Boston, MA 05/16/2014 (wallstreetpr) – Oiltanking Partners LP (NYSE:OILT) reported its first quarter result with net income $33.3 million on revenues of $60 million.
Operational highlights
High storage and ancillary services primarily drive growth in revenues for the Partnership. Total revenues were up by 49% to $60 million (1Q2013: $40.2 million) due to increased fees revenues across its services.
Storage fee services grew by $6.1 million due to new contracts and new storage capacity of ~.1 million barrels. Throughput fee revenues grew by $12.8 million as a result of an increase in volume-based throughput and margin sharing fees related to the export of LPG. But, cold weather across North America and oil spillage in Texas affected the operation during the first quarter. Ancillary services increased by 52% to $2.6 million versus $1.74 in 1Q2013.
Operating expenses also increased by $4.3 million during the period due to higher operating costs and increase in SG&A expenses. But, higher top line growth increased the adjusted EBITDA significantly to $40.4 million (+59%) compared to $25.7 million in 1Q2013. Consequently, net income for the period was $33.3 million, or $0.63 per unit, up by 65% from net income of $20.2 million, or $0.48 per unit.
Growth in operating earnings improve cash flow
Oiltanking Partners LP (NYSE:OILT) generated ~$39 million of cash from its operation with increasing efficiency. In addition, higher costs related to expansion and maintenance raised the capital expenditures by $16 million during the period.
Despite the expansion of projects, the Partnership retains cash flow for distribution. Overall, the net cash balance available for distribution was $22 million as of March 31, 2014.
The Partnership declared an increase in quarterly cash distribution to $1.98 per unit on an annual basis. So, the distribution coverage ratio for the period was 1.69x versus 1.48x a year’s ego.
Guidance for future spending
Considering the growth opportunities and higher associated costs for dock expansion projects, the Partnership increased capital expenditure estimate by $20 million and anticipates spending $250-$270 million in FY2014. The Partnership continues to evaluate new projects including leased property and invest accordingly, so, to deliver superior growth in the future.
