Trends

Martin Midstream Partners L.P. (MMLP) Q4 2022 Earnings Call Transcript

Trending 1 year ago
beritaja.com

Martin Midstream Partners L.P. (NASDAQ:MMLP) Q4 2022 Earnings Conference Call February 16, 2023 9:00 AM ET

Company Participants

Sharon Taylor - Chief Financial Officer

Bob Bondurant - Chief Executive Officer

Randy Tauscher - Chief Operating Officer

Conference Call Participants

Selman Akyol - Stifel

Patrick Fitzgerald - Baird

Operator

Ladies and gentlemen, convey you for opinionated by, and invited to nan MMLP's Fourth Quarter 2022 Earnings Call. I would now for illustration to move nan telephone complete to Sharon Taylor, CFO. Please spell ahead.

Sharon Taylor

Thank you, operator, and bully morning, everyone. With maine coming are Bob Bondurant, CEO; Randy Tauscher, COO; David Cannon, Controller; and Danny Cavin, Director of FP&A.

Before we get started, I will punctual you that guidance whitethorn beryllium making forward-looking statements arsenic defined by nan SEC. Such statements are based connected our existent judgments regarding nan factors that could effect nan early capacity of Martin, but existent outcomes could beryllium materially different. You should reappraisal nan consequence factors and different accusation discussed successful our SEC filings and shape your ain opinions astir Martin's early performance.

We will talk non-GAAP financial measures connected today's call. Please mention to nan array successful our net property merchandise posted successful nan Investor Relations conception of our website to find accusation regarding those non-GAAP financial measures, including a reconciliation of humanities non-GAAP financial measures referenced successful today's telephone to their corresponding GAAP measures.

And now, I will move nan telephone complete to Bob.

Bob Bondurant

Thanks, Sharon. Before I get started pinch my normal chat of our operating performance, I would for illustration to talk our thoughts astir nan caller determination to exit nan butane optimization business. We knowledgeable an EBITDA nonaccomplishment successful nan 4th fourth of $10.7 cardinal successful this statement of business.

While we took a noncash write-down of butane inventory to marketplace prices astatine nan extremity of nan 3rd quarter, connected a rate basis, we carried astir 1.65 cardinal barrels into nan 4th fourth trading play astatine an finance costs greater than market. We bought this inventory passim nan precocious outpouring and summertime but we did not hedge our inventory arsenic the guardant pricing curve was importantly backward-dated.

As we attack nan 4th fourth trading season, butane pricing did not amended and we knowledgeable losses from nan existent volumes sold retired of inventory, resulting successful nan $10.7 cardinal EBITDA nonaccomplishment knowledgeable successful nan 4th quarter.

As a consequence of nan important antagonistic financial capacity successful nan 4th fourth of our butane optimization business, we concluded immoderate early affirmative rate travel opportunity associated pinch this business statement was nary longer worthy nan commodity consequence associated pinch carrying inventory from nan summertime purchasing play to nan wintertime trading season.

As a consequence of nan determination to exit this peculiar business line, we will waste nan remaining butane inventory successful retention pinch nan mostly of inventories sold successful Q1 and nan remaining measurement being sold successful April and May. The rate realized from our butane inventory liquidation will beryllium utilized to salary down our revolving statement of credit. We judge proceeds from this inventory liquidation should approximate $45 cardinal to $50 million.

Going forward, our intent is to run arsenic a fee-based butane logistics business, chiefly utilizing our North Louisiana underground retention assets, which person some motortruck and obstruction capability. This logistics business will besides utilize our motortruck proscription assets for fee-based merchandise movements. As a consequence of this caller business model, we will nary longer transportation immoderate butane inventory going forward. This will destruct commodity risk, trim rate travel and net volatility, and will besides substantially little our moving superior requirements.

I would now for illustration to move to a chat of our 4th fourth operating performance. For nan 4th quarter, we had adjusted EBITDA of $17.8 cardinal compared to $39.7 cardinal a twelvemonth ago. The quality betwixt nan 2 quarters is attributable to nan butane optimization business. In nan 4th fourth a twelvemonth ago, butane optimization made $11 cardinal successful EBITDA and this twelvemonth it had an EBITDA nonaccomplishment of $10.7 million, a antagonistic plaything of $21.7 million.

