Superior Plus gives financial outlook
Back on October30,2014 Superior Plus gave it's third quarter results and financial outlook for 2015.First they reported adjusted operating cash flow per share(AOCF) of $.18 for Q3 2014 compared to$.19 per share for Q3 2013.Superior makes an adjustment for restructuring but it is not included in their reported figure.Funds used for restructuring are excluded from AOCF as an adjustment. Although 2014 AOCF is flat their revenues were up;they were up 4% over Q3 2013and 11% over the 9 months of 2013.Consequently Superior(SPB) raised it's dividend 20% to $.72 per share from $.60.It gave it's financial outlook for 2014;AOCF is expected to be$1.75 to $1.95 per share before restructuring costs.This is compared to guidance given in the second quarter of $1.65 to $1.95 per share before restructuring costs.This financial statistic which is rarely used is not comparable to adjusted EBITDA as all the non-cash charges have been removed.So AOCF is lower than EBITDA and comes closer to what other companies call net free cash flow.SPB did not take depreciation charges but it did take a restructuring charge after AOCF was calculated.
Superior shows a $10 million profit that was not recorded in 2013 and must be removed from Q3 2014 results.This will be recorded in the proper quarter in 2014. This will also raise annual 2014 AOCF by $.08 per share;guidance now is for $1.75 to $1.95 per share.But more importantly SPB gives guidance for 2015 of $1.80 to $2.10 AOCF before restructuring costs.This is a 5% increase from what was previously reported.This blog believes that a 15 to 20% increase is more likely.
Energy Services
SPB has three divisions;Energy Srvices,Specialty Chemicals and Construction Products Division.The first to be looked at is Energy Services.This division was the biggest contributor to overall EBITDA for the 9 month period;it had 50% of total EBITDA.It produced only $4.8 million in Q3 or 10% of total EBITDA.This wasonly slightly down from $8.5 million in Q3 2013.Sales volume was constant although margins were slightly higher.SPB continues to make restructuring changes that reduce costs.They anticipate that EBITDA will be higher in 2015 because of reduced costs and increased margins.
Specialty Chemicals
This division produced about 38% of the total EBITDA for the 9 month period.And it produced about 65% of EBITDA for Q3.It uses natural gas feedstock to produce mostly sodium chlorate, chloralkali and hydrochloric acid.Both sodium chlorate and chloralkali profits were modestly higher than for the same period last year.They put in a new hydrochloric acid burner expansion which will eventually double sales volume.Also their new facility in Saskatoon should be in commercial operation before the end of this year.So SPB expects modestly higher EBITDA in 2015 from this division.
Construction Products Distribution
This division was almost sold in Q3 2013 but they have decided to continue with"it's CPD business initiatives".It only produced about 12% of total EBITDA for the 9 months but it will make about a 25% contribution for Q3 2014.Margins have been higher in the U.S than in Canada and so it has moved this division to Texas. The 2015 contribution should be higher than that of 2014.
2015 Results
SPB expects AOCF of $1.80 to $2.10 per share for 2015;this is a 5% increase but could be up to 25% if it hits the top of this range.Also Superior Propane expects to reduce debt to 3.0 to 3.5 X debt which is a large reduction from 2013 and 2014.SPB is making steady improvements in all divisions and should see $15.00 a share again this year coming.It traded at this level in August,2014 and now has made some improvements.The surprise here could be the Construction Products division as a healthy year here will surely bring SPB closer to $2.10 or $2.15 AOCF per share or at the top end of their range.
Superior shows a $10 million profit that was not recorded in 2013 and must be removed from Q3 2014 results.This will be recorded in the proper quarter in 2014. This will also raise annual 2014 AOCF by $.08 per share;guidance now is for $1.75 to $1.95 per share.But more importantly SPB gives guidance for 2015 of $1.80 to $2.10 AOCF before restructuring costs.This is a 5% increase from what was previously reported.This blog believes that a 15 to 20% increase is more likely.
Energy Services
SPB has three divisions;Energy Srvices,Specialty Chemicals and Construction Products Division.The first to be looked at is Energy Services.This division was the biggest contributor to overall EBITDA for the 9 month period;it had 50% of total EBITDA.It produced only $4.8 million in Q3 or 10% of total EBITDA.This wasonly slightly down from $8.5 million in Q3 2013.Sales volume was constant although margins were slightly higher.SPB continues to make restructuring changes that reduce costs.They anticipate that EBITDA will be higher in 2015 because of reduced costs and increased margins.
Specialty Chemicals
This division produced about 38% of the total EBITDA for the 9 month period.And it produced about 65% of EBITDA for Q3.It uses natural gas feedstock to produce mostly sodium chlorate, chloralkali and hydrochloric acid.Both sodium chlorate and chloralkali profits were modestly higher than for the same period last year.They put in a new hydrochloric acid burner expansion which will eventually double sales volume.Also their new facility in Saskatoon should be in commercial operation before the end of this year.So SPB expects modestly higher EBITDA in 2015 from this division.
Construction Products Distribution
This division was almost sold in Q3 2013 but they have decided to continue with"it's CPD business initiatives".It only produced about 12% of total EBITDA for the 9 months but it will make about a 25% contribution for Q3 2014.Margins have been higher in the U.S than in Canada and so it has moved this division to Texas. The 2015 contribution should be higher than that of 2014.
2015 Results
SPB expects AOCF of $1.80 to $2.10 per share for 2015;this is a 5% increase but could be up to 25% if it hits the top of this range.Also Superior Propane expects to reduce debt to 3.0 to 3.5 X debt which is a large reduction from 2013 and 2014.SPB is making steady improvements in all divisions and should see $15.00 a share again this year coming.It traded at this level in August,2014 and now has made some improvements.The surprise here could be the Construction Products division as a healthy year here will surely bring SPB closer to $2.10 or $2.15 AOCF per share or at the top end of their range.
Comments
Post a Comment