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FGP, SPH, APU, and SGU: Analyzing Capex Trends


Sep. 8 2017, Updated 9:07 a.m. ET

Ferrellgas Partners’ capex fell 70%

Ferrellgas Partners’ (FGP) capital expenditures (or capex) for the nine months ended April 30, 2017, fell 70% compared to the same period in 2016. The year-over-year decrease in capex was primarily due to higher capital expenditures, including $62.9 million on midstream projects, in 2016. FGP is working to cut its capital spending to reduce its leverage.

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FGP’s growth through acquisitions

Ferrellgas Partners’ acquisition capital spending increased to $902.0 million in fiscal 2015 compared to $169.0 million in fiscal 2014. FGP’s capital spending on acquisitions fell to $28.0 million in fiscal 2016.

Ferrellgas Partners spent $822.5 million on the acquisition of Bridger Logistics in 2015. Ferrellgas has completed more than 235 acquisitions over more than 75 years of operations.

These acquisitions helped it grow from a single-location propane retailer to one of the largest propane retailers in the US. However, as we discussed in the last part, FGP’s leverage has increased significantly during the last couple of years.

Star Gas Partners’ capital spending

Star Gas Partners’ (SGU) capex increased 29% to $9.3 million for the nine months ended June 30, 2017, compared to the same period in 2016. Star Gas Partners spent $16.0 million in acquisitions for the nine months ended June 30, 2017, compared to $8.8 million in the same period in 2016.

Capex for APU and SPH

The chart above compares the capital expenditures for Ferrellgas Partners, Star Gas Partners, Suburban Propane Partners (SPH), and AmeriGas Partners (APU). AmeriGas Partners’ capital expenditures for the nine months ended June 30, 2017, remained flat compared to the same period in 2016.

Suburban Propane Partners reported a 32% year-over-year decline in capex for the nine months ended June 30, 2017.

In the next part, we’ll compare the distribution yields and growth in distribution per unit for the four propane MLPs.


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