Ferrellgas Reports $146.7 Million Net Loss Amid Rising Expenses and Revenue Decline

Ferrellgas Partners, L.P. reported a significant net loss of $146.7 million for the three months ending October 31, 2024, compared to a loss of $17.6 million in the same period last year. This substantial increase in losses was primarily driven by a $125.1 million rise in general and administrative expenses, largely due to a legal accrual, alongside increases in operating expenses and interest costs. Total revenues for the quarter decreased to $364.1 million from $371.0 million year-over-year, reflecting a decline in propane sales and other gas liquids.

The company experienced a 3% decrease in propane sales volumes, attributed to warmer-than-normal temperatures and adverse weather conditions affecting customer operations. Retail sales fell by $12.6 million, or 6%, while wholesale sales increased by $8.3 million, or 8%, due to growth in tank exchange sales and new customer acquisitions. Despite the overall revenue decline, gross margin from propane and other gas liquids sales increased slightly, indicating improved efficiency in cost management.

In terms of operational metrics, Ferrellgas reported a decrease in retail customers, down to 615,996 from 638,003, while tank exchange selling locations rose to 68,164, reflecting a 9% increase. The company also noted a strategic acquisition of Kilhoffer Propane in October 2024, which is expected to enhance its market presence. However, the overall customer engagement metrics indicate challenges in retaining retail customers amid competitive pressures and economic conditions.

Ferrellgas's financial position showed a decrease in total assets to $1.41 billion from $1.46 billion at the end of the previous fiscal period. Current liabilities increased significantly, primarily due to a rise in other current liabilities, which included a legal accrual of $125 million related to ongoing litigation. The company’s liquidity position remains constrained, with cash and cash equivalents dropping to $47.6 million from $124.2 million, and it currently has no capacity to distribute cash to its Class A and Class B unitholders due to restrictions under its credit agreements.

Looking ahead, Ferrellgas anticipates continued challenges due to market conditions, including fluctuating propane prices and the impact of weather on demand. The company has extended the maturity date of its credit facility to December 31, 2025, which alleviates some immediate concerns regarding its ability to continue as a going concern. However, management remains cautious about future performance, emphasizing the need for strategic adjustments to navigate the evolving market landscape.