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Ferrellgas Partners L.P., a leading propane distribution company, has reported an increase in net earnings and distributable cash flow for the quarter ending April 30, 2023.
The company’s net earnings attributable to Ferrellgas Partners, L.P. were $72,427,000, compared to $67,586,000 in the same period last year.
Positive Impact of Higher Revenues and Decrease in Operating Expenses
According to the quarterly report, the company’s net earnings were positively impacted by higher revenues and a decrease in operating expenses. Revenues from propane and other gas liquids sales were $587,347,000, a decrease of 9% compared to the prior year period. Gross margin from propane and other gas liquids sales increased by $10,439,000, or 4%, compared to the prior year period.
Decrease in Propane Sales Volumes
Propane sales volumes during the quarter decreased by 7%, or 17.8 million gallons, compared to the prior year period. This decrease was primarily due to warmer than normal temperatures, which reduced customer demand. The wholesale market price of propane also decreased, contributing to the decrease in sales price per gallon.
Increased Adjusted EBITDA and Distributable Cash Flow
Despite the decrease in sales volumes, the company’s adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased by $8,467,000, or 7%, compared to the prior year period. This increase was primarily due to the higher gross margin from propane and other gas liquids sales.
The company also reported an increase in distributable cash flow attributable to equity investors. For the quarter, distributable cash flow was $99,332,000, compared to $86,393,000 in the same period last year. This increase was primarily due to higher net earnings and lower distributions paid to preferred unitholders.
Positive Nine-Month Results
Looking at the nine-month period ending April 30, 2023, Ferrellgas Partners L.P. also reported positive results. Net earnings attributable to Ferrellgas Partners, L.P. were $165,982,000, compared to $167,385,000 in the prior year period. Adjusted EBITDA for the nine months increased by $25,312,000, or 8%, compared to the prior year period.
Propane sales volumes during the nine-month period decreased by 3%, or 18.0 million gallons, compared to the prior year period. Similar to the quarterly results, this decrease was primarily due to warmer temperatures and a decrease in the wholesale market price of propane.
Despite the decrease in sales volumes, the company’s gross margin from propane and other gas liquids sales increased by $69,553,000, or 9%, compared to the prior year period. This increase was primarily due to a decrease in the cost of sales, resulting from the lower wholesale market price of propane.
The company’s distributable cash flow attributable to equity investors for the nine-month period was $252,856,000, compared to $223,099,000 in the prior year period. This increase was primarily due to higher net earnings and lower distributions paid to equity investors.
Liquidity and Capital Resources
In terms of liquidity and capital resources, the company reported total liquidity of $369.5 million as of April 30, 2023. This includes $93.5 million in unrestricted cash and $276.0 million of availability under the company’s Credit Facility. The company believes that its liquidity and short-term capital resources will be sufficient to meet its working capital requirements, acquisitions, and capital expenditures.
Conclusion
Overall, Ferrellgas Partners L.P. has reported positive financial results for the quarter and the nine-month period ending April 30, 2023. Despite a decrease in propane sales volumes, the company has achieved higher net earnings, gross margin, adjusted EBITDA, and distributable cash flow. With a strong liquidity position, the company is well-positioned to meet its future capital requirements and continue its growth in the propane distribution industry.
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