Martin Midstream Partners reported a hefty increase in operating income on lower sales revenue for its specialty products business segment – which includes lubricants and greases – for the full year and for 2023’s fourth quarter. Full-year lubricant product sales declined 7%.
Specialty products operating income surged to $17.1 million in 2023, more than a 10-fold jump from $1.4 million for 2022. In the fourth quarter, the segment’s operating income reached $4 million, rebounding from a $900,000 loss in the same period in 2022.
Adjusted segment earnings before interest, taxes, depreciation, and amortization for specialty products improved to $4.9 million for the fourth quarter, a turnaround from a $5.8 million loss. This reflected improved volumes and margins in its grease business offset by higher product costs in its lubricants business, Martin Midstream said in its earnings release.
Specialty products sales revenues – including for lubricants, greases, propane and natural gasoline – fell 36% to $346.9 million for the full year, compared to $540.6 million in 2022. The cost of specialty products sold dropped for the year, by 39%, to $319.2 million, from $526 million.
For the full year, lubricant product sales declined to $132.1 million, compared to $142,091 in 2022, according to the company’s annual report filing with the Securities and Exchange Commission.
For the full year, lubricants accounted for $10 million and greases for $9.4 million in EBITDA, which combined comprised 85% of the company’s sub-total for specialty products EBITDA. Propane and natural gasoline accounted for the remainder. The company started breaking out separate EBITDA figures for lubricants and for greases in its quarterly earnings presentations in the first quarter of 2023.
In the fourth quarter, lubricants accounted for $1.7 million and greases for $2.1 million in operating income, which together made up 78% of the company’s sub-total for specialty products operating income. The company noted that it experienced headwinds in its lubricants business in the fourth quarter.
The company provides blending and packaging services for specialty lubricants and greases via its Martin Lubricants business, which operates two blending and packaging plants, one in Smackover, Arkansas, and the other in the Kansas City area. The company supplies bulk lubricants and packaged goods for automotive, industrial and commercial-grade use. Martin Lubricants also packages private label products for major oil companies, farm store chains, dollar stores, and auto parts wholesalers, as well as exports finished lubricants worldwide.
Based in Kilgore, Texas, Martin Midstream Partners’ other business segments include terminalling and storage, transportation and sulfur services.