Martin Midstream Partners cuts distribution by 38.5%
Martin Midstream Partners L.P. (MMLP) will lower its quarterly distribution to $0.50 per unit.
The distribution cut is a result of an asset sale to NuStar Logistics L.P. that was announced Thursday.
Concurrent with the announced disposition of the assets, Martin Midstream announced it has declared a quarterly cash distribution of $0.50 per unit, or $2.00 per unit on an annualized basis, for the quarter ended September 30, 2016. The quarterly distribution represents a reduction of approximately 38.5% from the distribution paid following the second quarter 2016. The distribution is payable on November 14, 2016 to common unitholders of record as of the close of business on November 7, 2016. The ex-dividend date for the cash distribution is November 3, 2016.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC said, “This sale of assets is a significant positive event for the Partnership and a necessary first step to ultimately returning MMLP to a growth trajectory. While these assets have historically performed well for the Partnership, they are not critical to its success moving forward. Given our focus on reduction of leverage, we feel this asset sale and distribution right-sizing are prudent moves for the Partnership at this time. Together, these two actions should provide a sound catalyst to reducing our currently elevated cost of capital by de-levering and improving increased distribution coverage to our unitholders. Looking ahead, we anticipate that these efforts will improve the balance sheet and result in estimated distribution coverage of at least 1.20 times in 2017 and 2018.”
The last time Martin Midstream raised it's distribution was two years ago. Based on a current stock price of $21.63 and a 50 cents quarterly distribution the new estimated dividend yield is 9.2%.
The distribution cut is a result of an asset sale to NuStar Logistics L.P. that was announced Thursday.
Concurrent with the announced disposition of the assets, Martin Midstream announced it has declared a quarterly cash distribution of $0.50 per unit, or $2.00 per unit on an annualized basis, for the quarter ended September 30, 2016. The quarterly distribution represents a reduction of approximately 38.5% from the distribution paid following the second quarter 2016. The distribution is payable on November 14, 2016 to common unitholders of record as of the close of business on November 7, 2016. The ex-dividend date for the cash distribution is November 3, 2016.
Ruben Martin, President and Chief Executive Officer of Martin Midstream GP LLC said, “This sale of assets is a significant positive event for the Partnership and a necessary first step to ultimately returning MMLP to a growth trajectory. While these assets have historically performed well for the Partnership, they are not critical to its success moving forward. Given our focus on reduction of leverage, we feel this asset sale and distribution right-sizing are prudent moves for the Partnership at this time. Together, these two actions should provide a sound catalyst to reducing our currently elevated cost of capital by de-levering and improving increased distribution coverage to our unitholders. Looking ahead, we anticipate that these efforts will improve the balance sheet and result in estimated distribution coverage of at least 1.20 times in 2017 and 2018.”
The last time Martin Midstream raised it's distribution was two years ago. Based on a current stock price of $21.63 and a 50 cents quarterly distribution the new estimated dividend yield is 9.2%.
