Plains All American posts Q1 2014 results

Plains All American Pipeline, L.P. (PAA) has released its Q1 2014 financial data, with the company’s results exceeding the midpoint of its quarterly guidance range. PAA’s Q1 2014 results reflect continued growth in its fee-based Transportation and Facilities segments, driven by execution of PAA’s expansion capital programme. These results also include solid performance from PAA’s Supply and Logistics segment as a result of constructive crude oil and NGL market conditions; however, such conditions were not as favourable as those experienced in Q1 2013.

“PAA reported first quarter results that exceeded the midpoint of our adjusted EBITDA guidance by over US$ 40 million,” said Greg L. Armstrong, Chairman and Chief Executive Officer of Plains All American. “Solid performance from our crude oil and natural gas liquids activities was partially offset by weather-related impacts in our natural gas storage and crude oil rail activities.

“PAA and Plains GP Holdings (PAGP) are on track to achieve their respective distribution growth objectives of 10% and 25% for 2014. PAA’s quarterly distribution of US$ 0.6300 per unit to be paid next week represents a 9.6% increase over the comparable distribution paid in May 2013, and PAGP’s quarterly distribution of US$ 0.17055 per share represents a 14.4% increase over the initial quarterly distribution included in its October 2013 initial public offering (“IPO”) prospectus. Importantly, we continue to execute on our expansion capital programme, which we believe will set the stage for continued, attractive distribution growth beyond 2014.

“Additionally, we are well positioned to not only fund our ongoing capital programmes, but also pursue acquisition-oriented growth opportunities as we ended the first quarter with a strong balance sheet, credit metrics favorable to our targets and US$ 2 billion of committed liquidity.”

Quarterly results

• Net income attributable to PAA stood at $US 384 million in Q1 2014, a 27% y/y fall compared to US$ 528 million in Q1 2013.
• EBITDA decreased by 19% y/y from US$ 748 million in Q1 2013 to $US 607 million in Q1 2014.
• Adjusted net income attributable to PAA totalled US$ 352 million, a 33% y/y decrease from US$ 524 million in Q1 2013.
• Adjusted EBITDA fell by 23% y/y to US$ 567 million, from US$ 739 million in Q1 2013.

Results by segment

Transportation

Q1 2014 Transportation adjusted segment profit increased 22% versus comparable 2013 results. This increase was primarily driven by higher crude oil pipeline volumes associated with recently completed organic growth projects and increased producer drilling activities, partially offset by the sale of the refined products pipelines in 2013.

Facilities

Q1 2014 Facilities adjusted segment profit increased 2% over comparable 2013 results. This slight increase was primarily due to increased profitability from the NGL fractionation and natural gas processing activities, partially offset by weather-related impacts in the natural gas storage operations.

Supply and Logistics

Q1 2014 Supply and Logistics adjusted segment profit exceeded the high end of our guidance, but decreased by approximately 52% relative to comparable 2013 results. This decrease was primarily a result of less favourable crude oil market conditions in the Q1 2014 compared to the 2013 period and reduced earnings from the natural gas storage commercial optimisation activities due to severe cold weather during Q1 2014.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.worldpipelines.com/business-news/15052014/plains_all_american_posts_q1_2014_results_352/