- Genesis Energy continues to see their unit price suffer throughout 2021 with them being one of the heaviest impacted Master Limited Partnerships by Covid-19.
- Thankfully it appears that they have finally turned a corner during the second quarter of 2021 with their underlying cash flow performance actually increasing year-on-year after continuous declines.
- This provides hope that their weak financial position and risky distributions can be stabilized, but sadly the prospects of renewed Covid-19 pain are looming large due to the Delta variant.
- Given their almost non-existent margin of safety below their covenant leverage ratio limit, even a small future impact could see their distributions end at any stage.
- Following this mixed situation, I still believe that a neutral rating is appropriate, especially given the unpredictability of this pandemic and the resulting economic conditions.
For further details see:
Genesis Energy: Finally Turning A Corner But Right As Delta Risks Loom Large