Results for the Fourth Quarter of 2020
- Net income of $10.3 million, or $0.44 per common unit
- Adjusted EBITDA of $13.8 million and distributable cash flow of $11.3 million
- Quarterly cash distribution of $0.12 per unit
- Distribution coverage ratio of 3.98x, LTM distribution coverage ratio of 3.99x
Green Plains Partners LP announced financial and operating results for the fourth quarter of 2020. Net income attributable to the partnership was $10.3 million, or $0.44 per common unit, for the fourth quarter of 2020 compared with net income of $10.4 million, or $0.44 per common unit, for the same period in 2019.
The partnership also reported adjusted EBITDA of $13.8 million and distributable cash flow of $11.3 million for the fourth quarter of 2020, compared with adjusted EBITDA of $13.3 million and distributable cash flow of $11.2 million for the same period in 2019. Distribution coverage was 3.98x for the three months ended December 31, 2020 as compared to 0.99x for the same period a year ago.
“Green Plains Partners achieved consistent financial results for its unitholders while continuing to reduce its debt,” said Todd Becker, president and chief executive officer. “With the recent sale of Green Plains Hereford and the announced sale of Green Plains Ord, we believe the partnership will continue to strengthen its balance sheet which accrues value to the unitholders as we work toward achieving our end goal of a debt free partnership.”
Full Year Highlights and Recent Developments
- On June 4, 2020, the partnership refinanced its debt facility into a $130.0 million term loan and a $5.0 million revolving credit facility, maturing December 31, 2021.
- On December 28, 2020, Green Plains Inc. closed on the sale of its Hereford, Texas ethanol plant.
Correspondingly, the partnership’s storage and transportation assets affiliated with the location were sold to Green Plains Inc. for $10.0 million, along with the transfer of certain railcar leases. In accordance with the loan agreement, the proceeds were used to repay debt.
- On January 21, 2021, the board of directors of the partnership’s general partner declared a quarterly cash distribution of $0.12 per unit, or approximately $2.8 million, for the fourth quarter of 2020. The distribution is payable on February 12, 2021, to unitholders of record at the close of business on February 5, 2021.
- On January 27, 2021, the partnership announced an agreement to sell its storage and transportation assets located at the Green Plains Inc. Ord, Neb. ethanol facility to Green Plains Ord LLC for $27.0 million, along with the transfer of certain railcar leases. In accordance with the loan agreement, the proceeds will be used to repay debt.
Results of Operations
Consolidated revenues increased $1.0 million for the three months ended December 31, 2020, compared with the same period for 2019. Storage and throughput services revenue increased $0.7 million due to an increase in the rate per gallon charged to Green Plains Trade beginning on July 1, 2020. Railcar transportation services revenue increased $0.3 million primarily due to an increase in average volumetric capacity provided and the average capacity fee charged of $0.4 million, offset by a decrease in railcar sublease revenue of $0.1 million. Trucking and other revenue increased $0.2 million due to an increase in volumes transported for Green Plains Trade. Terminal services revenue decreased $0.2 million as a result of a reduction in fees associated with minimum volume commitments.
Operations and maintenance expenses increased $0.4 million for the three months ended December 31, 2020, compared with the same period for 2019, primarily due to an increase in railcar lease expense as a result of higher average railcar lease rates. General and administrative expenses increased $0.2 million for the three months ended December 31, 2020, compared with the same period for 2019, primarily due to an increase in insurance expense.
During the fourth quarter of 2020, Green Plains Inc.’s average production utilization rate was approximately 75.7% of capacity. Ethanol throughput was 215.1 million gallons, which was below the contracted minimum volume commitment. As a result, the partnership charged Green Plains Trade $1.1 million related to the minimum volume commitment deficiency for the quarter, resulting in a credit to be applied against potential excess volumes in future periods. The cumulative minimum volume deficiency credits available to Green Plains Trade as of December 31, 2020 totaled $7.8 million. If these credits are unused by Green Plains Trade, $4.3 million will expire on June 30, 2021, $2.4 million will expire on September 30, 2021, and $1.1 million will expire on December 31, 2021. These credits have been recognized in revenue by the partnership, and as such, future volumes throughput by Green Plains Trade in excess of the quarterly minimum volume commitment, up to the amount of these credits, will not be recognized in revenue in future periods prior to expiration.
Liquidity and Capital Resources
Total liquidity as of December 31, 2020, was $7.5 million, including $2.5 million in cash and cash equivalents, and $5.0 million available under the partnership’s revolving credit facility. Total debt outstanding was $97.7 million, net of debt issuance costs.