NGL Energy Partners (NGL) 9 Aug 222023 Q1 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the NGL Energy Partners LP First Quarter 2023 Earnings Call. [Operator Instructions] After comments from Michael Krimbill and Linda Bridges, we will open the Q&A to sell-side analysts after the presentation.

It is now my pleasure to turn the floor over to your host, Linda Bridges, CFO of NGL Energy Partners. Ma'am, the floor is yours.

Thanks. NGL's fiscal to earnings welcome and first XXXX quarter call. Hi, of your I'd be our end this release, afternoon. like market start, after attention was found partnership's filed which to the can To close which call to the earnings language, safe towards the harbor the Today's contain of within Reform Litigation the statements may Securities Act remarks meaning forward-looking Private of XXXX. website. Management's in the act, I on for direct SEC partnership's to and partnership, website the available the to risk report would your and which in by section discussed like the on the Discussion also with on Form Analysis accordance and the SEC's the March In annual year other factors and XX, are made attention XX-K filings ended XXXX, the

safe in those from statements. set with could statement that factors together forward-looking earnings important in actual the results differ These, cause any such forth the to release contained materially harbor

quarter, reported of results than Starting EBITDA the XX% and segment and from quarter increase quarter to an the with when of increase an quarter. had XXXX financial immediately XX% strong of compared our the the record $XXX preceding Water million, first very Solutions fiscal for of more adjusted a

volumes driven than which processed were produced skim per sold. volumes quarter, higher-than-expected oil immediately approximately by results as barrels record preceding was X.XX million These the of higher water day, XX% well as

and and from expected reminder, favorable a segment our $XXX to outperformance utility, have by million over first we decrease in $X.XX barrel business inflation are million. of been guidance three a to costs, largest continued segment due the totaled $XXX to over chain increasing macro and agreements our suppliers. variable with chemical Due supply Solutions impacted the year royalty challenging this are to the quarter, for in Water expenses full to and not expenses contracted be rates environment. controlled of Operating costs not as the and inflationary successfully A

fiscal in adjusted favorable biodiesel primarily to by for of as segment the Results XXXX. EBITDA $XX.X markets in volumes and well reported supply Logistics Liquids of and the supply strong million inventory contracts refined to quarter tighter as positions. due compared were for this products million quarter $X.X segment The certain on first margins driven first

Our businesses as expected. propane and butane performed

majority the come However, gasoline reminder, later the in full heating earnings A demand, are the of year blending winter and in their disruptions. for results will when segment will in weather, propane, market seasons fiscal refining demand driven agricultural this by swing. be and activities

adjusted $XX.X Logistics million. quarter EBITDA for of Crude reported the

volatility As were results of gains approximately inventory the expected, to net in expect million inventory to the of by realized environment, as 'XX, gains subsequent quarters. quarter fourth losses realized as in due the well related fiscal in derivatives we to crude for negatively on quarter be financial that that $XX the impacted

Excluding performed Physical last first these approximately Mesa to barrels items, volumes day per XX,XXX compared per the in line with expectations. year XX,XXX quarter barrels the XX,XXX underlying day business Grand in and differentials prices. of on price increased barrels for per margin day certain were contracts on oil continued well adder and increased realization sales barrels quarter, rates the certain crude the full crude as the sold benefit as preceding with on whose of from oil on to contracts,

continue physical business XXXX. fiscal in in line to As to of logistics crude relatively the financial differences perform and we timing for adjusted settlements underlying expect inventory sales, with

XX. $XXX on focus reported to on liquidity continue total June and million sheet We balance the of

million quarter the $XX.X repurchased during unsecured additional an we notes Additionally, and approximately end. quarter $XX.X to million of the subsequent

XXXX if notes give certain requirements, we working that us if as most, as call, earnings the mentioned to should of all, to liquidity As well capital by needed, of fund end repay on continue initiatives this sufficient fiscal in our year. our work last elevated not

we're still them hope significant bringing completion initiatives, these progress While to have and made of prepared discuss in specifics to we the have to not updates soon.

With Mike. turn that, it I'll over to

Thanks, Linda.

XXXX the to to [in and leverage reducing pay continues on can the unsecured reinstate dividend that preferred below focus we Our so order X.XX the be repaying to] dividends.

We are growth additional continued adding our current water expanding disposal experiencing volumes, relationships. producers in and

growth With new the producers. or the $XX CapEx, we in XX-inch another million. being in this pipelines Poker addition delivered accommodate first CapEx to resulted the Lake by of second pipeline incurred of these respect all volumes XX% can With pipeline, and our quarter budget water

We also through accelerated about June maintenance our cap XX. incurred spend XX% budget of with

for volumes for year. fiscal increasing the We are the remainder of prepared

the Linda current are the guidance $XXX energy increase by amount we the coming could we environment quarters. in in an to million As further $XX of increasing million. continues, If guidance said, Water EBITDA Solutions excess

think open with I up we it that, questions. for

[Operator Securities. TD is Instructions] Your from question first Spicer coming from James

James live. is Spicer, your line Your live. line is

thanks the Hi, for taking questions.

trajectory is, a where during little that year, but example? I you they're understand the there to of think question provide water you of help the rate going volumes you're terms by for is an be of the in exit First end you can year? bit with increasing that just can the

James. Yes,

guided what barrels for X.X year we've this So to million the for is year.

provided haven't specific a growth We trajectory.

million. $X.X volumes right quarter First came were billion. below in It $X.XX that at

guiding to really right just million. the now, $X.X So we're

little year, we'll but the fiscal see be wanted through the growth on I think a remainder to guidance. hopeful of conservative we're we the

Okay. Understand.

beyond just capital next you you're see Secondly, I working wonder benefit? comment of and versus if little expecting then the working and capital on to use in a terms what quarter bit that could

follow other the that building inventory which we balances where start Yes. late the At fall. trend summer is year, really of propane this during point, butane and see capital every I think relative had they've -- you'll working relatively

and see continuing we'll typically, quarter. be think fiscal I our build in fourth liquidation through fiscal quarter, third to a our then you'll

last you'll what -- delayed do think had year, was we a inventory. I build think I seen see some in

it speaking, But you'll might I specifically see think the thing difference at relates year. you'll prices year's and a as think between last look this prices and and happen continue. to is little commodity you pattern relatively same butane this propane. I see year's commodity commodity bit that that And one build prices, sooner

Okay.

So inventory fair to cash year of the come your the with majority build, of it then? your in flow second to the assume going is half free is that

Yes.

Yes.

a for Okay. Thanks me. lot. That's it

Yes.

concludes Thank I Q&A our back hand Please you. will go now for That remarks. session. Bridges closing the Linda conference ahead. to

our for forward next right. All again in look you guys, few quarter guys Well, call. the months. next thank We'll Thank fiscal 'XX updating quarter the earnings joining on to you you. first

Thanks.

ladies gentlemen. This and you, Thank today's concludes event.

have participation. your may at Thank wonderful and for you a day. You this disconnect time,