Local & Regional
12:05 pm
Mon August 15, 2011

SemGroup Loss

Tulsa, OK – CLARIFICATION: The audio soundbites used in our on-air newscasts on Monday afternoon and Tuesday morning, indicating across the board cuts for SemGroup was for ONLY one division and not the entire company.

SemGroup Corporation today announced its financial results for the three and six months ended June 30, 2011.

SemGroup's adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") increased by 57% to $28.9 million for the quarter ended June 30, 2011, compared with a reported Adjusted EBITDA of $18.4 million for the same quarter in 2010. (See the section of the release entitled "Non-GAAP Financial Measures" for a discussion on Adjusted EBITDA and a reconciliation of this measure to net loss attributable to SemGroup.). This increase was primary due to higher crude oil, natural gas and asphalt volumes during the current quarter, partially offset by lower utilization rates in the SemLogistics storage business.

"SemGroup is focused on capturing the growing demand for midstream services," said Norm Szydlowski, president and chief executive officer of SemGroup. "Our strategy is to capture this growth through a combination of improved utilization of our existing asset base and disciplined organic growth in the high demand liquids fairway," added Szydlowski.

For the quarter ended June 30, 2011, SemGroup reported a net loss of $12.3 million, or 30 cents per share, on revenue of $344.2 million, compared to a net loss of $121.0 million, or $2.92 per share, on revenue of $315.9 million for the quarter ended June 30, 2010. SemGroup reported operating income of $12.5 million for the second quarter of 2011, compared to an operating loss of $94.0 million for the same period last year.

For the six months ended June 30, 2011, SemGroup reported a net loss of $12.3 million, or 29 cents per diluted share, on revenue of $751.2 million, compared to a net loss of $111.8 million, or $2.70 per diluted share, on revenue of $791.9 million for the six months ended June 30, 2010. Operating income for the six months ended June 30, 2011, was $26.8 million, compared to an operating loss of $69.5 million for the same period last year. Adjusted EBITDA for the six months ended June 30, 2011 totaled $55.4 million, compared to Adjusted EBITDA of $71.6 million for the six months ended June 30, 2010.

SemGroup is reaffirming its 2011 Adjusted EBITDA guidance range of $120 - $140 million, not taking into effect the impact of the recently announced initial public offering of common units in Rose Rock Midstream, L.P. due to the uncertainty surrounding the timing of its completion which is anticipated to be not any earlier than the fourth quarter of 2011.

The improvement in quarterly operating income for the period was driven by higher volumes and margins reported for SemCrude , L.P., SemGas , L.P. and SemMaterials MexicoMR. SemCrude reported quarterly operating income of $9.3 million, $7.5 million higher than the same period last year, as increased volumes and margins for the quarter more than offset the impact of the sale of a partial interest in White Cliffs Pipeline in the third quarter of 2010.

SemGas reported operating income of $3.0 million for the second quarter of 2011, $2.2 million higher than the same period last year as new wells in the Mississippian Oil Trend in northern Oklahoma significantly increased utilization rates. SemMaterials Mexico reported stronger volumes and margins based on an overall increase in asphalt sales.

SemCAMS reported stronger operating income during the quarter due largely to a favorable producer settlement of $6.1 million related to prior period services. This favorable settlement more than offset the impact of a temporary plant shutdown during part of the quarter.

SemLogistics reported operating income of $0.7 million for the second quarter of 2011, compared to operating income of $3.4 million for the prior year's quarter as backwardation in the European markets impacted the renewal of storage agreements.

Also affecting the comparability of second quarter operating income was the $92 million impairment related to our SemCanada Crude business in the second quarter of 2010. The SemCanada Crude business was divested in late 2010.