NuStar Energy‘s Third-Quarter Earnings Rose on Higher Volumes

Profit grows 23% YoY

Texas-based NuStar Energy (NS) released its third-quarter results today. It reported net income of $48 million for the quarter ended September 30 as against income of $39 million in the same quarter last year. Distributable cash flow available to limited partners rose to $88 million in the third quarter, an increase of 31% compared to $67 million in Q3 2017.

NuStar Energy’s higher earnings were mainly driven by continued volume growth in the Permian Basin and contributions from the East Pipeline System due to the acquisition of its assets in the Council Bluffs.

NuStar Energy‘s Third-Quarter Earnings Rose on Higher Volumes

Earnings highlights

NuStar Energy’s revenues for the third quarter came in at $490 million, an increase of more than 11% year-over-year. NuStar Energy reported EBITDA of $172 million in the third quarter of 2018, an increase of $16 million compared to the third quarter of 2017.

Operating income from NuStar Energy’s mainstay, its Pipeline segment, increased 26% YoY in the third quarter, while income from the Storage segment declined 23% in the reported quarter. Its Fuels Marketing segment reported income of $19 million in the third quarter of 2018 compared to a loss of $15 million in the third quarter of 2017.

Improving debt metrics

NuStar Energy agreed to sell its European assets to Canadian energy transport company Inter Pipeline for $270 million last week. The transaction is expected to close in the fourth quarter of 2018 and includes six liquid storage terminals and one facility. NuStar is expected to pay back its debt with the proceeds from this transaction, which will likely improve its debt metrics.

NuStar Energy stock has fallen more than 22%, while the Alerian MLP ETF (AMLP), which consists of the 25 largest midstream energy MLPs, is down 11% so far this year. NuStar forms more than 2.2% of AMLP.