Excluding nan results of nan butane optimization business for some 4th quarters, we had adjusted EBITDA of $28.5 cardinal successful nan 4th fourth compared to $28.7 cardinal a twelvemonth ago. For nan year, Martin Midstream had adjusted EBITDA of $114.9 cardinal compared to $114.5 cardinal a twelvemonth ago. This twelvemonth we had antagonistic EBITDA of $7.2 cardinal successful nan butane optimization business, compared to affirmative EBITDA of $22.3 million, a twelvemonth agone a antagonistic plaything of $29.5 million.

Excluding nan results of nan butane optimization business for some years, we had adjusted EBITDA of $122.1 cardinal compared to $92.2 million, a twelvemonth ago, an summation successful rate travel of astir $30 cardinal for nan year. For nan 4th quarter, our largest rate travel generator was our Transportation business, which had adjusted EBITDA of $14.7 cardinal compared to $8.8 cardinal a twelvemonth ago.

Our onshore proscription improved complete past year, arsenic we had $11.3 cardinal of adjusted EBITDA compared to $7.6 cardinal a twelvemonth ago. We had a 28% summation successful our load count successful nan 4th fourth of this twelvemonth compared to past year, chiefly driven by a corresponding summation successful our driver count. Also our gross per mile improved complete nan anterior year, which helped sorb nan inflationary costs increases we person been experiencing.

Our Marine Transportation business besides saw betterment compared to nan 4th fourth of past year. Adjusted EBITDA was $3.4 cardinal compared to $1.2 million, a twelvemonth ago. Our mean M&A complaint was astir 30% greater successful nan 4th fourth compared to a twelvemonth ago, and our utilization improved 10% compared to a twelvemonth ago.

For nan year, our Transportation conception had adjusted EBITDA of $54.9 cardinal compared to $24.1 million, a twelvemonth ago, an summation of $30.8 million. We saw important betterment successful our onshore proscription business arsenic it had adjusted EBITDA of $45.5 cardinal compared to $23.9 million, a twelvemonth ago.

Our load count accrued 25% compared to a twelvemonth ago, chiefly driven by nan summation successful our driver count, successful consequence to increasing customer needs and our description successful Central Florida. We besides were capable to negociate wide inflationary costs increases, by improving our gross per mile compared to past year.

For nan year, successful our Marine Transportation business, we saw an summation of $9.2 cardinal successful adjusted EBITDA from $0.2 million, a twelvemonth agone to $9.4 cardinal successful 2022. We had an wide 20% summation successful some inland barge utilization and time rates successful 2022 compared to 2021, arsenic we proceed to acquisition a very tight vessel barge marketplace for refined products.

Our 2nd strongest rate travel generator successful nan 4th quarter, was our Terminalling and Storage business, which had adjusted EBITDA of $10.5 cardinal compared to $11 million, a twelvemonth ago. On nan affirmative side, our shore-based terminals had an summation successful rate travel of $0.5 cardinal compared to a twelvemonth ago, arsenic we amended nan throughput statement pinch our wide partner, which improved throughput pricing.

We judge nan caller statement pricing will alteration our shore-based terminals to person astir $1 cardinal of adjusted EBITDA, per 4th going forward. Offsetting nan shore-based rate travel improvement, were some specialty terminals and our packaged lubricants and grease business.

Specialty Terminals rate travel was down astir $0.8 cardinal compared to a twelvemonth ago, chiefly owed to inflationary operating costs increases. A important magnitude of our Specialty Terminal contracts person CPI adjustments, truthful our gross should summation successful nan adjacent word to drawback up pinch nan inflationary costs we person been experiencing.

Our packaged lubricant and grease adjusted EBITDA was down $0.6 million, chiefly owed to separator compression compared to a twelvemonth ago. For nan year, our Terminal and Storage conception had adjusted EBITDA of $47.3 cardinal compared to $43.5 million, a twelvemonth ago, an summation of $3.8 million.

Our packaged lubricant and grease business improved $4.7 cardinal to $21.4 cardinal successful 2022, arsenic we were capable to grow our margins compared to 2021. Our shore-based business saw accrued rate travel of $0.5 million, chiefly owed to nan caller statement pricing pinch our wide partner, which became effective October 1, 2022.

For nan year, our Specialty Terminals had a alteration successful rate travel of $1.2 million, chiefly owed to wide inflationary costs increases. Again, a important mostly of our customer contracts successful our Specialty Terminal business person CPI adjustments, which will use america successful 2023.

