Crestwood Midstream’s 2Q15 Distributions Remained Flat

Crestwood Midstream’s revenue

Crestwood Midstream Partners (CMLP) reported its 2Q15 earnings on August 5. In this series, we’ll look at the company’s 2Q15 operating results. We’ll compare the actual numbers with analysts’ estimates, individual segment contributions to the operating performance in 2Q15, total return performance, the merger with its general partner, expansion opportunities, and the outlook for 2015. Let’s start with an analysis of Crestwood Midstream Partners’ 2Q15 operating results.

Crestwood Midstream’s 2Q15 Distributions Remained Flat
Crestwood Midstream’s 2Q15 revenue fell to $478.4 million from $675.7 million in 2Q14. This was a YoY (year-over-year) fall of ~29.20%. The fall in revenue was mainly due to lower crude oil and NGL (natural gas liquid) prices affecting Crestwood Midstream’s NGL and Crude Services segment.

Crestwood Midstream’s EBITDA

Crestwood Midstream’s 2Q15 adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) fell to $68.2 million in 2Q15 from $95.7 million in 2Q14. This was a YoY fall of 28.70%. The fall in the partnership’s EBITDA was mainly due to a $17.6 million fall in Crestwood Midstream’s NGL and Crude Services segment. We’ll analyze the segment-wise operating performance later in this series.

Crestwood Midstream’s distributions

Crestwood Midstream declared a quarterly distribution of $0.41 per unit for 2Q15 or $1.64 per unit on an annualized basis. The company’s distribution remained flat compared to 2Q14 and 1Q15. Crestwood Equity Partners’ (CEQP)—Crestwood Midstream’s general partner—2Q15 distributions also remained flat over 2Q14.

Crestwood Midstream’s flat distributions can be attributed to its low coverage ratio. Its 2Q15 distributable cash flow grew by ~19% over 2Q14 and ~4.10% compared to 1Q15. The recent growth in the partnership’s distributable cash flow is being used to boost its coverage ratio. Crestwood Midstream’s 2Q15 distribution coverage ratio stood at 1.09x. Its 2Q15 distributable cash flow growth was driven by various cost saving initiatives.

Key ETFs and stocks

In comparison, Crestwood Midstream’s peers EnLink Midstream Partners (ENLK), DCP Midstream Partners (DPM), and Sunoco Logistics (SXL) grew their 2Q15 distributions per unit by 5.48%, 2.97%, and 20% YoY, respectively. Together, Crestwood Midstream, EnLink Midstream, DCP Midstream, and Sunoco Logistics account for ~10.03% of the Global X MLP ETF (MLPA).