Genesis Energy (GEL - diversified energy MLP) chat spot Message Board

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Non-Tech : Genesis Energy (GEL - diversified energy MLP) chat spot

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To: Elroy who wrote (3)	2/16/2024 12:32:55 PM
From: Elroy	of 5

GEL reported yesterday afternoon. Here's some tidbits from their call. Hmmm, not a very well followed MLP! There were only two or three questions. Their investment story is twofold. First, they've spent a lot of money to increase their production capacity of a division which produces and sells Soda Ash. Prices in this commodity are currently weak. They think prices will rise to a mid-cycle level sometime between this summer and 2025. At mid-cycle prices, the EBITDA produced by this segment jump much higher than history due to higher production capacity at lower prices per ton for them. Second, they have some new pipelines coming on line toward the end of 2024. In 2025 these two projects are expected to allow the MLP to produce record EBITDA, and $250m-$350m free cash after interest, preferred dividends and Cap Ex. From 2025 on annual Cap Ex spending drops a lot as these two big projects complete. So from 2025 and on the company has a lot more free cash to spend on debt buybacks, preferred stock repurchase and distribution increases (currently 60 cents per year). Basically, wait 18 months, and the dividend should go up and leverage go down. I like the story.

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