Now, I'd for illustration to talk our Sulfur Services segment. We had adjusted EBITDA of $5.7 cardinal successful nan 4th quarter, compared to $11.4 cardinal a twelvemonth ago, a alteration of $5.7 million. Our fertilizer business had adjusted EBITDA of $2.7 cardinal successful nan 4th fourth compared to $7.8 cardinal a twelvemonth ago, a alteration of $5.2 million. The diminution successful rate travel tin chiefly beryllium attributed to nan timing of our customers' purchases, arsenic full volumes sold successful nan 4th quarter, was down 35%.

A twelvemonth agone successful nan 4th quarter, our customers held a position that prices would beryllium rising passim nan spring, truthful they sped up immoderate of their normal Q1 purchases into Q4. This year, our customers delayed normal Q4 purchases into Q1 of 2023, arsenic they now clasp a belief that location is downside unit successful pricing. However, based connected nan beardown forecast for maize acres to beryllium planted this spring, we judge an summation successful request for our fertilizer products will statesman successful nan outpouring of this year.

Our axenic sulfur broadside of this conception had adjusted EBITDA of $3.1 million, compared to $3.5 cardinal a twelvemonth ago, a diminution of $0.4 million. This diminution is afloat explained by nan waste of our Stockton prilling sulfur processing facility, which closed successful October of 2022. For nan year, our full Sulfur Services conception had adjusted EBITDA of $30.7 million, compared to $34.3 cardinal a twelvemonth ago, a alteration of $3.5 million.

Our fertilizer business had adjusted EBITDA of $21.6 cardinal successful 2022, compared to $24 cardinal a twelvemonth ago, a alteration of $2.4 million. The alteration successful yearly rate travel successful our fertilizer business tin again beryllium explained by nan delayed buying activity of our customer guidelines successful nan 4th fourth of 2022, compared to 2021.

For nan year, our axenic sulfur broadside of nan business had adjusted EBITDA of $9.1 million, compared to $10.2 cardinal a twelvemonth ago, a alteration of $1.1 million. Both years were negatively impacted by unsocial events. In 2022, we had a write-down successful nan worth of our sulfur inventory of $3.3 cardinal successful nan 3rd quarter, negatively affecting sulfur rate travel for nan year.

In 2021, our axenic sulfur business was negatively impacted by decreased refinery utilization and this corresponding diminution successful sulfur accumulation from Winter Storm Uri successful Q1 of 2021 and Hurricane Ida which impacted nan Beaumont and Lake Charles area refineries successful Q3 of 2021. Going forward, nether normal refinery operating conditions, nan yearly adjusted EBITDA for nan axenic sulfur broadside of nan business should approximate $12 million.

Now, I would yet for illustration to talk nan capacity of our NGL segment. For nan 4th quarter, we had adjusted EBITDA of antagonistic $9.1 million, compared to $12.8 cardinal a twelvemonth ago, a antagonistic EBITDA plaything of $21.9 million. This important diminution successful rate travel tin beryllium afloat explained by nan antecedently discussed butane optimization business.

Without nan butane optimization business included successful nan 4th fourth results, our NGL conception had adjusted EBITDA of $1.7 cardinal successful nan 4th quarter, compared to adjusted EBITDA of $1.8 cardinal a twelvemonth ago. For nan afloat year, our NGL conception had adjusted EBITDA of antagonistic $1.3 million, compared to $28.4 cardinal successful 2021, a antagonistic plaything of $29.7 million.

Again, nan important diminution successful rate travel tin beryllium explained by nan capacity of nan butane optimization business. Without nan butane optimization business included successful nan yearly results, our NGL conception had adjusted EBITDA of $5.9 million, compared to adjusted EBITDA of $6.1 cardinal successful 2021.

This concludes my chat of our capacity by business conception for some nan 4th fourth and nan year. Now, I would for illustration to move nan telephone backmost complete to Sharon to talk our equilibrium sheet, superior resources and our 2023 guidance.

Sharon Taylor

Thank you, Bob. As always, I'll statesman pinch our equilibrium expanse metrics and liquidity, talk superior expenditures successful nan 4th quarter, reappraisal nan statement offering and revolver amendment completed successful February and reason pinch a chat of 2023 financial guidance. At December 31, 2022, nan full of our semipermanent indebtedness outstanding was $516 million, a simplification of $31 cardinal from nan past quarter. Outstanding indebtedness consists of $171 cardinal drawn connected our $275 cardinal revolving in installments facility; $54 cardinal of secured 1.5 lien notes owed 2024 and $292 cardinal of secured 2nd lien notes owed 2025.

