Asset sale boosts Martin Midstream results

Kilgore, Texas-Martin Midstream Partners LP (MMLP) reported net income of $7.9 million ($.49 per limited partnership unit) on sales of $128.3 million for the second quarter ending June 30, compared to the year-ago $4.3 million ($.25 per unit) and $308.1 million. Second-quarter net income was positively impacted by a $5.1 million gain on an asset sale and was partially offset by a $1.8 million loss on derivatives. Without these one-time items, earnings would have been $4.6 million, still ahead of last year’s quarter. “Overall, I am pleased with our second quarter performance in the face of a tough economic environment,” said Ruben Martin, president and CEO of Martin Midstream GP LLC, MMLP’s general partner. “Our Terminalling and Sulfur Services segments exceeded expectations primarily due to strong asphalt volumes through our terminals and higher fertilizer margins, respectively.” MMLP told analysts that the cash flow in its Sulfur Services segment was $6 million in the second quarter, versus $3.4 million in the first quarter. On the pure sulfur side of the business, cash flow increased $700,000 as volume demand for sulfur improved by 35 percent. Demand was up from larger fertilizer customers. As for downstream sulfur fertilizer, there was a 2 percent decrease in volumes but a 68 percent increase in gross margin per ton, which was driven by reduced raw material costs. For the third quarter, MMLP expects reduced fertilizer cash flow due to typically softer demand. Sulfur Services margins, which include fertilizer, were touted; actual revenues were off, at $19.3 million versus the year-ago $86 million. Six-month segment revenues were only $45.9 million, compared to the year-ago $156.2 million. MMLP said sulfuric acid volumes through its terminals have been strong, and it expects them to remain so through the rest of the year. MMLP also saw strength in unit margins in propane and NGL businesses. Performance was down due to downtime at the Waskom gas processing plant and underutilization of offshore marine equipment. MMLP six-month net income was $12.8 million ($.76 per unit) on sales of $285.2 million, versus the year-ago $12.3 million ($.76 per share) and $621.1 million.