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BP Midstream Partners LP (BPMP) Q2 2021 Earnings Call Transcript

By Motley Fool Transcribers – Aug 5, 2021 at 2:31PM

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BPMP earnings call for the period ending June 30, 2021.

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BP Midstream Partners LP (BPMP)
Q2 2021 Earnings Call
Aug 5, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good morning ladies and gentlemen and welcome to the BP Midstream Partners 2Q 2021 Results Conference Call and Webcast. [Operator Instructions]

At this time, I'd like to turn the conference call over to Geoff Carr, Vice President of Investor Relations. Sir please go ahead.

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Geoff Carr -- Vice President, Investor Relations

Thank you, Jamie and good morning everyone. Welcome to BP Midstream Partners second quarter 2021 results presentation. Joining me today is Jack Collins, our Chief Financial Officer. Before we begin, let me draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially due to the factors we noted on this slide and in our SEC filings. We also refer to non-GAAP financial measures. Please refer to our SEC filings and supplemental information in this presentation for important disclosures related to these measures as well as reconciliations to the non-GAAP financial measures. These documents and our presentation today are available on our website.

Jack over to you.

Jack T. Collins -- Chief financial officer

Thanks Jeff. Good morning everyone. This morning we announced in our SEC filings that yesterday evening the Board of Directors of the general partner of BPMP received a non-binding offer from BP Pipelines North America Inc. through its wholly owned subsidiary BP Midstream Partners Holdings LLC both wholly owned subsidiaries of BP plc to acquire all of the outstanding common units of BPMP held by the public in exchange for newly issued American Depository Receipts of BP plc at a value of $13.01 per BPMP common unit. Our current filings contain all of the details that we are able to share at the moment and we won't be able to elaborate on BP Pipelines offer any further during today's call. We will update our filings as required. Additionally, in light of the announcement this morning, we will temporarily suspend providing forward guidance and temporarily suspend our formal unitholder engagement program such as attending investor conferences and road shows.

We will continue to manage BP in a thoughtful and disciplined manner, maintaining our focus on safe operations and delivering stable resilient performance. We will continue to report on our operational and financial performance as usual. Turning now to our operational and financial results for the second quarter of 2021. Total pipeline gross throughput was approximately 1.6 million barrels of oil equivalent per day in the second quarter, lower than the first quarter of 2021. We forecasted throughput in the second quarter to be broadly consistent with the first quarter. However, throughput on Proteus, Endymion, and Mars was lower than expected due to a slower ramp-up in production from offshore major projects and new wells. Throughput on Caesar and IRSA was lower than expected due to maintenance activity by offshore producers during the quarter and throughput on BP2 was also lower than expected largely driven by continued elevated levels of apportionment on the Enbridge mainline and refinery feedstock optimization.

Turning to financial results. Net income attributable to the partnership for the second quarter was $40.5 million, around 4% lower than the first quarter of 2021. This was largely driven by lower income from equity method investments due to lower throughput on Proteus and Damian and Mars as previously mentioned. Adjusted EBITDA for the second quarter was $45.6 million, reflecting higher distributions from equity method investments. Cash available for distribution for the second quarter was $45.4 million, compared to the first quarter cash available for distribution benefited from a lower cash reserve, related to the timing of interest payments and lower maintenance capital expenditures during the quarter. Our distribution coverage ratio for the second quarter was around 1.2 times. This reflected a second quarter declared distribution of $0.3475 per unit consistent with the distribution level for the first quarter 2021. With this coverage ratio, we continue to build cash adding around $8 million to our cash balance during the quarter.

We continue to progress our organic growth projects during the quarter commencing construction activities that will increase the capacity of the River Rouge onshore pipeline. In light of this morning's announcement and our temporary suspension of forward guidance, the Q&A portion of our call today will be limited to our operational and financial performance for the second quarter. We will not be able to elaborate further regarding BP Pipeline's offer, and we will not be able to take questions relating to future guidance or expectations for future performance.

Thank you again for joining our call today. We'll now take your questions.

Questions and Answers:

Operator

[Operator Instructions] And our first question today comes from Ryan Levine from Citi. Please go ahead with your question.

Ryan Levine -- Citi -- Analyst

Hi. Good morning. To the extent you -- I'm not sure if you're going to be able to answer it, but procedurally I realize recognizing your limitations around the transaction that was announced. Does the partnership have a voting procedure or can you speak to what's in the partnership agreement around requirements for voting from unitholders or the Board?

Jack T. Collins -- Chief financial officer

Thanks Ryan. Unfortunately -- and thanks for the question. As I mentioned earlier, we won't be able to elaborate any further today on the offer that BP has offered, and it's really too early at this point to speak to this. The offer was just received yesterday. We would though expect each party to look to the partnership agreement in the performance and requirements of their duties with respect to the offer.

Ryan Levine -- Citi -- Analyst

Okay. That's all for me. Thanks.

Operator

[Operator Instructions] And ladies and gentlemen, I'm showing no additional questions. We'll end today's question-and-answer session as well as today's webcast. [Operator Closing Remarks]

Duration: 8 minutes

Call participants:

Geoff Carr -- Vice President, Investor Relations

Jack T. Collins -- Chief financial officer

Ryan Levine -- Citi -- Analyst

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