Indianapolis-based company, Calumet Specialty Products Partners, L.P., announced its financial results for the first quarter ended March 31, 2024. The company reported a net loss of $41.6 million for the quarter, compared to a net income of $18.6 million in the same period last year. The limited partners’ interest in basic net loss per unit was $0.51.
Despite the challenging financial results, Calumet remains on track with its plan to convert its structure from a Master Limited Partnership to a C-Corp. The conversion is expected to bring about strategic advantages and demonstrate the competitive edge of Montana Renewables, which is the largest Sustainable Aviation Fuel (SAF) producer in the Western Hemisphere with an annual capacity of 30 million gallons.
Montana Renewables showed signs of improvement throughout the quarter, achieving positive EBITDA in March and operating at planned production levels in April. However, the first quarter’s financial performance was impacted by the sharp increase in crude price, which compressed specialty and wholesale asphalt margins. Additionally, the company’s Montana retail asphalt rack was closed due to the winter season but has now reopened in preparation for the upcoming paving season.
Calumet also provided insights into the performance of its different segments. The Specialty Products and Solutions (SPS) segment reported Adjusted EBITDA of $41.8 million, attributed to a return to near mid-cycle levels in the fuel market. The Performance Brands (PB) segment recorded Adjusted EBITDA of $13.4 million, including a $5.0 million insurance claim. However, the Montana/Renewables (MR) segment reported $(14.5) million of Adjusted EBITDA, primarily due to the impact of old, high-priced inventory in the Montana Renewables business and weakened fuels and asphalt realizations.
Looking ahead, Calumet is optimistic about the second quarter, as it enters with solid operating momentum after successfully completing the Shreveport turnaround. The company remains focused on its C-Corp conversion, showcasing the potential of Montana Renewables, and advancing its DOE loan process and MaxSAF project preparation.
For more information on Calumet Specialty Products Partners, a detailed webcast of the first-quarter financial results conference call is available on the company’s website.
Calumet Specialty Products Partners, L.P., reported a net loss of $41.6 million for the first quarter of 2024, compared to a net income of $18.6 million in the same period last year. Despite the challenging financial results, the company is still proceeding with its plan to convert its structure from a Master Limited Partnership to a C-Corp. This conversion is expected to bring strategic advantages and highlight the competitive edge of its subsidiary, Montana Renewables, which is the largest Sustainable Aviation Fuel (SAF) producer in the Western Hemisphere with an annual capacity of 30 million gallons.
While Montana Renewables showed signs of improvement in March, achieving positive EBITDA and operating at planned production levels in April, its first-quarter performance was impacted by the sharp increase in crude oil prices. The increase compressed specialty and wholesale asphalt margins. Additionally, the company’s Montana retail asphalt rack was temporarily closed due to the winter season but has now reopened in preparation for the upcoming paving season.
Calumet provided insights into the performance of its different segments. The Specialty Products and Solutions (SPS) segment reported Adjusted EBITDA of $41.8 million, attributed to a return to near mid-cycle levels in the fuel market. The Performance Brands (PB) segment recorded Adjusted EBITDA of $13.4 million, including a $5.0 million insurance claim. However, the Montana/Renewables (MR) segment reported $(14.5) million of Adjusted EBITDA, primarily due to the impact of old, high-priced inventory in the Montana Renewables business and weakened fuels and asphalt realizations.
Looking ahead, Calumet is optimistic about the second quarter, as it enters with solid operating momentum after successfully completing the Shreveport turnaround. The company remains focused on its C-Corp conversion, showcasing the potential of Montana Renewables, and advancing its DOE loan process and MaxSAF project preparation.
In the current market trends, there is a growing demand for sustainable aviation fuel due to an increased focus on reducing carbon emissions in the aviation industry. Calumet’s subsidiary, Montana Renewables, is well-positioned as a major SAF producer in the Western Hemisphere, which could benefit the company in the long term as the demand for SAF continues to grow.
One key challenge for Calumet is the volatility of crude oil prices, which can significantly impact the company’s financial performance. The increase in crude oil prices during the first quarter compressed the margins for specialty and wholesale asphalt, negatively affecting Calumet’s financial results. Calumet will need to closely monitor and manage the impact of crude oil price fluctuations to mitigate any adverse effects on its operations.
Overall, while Calumet Specialty Products Partners faces challenges in its financial performance, it is actively working towards strategic initiatives such as the C-Corp conversion and focusing on its sustainable aviation fuel subsidiary to drive future growth.
For more information on Calumet Specialty Products Partners’ first-quarter financial results, a detailed webcast of the conference call can be accessed on the company’s website: Calumet Specialty Products Partners.