Martin Midstream Partners LP, Kilgore, Texas, reported on July 25 that a $3.9 million one-time inventory adjustment in the Fertilizer division of its Sulfur Services segment impacted second-quarter results. The adjustment is a result of utilizing newly-implemented three-dimensional stockpile measurement technology to determine dry bulk inventory. The company told analysts on June 26 that the adjustment related to bulk ammonium sulfate inventory at its Plainview, Texas, warehouse. Going forward, the new measurement system will be done at the end of every quarter to get a more accurate count of bulk inventory.
Company-wide, Martin said better-than-forecasted results from its Marine Transportation segment helped offset the inventory adjustment.
Second-quarter Sulfur Services operating income was down 50 percent, to $3.6 million on revenues of $38.5 million from the year-ago $7.1 million and $34.9 million, respectively. Segment adjusted EBITDA was down at $5.6 million from the year-ago $9.8 million. Fertilizer EBITDA was below guidance at $1.7 million versus $6.1 million, while molten sulfur ($1.9 million versus $1.5 million) and sulfur prilling ($2 million versus $1.8 million) both exceeded it.
Second-quarter fertilizer volumes were up 31 percent to 93,000 lt from the year-ago 71,000 lt, while sulfur was off 7 percent to 178,000 lt from 192,000 lt. Total volumes netted a 3 percent overall increase at 271,000 lt from 263,000 lt.
Ruben Martin, president and CEO of Martin Midstream GP LLC, the general partner of the LP, told analysts that the company’s fertilizer products are focused mainly on corn, not soybeans, which are currently seeing the primary threat from tariffs. He said the company is seeing minimal impact at this moment.
Six-month Sulfur Services operating income was off 39 percent, to $11.3 million on revenues of $76.1 million from the year-ago $18.6 million and $77.2 million, respectively. While fertilizer volumes were up 10 percent to 181,000 lt from 165,000 lt, sulfur volumes were off 13 percent, to 354,000 lt from 409,000 lt. Total volumes were off 7 percent, to 535,000 lt from 574,000 lt.
Company-wide, Martin posted a second-quarter loss of $7.2 million ($0.18 per diluted unit) on revenues of $216.6 million, down from the year-ago income of $989,000 ($0.03 per unit) and $193.9 million, respectively. Adjusted EBITDA was $29.4 million, down from the year-ago $33 million.
Six-month net income remained in the plus column at $5.6 million ($0.14 per unit) on revenues of $500.8 million, though down from the year-ago $14.6 million ($0.38 per unit) and $447.2 million, respectively. Adjusted EBITDA was $74.2 million, down from the year-ago $79.8 million.