Total disposable liquidity was astir $84 cardinal nether our revolving in installments installation connected December 31 2022. The Partnership's bank-compliant adjusted leverage ratio astatine nan extremity of nan 4th was 4.27 times which includes a $29.7 cardinal indebtedness carve-out, attributed to our seasonal NGL inventory build, erstwhile nan inventory has been either guardant sold aliases hedged.

During nan 4th quarter, we incurred $5.4 cardinal successful attraction superior expenditures for a full of $24.3 cardinal for nan year. Of that number, $5.2 cardinal was attributable to turnaround costs astatine our fertilizer plants and attraction astatine nan Smackover refinery. Gross CapEx was $1.4 cardinal for nan 4th and $6.9 cardinal for nan year. The afloat twelvemonth full includes astir $218,000 successful expenditures related to nan DSM associated venture.

Turning to nan caller superior building that was closed and funded successful February of 2023. We person been communicating astir our indebtedness refinance for immoderate clip now and had hoped to initiate a transaction successful precocious 3rd 4th early 4th fourth of 2022. Internally, we worked connected a fewer different avenues, but we're focused connected a high-yield offering nan timing of which did not materialize for america until January.

On January 30, we announced a projected elder secured 2nd lien statement offering of $400 cardinal on pinch a rate tender for our outstanding 1.5 and 2 lien notes. At that time, we besides announced an amendment to our revolving in installments installation that would beryllium effective pinch nan closing of nan statement offering. On January 31, we announced nan pricing of nan offered $400 cardinal successful elder secured notes, which closed and funded connected February 8. The issued notes priced astatine 11.5% liking pinch an original rumor discount of 3% and will mature successful 2028.

The revolving in installments installation amendment includes a little committedness from $275 cardinal to $200 cardinal and a further measurement down to $175 cardinal connected June 30, 2023 to coincide pinch rate proceeds received from liquidating nan remaining inventory related to nan butane optimization business and 1 further simplification to $150 cardinal connected June 30, 2024. The installation does not see a moving superior sublimit carve-out for purposes of leverage calculation, since that is nary longer a interest pinch nan exit of nan butane optimization business.

Covenants for nan caller installation see maximum full leverage of 4.75 times, stepping down to 4.5 times connected March 31, 2025 maximum first lien leverage of 1.5 times and minimum liking complaint sum of 2 times. The revolver will mature successful February of 2027.

Next, I'll reappraisal our 2023 guidance, which is included arsenic an attachment to our net property merchandise and tin beryllium recovered connected our website. We expect afloat twelvemonth 2023 adjusted EBITDA of astir $115 cardinal aft giving effect to nan exit of nan butane optimization business, which we forecast to person antagonistic adjusted EBITDA of $9.9 million. You will statement erstwhile reviewing guidance that we person returned to providing guidance by conception by business statement alternatively of nan yearly scope we person published nan past fewer years.

As guidance contemplated nan exit from nan butane optimization business, we wished that our operating segments and nan businesses that rotation up into them needed it to beryllium realigned. So opening successful 2023, Martin's underground retention will now beryllium reported arsenic portion of nan Terminalling and Storage segment. Further, we person chosen to rename nan Natural Gas Liquids conception arsenic nan Specialty Products segment. The Lubricants and Grease businesses will now rotation up into nan Specialty Products conception alternatively of Terminalling and Storage.

Reviewing each conception briefly, for 2023, we expect Transportation Services to make adjusted EBITDA of $46 million. Compared to 2022, we expect nan Marine Group to use from higher time rates and accrued utilization and we are forecasting nan onshore group to person different beardown twelvemonth erstwhile compared to 2019 done 2021, but person immoderate contraction from 2022's elevated results.

The Terminalling and Storage, forecasted EBITDA is $33.3 million. The remaining operations successful this conception are fee-based pinch statement escalators that will amended results year-over-year. The shore-based terminals will summation astir $3 million, owed to a statement renegotiation that occurred successful nan 4th fourth of 2022.

And lastly, nan conception will use from projected net related to Martin's underground retention that antecedently were reported successful nan Natural Gas Liquids segment. The Sulfur Services segment's adjusted EBITDA is projected to beryllium $30.2 cardinal pinch nan sulfur and fertilizer businesses expected to return to much humanities margins and volumes.

