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PBF Logistics LP Common Units representing limited partner interests
Q2 2021 Earnings Conference Call
7/29/2021
spk02: Good day, everyone, and welcome to the PBF Logistics LP second quarter 2021 earnings conference call and webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following management's prepared remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. It is now my pleasure to turn the floor over to Colin Murray of Investor Relations.
spk01: Sir, you may begin. Thank you, Paul. Good morning and welcome to today's call. With me today are Matt Lucey, Executive Vice President, Eric Young, our CFO, and several other members of the Partnership Senior Management Team. If you would like a copy of our earnings release, it is available on our website. Before we begin, I'd like to direct your attention to the forward-looking statements disclaimer contained in today's press release. In summary, it outlines that statements in the press release and on this conference call that state the partnerships or management's expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions under federal securities laws. There are many factors that could cause actual results to differ from our expectations, including those we've described in our filings with the SEC. As noted in our press release, we'll be using certain non-GAAP measures while describing the partnership's operating performance and financial results. For reconciliations of non-GAAP measures to the appropriate GAAP figure, please refer to the supplemental tables provided in today's press release. Now I'll turn the call over to Matt.
spk03: Thank you, Colin. Good morning, everyone. PBF Logistics operated well during the second quarter of 2021. partnership's consistent results through 2020 and now through the second quarter of 21 continue to reflect the underlying strength of our business and relationship with our sponsor. We continue to expect partnership revenues for 21 to be in the $330 to $350 million range, with 2021 EBITDA in the $220 million range. Our consistent revenues and cash generations continue to allow the partnership to maintain healthy distribution coverage and reduce net debt. Maintaining financial flexibility, debt pay down, and strengthening liquidity are the priorities. Today we've maintained our distribution of 30 cents per unit. We'll continue to review our distribution policy going forward with respect to company performance, market conditions, and alternate use of funds. With that, I'll turn it over to Eric.
spk00: Thank you, Matt. Good morning, everyone. Thanks for joining us on today's call. We reported second quarter net income attributable to the limited partners of $37.1 million. Adjusted partnership EBITDA was $60 million, which includes approximately $3 million of non-cash unit-based compensation and environmental remediation costs associated with the East Coast terminals. During the quarter, we spent approximately $2.3 million in total CapEx, including $1 million for maintenance. For 2021, we currently expect capital expenditures to be approximately $15 million, inclusive of roughly $2 million in multiple small strategic projects. We ended the quarter with approximately $368.4 million in liquidity after repaying $25 million in debt during the second quarter. Our liquidity consists of a cash balance of $32.4 million and approximately $336 million of availability under our revolving credit facility. Net debt to annualized adjusted EBITDA was 2.7 times. We expect to continue using excess cash to improve leverage ratios and strengthen the balance sheet. Operator, we've concluded our opening remarks, and now we'll open the call for questions.
spk02: Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from Spiro Dunas with Credit Suites. Please proceed with your question.
spk04: Hi, this is Chad on FrisBiro. Just starting off on guidance, you mentioned the $220 million EBITDA range guide, and you previously pointed to some conservatism in the guide. As we look at the first half of the year, annualizing that EBITDA level would kind of give us a range just below $240 million of EBITDA for the full year. And it sounds like PBF is constructive on the outlook for the second half of the year as well. Are there any drivers in the second half of the year that would drive a meaningfully different outlook in the second half of the year versus the first half?
spk03: No. You cited that we've generally been conservative in the past. I'd say that's consistent going forward, but certainly nothing that we're objecting to corrections.
spk04: Okay, that's helpful. And then I guess just switching the growth on the PBF call, it sounds like you're progressing on the ShellNet project to an FID soon. Do you see any growth capex for PBFX related to the project? And if so, could that be meaningful spend or kind of, you know, a few million dollars of spend?
spk03: Well, if meaningful, based on your words, it I don't envision saying it's a few million dollars, but it's certainly possible, although there's a lot of chop, it's certainly possible that CDFX could participate in such a project. Of course, there's discussion in Washington now as far as qualified income. Will it qualify? What won't? Will the spectrum be widened? That's to come. I don't know. But, of course, PBFX today has zero non-qualified income. That's just a fact. So we have some room if we chose to go that way to PBFX or something like that. But it's too early to tell.
spk04: Okay, understood. That's all I had. Thanks for the time, guys. Thank you.
spk02: We have reached the end of our question and answer session. I will now turn the call over to Matt and Lucy for any closing remarks.
spk03: Well, I appreciate everyone listening in and look forward to speaking again next quarter. Have a great day.
spk02: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
Disclaimer