Despite $329M loss last year, Calumet looks ahead with ‘cautious optimism’

Calumet Specialty Products Partners LP posted a net loss of $329 million last year, but the Indianapolis-based company says it is looking ahead with “cautious optimism.”

On Friday, the company released its fourth-quarter and year-end financial reports. For the year ended Dec. 31, Calumet lost $329 million, or $4.18 per share. That was more than double the $139 million, or $2.05 per share, that it lost in 2015.

For the fourth quarter alone, Calumet lost $80 million ($1.01 per share), as compared with $117 million ($1.56 per share) during the same period a year earlier. Last quarter’s loss came in below expectations of analysts, whose consensus opinion was for a 70-cents-per-share loss.

Calumet produces specialty hydrocarbon and fuel products, including oils, waxes, asphalt, solvents, gasoline, diesel fuel and jet fuel.

Net sales for the quarter totaled $947 million, up 5 percent from a year earlier and meeting analysts’ expectations.

“2016 was a year of transition, stabilization and foundation building for our partnership,” CEO Tim Go said in a news release.

Last year Calumet took a number of actions to cut costs and improve efficiency. 

In June, the company sold off its interest in Dakota Prairie Refining, a joint-venture refinery in Dickinson, North Dakota. Calumet and partner MDU Resources Group joined forces in 2013 to build the $430 million diesel refinery. But by the time the facility began selling diesel fuel in May 2015, the market for diesel had weakened significantly.

Calumet also reduced its workforce by 128 positions, or 6 percent, last year. The company had 2,047 employees at the end of 2016, as compared with 2,175 at the end of 2015. 

“As we enter 2017, we do so with cautious optimism as we believe our strategy to eliminate waste, drive efficiencies and develop best practices across our organization is working,” Go said. “We completed additional cost reductions early in 2017, through ongoing headcount rationalization and other waste reduction initiatives.”

Calumet’s selling, general and administrative expenses totaled $221 million last year, down 21 percent from 2015.

Go said Calumet’s cost-reduction activities so far this year should reduce the company’s annual selling, general and administrative expenses by another $10 million to $20 million.

Shares of Calumet were trading at $3.80 as of noon Friday, down 5 percent from Thursday’s close.