Jamex settlement hurts results
Ferrellgas Partners (FGP) reported results for its latest fiscal quarter (ending October 31, 2016) on December 9, 2016. The company reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $29 million, as compared to $48.9 million in the prior year period. The fall in EBITDA was primarily due to the Jamex contract termination and settlement, which FGP completed in September 2016.
The above graph shows Ferrellgas Partners’ adjusted EBITDA over the last eleven quarters.
James E. Ferrell, the company’s interim President and CEO (chief executive officer), said, “Although the termination of the Jamex contract impacted our crude oil logistics segment, we believe in the potential of this business and are taking steps to maximize profitability by increasing utilization of our assets.”
Warm weather impacted results
Ferrell also stated: “While unusually warm weather conditions—including temperatures during our first quarter that were 35% higher than normal—continued to negatively impact our propane revenue, we are taking aggressive actions to position Ferrellgas for long-term growth and profitability.”
Ferrell added the following: “This quarter’s results include a 9% reduction in operating expenses, reflecting our ongoing efforts to meaningfully reduce costs. We also remain focused on growing our customer base, and are very pleased with our success winning new customers and retaining existing customers during the quarter.”