Improved 4Q and full year financial results for Blueknight Energy

Blueknight Closes Sale of Crude Oil Terminalling Business and Completes  Transition to Pure-Play Infrastructure Terminalling Company | Business Wire

 

Blueknight Energy reported increases in its fourth quarter and full year earnings on top of increased asphalt sales.

The company recently revealed it had fourth quarter 2021 income of $8.9 million from continuing operations which was 6% more than the $8.4 million reported a year earlier. The company’s adjusted EBITDA was $13.9 million, better than the $13.6 million in the fourth quarter of 2020.

Fourth quarter 2021 Distributable Cash Flow from continuing operations was $11.8 million compared to $11.3 million for the same period in 2020. The 4% increase was attributable to improved business performance and lower cash interest expense.

Full year 2021 Distributable Cash Flow from continuing operations was $44.4 million, up 15% compared to $38.8 million for the same period in 2020.

Blueknight’s full year income from continuing operations totaled $34.8 million, 21% better than 2020 numbers.

 

“We achieved a number of milestones across multiple fronts, namely successfully exiting the crude oil business, refinancing our credit facility, initiating growth with two new announced projects, increasing our common unit distribution, and exceeding our guidance targets,” commented Andrew Woodward, Chief Executive Officer.

“The confidence I have in our strategy is reinforced by our successful transformation of the business, recent track record, and improved financial flexibility.”

As of December 31, 2021, total debt was $98.0 million, and the leverage ratio was 1.84 times, versus 3.83 times as of December 31, 2020. Total availability under the credit facility was $201.4 million at the end of 2021.

As of March 1, 2022, total debt was $110.0 million and total cash was $1.1 million.

During the fourth quarter of 2021, Ergon Inc., filed an amendment to its Schedule 13D with the Securities and Exchange Commission disclosing that Ergon made a non-binding proposal to the Board, pursuant to which Ergon would acquire all the outstanding common and preferred units of the Partnership not already owned by Ergon and its affiliates.

The conflicts committee of the Board, which is composed solely of Blueknight’s three independent directors, has retained independent financial and legal advisors to assist in their evaluation and negotiation of the offer, which is still ongoing.

The transaction would be subject to a number of contingencies, including the approval of the conflicts committee, the approval by the Partnership’s unitholders, and the satisfaction of any conditions to the consummation of a transaction set forth in any definitive agreement concerning the transaction. There can be no assurance that a definitive agreement will be executed or that any transaction will materialize.

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Subsequent to year-end, Blueknight closed its previously announced asphalt terminal and industrial park acquisition in January 2022 and received all permitting and regulatory approvals necessary to proceed with its East Coast organic expansion project in February 2022.

For 2022 guidance, Blueknight anticipates the following:

  • Adjusted EBITDA expected to be approximately 2% higher year-over-year, excluding any impact from recently announced growth projects and $2.2 million of non-recurring other income recognized during 2021
  • Recently announced growth projects involving approximately $15.0 million of initial growth capital funded throughout 2022 and expected to contribute a combined incremental run-rate EBITDA of approximately $2.0 million per year upon completion
  • Total maintenance capital expenditures expected to be between $5.5 million and $6.5 million
  • Maintaining long-term targets for total leverage of 3.5 times and coverage of 1.3 times or greater on all distributions.

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