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Rose Rock Midstream publishes Q3 2014 results

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World Pipelines,

Rose Rock Midstream®, L.P. (RRMS) has announced its financial results for the three months ended 30 September 2014. The company reported Q3 2014 adjusted EBITDA of US$ 31.0 million, compared to US$ 20.6 million for Q2 2014 and US$ 15.7 million for Q3 2013, an increase of 50% over the previous quarter and up 97% y/y.

"Rose Rock finished the quarter strong and was in line with expectations. We increased distributions for the eleventh time since the IPO. This quarter's results benefited from the drop down of the final one-third interest in White Cliffs Pipeline and increased volumes," said Carlin Conner, Chief Executive Officer of Rose Rock Midstream's General Partner. "Our 2014 EBITDA is expected to exceed our previous year's performance by more than 70%, which is a significant reflection of the success of our ongoing operations and of the growth projects that we brought online in 2013 and thus far in 2014."

Q3 2014 highlights

Compared to Q2 2014:

  • US$ 5.7 million increase in cash distributions from White Cliffs Pipeline related to higher volumes and additional ownership as a result of the final one-third drop down in Q2 2014.
  • US$ 2.3 million increase related to higher transportation volume, 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 Q2 2014.

Adjusted gross margin was US$ 40.9 million for Q3 2014, up 21% from Q2 2014 of US$ 33.8 million and 72% above Q3 2013 adjusted gross margin of US$ 23.8 million. Third quarter 2014 net income attributable to Rose Rock totalled US$ 16.5 million, compared to US$ 11.0 million for Q2 2014 and US$ 9.4 million for Q3 2013.

Rose Rock Midstream's distributable cash flow for the three months ended 30 September 2014 was US$ 21.8 million. On 23 October 2014, Rose Rock Midstream increased the partnership's quarterly cash distribution to US$ 0.575 per unit from US$ 0.535 per unit, effective for Q3 2014, resulting in an annualised distribution of US$ 2.30 per unit. This is a 7.5% increase over Q2 2014 and up 27.8% over the Q3 2013 quarterly distribution of US$ 0.45 per unit. The distribution will be paid on 14 November 2014 to all unitholders of record on 4 November 2014.

Guidance for 2014

Rose Rock reaffirms its 2014 consolidated adjusted EBITDA guidance of between US$ 115 and US$ 120 million, an increase of approximately 72% over 2013 results of US$ 68.5 million. The company is on target to deploy approximately US$ 125 million in capital expenditures in 2014, and is targeting a 2014 distribution growth rate of 25% on a y/y basis.

Adapted from press release by Rosalie Starling

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