Americas News
Bunkering Demand Drops for US Supplier
NuStar Energy LP [NYSE:NS] (NuStar) reports it faced a tough bunkering market in the third quarter of 2013, but saw an increase in profit thanks to its pipeline and storage businesses, which are benefitting from shale production.
"Weak demand for bunkers and increased competition in the Caribbean continued to negatively impact our fuels marketing segment," said President and CEO Curt Anastasio.
"However, during the third quarter, we entered into a new bunker fuel supply agreement, which reduced our working capital requirements by approximately $50 million, and we continue to reduce the segment's operating costs."
The company said its gross margin from bunker fuel sales dropped $8.1 million year-over-year, driven by declines at its St. Eustatius and Texas City facilities.
Overall, the company reported net income applicable to limited partner of $21.9 million on revenues of $780.0 million for the third quarter, compared with a loss to limited partners of $6.5 million and $1.6 billion in revenues in the same period last year.
"Our results show we're on track with our strategic re-direction of the company focusing on our more stable pipeline and storage segments," Anastasio said.
"We continue to focus on internal growth investments in the Eagle Ford Shale, having completed another project in the region during the third quarter, which we expect will add about $15 million in incremental annual EBITDA."
NuStar said in its second-quarter results that it expected its bunker business to be profitable by Q4.
