Short-term challenges, including lower retail gas margins and unfavorable weather conditions in North Dakota that delayed tank and pipeline expansion, led to weaker second-quarter results for the Waltham fuel distributor Global Partners LP.
Net income for the second quarter of 2013 was $8.7 million, or $0.29 per diluted limited partner unit, compared with net income of $18.5 million, or $0.66 per diluted limited partner unit, for the second quarter of 2012, the company said in a Thursday press release. Sales for the second quarter of 2013 increased to $4.8 billion from $3.9 billion for the same period in 2012.
In a statement, company president and chief executive Eric Slifka said: “Our second-quarter 2013 results were not as strong as the same period in 2012, primarily because of lower retail gasoline margins and a less favorable distillates market. In addition, weather conditions in the Bakken region delayed planned tank and pipeline expansion at and to our crude transload facilities in North Dakota. At Columbus, N.D. which connects via single line haul on Canadian Pacific to our facility in Albany, N.Y., expansion of capacity from 100,000 to 270,000 barrels should now be finished early next year.”
Slifka also said: “At Beulah, N.D., we are building 280,000 barrels of storage capacity, which we now expect to bring online by the end of this year. Also during the quarter, we began receiving and distributing product from our new rail-fed propane storage facility in Albany. This 540,000-gallon terminal can source advantaged propane directly from Midwest and Canadian sources via single-line haul on Canadian Pacific as well as from the East Coast.”
For full-year 2013, Global Partners said it now expects EBITDA in the range of $150 million to $175 million, including the Cascade Kelly Holdings acquisition completed in the first quarter of 2013.
“Based upon our performance for the first half of the year and the short-term challenges we see for the balance of 2013 related to compressed margins and reduced volume to the East and West Coasts in our crude oil logistics and marketing activities, and to backwardation in the gasoline market, we are adjusting our full year 2013 EBITDA guidance,” Slifka said. “We believe in the strategic direction of the partnership. Despite short-term challenges, we believe that we will be able to deliver value to our unitholders through the optimization of our operating assets, our organic projects under development, and other strategic initiatives.”