By Michael Dabaie
Magellan Midstream Partners L.P. reported second-quarter net income of $280.4 million, up from $133.8 million.
The partnership that primarily transports, stores and distributes refined petroleum products and crude oil said it expects total refined products shipments with an overall increase of 13% expected versus 2020.
On crude oil results:
“Crude oil operating margin was $106.4 million, a decrease of $21.9 million.”
“Product margin decreased $7.2 million as a result of unrealized losses on futures contracts during the current year on the partnership’s crude oil inventory.”
On financial guidance:
“Guidance assumes total refined products shipments will be generally in-line with initial estimates for the year, with an overall increase of 13% expected versus 2020 as incremental volumes associated with recent expansion projects within the state of Texas continue to overcome the lingering impacts of the pandemic”
“These estimates continue to expect 13% higher gasoline, 10% higher distillate and 25% higher aviation fuel shipments, based on general trends so far this year.”
“Total 2021 refined products shipments are still expected to increase approximately 3% versus 2019, which is more representative of historical demand, as additional gasoline and distillate volumes from expansion projects are partially offset by lower aviation fuel.”
“The benefit from the stronger-than-expected second-quarter results are being offset as the partnership has now hedged approximately 80% of its forecasted gas liquids blending activities at lower margins than anticipated as well as higher costs in the second half of the year than assumed in the previous guidance.”
On non-GAAP results:
Non-GAAP diluted net income per unit excluding mark-to-market commodity-related pricing adjustments was $1.38 for second quarter 2021.
“These results exceeded the $1.15 guidance provided by management in late April primarily due to higher-than-expected refined products shipments, higher commodity prices that primarily benefited the partnership’s fractionation activities and value of its product overages, as well as lower expenses primarily due to timing.”
Write to Michael Dabaie at michael.dabaie@wsj.com
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