Q1 2021 PBF Logistics LP Earnings Call

Good day, everyone and welcome to the PBF Logistics LP first quarter 2021 earnings conference call and webcast.

At this time, all participants have been placed in a listen only mode and the flow will open for your questions. Following management's prepared remarks, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded it is now my pleasure to turn the floor over to Colin Murray of Investor Relations Sir.

You may begin.

Thank you Latanya good morning, and welcome to today's call with me today are Matt Lucey Executive Vice President Erik Young our CFO and several other members of the partners partnership Senior management team, if you'd like a copy of our earnings release is available on our website before we begin I'd like to direct your attention to the forward looking.

<unk> disclaimer contained in today's press release and summary, it outlines that statements and the press release and on this conference call that state the partnership's or management's expectations of the future are forward looking statements and tended to be covered by the safe Harbor provisions under federal Securities laws. There are many factors that could cause actual results to differ from our expectations.

Including those we've described in our filings with the SEC.

As noted in our press release, we'll be using certain non-GAAP measures, while describing the partnership's operating performance and financial results for reconciliations of non-GAAP measures to the appropriate GAAP figure. Please refer to the supplemental tables provided in today's press release I'll now turn the call over to Matt. Thank you Colin and good morning.

Everyone and thank you for joining us on today's call.

PBF logistics operated well during the first quarter.

The partnership's consistent results through 'twenty, and 'twenty and now through the first quarter of 'twenty one.

Continued to reflect the underlying strength of our business and relationship with our sponsor.

We continue to expect partnership revenues for 'twenty.

For 2021.

To be and the $330 million to $350 million range.

And with 2021, EBITDA and the $210 million to $220 million range.

Throughput levels have increased modestly and our terminals relative to last quarter.

And we see this as a positive sign relative to overall demand and for a potential increase and third party business.

Our consistent revenues and cash generations.

Continue to allow the partnership to maintain healthy distribution coverage and reduce net debt.

Maintaining financial flexibility.

Net pay down and.

Strengthening liquidity are the priorities.

Today, we maintained our distributions of <unk> 30 per unit.

We'll continue to review our distribution policy going forward with respect to the company's performance market conditions and all alternate use of funds.

With that I'll turn it over to Eric for some financial highlights. Thank you Matt.

And everyone. Thank you for joining us on today's call.

We reported first quarter net income attributable to the limited partners of $37 2 million.

Adjusted partnership EBITDA was $59 million, which includes approximately $1 million of noncash unit based compensation and environmental remediation costs associated with the east coast terminals.

During the quarter, we spent roughly $1 3 million and total capex, including 400000 from maintenance.

For 2021, we currently expect capital expenditures to be roughly 15 million inclusive of approximately 2 million from multiple small strategic projects.

We ended the quarter with approximately 355 million and liquidity, including a cash balance of $44 million and approximately $311 million of availability under our revolving credit facility.

Net debt to annualized adjusted EBITDA was two eight times.

We expect to continue using excess cash to improve leverage ratios and strengthen the balance sheet.

Operator, we've concluded our opening remarks and now we'll open the call for questions.

Thank you and a moment, we will open the call to questions. The company requests that all callers limit each turn to one question and one follow up you may rejoin the queue with additional questions. If you would like to ask a question. Please press star one on your telephone keypad it.

A confirmation tone will indicate your line is no question Q.

You May press Star two if you would like to remove your question from the queue from.

And for participants using speaker equipment, and it may be necessary to pick up your handset before pressing this darkies one moment, please while we poll for questions.

Oh.

Our first question comes from Spiro <unk> with credit Suisse. Please proceed.

And this is Chad on for spear on just starting off I believe the high and your full year EBITDA guidance implies roughly a 9% decline from the first quarter on the PBF call. It sounds like Youre planning several turnarounds and the second half of the year is that the driver and that implied decline and what's the impact from those.

Turnarounds to PBF.

Thanks.

There there really shouldn't be much impact from turnarounds on a go forward basis, I think Matt's comments around you know the stable nature of cash flows. We did have there's probably about a million dollars running through the P&L, maybe a little bit more than that that basically relates to some product sales that we had there is not much cost again.

And that so I think that will ultimately go away and quite frankly, I think we're probably somewhat conservative in terms of the full year estimates, but these are consistent with what we've laid out for our board of directors, what our 2021 budget ultimately relies on and Thats kind of where we're benchmarking ourselves against at this.

Point, we've clearly there will be some times, where certain volume metrics will be higher than those N V C's and we'll be able to generate some incremental profitability, but the key message is really that the N V. C nature of those contracts provides and ultimate floor in terms of the MVC side of things is really draw.

Our full year guidance.

Okay. Thanks for that that's helpful and just the second one.

For the show on the renewable diesel project and PBF.

And sort of go through what your opportunity set is for PBF FX and renewables.

I would.

I would answer it this way.

Certainly there has been no decision has been made but just to give you I guess what would be three facts.

Nothing.

<unk> and round of renewable diesel project.

And would be qualified income.

To maintain.

Your tax status as a pass through MLP.

You are allowed up to 10%.

Of of Nonqualified income and you can't go over 10%.

And currently PBF ex has zero dollars.

Net.

And our nonqualified income.

So there's certainly some flexibility with N P b FX, but theres nothing.

And decided or that we can talk about at the moment.

Okay understood. Thanks for that thanks, and the time guys Thats all I had.

Thank you.

Thank you there are no further questions in queue at this time I would like to turn the call back over to Matt Lucey for closing comments.

Thank you everyone I appreciate your attendance day and look forward to speaking to you again next quarter have a great day.

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

Yeah.