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What Drove EnLink Midstream’s 2Q16 Earnings?

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EnLink Midstream’s 2Q16 EBITDA

EnLink Midstream Partners (ENLK), or EnLink Midstream, and its general partner, EnLink Midstream LLC (ENLC), reported their 2Q16 earnings on August 2, 2016. EnLink Midstream’s 2Q16 adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) decreased to $189.5 million from $190.4 million in 2Q15, which represents a YoY (year-over-year) decline of 0.5%. However, the partnership beat its 2Q16 EBITDA estimate by 1.7%.

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EnLink Midstream’s 2Q16 EBITDA drivers

EnLink Midstream’s YoY change in 2Q16 EBITDA was driven by the following factors:

  • Texas: This segment’s performance was negatively impacted by declines in throughput volumes and “expiration of certain higher margin contracts.”
  • Louisiana: This segment saw a $3.9 million increase in gross operating margin driven by slight improvement in NGLs (natural gas liquids) prices.
  • Oklahoma: This segment benefitted from the acquisition of Central Oklahoma assets completed in January 2016.
  • Crude & Condensate: This segment’s performance was negatively impacted by Eagle Ford throughput decline and “termination of a customer contract.”

EnLink Midstream’s distributions

EnLink Midstream Partners declared a distribution of $0.39 per unit for 2Q16, which represents a flat distribution compared to the previous quarter and a 1.3% increase compared to 2Q15. Its General Partner, EnLink Midstream LLC, also declared a flat distribution of $0.225 per unit for 2Q16.

EnLink Midstream’s 2Q16 distributable cash flow increased by 12.5% YoY, resulting in a slight improvement in its distribution coverage ratio as compared to 2Q15. The partnership ended 2Q16 with a distribution coverage of 1.03x.

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