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World Point Terminals 1Q16 results

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Hydrocarbon Engineering,


World Point Terminals, LP (the partnership), a Delaware limited partnership, has announced its financial results for the quarter ended 31 March 2016.

“The first quarter of 2016 was another solid quarter for World Point,” said Ken Fenton, President and Chief Operating Officer of WPT GP, LLC, the general partner of the partnership. “Despite the ongoing market challenges, our operating results remain steady and in line with our expectations.”

Financial summary

A summary of the financial results for the three months ended 31 March 2016 compared to the three months ended 31 March 2015, includes: 

  • Revenues for the three months ended 31 March 2016 decreased US$0.6 million compared to the three months ended 31 March 2015.
  • Base storage services fees decreased US$0.2 million, or 1%, primarily as a result of contracts that terminated in the second half of 2015 at the Chickasaw and Galveston terminals, partially offset by additional capacity placed under month to month contract at the Blakeley Island terminal and the addition of the Salisbury terminal.
  • Excess storage fees decreased US$0.2 million, or 69%, compared to the three months ended 31 March 2015, primarily as a result of decreased throughput at our Newark and Weirton terminals.
  • Ancillary and additive services decreased US$0.1 million, or 3%, primarily as a result of reduced barge loading fees at the Newark terminal and reduced heating fees at the Pine Bluff terminal, partially offset by increased polymer processing activity at the Granite City terminal.
  • Operating expenses for the three months ended 31 March 2016 decreased US$0.5 million, or 6%, compared to the three months ended 31 March 2015. This decrease was primarily attributable to a US$0.3 million decrease in repairs and maintenance due to periodic tank cleaning and repairs in 2015; US$0.1 million decrease in insurance and labour expense; and US$0.1 million decrease in other expenses primarily due to 2015 security and equipment rental expenses at the Chickasaw terminal that were reduced in 2016, offset by a US$0.1 million increase in utilities and property taxes.
  • Selling, general and administrative expenses, including reimbursements to affiliates, for the three months ended 31 March 2016 increased US$0.2 million or, 11%, compared to the three months ended 31 March 2015 primarily as a result of a US$0.1 million combined increase in accounting, audit and directors’ fees and US$0.1 million increase in administrative salaries expense.
  • Depreciation and amortisation expense for the three months ended 31 March 2016 decreased US$0.3 million, or 4%, compared to the three months ended 31 March 2015. This decrease is primarily due to terminal assets that became fully depreciated in December of 2015 and January of 2016 at the Baltimore and Newark terminals.
  • Interest expense for the three months ended 31 March 2016 increased slightly compared to the three months ended 31 March 2015.
  • Interest and dividend income for the three months ended 31 March 2016 decreased slightly compared to the three months ended 31 March 2015. This decrease was attributable to lower amounts of short term investments held during the 1Q16.
  • Gain on investments for the three months ended 31 March 2016 decreased US$0.1 million compared to the three months ended 31 March 2015. The decrease was primarily attributable to a smaller mark to market gain on investments recorded at 31 March 2016.
  • Income tax expense for the three months ended 31 March 2016 increased slightly compared with the three months ended 31 March 2015.
  • Net income for the three months ended 31 March 2016 decreased US$0.1 million, or 1%, compared to the three months ended 31 March 2015.
  • Average daily terminal throughput for the three months ended 31 March 2016 decreased 45 million bbls, or 23%, compared to the three months ended 31 March 2015 primarily as a result of decreased throughput at our Newark and Weirton terminals.
  • Adjusted EBITDA, as defined by the partnership, decreased US$0.2 million for the three months ended 31 March 2016 compared with the three months ended 31 March 2015.

Attachment A to this communication contains selected financial and operational data from the partnership’s Condensed Consolidated Statements of Income for the three month periods ended 31 March 2016 and 31 March 2015.

Operational update

While the partnership’s financial results for the quarter ended 31 March 2016 were relatively consistent with the 1Q15 results, the partnership generated increased revenues, net income and Adjusted EBITDA in the 1Q16 as compared to the 4Q15. This increase continued the recovery from the period of reduced utilisation that occurred during the middle of 2015 when some customers did not renew their contracts, resulting in approximately 580 000 bbls of tankage being placed under ‘spot’ (month to month) contracts at the Galveston terminal.

As of 31 March 2016, 518 000 bbls of tankage remain under spot contracts at the Galveston terminal. There is no certainty that we will be able to keep those tanks under contract throughout 2016. In addition, there is no certainty that contracts expiring in 2016 will be extended or that any extension or recontracting will result in the same level of revenue to the partnership.

The partnership has recently completed the construction of two tanks totalling 178 000 bbls of storage capacity at the North Little Rock terminal and anticipates placing those tanks in service during the 2Q16.


Adapted from press release by Francesca Brindle

Read the article online at: https://www.hydrocarbonengineering.com/tanks-terminals/10052016/world-point-terminals-1q16-results-3252/


 

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