Calumet Specialty Products Partners LP (CLMT) Reports Mixed Q3 Results Amid Operational Challenges
Calumet Specialty Products Partners LP (NASDAQ:CLMT) announced a significant increase in net income for Q3 2023 compared to the same period last year.
Despite operational issues, the company's Performance Brands and Montana/Renewables segments showed improved Adjusted EBITDA.
Operational challenges at Shreveport and Montana Renewables facilities impacted overall profitability.
On November 9, 2023, Calumet Specialty Products Partners LP (NASDAQ:CLMT) released its earnings report for the third quarter ended September 30, 2023. The company reported a substantial increase in net income attributable to partners, reaching $103.0 million, up from $15.7 million in the same quarter of the previous year. Basic net income per limited partner unit rose to $1.26 from $0.19 year-over-year. However, Adjusted EBITDA for the quarter was $75.5 million, a decrease from $127.0 million in Q3 2022.
Financial Highlights and Segment Performance
Calumet's Specialty Products and Solutions (SPS) segment faced margin pressures, with Adjusted EBITDA dropping to $38.7 million from $131.7 million in the prior-year quarter. The Performance Brands (PB) segment, however, improved its Adjusted EBITDA to $13.2 million, up from $8.5 million in Q3 2022. The Montana/Renewables (MR) segment also saw an increase in Adjusted EBITDA to $38.2 million, compared to $11.3 million in the same period last year.
CEO Todd Borgmann commented on the quarter's performance, stating,
The third quarter at Calumet was a tale of two halves,"
highlighting the strong initial performance of Montana Renewables and the supportive demand environment for the specialties business. However, he also noted the impact of operational issues, including a crack in the steam drum at the renewable hydrogen plant and plugging at the Shreveport facility, which led to significant lost profit opportunities.
Operational Summary and Future Outlook
Calumet reported total sales volume of 82,787 barrels per day (bpd) for Q3 2023, up from 75,789 bpd in the same quarter of the previous year. The company's total feedstock runs were 82,409 bpd, compared to 75,722 bpd in Q3 2022. Despite the challenges, the company remains confident in its strategic objectives and expects to unlock intrinsic value for unitholders in 2024.
Balance Sheet and Cash Flow Statements
As of September 30, 2023, Calumet had cash and cash equivalents of $13.7 million, a decrease from $35.2 million at the end of 2022. The company's total assets stood at $2,804.8 million, while total liabilities were $3,002.4 million. The balance sheet also reflects a redeemable noncontrolling interest of $250.0 million and a partners' capital deficit of $(447.6) million.
In summary, Calumet's Q3 2023 results reflect a mixed performance with significant net income growth but challenges in Adjusted EBITDA due to operational issues. The company's strategic focus remains on addressing these challenges and capitalizing on opportunities to enhance value for its partners.
For more detailed information and to access the webcast discussing these financial results, investors and interested parties can visit Calumet's investor relations website at www.calumetspecialty.investorroom.com/events.
Explore the complete 8-K earnings release (here) from Calumet Specialty Products Partners LP for further details.
This article first appeared on GuruFocus.
