World Point Terminals announces financial results

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

• Revenues for the three months ended 30 September 2016 increased US$2.7 million, or 12% compared to the three months ended 30 September 2015.
• Base storage services fees increased US$1.6 million, or 9%, primarily as a result of the addition of new customer contracts at the Blakeley Island, Jacksonville and Galveston terminals, increased terminaling activity at the Glenmont terminal and the addition of the Salisbury terminal in the fourth quarter of 2015, partially offset by reduced base storage fees at the St. Louis terminal.
• Excess storage services fees for the three months ended 30 September 2016 increased US$0.2 million, or 135%, primarily as a result of increased terminaling activity at the Jacksonville terminal.
• Ancillary and additive services increased US$0.9 million, or 28%, primarily as a result of increased railcar loading activity at the Chickasaw terminal, increased heating activity at the Baton Rouge terminal, increased ethanol blending activity at the Jacksonville terminal and profit sharing revenue earned at the St. Louis terminal during 2016.
• Operating expenses for the three months ended 30 September 2016 increased US$1.2 million, or 16%, compared to the three months ended 30 September 2015. This increase was primarily attributable to a US$0.7 million increase in other expense including environmental compliance costs of US$0.5 million incurred at the Newark terminal that are expected to be reimbursed by insurance, less a deductible, US$0.6 million increase in repairs and maintenance primarily due to periodic tank cleaning and repairs completed in the third quarter of 2016 (3Q16), and US$0.1 million increase in utilities, offset by a US$0.1 million decrease in insurance expense and US$0.1 million decrease in property taxes.
• Selling, general and administrative expenses, including reimbursements to affiliates, for the three months ended 30 September 2016 decreased 2%, compared to the three months ended 30 September 2015 primarily as a result of US$0.1 million in directors’ fees that were incurred later in the year in 2015 than in 2016, offset by a US$0.1 million increase in personnel costs and professional fees.
• Depreciation and amortisation expense for the three months ended 30 September 2016 decreased US$0.5 million, or 8%, compared to the three months ended 30 September 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 consists primarily of commitment fees paid to maintain the Credit Facility and amortisation of associated costs over the term of the facility. Interest expense remained unchanged for the three months ended 30 September 2016 compared to the three months ended 30 September 2015.
• Interest and dividend income for the three months ended 30 September 2016 increased slightly compared to the three months ended 30 September 2015. This increase was attributable to higher amounts of short term investments held during the 3Q16.
• Gain on investments for the three months ended 30 September 2016 decreased US$0.1 million, or 84% compared to the three months ended 30 September 2015. The decrease was primarily attributable to a small mark to market loss on investments recorded in the 3Q16 as opposed to a US$0.1 million gain during the 3Q15.
• Income tax expense for the three months ended 30 September 2016 decreased US$0.1 million, compared with the three months ended 30 September 2015.
• Net income for the three months ended 30 September 2016 increased US$1.8 million, or 26%, compared to the three months ended 30 September 2015. Net income was US$0.25 per unit for the three months ended 30 September 2016.
• Average daily terminal throughput for the three months ended 30 September 2016 increased 17 million bbls, or 10%, compared to the three months ended 30 September 2015 primarily as a result of increased throughput at the Jacksonville and Galveston terminals.
• Adjusted EBITDA, as defined by the partnership, increased US$1.3 million for the three months ended 30 September 2016 compared with the three months ended 30 September 2015.

 

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

• Revenues for the nine months ended 30 September 2016 increased US$2.8 million, or 4%, compared to the nine months ended 30 September 2015.
• Base storage services fees increased US$2.6 million or 4%, primarily as a result of additional tanks at the Blakeley Island terminal that were placed under contract during the first half of 2016, new customers at the Galveston terminal, increased terminaling 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$0.1 million, or 10% for the nine months ended 30 September 2016 compared to the nine months ended 30 September 2015.
• Ancillary and additive services increased US$0.3 million, or 3%, compared to the nine months ended 30 September 2015, primarily as a result of increased railcar loading activity at the Chickasaw terminal, increased heating activity at the Baton Rouge terminal, increased ethanol blending activity at the Jacksonville terminal and profit sharing revenue earned at the St. Louis terminal, partially offset by 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 during 2016.
• Operating expenses for the nine months ended 30 September 2016 increased US$1.0 million, or 4%, compared to the nine months ended 30 September 2015. This increase was primarily attributable to a US$0.9 million increase in environmental compliance costs incurred at the Newark terminal that are expected to be reimbursed by insurance, less a deductible, US$0.2 million increase in repairs and maintenance primarily due to periodic tank cleaning and repairs, and US$0.2 million increase in utility costs, offset by a US$0.3 million decrease in insurance expense.
• Selling, general and administrative expenses for the nine months ended 30 September 2016 increased US$0.2 million, or 4%, compared to the nine months ended 30 September 2015 as a result of a US$0.2 million increase in personnel and office expenses, US$0.1 million increase in audit and tax preparation expenses and US$0.1 million increase in public company expenses, offset by a US$0.2 million decrease in insurance and professional fees.
• Depreciation and amortisation expense for the nine months ended 30 September 2016 decreased US$1.1 million, or 6%, compared to the nine months ended 30 September 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 consists primarily of commitment fees paid to maintain the Credit Facility and amortisation of associated costs over the term of the facility. Interest expense increased slightly for the nine months ended 30 September 2016 compared to the nine months ended 30 September 2015.
• Interest and dividend income for the nine months ended 30 September 2016 decreased US$0.1 million compared to the nine months ended 30 September 2015. This decrease was attributable to lower amounts of short term investments held during the first half of 2016.
• Gain on investments for the nine months ended 30 September 2016 increased US$0.1 million compared to the nine months ended 30 September 2015. The increase was primarily attributable to a mark to market gain on investments recorded at 30 September 2016 as opposed to a loss at 30 September 2015.
• Income tax expense for the nine months ended 30 September 2016 increased slightly compared with the nine months ended 30 September 2015.
• Net income for the nine months ended 30 September 2016 increased US$2.7 million, or 11%, compared to the nine months ended 30 September 2015. Net income was US$0.80 per unit for the nine months ended 30 September 2016.
• Average daily terminal throughput for the nine months ended 30 September 2016 decreased 20 million bbls or, 11%, compared to the nine months ended 30 September 2015 primarily as a result of decreased throughput at the Galveston, Newark and Weirton terminals.
• Adjusted EBITDA, as defined by the partnership, increased US$1.6 million for the nine months ended 30 September 2016 compared with the nine months ended 30 September 2015.

 

Operational update

The partnership generated increased revenues, net income and Adjusted EBITDA in the 3Q16 as compared the 3Q15. 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 during the 1Q15, and 739 000 bbls of unutilised storage as of 30 September 2015, at the Galveston terminal.

During the 2Q16, some spot contracts were terminated. As of 30 September 2016, 159 000 bbls of tankage remain under spot contracts, and 470 000 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 recently completed the construction of two tanks totalling 178 000 bbls of storage capacity at the North Little Rock terminal. The tanks were placed in service effective 14 August 2016.