarter of 2018, inclusive of a one-time gain on sale of assets of $38.9 million. Excluding the gain on sale of assets, Available Cash before Reserves provided 1.66X coverage for the quarterly distribution of $0.55 per common unit attributable to the fourth quarter. We paid distributions on our preferred units in the form of 534,576 additional convertible preferred units.
• Adjusted EBITDA of $213.2 million for the fourth quarter of 2018, inclusive of a one-time gain on sale of assets of $38.9 million. Excluding the gain on sale of assets, Adjusted EBITDA would have been $174.3 million.

Grant Sims, CEO of Genesis Energy, said, “We are pleased to announce Total Segment Margin of $185.5 million in the quarter which is a testament to the strength of our underlying diverse business segments. This was primarily driven by continued over performance in our soda ash business and continued ramping up of volumes on our Louisiana infrastructure.

As we have previously alluded, we have identified and are currently evaluating several organic growth opportunities that are complementary to our existing core businesses with apparent multiples to Adjusted EBITDA of plus or minus 5 times. In conjunction with our desire to internally fund these potential investments and possibly other future opportunities and to further strengthen our balance sheet and maintain our financial flexibility, our Board of Directors has made the decision to hold our quarterly distribution rate flat at $0.55 per common unit beginning with the distribution attributable to the quarter ending March 31, 2019. We intend to use our capital for the highest and best use for all of our stakeholders. We will revisit our distribution policy quarterly, but we currently expect for our quarterly distribution rate to remain at $0.55 per common unit for the foreseeable future.

Turning to our quarterly financial results, our business continued to perform well, generating consistent financial results that provided 1.66X coverage for our increased quarterly distribution. Our distribution coverage ratio should be slightly lower in future periods, everything else the same, as we move out of the paid-in-kind period on our preferred equity units beginning on March 1, 2019 and start paying the 8.75% preferred payment in cash on a go forward basis.

In our offshore business, we continue to be encouraged by the current activity in and around our substantial footprint in the Gulf of Mexico. We are currently seeing increasing demand for our assets from production that is currently dedicated to pipelines of our competitors that, in our estimation, appear to be oversubscribed. Given our excess capacity and connectivity on certain of our systems, we expect to benefit from this takeaway capacity constraint for the next twelve to twenty-four months."

For earnings history and earnings-related data on Genesis Energy (GEL) click here.

You May Also Be Interested In

• Tesla to launch Cybercab in Austin this month - report
• Yalla Group Limited (YALA) Reports Q2 EPS of $0.24
• DocGo (DCGO) Misses Q2 EPS by 6c; Offers Guidance