Boston, MA 04/08/2014 (wallstreetpr) – World Point Terminals LP (NYSE:WPT) is operates terminal assets which handle storage of a variety of petroleum products. The assets are located along the U.S. Gulf Coast, East Coast and Midwest regions.
In August 2013, the company completed common unit initial public offering of 8.75 million units for $20 per unit. A month later the company sold more common units numbering 1.31 million for $20 each. As a master limited partnership business, WTP raises capital from the market and returns all the profits to investors.
The company realized earnings before interest and taxes of $50.6 million in fiscal 2013. Revenue was $79.1 million. Revenue in the company is generated from long-term terminal use by customers. Its long-term business ensures stable cash flow. Usually the customers enter long-term storage capacity contracts where charges are based on the storage capacity contracted. The company charges extra fees on capacity handled above the contracted amount.
Besides operating a long-term business model, consistent customer retention is also another business strength that can be seen in World Point Terminals LP (NYSE:WPT). Owing to the long-term contracts and good customer retention, the partnership always enjoys optimum capacity in its facilities. For example, the company had about 93 percent of its storage facility under contract as of December 2013.
By operating free-from customer terminal storage facilities, the company enjoys relative protection from commodity price volatility. The fact that it doesn’t own commodities itself ensures that it is not affected by price fluctuations. However, its revenues get impacted due to futures prices changes as it means reduced demand for storage capacity.
Strategic terminal locations
Above everything else, the fact that World Point Terminals LP (NYSE:WPT) has most of its terminals on major waterways ensures that they provide convenient access. Moreover, several WPT terminals are served by pipeline and rail access. Plus, the company boasts loading logistics which are very efficient. In view of its solid business model and strategic facility locations, the company is well-placed to benefit from the boom in petroleum products.
