Martin Midstream Partners LP, Kilgore, Texas, reported net income was down to $4.9 million ($.28 per diluted lp unit) on sales of $156.9 million for the first quarter ending March 31, 2009, from the year-ago $8 million ($.51 per unit) and $313.0 million, respectively. Sales at the sulfur services unit, which includes fertilizer, dropped to $26.6 million, compared to the year-ago $70.2 million.
“The first quarter proved to be a challenging quarter for our company given the overall state of the economy,” said Ruben Martin, Martin Midstream GP LLC president and CEO. “Our terminalling and natural gas processing businesses were negatively impacted by the decline in commodity prices, while our sulfur services volumes were down due to the current economic downturn and a wetter-than-expected planting season. Despite these challenges, however, our propane and NGL businesses experienced improved unit margins which helped to maintain our strong distribution coverage at approximately 1.2 times for the quarter.”
Also last week, Martin announced that it has successfully executed on a non-strategic asset divestiture plan with the sale of the Mont Belvieu rail rack facility to an affiliate of Enterprise Products Partners for approximately $23.1 million, $3.5 million of which will be received upon the completion of construction projects at the facility. It is a natural gas liquids (NGL) railroad unloading terminal. The facility has been operated by MMLP or its predecessor since 1991, and has the capability to unload refinery grade propylene (RGP) railcars and transport the RGP to the Enterprise Products Mont Belvieu facility via pipeline. As part of its 2008 organic growth plan, Martin entered into an agreement with Enterprise to significantly enhance the existing railrack facility by expanding its throughput capacity. Under the terms set forth in the sale agreement, Martin will finish construction related to the expansion, which is expected in June 2009. The facility supplies Enterprise’s propane/propylene facility in Mont Belvieu, which is part of the world’s largest NGL fractionation complex and features approximately 100 million barrels of liquids storage capacity.
Martin said the sale provides additional liquidity while having a negligible impact relative to historical distributable cash flow. “We have identified additional potential asset sales and will continue to evaluate opportunities that generate liquidity with minimal impact to our cash flows,” added Martin.