Martin Midstream Partners L.P (NASDAQ: MMLP) had a near bankruptcy miss last year, but as the company continues deleveraging its offering, more significant returns. The company’s 2020 guidance could generate considerable cash flow, thus helping cut net debt.
Martin Midstream Partners ‘ operations impacted by Texas Winter storm
Despite the company’s near-miss with bankruptcy, it saw distributions drop almost to nothing with a less than 1% yield. In addition, the first quarter of 2021 wasn’t encouraging, with operating cash flow being $3.9 million, which is a massive decline from $44.9 million reported last year. Although the decrease is worrying, it was affected by the Texas Winter storm in Q1 2021 that affected the energy sector. The company indicated the extreme weather had impacted them but didn’t specify the extent of the impacts.
The company’s full-year guidance for 2021 is promising, and they expect an EBITDA of $98.5 million at the midpoint. This is slightly above the $94.9 million reported in 2020, and it is an indication that earnings seem to have bottomed but will not fade in the future. In addition, in 2020, the company generated a free cash flow of $65 million, and considering the correlation with EBITDA, they likely expect a good cash flow in 2021.
Martin Midstream Partners released Q1 2021 results
Recently the company released Q1 2021 financial results, which topped internal projects despite the impact of the Texas weather storm. Net income was $2.5 million, and adjusted EBITDA was $30.9 million. In addition, the company generated $12.8 million in distributable cash flow in the quarter and declared a distribution of $0.005 quarterly or $0.02 per year.
Bob Bondurant, the company’s CEO, said, “For the first quarter of 2021, the Partnership exceeded our internal earnings forecast by $3.7 million despite headwinds from the February winter storm that plunged Texas and surrounding areas into a deep freeze.”