Those net will beryllium offset slightly, owed to nan waste of nan Stockton California Sulfur priller successful October of 2022. Last, nan Specialty Products conception is forecasted to person $23.1 cardinal successful EBITDA, aft giving effect to nan exit of nan butane optimization business which we task to person antagonistic adjusted EBITDA of $9.9 million.

Within this segment, nan Lubricants and Grease businesses are projected to person beardown results pinch immoderate separator compression from past twelvemonth and nan earthy gasoline and propane businesses stay dependable year-over-year.

For 2023, we are forecasting maturation superior expenditures of astir $17.5 cardinal pinch $12.7 cardinal for nan Oleum Tower astatine Planview which is portion of nan superior walk related to nan DSM Joint Venture.

Maintenance superior is anticipated to beryllium astir $26.6 cardinal for nan year. Some of our larger expenditures see $4.7 cardinal successful our Marine Group related to regulatory inspections connected our equipment, $4.2 cardinal successful turnaround costs astatine our fertilizer plants, $1.7 cardinal for a 10-year inspection owed connected a sulfur vessel and $1.5 cardinal successful bulk caput repairs astatine nan Galveston terminal.

Finally, for afloat twelvemonth 2023, we expect distributable rate travel of $23.5 cardinal and free rate travel of $6 million. Additionally, we expect to make rate for indebtedness repayment of astir $45 cardinal to $50 cardinal from nan liquidation of nan butane optimization inventory.

This concludes our prepared remarks. I'll move nan telephone complete to nan usability for Q&A.

Question-and-Answer Session

Operator

The level is now unfastened for your question. [Operator Instructions] We will now return a infinitesimal to tally our roster. Our first mobility comes from nan statement of Selman Akyol from Stifel. Please proceed.

Selman Akyol

Thank you. Good greeting all. Quick question, conscionable wherever does nan revolver guidelines today? How overmuch is connected it?

Sharon Taylor

The revolver coming has astir $121 cardinal borrowed.

Selman Akyol

So from location are you expected to get reduced by an further $40 cardinal to $50 cardinal from nan proceeds of nan remaining butane?

Sharon Taylor

It's location astir apt betwixt $35 cardinal and $40 cardinal astatine this time, because we person received nan rate from nan income from January.

Selman Akyol

Got it. Okay. All right. And truthful past should I beryllium reasoning astir it that as, benignant of, for illustration a $480 cardinal aliases truthful indebtedness outstanding against your $115 million.

Sharon Taylor

Yes.

Q – Selman Akyol

When you deliberation astir leverage outcome?

Sharon Taylor

Yes.

Q – Selman Akyol

Okay. Thanks. And past conscionable flipping complete to your JV since we're constricted successful questions. I deliberation erstwhile I looked astatine nan original property merchandise you talked astir 1Q 2024 timing. Is that still good? And past you talked astir an finance of $20 cardinal which I conjecture now you're investing $12.5 million. Has thing changed successful timing investment-wise thing we should beryllium reasoning about? And past lastly immoderate thought wherever you're going to beryllium reporting this?

Randy Tauscher

Selman, bully morning.

Q – Selman Akyol

Good morning

Randy Tauscher

No thing has changed from a timing perspective. Our target is still nan first 4th of 2024 and thing has changed from nan finance superior amount. And to nan grade you person much questions consciousness free to inquire much questions.

Q – Selman Akyol

Okay. All right. I admit that. So past you're going to put $12.5 cardinal and past you still person astir different $7.5 cardinal to spell sometime successful 2024. And past nan EBITDA tally complaint still of $5 cardinal to $6 cardinal that's still a bully estimate retired there?

Randy Tauscher

It is. We expect $13 cardinal aliases truthful being spent anterior to installation start-up and past upon installation start-up we would person nan remainder of nan rate going retired astatine that constituent to nan JV. That would beryllium nan past $7 million-ish.

Q – Selman Akyol

Got it. Appreciate that. And past you alluded to I conjecture things look beautiful bully for Marine. Can you talk astir are you seeing immoderate lengthening successful contracting location astatine all?

Randy Tauscher

Well, nan Marine business has travel a agelong measurement complete nan past year. Our rates are astatine $2,000 a time higher than they were a twelvemonth agone and they're higher successful January than they were successful December. So nan rates are still continuing to spell up. As opposed to nan reply to your word statement we do person 3 -- six months agone everything isolated from for possibly 1 toed would person been successful nan spot market.

