World Point Terminals releases results

World Point Terminals, LP (the partnership), a Delaware limited partnership, has announced its financial results for the quarter ended 30 June 2016.

“World Point was able to attract new customers and lease additional tankage to existing customers under long term contracts, thereby reducing the barrels of tankage under ‘spot’ (month-to-month) contracts during the 2Q16,” said Ken Fenton, President and Chief Operating Officer of WPT GP, LLC, the general partner of the partnership. “I am pleased at the resulting continued trend of measured, incremental growth.”

Financial summary

A summary of the financial results for the three months ended 30 June 2016 compared to the three months ended 30 June 2015, includes:

• Revenues for the three months ended 30 June 2016 increased US$0.7 million, or 3% compared to the three months ended 30 June 2015.
• Base storage services fees increased US$1.1 million, or 6%, primarily as a result of the addition of new customers at the Blakeley Island and Galveston terminals, increased terminalling activity at the Glenmont terminal and the addition of the Salisbury terminal in the 4Q15, partially offset by reduced base storage fees at the St. Louis terminal.
• Excess storage fees decreased slightly compared to the three months ended 30 June 2015.
• Ancillary and additive services decreased US$0.4 million, or 10%, primarily as a result of reduced polymer processing activity at the Granite City terminal caused by a disruption in the Keystone Pipeline.
• Operating expenses for the three months ended 30 June 2016 increased US$0.3 million or 4% compared to the three months ended 30 June 2015. This increase was primarily attributable to a (i) US$0.4 million increase in other expense due to environmental compliance costs incurred at the Newark terminal, and (ii) US$0.1 million increase in property taxes and utilities, offset by a (i) US$0.1 million decrease in insurance expense and (ii) US$0.1 million decrease in repairs and maintenance primarily due to periodic tank cleaning and repairs completed in the 2Q15.
• Selling, general and administrative expenses, including reimbursements to affiliates, for the three months ended 30 June 2016 increased US$0.1 million or 4%, compared to the three months ended 30 June 2016 primarily as a result of higher audit and tax preparation fees in 2016.
• Depreciation and amortisation expense for the three months ended 30 June 2016 decreased US$0.3 million, or 5%, compared to the three months ended 30 June 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 30 June 2016 increased slightly compared to the three months ended 30 June 2015.
• Interest and dividend income for the three months ended 30 June 2016 decreased slightly compared to the three months ended 30 June 2015. This decrease was attributable to lower amounts of short term investments held during the 2Q16.
• Gain on investments for the three months ended 30 June 2016 increased US$0.3 million compared to the three months ended 30 June 2015. The increase was primarily attributable to a mark-to market gain on investments recorded at 30 June 2016 as opposed to a small loss at 30 June 2015.
• Income tax expense for the three months ended 30 June 2016 increased slightly compared with the three months ended 30 June 2015.
• Net income for the three months ended 30 June 2016 increased US$1 million, or 12%, compared to the three months ended 30 June 2015. Net income was US$0.27 per unit for the three months ended 30 June 2016.
• Average daily terminal throughput for the three months ended 30 June 2016 decreased 27 000 bbls, or 14%, compared to the three months ended 30 June 2015 primarily as a result of decreased throughput at the Galveston and Weirton terminals.
• Adjusted EBITDA, as defined by the partnership, increased US$0.5 million for the three months ended 30 June 2016 compared with the three months ended 30 June 2015.

A summary of the financial results for the six months ended 30 June 2016 compared to the six months ended 30 June 2015, includes:

• Revenues for the six months ended 30 June 2016 increased US$0.1 million, or less than 1%, compared to the six months ended 30 June 2015.
• Base storage services fees increased US$0.9 million or 2%, primarily as a result of additional tanks at the Blakeley Island terminal that were placed under contract during the first half of 2016, increased terminalling activity at the Glenmont terminal, and the addition of the Salisbury terminal in the 4Q15, partially offset by reduced base storage fees at the St. Louis terminal.
• Excess storage services fees decreased US$0.2 million, or 40% for the six months ended 30 June 2016 compared to the six months ended 30 June 2015.
• Ancillary and additive services decreased US$0.6 million, or 7%, compared to the six months ended 30 June 2015, primarily as a result of reduced polymer processing activity at the Granite City terminal caused by a disruption in the Keystone Pipeline, reduced barge loading fees at the Newark terminal and reduced heating fees at the Pine Bluff terminal.
• Operating expenses for the six months ended 30 June 2016 decreased US$0.2 million, or 1%, compared to the six months ended 30 June 2015. This decrease was primarily attributable to a (i) US$0.4 million decrease in repairs and maintenance primarily due to periodic tank cleaning and repairs completed in the first half of 2015, (ii) US$0.1 million decrease in labour costs, and (iii) US$0.2 million decrease in insurance expense, offset by a (i) US$0.3 million increase in other expense due to US$0.4 million in environmental compliance costs incurred at the Newark terminal offset by US$0.1 million in operational efficiencies achieved at the Chickasaw terminal, and (ii) US$0.2 million increase in property taxes and utilities.
• Selling, general and administrative expenses for the six months ended 30 June 2016 increased US$0.2 million, or 8%, compared to the six months ended 30 June 2015 as a result of a (i) US$0.3 million increase in audit and tax preparation expenses and (ii) US$0.1 million increase in directors’ fees, offset by a US$0.2 million decrease in insurance and professional fees.
• Depreciation and amortisation expense for the six months ended 30 June 2016 decreased US$0.6 million, or 5%, compared to the six months ended 30 June 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 six months ended 30 June 2016 increased slightly compared to the six months ended 30 June 2015.
• Interest and dividend income for the six months ended 30 June 2016 decreased US$0.1 million compared to the six months ended 30 June 2015. This decrease was attributable to lower amounts of short term investments held during the first half of 2016.
• Gain on investments for the six months ended 30 June 2016 increased US$0.2 million compared to the six months ended 30 June 2015. The increase was primarily attributable to a mark-to market gain on investments recorded at 30 June 2016 as opposed to a small loss at 30 June 2015.
• Income tax expense for the six months ended 30 June 2016 increased slightly compared with the six months ended 30 June 2015.
• Net income for the six months ended 30 June 2016 increased US$1 million, or 5%, compared to the six months ended 30 June 2015. Net income was US$0.54 per unit for the six months ended 30 June 2016.
• Average daily terminal throughput for the six months ended 30 June 2016 decreased 36 000 bbls, or 19%, compared to the six months ended 30 June 2015 primarily as a result of decreased throughput at the Galveston, Newark and Weirton terminals.
• Adjusted EBITDA, as defined by the partnership, increased US$0.3 million for the six months ended 30 June 2016 compared with the six months ended 30 June 2015.

Operational update

The partnership generated increased revenues, net income and adjusted EBITDA in the 2Q16 as compared to both the 1Q16 and the 2Q15. 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.

During the 2Q16, some spot contracts were terminated. As of 30 June 2016, 203 000 bbls of tankage remain under spot contracts, and 421 000 bbls of tankage are unutilised at the Galveston terminal. There is no certainty that we will be able to keep the remaining 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 3Q16.

Adapted from press release by Francesca Brindle

Read the article online at: https://www.hydrocarbonengineering.com/tanks-terminals/10082016/world-point-terminals-release-financial-results-2q16-3895/