PBF Logistics LP
Q1 2017 Earnings Call Transcript

Published: 7 May 2017

[Operator:]

Welcome to the PBF Logistics' First Quarter 2017 Earnings Conference Call and Webcast. At this time, all participants have been placed on a listen-only mode. And this will be open for questions following management's prepared remarks. [Operator Instructions].Please note today's call may be 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, Erika. 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 senior management team. If you would like a copy of our earnings release, it is available on our website. Before we begin, I would like to direct your attention to the forward-looking statement disclaimer contained in today's press release. In summary, it outlines those statements in the press release and on this conference call that state the partnership's or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we've described in our filings with the SEC. Now I will turn the call over to Matt Lucey.

[Matt Lucey:]

Thanks, Colin. Good morning, everyone and thank you for joining us on today's call. We're pleased to report better-than-consensus first quarter results. 2017 has continued on a positive note with a recent announcement of the acquisition of Toledo Terminal from Sunoco Logistics. On our last earnings call I mentioned that we had a small transaction that was imminent and indeed I was referring to this Toledo transaction. The acquired assets are located adjacent to the Toledo refinery and added 10 bay truck rack and 110,000 barrels of products stores capacity to partnership asset base. The assets are expected to general approximately $3 million in annualized EBITDA. The transaction was our second third party acquisition and is consistent with our strategy of acquiring midstream assets which are complimentary to our refining footprint. In addition to the external acquisitions and drop downs, we are committed to expanding our revenue base through organic growth opportunities. We continue to work towards the completion of the two previously announced projects and expect Paulsboro pipeline to be operational in July, and the Chalmette storage facility to be completed in late fall. The partnership expects to spend approximately $82 million in total on these projects and when complete will generate approximately $12 million of EBITDA. In closing, we expect to continue to build on the growth that we've already delivered in 2017 and look forward to an active and productive future at PBF Logistics. With that I'll turn the call over to Erik.

[Erik Young:]

Thank you, Matt. This morning we reported first quarter of net income to the partnership of $24.6 million, or $0.55 per common limited partner unit and partnership EBITDA of approximately $36.5 million. Revenue for the quarter was $60.5 million, which includes $4.3 million of third party revenues. We generated $28.6 million of cash available for distribution in the quarter, which represents a quarterly coverage ratio of approximately 1.35x. Total expenses for the first quarter were $24.3 million, including operating and maintenance expenses, G&A and depreciation and amortization. Interest expense and financing costs totaled approximately $8 million. During the quarter, we spent approximately $19.5 million in CapEx which includes $0.8 million for maintenance with the balance on growth projects. For the full year 2017, CapEx should be between $110 million and $120 million, which reflect the recent transactions. We ended the quarter with approximately $248 million in liquidity which includes $81 million of cash and marketable securities and approximately $167 million of availability under our revolving credit facility. As a result, our net debt to EBITDA ratio was approximately 3.2x on an annualized basis. We are pleased to announce our 10th consecutive distribution increase to $0.46 per unit per quarter. This represents a 53% increase to our minimum quarterly distribution and a compound annual growth rate of approximately 17% since our IPO. Operator, we concluded our opening remarks. And now we'll open the call for questions.

[Operator:]

[Operator Instructions]

[Matt Lucey:]

Okay. If there are no questions, obviously the company is always reachable. We look forward to future good results and we appreciate your time. Thanks.

[Operator:]

I'd like to thank everybody for their participation on today's conference call. Please feel free to disconnect your line at any time.