Today we person 3 to 4 toes that are successful much word business, but we're not moreover talking a twelvemonth out. We're talking three, six aliases 9 months of word arsenic opposed to a twelvemonth aliases longer connected nan term. So I still see astir of america -- astir of our those being successful nan spot business aliases will beryllium backmost to nan spot wrong a short magnitude of time.

Q – Selman Akyol

Got it. And past I deliberation industry-wise they're looking for a heavier refinery turnaround season. Can you possibly conscionable talk a small spot astir that and what you expect successful sulfur?

Randy Tauscher

Yes, that's correct. And it's going to travel astatine america beautiful quickly present arsenic we get to nan extremity of nan first 4th and early successful nan 2nd quarter. And erstwhile you deliberation astir nan Beaumont area astatine slightest for nan refineries we activity pinch location and supply services to for trucking and sulfur, but do person turnarounds playing to version lengths and varying degrees complete nan March-April possibly early May clip framework and that will surely effect nan magnitude of sulfur we person coming into nan sites and nan trucking business. But we person each that addressed successful our guidance.

Q – Selman Akyol

Got it. And past I heard you and I've seen surely articles connected higher acres being planted for maize this year, which surely is bully for you guys and request for fertilizer. Have you seen that strategy move up successful either conversations you're having aliases immoderate orders that you're seeing? Is location any, benignant of , confirmation of a stronger marketplace this year?

Randy Tauscher

The reply to that is, no. We haven't seen it yet. Going backmost to nan 3rd 4th we had arsenic you will callback very slow sales. We expected nan 4th fourth to prime up importantly and nan 4th fourth was connected nan debased extremity of nan scope that we would see normal for nan 4th fourth and done nan first half of February we're successful nan aforesaid place. So nan income person not picked up importantly moreover though nan USDA is projecting 92 cardinal acres of maize planted which is simply a large number.

So arsenic nan ammonia value has continued to travel down and internationally we're seeing sulfur prices diminution conscionable a small bit. They're edging down. We deliberation nan farmers person made nan determination to hold their purchases, until they request it. And truthful we do expect that business to prime up, and we expect that to prime up soon, but we haven't seen it yet.

Q – Selman Akyol

Got it. And past conscionable nan past one, for me. On nan caverns and re-leasing, really is that going? I mean, you sewage contracts signed. Is location immoderate update you tin benignant of conscionable springiness connected really that's going?

Randy Tauscher

Yes. We conscionable very precocious person started to attack imaginable customers, and we still person immoderate to attack and that will each beryllium happening wrong nan period of February, and nan first mates of days of March, and we really can't remark connected that further until we person those meetings.

Q – Selman Akyol

Understood. All right. Thanks very much.

Operator

Our adjacent mobility comes from nan statement of Patrick Fitzgerald from Baird. Please proceed.

Patrick Fitzgerald

Hi, acknowledgment a batch for taking nan questions. And congrats connected nan refinancing. So, if you wouldn't mind, I'm a small spot confused connected really your revolver equilibrium is truthful debased aft fixed nan sources and uses of your enslaved deal, and they were issued astatine a discount and past location was some. Is that taking into relationship each of nan redemption of each nan notes?

Sharon Taylor

Yes. yes. So...

Patrick Fitzgerald

Because you were expected to person $161 cardinal I judge connected nan revolver astatine adjacent of nan deal?

Sharon Taylor

That is correct, but we had -- we closed nan woody connected February 8. The mostly of our butane rate proceeds for nan monthly sales, are received betwixt nan tenth and nan 15th of nan period following. So nan woody closed and past 2 days later, we received astir $30 cardinal successful proceeds from nan butane inventory sales.

Bob Bondurant

I would for illustration to note. And would nan numbers beryllium pro forma arsenic of September 30. Is that true?

Sharon Taylor

Yes.

Bob Bondurant

So we besides collected money successful nan 4th fourth from butane business arsenic well.

Patrick Fitzgerald

Okay. Yes, that's true. Okay. So -- and past you -- truthful if you expected $40 cardinal to $45 cardinal of unwinding it, and you conscionable sewage did you opportunity $30 cardinal truthful $10 cardinal to $15 cardinal much and past you're expected to suffer $10 cardinal of adjusted EBITDA, successful nan first half. So from here, it's benignant of neutral, aliases is that nan incorrect knowing of that?

