Martin Midstream Partners LP (MMLP), Kilgore, Texas, reported net income of $4.3 million ($.25 per share) on sales of $308.1 million for the second quarter ending June 30, 2008, compared to the year-ago $5.9 million ($.41 per share) and $162.3 million, respectively. MMLP said the income decline was due to a $3.3 million non-cash derivative loss.
“Our overall business remains strong as we continue to benefit from our diversification,” said Ruben Martin, president and CEO of Martin Midstream GP LLC, the general partner of MMLP. “In our fourth segment, sulfur services, margins declined as expected due to pricing lags in certain contracts and a reduction in fertilizer volumes sold due to seasonality. Accordingly, we expect our third-quarter sulfur services margins to be substantially improved. For our other businesses, we expect continued improvement as organic growth projects come online through the end of the year and into the first half of 2009. We recently announced our seventh consecutive quarterly distribution increase, which represented a 12.1 percent increase over our distribution one year ago.”
MMLP six-month net income was $12.3 million ($.76 per share) on sales of $621.1 million, versus the year-ago $11.7 million ($.82 per share) on sales of $318.1 million.
Second-quarter sulfur services operating income was $2.94 million on revenues of $86.0 million, compared to the year-ago $1.86 million and $30.3 million. Second-quarter sulfur (molten and prilled) and fertilizer volumes were 289,800 lt versus the year-ago 355,200 lt. The sulfur services segment includes MMLP’s sulfur and fertilizer businesses.
MMLP told analysts it made a decision to defer some sulfur sales into the third quarter due to the anticipation that prices would go up in the third quarter – and they did, by $165/lt. Ruben Martin told analysts that sulfur and fertilizer prices may be near their peak, and that it boils down to managing inventories as things start back down and keeping them at minimum levels. He said most people are thinking prices will hold through the end of the year. Citing his experience in commodity markets, he said nobody is going to tell you what it’s going to do, but that managing inventories is a good option. “I think that it will actually be a positive for us if things come down or at least level off.”
Six-month sulfur services income was $10.05 million on sales of $156.2 million versus the year-ago $3.4 million and $59.7 million, respectively. Six-month sulfur and fertilizer volumes were 467,200 lt versus the year-ago 720,800 lt.