Martin Midstream Partners LP (MMLP), Kilgore, Texas, reported a decline in first-quarter net income to $2.5 million ($0.06 per limited partner unit) on revenues of $201 million, compared to the year-ago $8.8 million ($0.22 per unit) and $199 million, respectively. Adjusted EBITDA was $30.9 million down from $31 million. However, MMLP said the results exceeded internal forecasts.
“For the first quarter of 2021, the partnership exceeded our internal earnings forecast by $3.7 million despite headwinds from the February winter storm that plunged Texas and surrounding areas into a deep freeze,” said Bob Bondurant, President and CEO of Martin Midstream GP LLC, the general partner of the partnership.
“The majority of the impact from winter storm Uri was centered around our Transportation and Sulfur Services segments as refineries ran at reduced rates or halted operations entirely. Our Smackover Refinery was down approximately nine days due to the storm, during which time we began preparations for the previously scheduled turnaround in March,” he continued. “This allowed us to minimize the amount of downtime at the refinery which was back in operation by March 9th. In the NGL segment, butane and propane margins were strong as customary seasonal demand returned.
“At this time, the refineries we service have restored operations and utilization has climbed back to 86 percent of Gulf Coast capacity,” he added. “The COVID-19 pandemic continues to impact demand, but appears to be lessening as vaccinations become more widespread and the economy improves as a result. The partnership remains focused on our leverage reduction goals and optimizing our assets to maximize free cash flow generation.”
MMLP declared a quarterly distribution of $0.005 per unit or $0.02 per unit annually.
Operating income at MMLP’s Sulfur Services segment, which includes both sulfur and fertilizer, was off 43 percent to $6.4 million on revenues of $34.8 million, down from the year-ago $11.3 million and $28.3 million. Adjusted EBITDA for the unit was $9.2 million, down from $10.1 million.
The results reflected increased fertilizer demand compared to the first-quarter 2020 offset by lower refinery utilization volumes during first-quarter 2021 as a result of COVID-19 and the impact from winter storm Uri. First-quarter 2020 also benefited from business interruption insurance proceeds received of $2.7 million as a result of storm damage to the Neches shiploader.
First-quarter fertilizer volumes were up 28 percent to 95,000 lt from the year-ago 74,000 lt, while sulfur was off 60 percent to 73,000 lt from 183,000 lt. Total volumes were down 35 percent to 168,000 lt from 257,000 lt.