Martin Midstream Partners LP reported first-quarter net income of $3.3 million on revenues of $180.8 million, compared to a year-ago $5.1 million net loss and $244.5 million, respectively. The company reported adjusted EBITDA of $30.4 million, up from the year-ago $21.7 million.
“The partnership had a strong quarter resulting in adjusted EBITDA of $30.4 million compared to guidance of $31.6 million,” said Bob Bondurant, President and CEO of Martin Midstream GP LLC, the general partner of the LP. “Demand in both the marine and land transportation divisions remains robust leading to outperformance in the transportation segment when compared to our forecast.”
Bondurant said lower-than-forecasted margins in the company’s fertilizer and lubricants businesses, along with extended Gulf Coast refinery turnarounds, resulted in lower sulfur receipts, negatively impacting results compared to first-quarter projections. “However, current strength in our land and marine transportation divisions should result in meeting our annual adjusted EBITDA guidance of $116.1 million,” he said.
Adjusted EBITDA for the Sulfur Services segment, which includes fertilizer and sulfur, was down to $6.7 million from the year-ago $7.2 million, and some 46% down from guidance of $9.8 million. The company cited lower margins in its molten sulfur division coupled with decreased sulfur prilling fees as a result of Gulf Coast refinery turnarounds, offset by increased sales volumes.
Fertilizer adjusted EBITDA was $4.2 million compared to guidance of $6.6
million, while sulfur was $2.5 million versus $3.2 million.
“Looking towards the second quarter, we continue to see solid sales volumes and
believe that should continue throughout the quarter,” Bondurant said in an
earnings call. “We still see headwinds regarding margin expansion. And as a
result, there is some chance we might not fully achieve our second-quarter
fertilizer forecast.”
Total Sulfur Services sales volumes were up 22%, to 165,000 lt from the year-ago 135,000 lt. Sulfur volumes were up 24%, to 92,000 lt from 74,000 lt, while fertilizer was up 20%, to 73,000 lt from 61,000 lt.
The unit saw a 19% drop in operating income, to $3.69 million from the year-ago $4.6 million, while revenues were off 6%, to $33.7 million from $35.7 million.
“For the quarter, growth capital expenditures totaled $6.2 million with $4.8 million for improvements at the Plainview facility related to the DSM Semichem Joint Venture,” added Bondurant. The jv will produce electronic-level sulfuric acid (ELSA) for the semiconductor industry (GM Feb. 16, p. 26; Oct. 21, 2022).
“Maintenance capital expenditures were $11.2 million for the quarter, including $5.3 million in refinery turnaround costs,” he said. “These higher than historical quarterly capital expenditures contributed to our adjusted leverage increasing slightly from 3.75 times at Dec. 31, 2023, to 3.81 times at March 31, 2024.”
Martin declared a quarterly cash distribution of $0.005 per unit for the quarter.