Results reflect a continuation of the difficult refining environment experienced in the first two quarters of 2016, says Alon’s president and CEO.
Alon USA Partners LP announced results for the third quarter of 2016.
Net income for the third quarter of 2016 was $2.1 million, or $0.03 per unit, compared to $53.8 million, or $0.86 per unit, for the same period last year.
Net loss for the first nine months of 2016 was $(5.3) million, or $(0.08) per unit, compared to net income of $149.7 million, or $2.39 per unit, for the same period last year.
The Board of Directors of Alon USA Partners GP LLC, the general partner of Alon Partners, declared a cash distribution for the third quarter of 2016 of $0.15 per unit payable on November 22, 2016 to common unit holders of record at the close of business on November 11, 2016, based on cash available for distribution of $9.4 million.
“Our third quarter results reflect a continuation of the difficult refining environment experienced in the first two quarters of 2016,” Paul Eisman, president and CEO commented. “While crack spreads were relatively flat with the second quarter of 2016, the average benchmark crack spread in the third quarter was down approximately $6.50 per barrel relative to the same quarter last year. As discussed in our previous earnings release, our third quarter results were also negatively impacted by a reformer regeneration in August. We estimate that the lost opportunity cost and maintenance expense associated with the reformer regeneration negatively impacted Alon Partners’ adjusted EBITDA by approximately $8 million which reduced cash available for distribution by $0.13 per unit for the third quarter. Additionally, high RINs costs continue to weigh on our profitability.”
“The Big Spring refinery achieved total throughput of 70,000 barrels per day and generated refinery operating margin of $9.22 per barrel. Our direct operating expense of $3.90 per barrel was negatively impacted by the reformer regeneration, which lowered throughput volumes and increased maintenance expense. We expect total throughput to average approximately 77,000 barrels per day for the fourth quarter of 2016. Based on current forward curve crack spreads, it is our expectation that with operations consistent with our plan we should generate sufficient cash available for distribution during the fourth quarter of 2016,” he added.
Alon Partners has scheduled a conference call, which will be broadcast live over the internet on Friday, Oct. 28, 2016 at 9:30 a.m. Eastern Time (8:30 a.m. Central Time), to discuss the third quarter 2016 financial results.
