USD Partners LP (NYSE:USDP) Q1 2019 Earnings Conference Call Transcript
May 07, 2019 • 11:00 am ET
Ladies and gentlemen, thank you for standing by and welcome to the USD Partners LP, First Quarter 2019 Results Conference Call. (Operator Instructions)
It is now my pleasure to turn the call over to Jennifer Waller, Associate Director of Financial Reporting and Investor Relations for opening remarks. Please go ahead.
Thank you, Brandi. Good morning and thank you for joining us. Welcome to our first quarter 2019 earnings call. With me today are Dan Borgen, our Chief Executive Officer; Adam Altsuler, our Chief Financial Officer; Brad Sanders, our Chief Commercial Officer; Josh Ruple, our Chief Operating Officer, as well as several other members of our senior management team. Yesterday evening, we issued a press release announcing results for the three months ended March 31, 2019. If you would like a copy of the press release, you can find one on our website at usdpartners.com.
Before we proceed, please note that the Safe Harbor disclosure statement regarding forward-looking statements and last night's press release applies to statements of management on this call. Also, please note that information presented on today's call speaks only as of today, May 7, 2019. Any time-sensitive information provided may no longer be accurate at the time of any webcast replay or reading of the transcript.
Finally, today's call will include discussion of non-GAAP financial measures. Please see last night's press release for reconciliations to the most comparable GAAP financial measures.
And with that, I would like to turn the call over to Dan Borgen.
Thanks, Jennifer, and good morning, everyone. Thanks for being on the call today. We are pleased to announce another positive quarter at the partnership and our 16th consecutive quarterly distribution increase, which is consistent with our previously stated 2019 distribution guidance. We continue to see momentum at our terminals and have seen a material ramp up in recent nominations due to current and projected spreads widening to levels that should incentivize our customers to fully utilize the capacity at our terminals. As we mentioned on our fourth quarter earnings call, we view the first half of 2019 as somewhat of a transition period for the partnership and we look forward to transition to the second half of this year, when the higher rates from our recently extended terminal services agreements at Hardisty kick in.
We also continue to see increased momentum at our sponsor, as previously mentioned during the first quarter, our sponsor executed a new multi-year take-or-pay terminalling services agreement with the Alberta Petroleum Marketing Commission or APMC, an agent of the government of Alberta. The agreement is for translating capacity at the Hardisty rail terminal starting in January 2020 and contains take-or-pay terms with minimum monthly payments. The agreement will further support growth at USDG's Hardisty South expansion and will provide additional capacity beyond the APMC commitment. This expansion will be funded by our sponsor pursuant to its development rights at the Hardisty terminal. As we've discussed in the past, this opportunity, along with other opportunities at our sponsor could be