Release Date: April 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you provide an update on the rate environment for both marine and land transportation, and the difference in 1Q results versus your guidance for 2Q?
A: Randall Tauscher, COO of Martin Midstream Partners, explained that marine rates increased by 50% over the last two years, with a 20% increase from the end of the first quarter of 2023 to 2024. The company has secured long-term contracts for most of its inland tows. For land transportation, rates are stable despite fluctuations due to changes in the trucking business. The company expects stable rates moving forward, with refineries in Beaumont operating at high utilization.
Q: What's driving the change in the raised outlook for fertilizer in the fourth quarter of this year from $2.4 million to $3.2 million?
A: Randall Tauscher mentioned that the adjustment is due to small growth investments in semicap, where they expanded their warehouse. This allows them to operate longer during the summer months and have more inventory to sell during the disposal season, which is primarily in the fall and early winter.
Q: Is the second chip factory announced by Samsung included in the DSM semicap joint venture, or is it a potential upside?
A: Tauscher clarified that there is no commitment yet regarding the second chip factory as the size of chips to be produced, which affects asset needs, is still unknown. However, it represents a potential upside for the future.
Q: Regarding the heavy drydock year for marine, how many are going into drydock, and is it heavier than other years?
A: CEO Robert Bondurant noted that it is a heavy drydock year, with significant maintenance already completed in the first quarter. Two inland barge tows will go into drydock in the second quarter, and only one in the fourth quarter, with most maintenance expected to be completed by the end of the second quarter.
Q: Are there any new contracts or increased demand for your transportation services?
A: Bondurant stated that the demand for marine and trucking services is stable, with no significant new opportunities for growth. The focus is on utilizing current assets and possibly achieving incremental growth in trucking if conditions allow.
Q: Was there anything unusual about the large turnaround expense reported, or is it just inflation?
A: Bondurant explained that the large turnaround expense is part of a heavy year, influenced by inflation. The company budgeted $32 million for the year, with significant expenses already incurred in the first quarter due to refinery turnarounds.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
