MMP: Q2 In Line and FY Guidance Maintained—Neutral Initial Thoughts Q2 EBITDA In Line With Our Estimate. EBITDA of $336MM was essentially in line with our estimate of $326MM and Consensus of $329MM. The slight EBITDA variance relates primarily to stronger Refined Products contributions (higher volumes and product margins). FCF was $1.06/unit versus our estimate of $0.89/unit and up 94% year/year. The variance from our estimate was primarily related to slightly higher EBITDA and timing of growth and maintenance capex spending.
Distribution Maintained. MMP’s Q2 distribution of $1.0275/unit (or $4.11 annualized) was in line with our forecast. Distribution coverage was almost ~1.2x (DCF basis) and FCF after distributions was ~$8MM (excluding proceeds from asset sales). The company continues to plan to hold the distribution flat in 2021 with distribution coverage expected to approximate 1.17x.
2021 Guidance Re-Affirmed. Management re-affirmed its 2021 EBITDA and DCF guidance of $1,377MM and $1,070MM, respectively. The company also continues to expect 2021 and 2022 growth capex to be ~$75MM and ~$15MM, respectively.
Buybacks Above Our Estimate. During Q2, Magellan repurchased $82.3MM or 1.7MM units which was above our estimate of $25MM or 0.5MM units.