Boston, MA 05/19/2014 (wallstreetpr) – Rose Rock Midstream LP (NYSE:RRMS) posted solid growth in its first quarter result as a result of acquisitions made during 2013.
In 1Q2014, total revenues increased by 70% to $291 million due to a significant increase in revenue from transportation (+222%) and marketing activities (+69%). Fixed fee services primarily drove the transportation revenue that increased to $18.7 million during 1Q2014 (1Q2013: $5.8 million) as a result of $1.4 million of pipeline transportation fees, $13.5 million of fees from trucking and $3.8 million of fixed margin.
Adjusted gross margin improved by 66% to $37.0 million during the quarter (1Q2013: $22.3 million), due to higher pipeline and trucks transportation volumes, more storage capacity and higher marketing volumes. The increased gross margin and reduction in operating and G&A costs raised the adjusted EBITDA by 70% to $27.8 million (1Q2013: $16.4 million) and net income of $16.2 million (1Q2013: $12.0 million).
Rose Rock’s cash distribution
Higher adjusted EBITDA and lower maintenance costs ($907K) improved Rose Rock’s distribution cash flow to $24.9 million in 1Q2014 compared to $12.7 million during 1Q2013. Therefore, the Partnership increased the quarterly distribution to $0.495 per unit (1Q2013: $0.465) with distribution coverage ratio of 1.79x (1Q2013: 1.43x).
Strong liquidity position
Rose Rock Midstream LP (NYSE:RRMS) is financially sound with strong liquidity of $301 million including available revolver of $298 million and cash and cash equivalent of $3 million as of March 31, 2014. During the period, the partnership has a total capitalization of $605 million with total equity of $360 million and total debt of $245 million. So, the leverage ratio (net debt/adjusted EBITDA LTM) was 3.0x.
Considering the positive trends, Rose Rock Midstream LP (NYSE:RRMS) expects growth in performance and anticipates adjusted EBITDA of $92-$97 million in FY2014. The partnership continues to focus on organic growth as well as growth oriented acquisitions, therefore, targets capital investments of $75 million in 2014.