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NuStar announces stable Q3 results, fuelled by strong throughputs

NuStar Energy LP has announced solid Q3 2021 results, fuelled by strong throughputs on its refined products and crude oil pipelines.

‘In the third quarter, we completed the $250 million sale of our Eastern US terminal facilities to Sunoco LP, which made it possible for us to execute on our plan to optimise our business and strengthen our balance sheet by deploying the sales proceeds to lower our leverage and focus 100%  of our resources on our core asset footprint,’ says NuStar president and CEO Brad Barron.

‘As a result, we are now targeting a year-end debt metric below 4.0 times. We also continue to expect to self-fund all of our spending from our internally generated cash flows in 2021, 2022 and beyond.’

‘We are pleased to see the pieces of our plan coming into place and our ongoing core business performing solidly with a comparable, and in some cases, better quarter-over-quarter performance, despite the lingering effects of the pandemic on the global economy and the non-cash charges associated with the asset sale.’

Barron said the quarter’s results include a $130 million non-cash charge related to the sale of its Eastern US terminal assets and a $59 million non-cash impairment charge on a portion of NuStar’s Houston 12-inch pipeline, as well as a $9 million cash gain from insurance proceeds to rebuild tanks at its Selby terminal.

As a result of the non-cash charges, NuStar reported a net loss of $125 million for Q3 2021, or $1.48 net loss per unit, compared to a net loss of $97 million, or a $1.22 net loss per unit, for the third quarter of 2020, which was negatively impacted by a pandemic-related non-operational charge.

Excluding the effects of the non-cash charges, adjusted net income was $55 million for the third quarter of 2021, or $0.16 per unit, compared to adjusted net income of $45 million, or $0.08 per unit, for the third quarter of 2020.

Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) were $177 million for the third quarter of 2021, comparable to the third quarter of 2020 adjusted EBITDA of $180 million and up 5% over the pre-pandemic third quarter of 2019.

Distributable cash flow (DCF) available to common limited partners was $92 million for the third quarter of 2021, up $8 million, or 10 percent, compared to $84 million of adjusted DCF in the third quarter of 2020. The distribution coverage ratio to common limited partners was 2.10 times for Q3 2021 and 2.05 times for the nine months ended September 30, 2021.

‘We are pleased with the strong, stable results our business generated in Q3, as the world has continued to bounce back from the pandemic. And we are expecting our full-year 2021 results to demonstrate, once again, the strength and resilience of our assets, our employees and our business,’ said Barron.


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