Sharon Taylor

Well, I deliberation first of each nan $40 cardinal to $45 cardinal to Bob's constituent connected nan indebtedness side, that was pro forma from a September 30 number, and our $45 cardinal to $50 cardinal near is from December 31 forward. So there's a flimsy disconnect there. And then, nan different -- location was different portion of your mobility Patrick, I'm sorry.

Patrick Fitzgerald

Just really overmuch much rate is going to beryllium released, by nan clip you exit nan butane business?

Bob Bondurant

Should beryllium astir $80 cardinal near connected nan revolver, astatine nan extremity of nan butane unwind. So, full indebtedness would beryllium nan $400 cardinal positive nan $80 cardinal aliases $480 million.

Sharon Taylor

Yes.

Patrick Fitzgerald

Okay. Well, that's great. So -- and past is that business -- that business has conscionable gone, nary 1 will salary you, a interest to do it anymore, aliases really does that work?

Randy Tauscher

Yes. So, I cognize you're acquainted pinch that business. So that's nan way, we're taking arsenic we were buying successful nan summertime months and turning astir and waste it successful wintertime months. And we conscionable are not going to return connected nan guidance of that risk, from this constituent going forward. So, we're -- arsenic Bob mentioned successful his comments, we're going to move that into a interest business. We person an underground retention successful Arcadia, Louisiana that has invested successful obstruction assets location successful 2014.

We person motortruck capabilities there. There are definite refineries that we deliberation will worth having retention there. And truthful our intent is to move that into work fee-based arsenic opposed to nan measurement we were doing. And yes, we don't -- if there's personification retired there, and we're looking for this personification that mightiness beryllium consenting to return connected nan position we took connected we would entertain that. We don't cognize if that's going to hap aliases not.

Patrick Fitzgerald

Got you. Okay. Thanks. In position of your visibility -- and convey you for providing nan projections, it's very, very helpful. But successful position of your visibility successful nan Transportation segment, you benignant of person that business declining each 4th for nan remainder of nan year, astatine slightest successful land. So what's benignant of underpinning your assumptions for that conception and -- because I judge that's much of a spot marketplace business. How overmuch consequence is location to those forecasts?

Randy Tauscher

Yes. So erstwhile you deliberation astir nan onshore proscription business and spell backmost to nan mediate of 2021 to nan extremity of 2022, nan situation we were successful was our rates were rising quicker than our OpEx was rising. And we cognize that's not going to hap forever. The feedback we person received from our customers. Now nan refineries, we expect to proceed to tally beardown passim nan year. The feedback we've sewage from nan chemic producers arsenic we get done nan year, they whitethorn beryllium trading little pulling backmost a small spot than what they historically have. So those 2 factors, we person chosen to bring nan EBITDA contributed from nan Land Transportation down arsenic we activity done nan year.

Patrick Fitzgerald

Okay. Thanks. Now pinch nan butane gone, that was ever benignant of -- didn't really cognize what to expect your -- each year. So which business do you consciousness for illustration is nan hardest to forecast of yours correct now pinch butane gone?

Randy Tauscher

I deliberation fertilizer is nan largest margin-based business we person left, and complete nan years we person seen betwixt $14 cardinal and $24 million-ish successful that business annualized, and truthful I deliberation going guardant that would beryllium nan 1 we expect nan astir volatility in.

Patrick Fitzgerald

All right. Thanks a batch guys. Appreciate it.

Sharon Taylor

Thank you, Patrick.

Operator

[Operator Instructions] It appears location are nary further questions astatine this time. I would now for illustration to move nan telephone complete to Bob Bondurant for closing remarks.

Bob Bondurant

Thank you, Mandeep. Thanks to everyone connected nan telephone coming for your liking successful Martin Midstream. We've had a speedy commencement to 2023 arsenic we refinanced our indebtedness pushing nan closest maturity retired to 2027 and decided to exit nan butane optimization business successful bid to region a awesome woody of volatility from our net and importantly trim early moving capital.

In a short clip frame, we person substantially lowered nan consequence floor plan of our institution and we intend to do much by utilizing nan rate proceeds from nan liquidation of nan butane inventory to trim outstanding indebtedness and further amended our equilibrium expanse successful nan adjacent future. Thanks again for your clip this morning.

Operator

Thank you, ladies and gentlemen. This concludes today's call. Thank you for your participation. You whitethorn now disconnect.

Editor: Naga



Read other contents from Beritaja.com at
More Source
↑
close