Martin Midstream Partners LP (MMLP), Kilgore, Texas, reported operating income of $29 million on revenues of $108 million for the year-ending Dec. 31, 2020, for the Sulfur Services segment, which includes both its sulfur and fertilizer business, whereas year-ago results were $14 million and $111.3 million, respectively. Adjusted EBITDA for the segment was $32 million, up from 2019’s $7.4 million.
Fertilizer volumes were up 6 percent, to 275,000 lt from the 2019’s 260,000 lt, while sulfur tons were off 3 percent, to 642,000 lt from 665,000 lt.
Although MMLP reported that fourth-quarter fertilizer volumes were up 44 percent, operating income for the unit was up only slightly to $4.7 million from $4.6 million, and adjusted EBITDA remained level at $7.4 million. MMLP said fertilizer benefited from an improved planting season and higher prices, while sulfur saw lower margins due to COVID-19’s impact on the refining industry. The unit also had a year-ago benefit of including business interruption insurance.
MMLP-wide was in the loss column for both the fourth quarter and full-year, however, the company did meet the low end of its guidance for full-year adjusted EBITDA.
“Despite the difficulties associated with the pandemic and the specific challenges to our industry, we were able to meet the low end of our full year guidance even though the fourth quarter fell short of our expectations,” said Bob Bondurant, President and CEO of Martin Midstream GP LLC, the general partner of MMLP.
“Headwinds in both our Transportation and NGL segments impacted our results significantly. In the Transportation segment, as expected, reduced refinery utilization resulted in lower demand for our marine assets,” he said. “In the NGL segment, the backwardation of the butane price curve led refineries to delay purchases anticipating a lower price environment in the first quarter of 2021. This negatively impacted our fourth quarter sales volumes, specifically in December, resulting in a misalignment between physical sales and financially hedged volumes.”
“As we look to 2021, I am optimistic that refinery utilization will continue to increase as demand rises as a result of widespread vaccinations, government stimulus and a rebounding economy,” added Bondurant. “Our businesses remain solid with approximately 62 percent of our cash flows tied to fixed-fee contracts. We will continue to focus on optimizing utilization of our asset base, reducing costs, and generating consistent cash flows to meet our leverage reduction goals and return value to our unitholders.”
MMLP reported a full-year loss of $6.8 million on revenues of $672.1 million, compared to the year-ago loss of $174.9 million and $847.1 million. The year-ago loss reflected discontinued operations. Adjusted EBITDA was $94.9 million, down from $108.3 million.
MMLP is giving guidance for 2021 of 95-$102 million in adjusted EBITDA.
MMLP reported a fourth-quarter net loss of $2.56 million on revenues of $180.1 million, down from the year-ago net income of $6.64 million and $241.9 million, respectively. Adjusted EBITDA was $17.4 million, down from $35.5 million.