Strong third quarter for SemGroup Corporation

SemGroup® Corporation (SEMG) today announced its financial results for the three months ended 30 September 2014. The company’s adjusted earnings before interest, taxes, depreciation and amortisation (adjusted EBITDA) was US$ 79.4 million for Q3 2014, compared to US$ 57.5 million for Q2 2014 and US$ 52.1 million for Q3 2013, an increase of approximately 38% over the previous quarter and up 52% y/y.

"Our exceptional third quarter results were the product of strong performance across our businesses and indicative of the continued substantial demand for services throughout our business footprint," said Carlin Conner, President and Chief Executive Officer of SemGroup. "Our assets, which contribute to more than 85% fixed fee margins, are located in some of the most active oil and gas producing basins in the country. This combined with a growing and diverse footprint, positions us well for continued growth."

Q3 2014 highlights

Compared to Q2 2014:

• Crude increased US$ 10.3 million: US$ 4.6 million increase driven by increased White Cliffs Pipeline transportation volumes; US$ 2.3 million increase related to higher transportation volumes, excluding White Cliffs Pipeline; US$ 1.7 million decrease in G&A expenses primarily due to rating agency fees and drop down costs incurred during the second quarter.
• SemCAMS increased US$ 8.8 million: US$ 3.6 million increase related to higher capital fee recoveries; US$ 3.4 million increase as a result of higher volumes which were primarily impacted by the planned outage at the K3 Plant; US$ 1.8 million increase related to operating expense recoveries.

SemGroup reported revenues for Q3 2014 of US$ 594.2 million with net income attributable to SemGroup of US$ 25.3 million, or US$ 0.59 per diluted share, compared to revenues of US$ 482.2 million with a net loss attributable to SemGroup of US$ 17.6 million, or a loss of US$ 0.41 per diluted share, for Q2 2014. For Q3 2013, revenues totalled US$ 357.7 million with a net loss attributable to SemGroup of US$ 1.9 million, or a loss of US$ 0.05 per diluted share.

Dividend

The SemGroup Board of Directors declared a quarterly cash dividend to common shareholders of US$ 0.30 per share, resulting in an annualised distribution of US$ 1.20 per share. This represents an 11% increase from the previous quarterly dividend of US$ 0.27 and a 43% increase over our dividend one year ago. The dividend will be paid on 28 November 2014 to all common shareholders of record on 17 November 2014.

2014 Guidance

SemGroup reaffirms 2014 consolidated adjusted EBITDA guidance of between US$ 260 and US$ 275 million, an increase of approximately 42% over 2013 results of US$ 189 million. The company is on target to deploy approximately US$ 475 million in capital expenditures in 2014, with nearly 90% allocated to growth projects.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/10112014/strong-third-quarter-for-semgroup-corporation-998/