NGL Energy Partners LP (NGL) Q4 2024 Earnings Report

Overview of the QQ4 2024 financials and notable trend signals:
- Revenue: $1.6296 billion; YoY decline of 20.5%; QoQ decline of 12.9%.
- Gross profit: $160.3 million; gross margin 9.84%.
- Operating income: -$82.3 million; operating margin -5.05%.
- EBITDA: -$73.9 million; EBITDA margin -4.54%.
- Net income: -$236.8 million; net income margin -14.53%; EPS -$1.79 (diluted).
- Water Solutions: Q4 adjusted EBITDA $123.4 million; full-year adjusted EBITDA $508.3 million, +10% YoY; physical disposed water volumes 2.39 million barrels/day in Q4 (2.46 in prior Q4).
- Volumes and utilization: Total produced-water disposed for fiscal 2024 averaged +4% vs. 2023; total volumes paid to dispose rose 7% to 2.59 million barrels/day (fiscal 2024).
- Grand Mesa Pipeline: Q4 physical volumes ~67,000 bpd vs. ~76,000 bpd prior-year quarter; management sees potential up to 110–115k bpd exit volumes in 6–12 months.
- Crude Logistics: Q4 EBITDA $15.3 million vs. $29.7 million prior-year quarter; margin pressure from lower production on long-tenor acreage and a contract expiration (Dec 31, 2023).
- Liquids Logistics: Q4 EBITDA $21.8 million vs. $28.5 million prior-year quarter; weakness driven by lower propane margins, terminal closures/sales, and warmer winter conditions; biodiesel pricing pressure from late-2023 mandates.
- Cash flow and capital allocation: Net cash provided by operating activities $152.2 million; free cash flow $119.8 million; capex $32.4 million; dividends paid $178.3 million; net cash used in financing activities $79.6 million; cash balance at period-end $38.9 million.
- Balance sheet and leverage: Total assets $5.02 billion; total Liabilities $4.02 billion; total debt $2.95 billion; net debt $2.91 billion; stockholders’ equity negative about $0.499 million; debt-to-capitalization ratio ~1.00; interest coverage negative; cash ratio ~0.0398; current ratio ~1.206. Note: equity impairment reflects heavy debt load and preferred equity structure.
- Guidance: Fiscal 2025 consolidated adjusted EBITDA guidance of $665 million, implying ~9% YoY growth; Water Solutions expected to drive most of the growth (8–10% range). CapEx guidance of $210 million for 2025 (approx. 60% tied to LEX II). Common-unit repurchase program authorized up to $50 million. Soft-call on Term Loan B at 101 through July; potential opportunities for debt repayment thereafter.
- Operational efficiency: Water Solutions operating costs per barrel run at $0.23 in Q4 and ~$0.24 per barrel for FY2024, highlighting disciplined cost control in a variable-margin environment.