SemGroup ends Q2 with $333 million of liquidity, 2.3 times leverage

By Lisa Kerner

Charlotte, N.C., Aug. 15 - SemGroup Corp. ended its second quarter on June 30 with $317 million of debt outstanding and total liquidity of $333 million, chief financial officer Bob Fitzgerald said during the company's earnings call on Monday.

During the quarter, SemGroup closed a new $600 million credit agreement that was upsized to $625 million. The facilities include a $350 million revolving line of credit that matures on June 20, 2016 and $275 million of term loans.

SemGroup's cash interest expense in 2011 will be $28 million less than in 2010, said Fitzgerald.

For the second quarter, SemGroup reported a debt-to-adjusted EBITDA ratio of 2.3 times and a debt-to-capitalization ratio of 27%.

SemGroup's adjusted EBITDA for the quarter was $28.9 million, an increase of 57% from the prior-year period.

The increase was attributed to higher crude oil, natural gas and asphalt volumes during the quarter, partially offset by lower utilization rates in the SemLogistics storage business, a company news release said.

For the six months ended June 30, adjusted EBITDA totaled $55.4 million, compared with $71.6 million for the six months ended June 30, 2010.

SemGroup reaffirmed its 2011 adjusted EBITDA guidance range of $120 million to $140 million, not taking into effect the impact of the recently announced initial public offering of common units in Rose Rock Midstream, LP. The completion of the IPO is not expected to occur any earlier than the fourth quarter of 2011, president and chief executive officer Norm Szydlowski said on the call.

Szydlowski said earnings growth beyond 2011 is expected to come from accretive acquisitions and partnerships, adding that SemGroup has a "strong portfolio of projects in development."

The company reported a second-quarter net loss of $12.3 million, or 30 cents per share, on revenue of $344.2 million, compared with a net loss of $121.0 million, or $2.92 per share, on revenue of $315.9 million for the quarter ended June 30, 2010.

For the six months ended June 30, SemGroup posted a net loss of $12.3 million, or 29 cents per diluted share, on revenue of $751.2 million, compared with a net loss of $111.8 million, or $2.70 per diluted share, on revenue of $791.9 million for the prior-year period.

SemGroup is a Tulsa, Okla.-based midstream service company.

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