SemGroup® Corporation (NYSE:SEMG) today announced its third quarter 2016 financial results and quarterly dividend.
SemGroup reported third quarter 2016 revenues of $327.8 million with a net loss attributable to SemGroup of $(7.4) million, or a loss of $(0.14) per diluted share. This compares with second quarter 2016 revenues of $287.4 million with net income attributable to SemGroup of $8.0 million, or $0.18 per diluted share. Third quarter 2015 revenues totaled $397.1 million with net income attributable to SemGroup of $4.9 million, or $0.11 per diluted share
SemGroup’s third quarter 2016 Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) was $71.3 million, up approximately 5 percent from $67.6 million in second quarter 2016 but down 6 percent from $75.9 million in third quarter 2015. Adjusted EBITDA is a non-GAAP measure and is reconciled to net income below.
“SemGroup delivered solid results for the third quarter and continued to execute key steps in our growth strategy,” said Carlin Conner, president and chief executive officer of SemGroup. “In addition to the acquisition of our former MLP, we also made construction progress on Maurepas Pipeline and announced plans to build a new Canadian sour gas plant, which we expect to be fully contracted by startup. By focusing on regional customer infrastructure gaps, we are capturing growth opportunities in this ‘lower for longer’ market.”
As previously announced, the company closed on its agreement to acquire all of the outstanding common units of its former MLP, Rose Rock Midstream L.P., in an all stock-for-unit transaction. The transaction simplifies SemGroup’s corporate capital structure and is expected to deliver important benefits to shareholders.
In October, SemGroup’s subsidiary SemCAMS announced that it will build a new 200 mmcf/d sour gas processing plant in the Wapiti area of the Montney play in Alberta. The new plant is underpinned by a 15-year, take-or-pay contract for a portion of the capacity. The plant is expected to be fully committed prior to the anticipated startup in mid-2019. The new sour gas plant is estimated to cost $225 million to $250 million.
Third Quarter 2016 Dividend
The SemGroup board of directors declared a quarterly cash dividend to common shareholders of $0.45 per share, resulting in an annualized dividend of $1.80 per share. The dividend will be paid on November 28, 2016 to all common shareholders of record on November 18, 2016.
Consistent with guidance provided the last two quarters, SemGroup continues to expect its 2016 Adjusted EBITDA to be below the midpoint of its previously announced guidance range, due primarily to the company’s sale of NGL Energy Partners LP units.
Earnings Conference Call
SemGroup will host a conference call for investors today, November 7, 2016, at 1:30 p.m. ET. The call can be accessed live over the telephone by dialing 1.855.239.1101, or for international callers, 1.412.542.4117. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto SemGroup’s Investor Relations website at ir.semgroupcorp.com. A replay of the webcast will be available following the call. The third quarter 2016 earnings slide deck will be posted under Presentations.
Based in Tulsa, Okla., SemGroup® Corporation (NYSE:SEMG) is a publicly traded midstream service company providing the energy industry the means to move products from the wellhead to the wholesale marketplace. SemGroup provides diversified services for end-users and consumers of crude oil, natural gas, natural gas liquids, refined products and asphalt. Services include purchasing, selling, processing, transporting, terminalling and storing energy.
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