Hi-Crush Partners' Q1 punished by weaker frac sand prices

|By:, SA News Editor

Hi-Crush Partners (NYSE:HCLP) -6.4% after-hours as it reports a larger than expected Q1 loss and a 26% Y/Y decline in revenues, even as total volumes sold rose 22% Q/Q to 2.4M tons.

HCLP says the average sales price for frac sand fell to $48/ton in Q1 from $58/ton in Q4 2018, driven by contract pricing renegotiations for sand produced from the Kermit facilities, as well as by sales mix; Q1 contribution margin was $12.19/ton vs. $14.35/ton in Q4 2018.

HCLP attributes the higher volumes primarily to the continued ramp of its second Kermit facility, which began initial production in December 2018 and achieved full production capability of 3M tons/year in March 2019; for Q2, HCLP expects total sales volumes of 2.5M-2.7M tons.

The company expects sales prices to be largely unchanged in Q2, along with a modest ramp in overall completions activity, as E&Ps manage capital allocation over the course of the year.

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