Net income drop recorded by NGL Energy Partners


NGL Energy Partners LP reported its first quarter Fiscal 2024 financial results, reflecting a drop in net income but a gain in adjusted earnings.

The net income slipped from $23.1 million reported a year ago to $19.6 million this year but adjusted EBITDA rose from $123.9 million to $134.7 million.

The company’s water solutions division saw a 14.1 % increase in the amount processed and its quarterly adjusted EBITDA rose 17.3% reaching $123.2 million.

“Our Water Solutions segment achieved strong Adjusted EBITDA(1) growth of 17.3% in the 1st quarter versus the same period in the prior year, with disposal volumes increasing 14.1%. During the quarter we purchased $99.3 million of the 2025 unsecured notes, leaving a very manageable outstanding balance of $280.7 million,” stated Mike Krimbill, NGL’s CEO.

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“We will continue to utilize operational free cash flow, reduced working capital, and proceeds from asset sales to further improve the balance sheet. We are reaffirming our full year consolidated Adjusted EBITDA(2) guidance of $645 million plus.”

Operating income for the Water Solutions segment increased $15.7 million for the quarter ended June 30, 2023, compared to the quarter ended June 30, 2022. This increase was due to an increase in produced water volumes processed from contracted customers mainly in the Delaware Basin, increased fees from new contracts entered into during fiscal year 2023 and higher fees charged for interruptible spot volumes.

Revenues from recovered skim oil totaled $23.0 million for the quarter ended June 30, 2023, a decrease of $15.4 million from the prior year period. This decrease was due primarily to lower realized crude oil prices received from the sale of skim oil barrels and lower skim oil volumes per barrel of produced water processed.

Operating income for the Crude Oil Logistics segment decreased $2.0 million for the quarter ended June 30, 2023, compared to the quarter ended June 30, 2022. The decrease was due to the sale of higher priced inventory into a market in which prices are declining. The lower crude oil prices resulted in lower contracted rates with certain producers, compared to the prior year.

Operating income for the Liquids Logistics segment decreased by $18.8 million for the quarter ended June 30, 2023, compared to the quarter ended June 30, 2022. The decline was primarily due to lower propane, butane and other product margins.

The operating loss for the quarter ended June 30, 2023 includes losses from derivatives of $4.2 million. The company said it has entered into economic hedges to protect liquidity positions and leverage from a significant increase in commodity prices that drive the working capital demands, as it experienced in the prior fiscal year, thus impacting ability to reduce absolute indebtedness until commodity prices weakened.

Source: Business Wire