NuStar Energy Posts Highest-Ever Quarterly Profit of $141.5 Million on Strong Asphalt Sales

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Researched by Industrial Info Resources (Sugar Land, Texas)--NuStar Energy L.P. (NYSE:NS) (San Antonio, Texas) reported on October 23 that its third-quarter 2008 profit more than tripled to $141.5 million, compared with $45.4 million in the same period last year. The profit is the highest quarterly gain the company has ever recorded. "Our strong financial performance was primarily due to excellent margins and robust sales volumes on our asphalt operations, which were acquired in March," said Curt Anastasio, Chief Executive Officer and President. He said the company's asphalt and fuels marketing segment brought in $122.5 million in operating profit, or 63% of the total segment income. Revenue jumped to $1.83 billion, up by more than four times compared with $397 million in the same period last year.

Anastasio said that the company expects fourth-quarter results to be lower, considering the seasonal shift in asphalt operations. However, he expects the company to finish 2008 as a record year, largely in part to third-quarter earnings.

Formerly known as Valero L.P., NuStar Energy's portfolio includes 9,063 miles of pipeline, 85 terminals, four crude oil storage tank facilities and two asphalt refineries with a combined throughput capacity of 104,000 barrels per day. In the U.S., it is one of the largest asphalt refiners and marketers and the second largest independent-liquids terminal operator.

As part of our North American Project Database, Industrial Info is tracking 30 NuStar projects worth $85 million. Fifteen of the projects are scheduled for completion by the end of 2008 and 11 are scheduled for completion in 2009. The largest of the projects is the proposed addition of petroleum terminal tanks at the Point Tupper terminal in Nova Scotia, making up nearly half of the total investment value at $40 million. Construction on the project could begin in the second quarter of 2010 and be complete by 2012.

Looking forward, Anastasio said NuStar Energy is scaling back on its budget and capital expenditures in 2009 to $150 million, although it has identified nearly $500 million worth of projects. "With the global economic meltdown, I think we can all agree that these are certainly interesting, albeit challenging and volatile times," he said.

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