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Green Plains Partners LP (GPP) Reports Q3 2023 Earnings: Net Income Drops to $9.4 Million

  • Green Plains Partners LP (NASDAQ:GPP) reports a net income of $9.4 million for Q3 2023, a decrease from $10.2 million in the same period in 2022.

  • The company's adjusted EBITDA and distributable cash flow for Q3 2023 were $12.7 million and $10.7 million respectively.

  • Green Plains Partners LP (NASDAQ:GPP) announced a quarterly cash distribution of $0.455 per unit.

  • The company entered into a definitive merger agreement with Green Plains Inc. in September 2023.

Green Plains Partners LP (NASDAQ:GPP) released its financial and operating results for the third quarter of 2023 on October 31, 2023. The company reported a net income of $9.4 million, or $0.40 per common unit, a decrease from the net income of $10.2 million, or $0.43 per common unit, for the same period in 2022. The adjusted EBITDA and distributable cash flow for the third quarter of 2023 were $12.7 million and $10.7 million respectively, compared with $13.0 million and $11.3 million for the same period in 2022.

Financial Highlights and Developments

On October 19, 2023, the board of directors declared a quarterly cash distribution of $0.455 per unit, or approximately $10.8 million, for the third quarter of 2023. The distribution is payable on November 10, 2023, to unitholders of record at the close of business on November 3, 2023.

On September 16, 2023, Green Plains Partners and Green Plains Inc. entered into a definitive merger agreement. Under the merger agreement, each outstanding common unit of Green Plains Partners that Green Plains and its affiliates do not already own will be converted into the right to receive 0.405 shares of Green Plains common stock and $2.00 in cash, plus an amount of cash equal to unpaid distributions from the end of the last quarter for which a quarterly distribution was made to the closing date, as determined in accordance with the merger agreement, without interest.

Operational Performance

Consolidated revenues for the three months ended September 30, 2023 increased by $0.1 million compared with the same period for 2022. Operations and maintenance expenses increased by $0.4 million for the three months ended September 30, 2023, compared with the same period for 2022. General and administrative expenses increased $1.8 million for the three months ended September 30, 2023 compared with the same period for 2022 primarily due to transaction costs related to the merger agreement.

During the third quarter of 2023, Green Plains average production utilization rate was approximately 93.9% of capacity. Ethanol throughput was 225.1 million gallons, which exceeded the contracted minimum volume commitment. As a result, a prior period deficiency credit of $0.4 million was utilized toward the excess volume. The cumulative balance of minimum volume deficiency credits available to Green Plains Trade as of September 30, 2023 was $1.3 million.

Financial Position

Total liquidity as of September 30, 2023 consisted of $19.1 million in cash and cash equivalents. Total debt outstanding was $55.6 million, net of unamortized debt issuance costs of $0.3 million.

Green Plains Partners LP (NASDAQ:GPP) is a fee-based Delaware limited partnership formed by Green Plains Inc. to provide fuel storage and transportation services by owning, operating, developing and acquiring ethanol and fuel storage terminals, transportation assets and other related assets and businesses.

Explore the complete 8-K earnings release (here) from Green Plains Partners LP for further details.

This article first appeared on GuruFocus.

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