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How Milder Winter Impacted Fiscal 2Q16 Results for APU, SPH, and SGU


May. 23 2016, Updated 11:14 a.m. ET


Suburban Propane Partners (SPH) reported a 32% decline in its EBITDA (earnings before interest, tax, depreciation, and amortization) for the quarter ended March 26, 2016, compared to one year previously. Similarly, AmeriGas Partners (APU) and Star Gas Partners (SGU) reported a 14% and 31% YoY (year-over-year) drop, respectively, in their EBITDAs in the quarter ended March 31, 2016.

Ferrellgas Partners’ (FGP) EBITDA for the quarter ended January 31, 2016, was relatively flat compared to the same quarter last year. On June 8, 2016, it’s scheduled to report results for its quarter ended April 30, 2016.

How Milder Winter Impacted Fiscal 2Q16 Results for APU, SPH, and SGU

The above graph compares the year-over-year EBITDA growth for SPH, APU, FGP, and SGU. SPH, APU, and SGU attributed the decline in EBITDA to the warmer-than-normal winter temperatures during the quarter.

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Fiscal year end for 4 propane MLPs

The end of the fiscal year for AmeriGas Partners and Star Gas Partners is September 30. Suburban Propane Partners’ fiscal year ends on September 26. Ferrellgas Partners’ fiscal year ends on July 31. APU forms ~0.5% of the Guggenheim Mid-Cap Core ETF (CZA).

Seasonal variation

As we’ve already seen, the earnings of propane distribution MLPs have significant seasonal variations. The above graph shows the adjusted EBITDA for our four MLPs over eight quarters. As the graph shows, EBITDAs were the highest in the quarter that ended March 31, which includes the winter heating season. FGP’s EBITDA is spread over the March and June quarters because its comparable March-ending quarter ends on January 31. February and March get reflected in the fiscal quarter that ends on April 30.

Now let’s analyze and compare the leverage situation of the four MLPs.


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