BlueKnight Energy Partners (BKEP) Reports Q4 Loss of $0.82

BlueKnight Energy Partners (NASDAQ: BKEP) reported Q4 EPS of ($0.82), versus ($0.05) reported last year. Revenue for the quarter came in at $29.81 million versus the consensus estimate of $83.4 million.

• Completed transition to pure-play infrastructure terminalling company with $164 million sale and exit of crude oil business
• Fourth quarter and full year 2020 net loss of $29.2 million and $13.5 million, respectively, primarily due to crude oil pipeline impairment
• Fourth quarter 2020 Adjusted EBITDA of $17.8 million and distribution coverage of 1.64 times
• Exceeded 2020 financial targets with full year Adjusted EBITDA of $67.5 million, distribution coverage of 1.53 times, and leverage ratio of 3.83 times
• Full year 2020 Adjusted EBITDA from continuing operations of $49.7 million, which excludes any expected synergies from the crude oil business sale
• 2021 outlook underpinned by stable cash flows, solid distribution coverage, improved balance sheet and liquidity profile, with pro forma leverage ratio of approximately 2.0 times

“We ended 2020 with strong performance in our asphalt terminalling segment to cap off one of our best years despite challenges brought on by COVID-19, a testament to the stability and strength of our core businesses and solid execution by our team. Most importantly, we delivered on our top strategic priority, transforming Blueknight into a pure-play infrastructure terminalling business with greater financial flexibility,” commented Andrew Woodward, Chief Executive Officer.

“With the sale of our crude oil businesses, we significantly reduced the volatility and risk profile of our business, and now have a sharper strategic focus and improved growth trajectory. As we look forward to the remainder of 2021 and beyond, our team is optimistic about the long-term investment trends in infrastructure and is turning its full attention to growth and expansion of our core terminalling competencies, while maintaining our key financial metrics and a disciplined capital allocation strategy,” added Woodward.

2021 OUTLOOK

For 2021, Blueknight expects infrastructure and highway construction demand for its asphalt terminalling business to be comparable with the prior year with a more favorable outlook beyond 2021 over the medium and long-term driven by the expectation of a more comprehensive infrastructure funding bill. As a result, Blueknight expects its Adjusted EBITDA from continuing operations to be in-line with 2020, excluding any expected corporate synergies of $1.5 million to $2.5 million related to the Crude Oil Transaction. These earnings are supported by:

• Geographically-diverse and industry-leading asphalt terminalling portfolio
• 95% take-or-pay fixed fee revenue
• Predominately investment-grade customer base
• Weighted average remaining contract term of approximately six years

Total maintenance capital expenditures in 2021 are expected to be between $5.5 million and $6.5 million. Blueknight expects to use internally generated cash flow to fund 2021 distributions and is targeting a full year coverage ratio of 1.2 times or greater on all distribution

For earnings history and earnings-related data on BlueKnight Energy Partners (BKEP) click here.

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