Acquired Assets Drove Holly Energy Partners’ 4Q15 Earnings Growth
By Rekha Khandelwal, CFADec. 4 2020, Updated 10:52 a.m. ET
HEP’s EBITDA beats estimates
Holly Energy Partners (HEP) reported its 4Q15 results on February 23, 2016. The company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) for 4Q15 was $67.4 million, 28% higher than its 4Q14 EBITDA of $52.7 million. Its 4Q15 EBITDA beat estimates of $63.2 million by 6.6%.
For 2015, HEP’s reported EBITDA was $237.2 million. This was 12% higher than its 2014 EBITDA of $211.7 million.
The above graph compares HEP’s EBITDA estimates with its adjusted EBITDA. HEP beat EBITDA estimates in five out of the last ten quarters. Holly Energy Partners forms ~1% of the First Trust North American Energy Infrastructure ETF (EMLP).
Higher volumes, acquired assets drove growth
Holly Energy Partners’ 4Q15 EBITDA growth was driven by increased revenues from its UNEV products pipeline, earnings from HEP’s 50% interest in the Frontier Pipeline Company, the expansion of its New Mexico gathering system, and its newly acquired refinery processing units and El Dorado crude tanks. Increased pipeline volumes and annual tariff increases also contributed to growth.
Commenting on HEP’s 4Q15 results, CEO Mike Jennings stated, “We remain optimistic about our organic growth potential, especially on the UNEV products pipeline. Additionally, we successfully completed our acquisition of the newly constructed naphtha fractionation and hydrogen generation units at HollyFrontier Corporation’s El Dorado refinery during the quarter, and we continue to evaluate new growth opportunities that leverage our capabilities and HollyFrontier Corporation’s refining footprint.”
Tesoro Logistics (TLLP) reported a 65% year-over-year growth in 4Q15 EBITDA. Phillips 66 Partners (PSXP) doubled its distributable cash flow in 4Q15. Delek Logistics Partners (DKL) is scheduled to report its 4Q15 earnings on February 25, 2016.
