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Hello MLP investors, this board is for discussion of NGL a partnership that traded in 2022 like it was going to go bust, but.....didn't. Lets see - quick snapshot. NGLs fiscal year ends in March. In March of 2022 they had.... $3.35b long term debt $550m Class D 9% preferred stock (which is in arrears) $348m Class C and B partners preferred stock (also in arrears) $116m bank loan on line of credit The annual interest expense on that mess was $271m. Sales were $7.95b (wow!). The have three business lines described as Water Solutions $ 545m Crude Oil Logistics $2.5b Liquids Logistics $4.9b Adjusted EBITDA for fiscal 2022 was $543m. So...the good news is that $543m of F2022 EBITDA can service the F2022 $271m of interest expense. OK. Hmmm, so why were they trading like they were going to go bankrupt? The F2022 $543m EBITDA was an improvement from F2021 $448m EBITDA. EBITDA grew. That's also good. So we are now in the final months of NGL's fiscal 2023 (March). The recent news is..... NGL has paid down 2023 debt such that total long term debt should be about $2.92b in March 2023. NGL's business is doing well, so fiscal 2023 EBITDA is expected to be $630m (compared to $543m last fiscal year). Interest expense for F2023 will probably be about $280m, declining to ~$260m next year (due to the reduction in long term debt). The main driver of NGL's EBITDA growth is growth in their "Water Solutions" segment. I think this is some water pipeline that exists and is paid for, and as NGL fills it up with sales volumes, the margin on every extra barrel of water transported is. well, very high. More water transport sales = more EBITDA. To illustrate. In the nine months through Dec 2022 NGL did $511m Water Solutions sales with a COGS of $14. Yowza! I don't claim to know how that is possible, but that's what the financial statement say. I think investors are hoping NGL can grow their water sales, because it's almost the same as growing cash flows. ----------- So....this brings to mind the question - what's $630m of EBITDA versus $2.9 billion in long term debt worth? It depends on the growth of EBITDA I think, well EBITDA will grow from 2021 (Mar) $448m to 2022 (Mar) $543m and now perhaps to 2023 (Mar $630m). It's definitely growing. The market cap of NGL today (with $9 billion in sales and probably $630m in EBITDA) is $365m. This market cap seems low to me. Ok, off we go SI, anybody have any comments on NGL? | ||||||||||||
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