Cypress Environmental Partners, L.P. reports a 24% drop in revenue in the first quarter of 2020 compared to a year ago. The Tulsa company said revenues were $68.5 this year compared to $90 million last year and it lost close to $1 million while a year ago, it reported net income of $1.4 million, a drop of 164%.
The company said the net loss to common unitholders was $1.8 million this year compared to net income of $0.6 million last year, representing a 422% decline.
Adjusted EBITDA was down 40% for the company while adjusted EBITDA for limited partners dropped 42%.
The earnings came on $68.5 million in revenue.
“Our first quarter is typically a weaker quarter and last year we had an exceptional first quarter as the result of inspection work on a major new pipeline,” said Peter C. Boylan III, CELP’s Chairman and Chief Executive Officer. “Our results were also adversely affected by the significant decline in oil prices of over $40 per barrel or 66% during the quarter, which was driven primarily by increased supply from Russia, Saudi Arabia, and other oil-producing nations as a result of a price war and a significant decrease in demand as a result of the COVID-19 pandemic.”
Like many other energy companies, Cypress is cutting overhead and other costs, trimming more than $3.5 million through salary reductions, reduction in force and furloughs.
“We will take further actions as necessary to adjust to evolving market conditions. We believe the actions we take will not only temper the impact of the activity declines, but also enable us to be in a strong position to take advantage of the market’s eventual recovery,” added Boylan.
He expects more of a negative impact especially as some pipeline customers reduce their capital expansion budgets.
While the company’s Pipeline and Process Services segment performed well in the first quarter, its Water and Environmental Services division experienced what he called a significant decline in revenue in the first quarter.
“Several prominent E&P customers have elected to shut in their production instead of selling oil at these prices. Many of our customers have also dropped all or the majority of their rigs associated with their drilling programs.”
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Source: Business Wire