Despite the COVID-19 impact, refinery operator Holly Energy Partners, L.P. reported increased second quarter net income. The Dallas based company, owner of a refinery in Tulsa and other locations across the country reported net income of $76.5 million or 73 cents per diluted limited partner unit compared to $45.7 million and 43 cents a unit in the second quarter of 2019.
But revenues for the quarter also fell, coming in at $114.8 million or nearly $16 million less than a year earlier. The company said the decline was mainly due to a 216% reduction in overall crude and product pipeline volumes in the firm’s Southwest and Rockies regions.
Distributable cash flow was $65.5 million for the quarter, a decrease of $2.0 million, or 3.0% compared to the second quarter of 2019. HEP declared a quarterly cash distribution of $0.35 per unit on July 23, 2020.
“Despite the challenging economic conditions, our stable and secure cash flows, supported by minimum volume commitment contracts across our asset base, continue to highlight the strength of HEP’s business model,” said Michael Jennings, Chief Executive Officer.
“The COVID-19 pandemic has created destruction of demand, as well as lack of forward visibility, for refined products and crude oil transportation, and for the terminalling and storage services that we provide. Over the course of the second quarter, demand for transportation fuels stabilized, and we saw incremental improvement in our volumes late in the quarter.”
A breakdown of the segments of the company’s operations showed revenues from refined product pipelines were $25.1 million, a drop of $7.5 million compared to a year earlier. Shipments averaged 158.4 thousand barrels a day compared to 197.8 mbpd ford the second quarter of 2019.
Revenues from Holly’s intermediate pipelines were $7.5 million, an increase of $0.2 million from a year earlier.
The crude pipelines segment had revenues of $26.4 million, a $6 million drop from a year ago. The company said the decline was mostly due to decreased volumes on its crude pipeline systems in New Mexico and Texas.
The refinery processing units segment had $19.6 million in revenues, an increase of $0.2 million from a year earlier.
Holly’s revenues for the first half of the year were also down. They totaled $242.7 million, a decrease of $22.6 million from the six months that ended June 30, 2019.
Holly’s refineries and crude oil storage has sites throughout Oklahoma, Texas, New Mexico, Wyoming, Kansas, Utah, Nevada, Washington and Idaho.
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