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Dec 31, 2023
Genesis Energy Q4 2023 Earnings Report
Reported fourth quarter results, exceeding internal expectations and contributing to a record year.
Key Takeaways
Genesis Energy reported a strong fourth quarter, with Adjusted EBITDA exceeding internal expectations and contributing to a record year. The company saw solid performance across its diversified businesses, including offshore pipeline transportation, soda and sulfur services, and marine transportation. Genesis also achieved significant project milestones and strengthened its balance sheet.
Net income attributable to Genesis Energy, L.P. was $12.0 million.
Cash flows from operating activities were $124.8 million.
Available cash before reserves to common unitholders was $88.3 million, providing 4.8x coverage for the quarterly distribution.
Adjusted EBITDA was $188.7 million.
Genesis Energy
Genesis Energy
Forward Guidance
Genesis Energy expects to generate Adjusted EBITDA in the range of $680 - $740 million. The midpoint of the guidance range is marginally down versus 2023 results, with 2024 viewed as an inflection point towards a significant step change in earnings in 2025.
Positive Outlook
- Continued volume growth in offshore pipeline transportation from additional wells at Argos and new sub-sea tiebacks.
- Marine transportation segment expected to have another banner year with sequential improvement, driven by tight supply and demand in the Jones Act market.
- Legacy refinery services business expected to see some sequential improvement over its performance in 2023.
- New long-term charter for the American Phoenix commenced, contributing to expected record results in the marine transportation segment.
- The company anticipates a recovery back to mid-cycle earnings in its soda ash business as the market comes into better balance.
Challenges Ahead
- Offshore pipeline transportation segment margin expected to be generally flat year-over-year due to an economic step-down on the 10-year anniversary of an existing life-of-lease transportation dedication.
- Macro conditions in the soda ash business expected to continue through at least the first half of 2024, with segment margin contribution near the low end of the previously provided range.
- Expects approximately $10 million of incremental general and administrative costs as short-term cash incentive programs conform to industry standards.
- Anticipates approximately $10 million of weather-related downtime in the offshore pipeline transportation segment.
- Growth capital expenditures are expected to range from $200 - $250 million.