Calumet Specialty Products Partners, L.P (NASDAQ:CLMT)
Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) has announced its financial results for the first quarter of fiscal 2017. The company reported a Q1 net loss of $6.2 million and $78.7 million in Adjusted EBITDA.
Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) Chief Executive Officer, Tim Go, in a statement said the company’s strong performance is a result of the transformative programs and the successful implementation of the strategic programs initiated last year. He added that the company has started benefiting from newly implemented efficiency efforts. This was reflected in the company’s reduced loss, strong improvement in Adjusted EBITDA and improved gross margins in both the fuels and specialty businesses.
In Q1, Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) reported 10% improvement in sales from specialty products compared to what was reported in Q1 of the previous financial year. Some of the sectors that recorded high levels of growth include packaged specialty products, waxes and lubricating oils. The company reported $31.85 in gross profits per barrel compared to $25.30 that was reported in Q1 of 2016. There was $45.6 million in Adjusted EBITDA compared to the $28.0 million that was reported in Q4 of the previous financial year.
The financial effects from price changes were offset by periodic downtime for renovation activities at two of the company’s facilities. The company reported lower gross profit and Adjusted EBITDA per barrel in Q1 compared to the same period last year. This is attributed to increased margin in 2016 as prices of crude oil went down in Q1 of 2016. The Adjusted EBITDA from Q1 also benefited from $2.7 million favorable adjustment in LCM inventory.
Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) reported an improvement of around 2% in sales from fuel products in Q1 of 2017. The highest sales volumes were reported in asphalt, diesel, and jet fuel. There was also remarkable improvement in Adjusted EBITDA and gross profits compared to the same period in the previous financial year. This is attributed to an increase in margins of benchmark refined product as well as reduction in Renewable Identification Numbers compliance costs. The improvement was specifically as a result of around a 30% increase in benchmark Gulf Coast 2/1/1 crack spread plus increased sales volume. The sector also benefited from zero losses from Dakota Prairie Refining, LLC a joint venture refinery company that was sold in the last quarter of the last financial year. There was also reduction in operation costs related to RINs pricing.
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About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.