Genesis Energy LP (GEL) Reports Q3 2023 Earnings: Net Income Soars to $58.1 Million
Net Income Attributable to Genesis Energy, L.P. rose to $58.1 million in Q3 2023 from $3.4 million in the same period in 2022.
Cash Flows from Operating Activities increased to $141.0 million in Q3 2023, up from $94.3 million in Q3 2022.
Available Cash before Reserves to common unitholders stood at $89.0 million for Q3 2023, providing 4.84X coverage for the quarterly distribution.
Total Segment Margin was $207.9 million for Q3 2023.
Genesis Energy LP (NYSE:GEL) released its third-quarter earnings report on November 2, 2023. The company reported a significant increase in net income attributable to Genesis Energy, L.P., which rose to $58.1 million in Q3 2023, compared to $3.4 million in the same period in 2022. Cash Flows from Operating Activities also saw a substantial increase, reaching $141.0 million in Q3 2023, up from $94.3 million in Q3 2022.
Financial Highlights
Genesis Energy declared cash distributions on its preferred units of $0.9473 per unit, equating to a cash distribution of approximately $22.6 million. This is reflected as a reduction to Available Cash before Reserves to common unitholders, which stood at $89.0 million for Q3 2023, providing 4.84X coverage for the quarterly distribution of $0.15 per common unit attributable to the third quarter.
The company reported a Total Segment Margin of $207.9 million for Q3 2023, with Adjusted EBITDA of $190.6 million for the same period. Adjusted Consolidated EBITDA was $808.8 million for the trailing twelve months ended September 30, 2023, and a bank leverage ratio of 3.92X, both calculated in accordance with the company's senior secured credit agreement.
CEO Commentary
Our financial results for the third quarter came in ahead of our internal expectations and once again demonstrated the resilient earnings power of our diversified market leading businesses," said Grant Sims, CEO of Genesis Energy.
Segment Performance
Genesis Energy's offshore pipeline transportation segment benefited from steady and increasing volumes, with zero downtime associated with any weather-related events in the Gulf of Mexico. The soda and sulfur services segment performed in line with expectations, while the marine transportation segment exceeded expectations due to a structurally short market driving strong utilization and increasing day rates across all vessel classes.
The company expects strong financial contributions from its offshore pipeline transportation and marine transportation segments for the remainder of the year, offset by marginally weaker performance in soda ash operations due to continued weakness in soda ash prices, primarily in export markets.
Looking Ahead
Genesis Energy expects to see continued volume growth offshore from additional wells coming online at Argos, along with additional volumes from new sub-sea tiebacks and continuing in-field drilling. The company remains well positioned to benefit from the increasing amounts of cash flow expected once its identified and ongoing growth capital projects are complete in mid to late 2024.
Genesis Energy's management team and board of directors remain committed to building long-term value for all stakeholders in the capital structure, and the company continues to expect to generate record annual Adjusted EBITDA for the partnership this year.
Explore the complete 8-K earnings release (here) from Genesis Energy LP for further details.
This article first appeared on GuruFocus.
