Icahn Enterprises L.P. (NASDAQ:IEP) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 10:00 am ET

Previous

Icahn Enterprises L.P. (NASDAQ:IEP) Q3 2019 Earnings Conference Call - Final Transcript

Share
Close

Loading Event

Loading Transcript

Presentation
Executive
SungHwan Cho

and higher throughput volumes.

CVR Refining reported Q3 2019 adjusted EBITDA of $228 million, compared to $219 million in the prior year period, combined total throughput was approximately 222,000 barrels per day for the quarter, which was slightly above the prior year period. Refining margin per total throughput barrel was $16.34 in Q3 '19, compared to $15.70 per barrel in the prior year period.

CVR Partners reported Q3 2019 adjusted EBITDA of $18 million adjusted for turnaround expenses, compared to $19 million for Q3 2018. East Dubuque successfully completed its planned turnaround in October and is now coming back up to full production. CVR Energy recently announced a $300 million stock repurchase program and increased its quarterly cash dividend by 7% to $0.80 per share, which represents an annualized dividend yield of approximately 7%.

Now to our Automotive segment. Q3 2019, net sales and service revenue for Icahn Automotive Group were $744 million, up 1% from the prior year period. The increase was attributable to higher automotive service revenues, partially offset by a decrease in aftermarket part sales. Higher service revenues were due to growing do-it-for-me and fleet businesses.

Adjusted EBITDA attributable to IEP for the Automotive segment was a loss of $23 million in Q3 2019, compared to a gain of $8 million in the prior year period. Profitability was impacted by margin rate contraction for services and parts businesses, due to the reduction in vendor support funds and other unfavorable margin adjustments. As previously disclosed, Icahn Automotive is implementing a plan to separate its aftermarket parts business from the service business. We have started to execute on a multi-year transformation plan to improve profitability in our parts business and continue to invest in our growing service business.

Now turning to our Food Packaging segment. Net sales for Q3 2019 were flat with the prior year period. Favorable price and product mix was offset by unfavorable foreign exchange and lower sales volumes. Consolidated adjusted EBITDA was $12 million in Q3 2019, which was down $2 million in the prior year period. Gross margin as a percentage of net sales was $18 million for Q3 '19, compared to 21% in the prior year period.

And now to our Metals segment. Net sales for Q3 2019 decreased by $38 million or 32%, compared to the prior year period. The net sales decrease was due to lower volumes and lower average pricing for all product lines. Non-ferrous shipment volumes continue to be significantly impacted by the ongoing trade dispute with China. Adjusted EBITDA was $1 million for Q3 '19, which is $4 million below the prior year period.

And now to our Real Estate segment. Real estate operating revenues were $28 million in Q3 '19, which was $1 million below the prior year period. Revenue from our real estate operations for both Q3 '19 and Q3 '18 were substantially derived from income from club and rental operations. The Real Estate segment generated $7 million of adjusted EBITDA in Q3 '19. The decline