Buckeye Partners (BPL +0.00%) announced first-quarter results before the opening bell this morning. The company reported income from continuing operations of $101.5 million. This was up from the $94.8 million it earned in last year's first quarter. Meanwhile, adjusted EBITDA rose to $188.6 million in the quarter, up from $160.2 million last year.
The big driver in the quarter was the contribution from the terminals that Buckeye Partners recently acquired from Hess (HES +0.00%). This was the first full quarter that the former Hess assets contributed to its results. In addition to this contribution, it also experienced strong returns from the growth capital it spent to grow its domestic pipelines and terminals segment as well as from its global marine terminals segment.
These new investments grew the company's distributable cash flow from $125.6 million in last year's first quarter to $131.8 million in this year's first quarter. That led to its distribution coverage ratio of 1.03 times for the first quarter, which is just above the minimum 1.0 times ratio.
Looking ahead, Buckeye Partners expects to spend about $300 million on growth capital investments this year. This capital, combined with a focus on improving the results of the newly acquired Hess assets, should drive further increases in the company's distribution coverage ratio as well as future distribution increases.
