Genesis Energy(GEL) - 2025 Q2 - Quarterly Results

Financial and Operational Highlights Genesis Energy reported a Q2 2025 net loss of $0.4 million, achieving $135.9 million Total Segment Margin and $122.9 million Adjusted EBITDA Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss Attributable to Genesis Energy, L.P. | $0.4 million | $8.7 million | | Cash Flows from Operating Activities | $47.0 million | $104.7 million | | Total Segment Margin | $135.9 million | N/A | | Adjusted EBITDA | $122.9 million | N/A | | Available Cash before Reserves to common unitholders | $32.2 million | N/A | | Bank Leverage Ratio (TTM) | 5.52X | N/A | - Declared cash distributions on preferred units totaled approximately $14.9 million[4] - The company achieved 1.59x coverage for its quarterly distribution of $0.165 per common unit[4] CEO Commentary and Strategic Outlook The CEO highlighted successful Shenandoah and SYNC commissioning, Salamanca progress, and anticipated free cash flow growth for debt reduction - The Shenandoah production facility successfully delivered first oil to the new SYNC pipeline, with production expected to ramp up to 90-100 kbd[2] - The Salamanca project remains on track to achieve first oil by the end of Q3 2025, with an initial peak design of 40-50 kbd[3] - The company anticipates generating increasing free cash flow starting in Q3, which will be used to pay down its revolving credit facility[5][6] - Future capital allocation strategy includes debt reduction, potential redemption of high-cost preferred units, and possible increases in common unit distributions[7] Segment Performance Total Segment Margin slightly decreased to $135.9 million in Q2 2025, with Offshore growth offset by Marine and Onshore declines, and a segment reorganization Segment Margin (in thousands) | Segment | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Offshore pipeline transportation | $87,594 | $86,131 | +$1,463 | +1.7% | | Marine transportation | $29,817 | $31,543 | -$1,726 | -5.5% | | Onshore transportation and services | $18,458 | $20,242 | -$1,784 | -8.8% | | Total Segment Margin | $135,869 | $137,916 | -$2,047 | -1.5% | - The company reorganized its operating segments, moving the sulfur services business into the Onshore transportation and services segment[14] Offshore Pipeline Transportation Offshore Segment Margin increased by 2% to $87.6 million, driven by new MVCs and higher volumes from key projects, partially offset by rate adjustments - Growth was driven by the commencement of MVCs on the SYNC and CHOPS pipelines for the Shenandoah development, which began contributing in June 2025[15] - Deepwater drilling activity in the Gulf of America remains resilient and is not expected to be significantly altered by near-term macroeconomic headwinds[10] Offshore Operating Data | Metric (average/day) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Crude oil pipelines (barrels) | 646,010 | 642,251 | | Natural gas transportation (MMBtus) | 403,703 | 357,687 | Marine Transportation Marine Segment Margin decreased by 5% to $29.8 million, with inland market strength offset by offshore market softening due to increased vessel availability - The inland barge business saw slightly lower utilization due to a decline in Midwest refinery demand for black oil equipment[17] - The bluewater market experienced pressure on day rates as third-party vessels were redeployed from the West Coast to the East and Gulf coasts[11][17] Marine Utilization Percentage | Fleet | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Inland Barge | 98.1% | 100.0% | | Offshore Barge | 97.3% | 94.9% | Onshore Transportation and Services Onshore Segment Margin decreased by 9% to $18.5 million, driven by lower NaHS and caustic soda sales, partially offset by higher rail unload and Texas pipeline volumes - The decrease was mainly driven by lower sales volumes of NaHS and caustic soda[18] - Performance was partially offset by higher volumes at the Texas system and Raceland terminal, and increased rail unload volumes at the Scenic Station facility[12][18] Onshore Operating Data | Metric (average/day) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Onshore crude oil pipelines (barrels) | 151,899 | 129,522 | | NaHS volumes (Dry short tons) | 23,256 | 29,656 | Financial Outlook The company revised its full-year 2025 guidance due to temporary delays in Shenandoah and Salamanca first oil, and producer outages, without affecting long-term earnings - Full-year 2025 Adjusted EBITDA is now expected to be at or near the low end of the prior guidance range of $545–$575 million[13] - The delays are considered temporary and are not expected to have any lasting impact on the ability to generate increasing Adjusted EBITDA and free cash flow in 2026 and beyond[13] Condensed Consolidated Financial Statements The unaudited financial statements detail Q2 2025 performance, showing a return to profitability from continuing operations and balance sheet changes after the Alkali Business sale Statements of Operations (Income Statement) For Q2 2025, Genesis reported revenues of $377.3 million and a net loss of $0.4 million, a significant improvement from Q2 2024, with net loss per common unit at $0.12 Q2 Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $377,348 | $430,179 | | Operating Income | $67,715 | $49,779 | | Net Income (Loss) from Continuing Operations | $10,011 | $(3,965) | | Net Loss Attributable to Genesis Energy, L.P. | $(406) | $(8,744) | | Net Loss per Common Unit - Basic and Diluted | $(0.12) | $(0.25) | Balance Sheets As of June 30, 2025, total assets were $4.84 billion and liabilities $4.12 billion, with the senior secured credit facility balance significantly reduced due to the Alkali Business sale Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $587,308 | $911,734 | | Total assets | $4,838,538 | $7,037,692 | | Senior secured credit facility | $71,600 | $291,000 | | Total liabilities | $4,121,134 | $5,521,909 | Non-GAAP Financial Measures and Reconciliations The company provides detailed reconciliations for key non-GAAP measures, reporting Q2 2025 Adjusted EBITDA of $122.9 million, Available Cash before Reserves of $32.2 million, and a 5.52x leverage ratio Key Non-GAAP Metrics (Q2 2025) | Metric | Value | | :--- | :--- | | Adjusted EBITDA | $122.9 million | | Available Cash before Reserves | $32.2 million | | Adjusted Debt-to-Adjusted Consolidated EBITDA (LTM) | 5.52X | - The report includes detailed definitions and the company's rationale for using non-GAAP measures such as Available Cash before Reserves and Adjusted EBITDA, which management believes are useful for assessing financial performance, operating performance, and the ability to generate cash[38][40][50] - The calculation for the leverage ratio includes pro forma adjustments for material organic growth projects like Shenandoah, based on contractual minimum cash commitments[37]