PBF Logistics LP
Q2 2021 Earnings Call Transcript

Published: 29 Jul 2021

[Operator:]

Good day everyone, and welcome to the PBF Logistics LP Second Quarter 2021 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions, following management’s prepared remarks. Please note this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations. Sir, you may begin.

[Colin Murray:]

Thank you, Paul. Good morning, and welcome to today’s call. With me today are Matt Lucey, our Executive Vice President; Erik Young, our CFO; and several other members of the partnership’s senior management team. If you’d like a copy of our earnings release, it is available on our website.

[Matt Lucey:]

Thank you, Colin. Good morning, everyone. PBF Logistics operated well during the second quarter of 2021. Partnerships consistent results through 2020 and now through the second quarter of 2021 continue to reflect the underlying strength of our business in relationship with our sponsor. We continue to expect partnership revenues for 2021 to be in the $330 million to $350 million range with 2021 EBITDA in the $220 million range. Our consistent revenues and cash generations continue allow the partnership to maintain healthy distribution coverage and reduce net debt. Maintaining financial flexibility, debt pay down and strengthening liquidity are the priorities. Today, we maintain our distribution of $0.30 per unit. We'll continue to review our distribution policy going forward with respect to company performance, marketing conditions, and alternate use of funds. With that, I’ll turn it over to Erik.

[Erik Young:]

Thank you, Matt. Good morning, everyone. Thanks for joining us on today's call. We reported second quarter net income attributable to the limited partners of $37.1 million. Adjusted partnership EBITDA was $60 million, which includes approximately $3 million of non-cash unit based compensation and environmental remediation costs associated with the East Coast terminals. During the quarter, we spent approximately $2.3 million in total CapEx including $1 million for maintenance. For 2021, we currently expect capital expenditures to be approximately $15 million inclusive of roughly $2 million in multiple small strategic projects. We ended the quarter with approximately $368.4 million in liquidity after repaying $25 million in debt during the second quarter. Our liquidity consists of a cash balance of $32.4 million and approximately $336 million of availability under our revolving credit facility.

[Operator:]

Thank you. Thank you. Our first question comes from Spiro Dounis with Credit Suisse. Please proceed with your question.

[Chad Bryant:]

Hi, this is Chad on for Spiro. Just starting off on guidance you mentioned the $220 million EBITDA range guide and you previously pointed to some conservative in the guide. As we look at the first half of the year, annualized and net EBITDA level would kind of give us a range just below $240 million of the EBITDA for the full year. And it sounds like PBF is constructive on the outlook for the second half of the year as well. Are there any drivers in the second half of the year that would drive a meaningfully different outlook in the second half of the year versus first half.

[Matt Lucey:]

So you, you cited that we've generally been conservative in the past, I'd say that's consistent going forward, but certainly nothing that--

[Chad Bryant:]

Okay, that's helpful. And then I get just switching the growth. On the PBF call, it sounds like you're progressing on the Chalmette project to an FID soon. Do you see any growth CapEx for the for PBFX related to the project? And if so, could that be meaningful spend or kind of, a few million dollars is spent.

[Matt Lucey:]

Meaningful based on your words. I don't have visions, a few million dollars, but it's certainly possible. Although there's a lot of job and certainly possible participate in commercial project. Of course, there's discussion in Washington now. Income will qualify well, but well, will the will the spectrum be widened to come? I don't know. Of course, PBFX today has zero non-qualified income. That's just a fact. So, we have some room does it go that way to -- something like that? It's too early to tell.

[Chad Bryant:]

Okay, understood. That's all I had. Thanks for the time guys.

[Operator:]

We have reached the end of our question-and-answer session. I will now turn the call over to Matt Lucy for any closing remarks.

[Matt Lucey:]

Well, I appreciate everyone listening in and look forward to speaking again next quarter. Have a great day.

[Operator:]

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.