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Genesis Energy L.P. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 3, 2012 11:22AM
Genesis Energy L.P. (GEL) filed Quarterly Report for the period ended 2012-06-30. Genesis Energy, L.p. has a market cap of $2.47 billion; its shares were traded at around $31.11 with a P/E ratio of 31.1 and P/S ratio of 0.8. The dividend yield of Genesis Energy, L.p. stocks is 5.8%. Genesis Energy, L.p. had an annual average earning growth of 6.1% over the past 10 years.
Highlight of Business Operations:At June 30, 2012 and December 31, 2011, an affiliate of the Robertson Group owed us $0.2 million and $1.9 million, respectively, for petroleum product sales. We owed the affiliate $0.2 million and $0.1 million, respectively, for marine related costs. Sandhill Group, LLC owed us $0.4 million and $0.2 million, at June 30, 2012 and December 31, 2011, respectively, for purchases of CO2.
Segment Margin (as described below in “Financial Measures”) increased by $15.2 million, or 32%, in the 2012 Quarter, as compared to the 2011 Quarter. This increase resulted from improvement in Segment Margin in our pipeline transportation and supply and logistics segments of 23% and 110%, respectively, partially offset by a 9% decrease in our refinery services segment. The contribution from our recently acquired interests in certain Gulf of Mexico pipelines and higher crude oil tariff revenues were the primary factors increasing pipeline transportation Segment Margin. Results for our pipeline transportation segment were somewhat reduced due to ongoing maintenance at several dedicated fields that significantly reduced throughput on one of our major offshore pipelines, however we expect this maintenance to be completed in the third quarter of 2012. Our refinery services Segment Margin decreased primarily as a result of increased costs due to longer than anticipated refinery turnarounds at some of our largest refinery service locations. To ensure uninterrupted supplies to our customers, we incurred increased costs as a result of processing at less efficient locations. Our supply and logistics segment benefited from acquisitions and other growth initiatives completed in the second half of 2011 as well as higher volumes due to increased industry activity in our operational areas.
Our revenues for the six months ended June 30, 2012 increased $403 million, or 28% from the six months ended June 30, 2011. Costs and expenses increased $387.4 million, or 27% between the two six month periods.
Average index prices for caustic soda increased to $559 per DST in the first half of 2012 compared to $468 per DST during the first half of 2011. Those price movements affect the revenues and costs related to our sulfur removal services as well as our caustic soda sales activities. However, generally changes in caustic soda prices do not materially affect Segment Margin attributable to our sulfur processing services because we usually pass those costs through to our NaHS sales customers. Additionally, our bulk purchase and storage capabilities related to caustic soda allow us to mitigate the effects of changes in index prices for caustic on our operating costs.
Net cash flows provided by our operating activities for the six months ended June 30, 2012 were $99.3 million compared to $9.4 million for the six months ended June 30, 2011. As discussed above, changes in the cash requirements related to payment for petroleum products or collection of receivables from the sale of inventory impact the cash provided by operating activities. Additionally, changes in the market prices for crude oil and petroleum products can result in fluctuations in our operating cash flows between periods as the cost to acquire a barrel of oil or products will require more or less cash. The increase in operating cash flow for the six months ended June 30, 2012 compared to the same period in 2011 was primarily due to higher cash earnings and lower working capital requirements.
Stocks Discussed: GEL,