NGL Energy Shares Lower After 4Q Results

By Michael Dabaie

NGL Energy Partners LP shares were down 6% to $1.98 after the company posted a surprise loss per unit for the fourth quarter.

The partnership after the bell Monday reported fourth-quarter revenue increased to $2.5 billion, beating FactSet consensus for $2.4 billion. Loss per unit was 43 cents, narrower than the loss of $1.96 per unit a year earlier but missing FactSet consensus for earnings per unit of 20 cents.

NGL, a midstream energy company, transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products, and transports, treats and disposes of produced water generated as part of oil and natural gas production.

Water Solutions Adjusted earnings before interest, taxes, depreciation and amortization for the quarter was $90.3 million.

Adjusted EBITDA from continuing operations for the fourth quarter was $157.4 million, up from $94.3 million a year earlier but missing FactSet consensus for $165.2 million.

“We are increasing our Water Solutions’ EBITDA forecast from $385 million to at least $400 million. The fourth quarter of the recently-completed fiscal 2022 was the first $90 million EBITDA quarter for Water Solutions,” Chief Executive H. Michael Krimbill said on the company’s earnings call. “We have clarity into the first quarter of fiscal 2023 where it appears we will realize our first $100 million EBITDA quarter.”

“Similar to what we saw in fiscal 2022, going forward should we continue to experience a highly volatile crude price environment, we would expect to continue to see fluctuations in our quarter-over-quarter adjusted EBITDA numbers due to timing differences between the physical and financial settlements of inventory sales,” Chief Financial Officer Linda Bridges said on the earnings call. “Again, these fluctuations relate to timing, and any increase or decrease due to timing in a particular fiscal quarter will be offset in subsequent fiscal quarters, leaving the underlying business neutral.”

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