Higher than expected revenues in San Antonio-based NuStar Energy’s pipeline and storage businesses, along with lower administrative expenses, led the company to a 2.4% increase in net income in Q3.
NuStar said net income applicable to limited partners was $59.8 million (€43 million) or $0.92 a unit, compared with $58.4 million, or $0.90 a unit, for the same period a year ago.
The results beat analysts’ per-share estimates that it would earn $0.66 a share.
NuStar, which owns pipelines, storage facilities, terminals and refineries, said its third-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) were $138.8 million for Q3 compared to $131 million for Q3 last year.
However, distributable cash flow available to limited partners was $80.3 million in the quarter, $4 million less than the same period last year because of accounting adjustments related to derivates activities.
Along with higher than projected revenues in NuStar’s transportation segment, reduced operating expenses in both the transportation and storage segments and lower than expected administrative expenses were main reasons for NuStar’s higher than anticipated results.
Increased tariffs and new revenue streams generated from two Eagle Ford-related projects brought online this year more than offset lower throughput volumes in the company’s transportation segment.
Nustar’s board has declared a distribution of $1.095 a unit, which would equate to $4.38 a unit on an annual basis.
The distribution will be paid on November 14 to holders as of 8 November.
The company’s CEO Curt Anastasio says NuStar will continue to consider acquisitions, but the company’s internal growth plans will be its main focus in 2012.
One of those projects is a deal NuStar inked with Houston-based EOG Resources to ship 70,000 barrels a day of crude by train to NuStar’s St. James, Louisiana, terminal and add 360,000 barrels of storage there.
Also, in July, NuStar signed a deal with refiner Valero Energy to build a pipeline to transport more crude from the Eagle Ford shale to Valero’s plants in South Texas and on the Gulf Coast.