Magellan Midstream Companions LP has reported a web earnings of $239 million for the second quarter, a lower of 32.5 % in comparison with $354 million for a similar quarter in 2022.
In a current earnings launch, Magellan mentioned that the prior interval included a $162 million acquire on the sale of discontinued operations associated to the June 2022 divestiture of an unbiased terminals community. Excluding the prior-period acquire, the rise in second-quarter 2023 web earnings was pushed by increased income from the partnership’s commodity-related actions and general improved monetary outcomes from its core fee-based transportation and terminals actions, Magellan mentioned.
Magellan’s diluted web earnings per frequent unit was $1.18 within the quarter, in comparison with $1.67 within the second quarter of 2022, exceeding the steering supplied by the partnership’s administration in Could. It attributed the outcomes to increased contributions from commodity-related actions and a better proportion of longer-haul shipments and the associated increased common tariff charges related to the actions on its refined merchandise pipeline system.
Magellan’s refined merchandise working revenue elevated $67 million to $234 million. Its transportation and terminals income elevated by $41 million primarily resulting from increased common transportation charges. The partnership attributed the upper charges to its six % common mid-year 2022 tariff improve in addition to a better proportion of long-haul shipments, which moved at increased charges, as “clients continued to benefit from the intensive connectivity” of the pipeline system, Magellan mentioned.
Magellan reported a crude oil working revenue of $61 million, a lower of $12 million yr over yr. Its transportation and terminals income decreased $6 million, primarily from decrease revenues from the partnership’s condensate splitter in addition to decrease storage revenues within the second quarter, in keeping with the discharge.
In the meantime, Magellan reported a rise of $32 million in its product margin, primarily resulting from increased margins and better gross sales volumes on gasoline liquids mixing actions in addition to decrease losses on futures contracts within the second quarter.
Magellan mentioned it continues to make “important progress” on the 30,000 barrel-per-day enlargement of its refined merchandise pipeline to El Paso, Texas. The partnership has accomplished the development of a brand new 16-inch, 30-mile pipe alongside its present route between Odessa and Crane, Texas, with new operational storage to facilitate incremental shipments nonetheless being constructed. Magellan expects to finish the complete enlargement capability for the pipeline in early 2024.
“Magellan delivered one other strong quarter, reflecting robust execution by our groups and a supportive commodity atmosphere”, Magellan CEO Aaron Milford mentioned. “We shall be properly positioned to ship even better outcomes for traders as half of a bigger, extra diversified ONEOK following the completion of the pending merger.”
In Could, ONEOK introduced a definitive merger settlement with Magellan underneath which ONEOK will purchase all excellent items of Magellan in a cash-and-stock transaction valued at roughly $18.8 billion, together with assumed debt, that’s anticipated to lead to a mixed firm with a complete enterprise worth of $60 billion. Below the deal, Magellan shall be merged right into a newly created, 100% wholly-owned subsidiary of ONEOK, in keeping with an earlier assertion.
Magellan had warned shareholders that they may face heftier taxes if the merger was not accredited.
In a separate assertion, Magellan issued the warning after Power Revenue Companions LLC (EIP), which claims to be the fourth greatest shareholder in Magellan, urged co-investors to reject the merger totally on the danger of larger taxes, opposite to Magellan’s claims.
Magellan unitholders will vote on the pending merger with ONEOK on September 21. Magellan unitholders of document on the shut of enterprise on July 24 are entitled to vote at or prematurely of the particular assembly, the partnership mentioned.
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