NGL Energy Partners Reports 10.8% Revenue Decline but Significant Net Income Increase in Q2 Fiscal 2026

NGL Energy Partners LP reported a decline in financial performance for the second quarter of fiscal 2026, with total revenues of $674.7 million, down 10.8% from $756.5 million in the same quarter of the previous year. The decrease was attributed to lower product sales, which fell to $484.3 million from $575.0 million, and a slight increase in service revenues. The partnership's net income for the quarter was $29.8 million, a significant increase from $3.4 million in the prior year, driven by improved operating income and reduced interest expenses.

Comparatively, the first half of fiscal 2026 saw total revenues of $1.3 billion, down from $1.5 billion in the first half of fiscal 2025. The partnership's operating income increased to $191.7 million from $163.6 million, reflecting a stronger operational performance despite the revenue decline. The increase in operating income was primarily due to higher water disposal revenues and improved margins in the Water Solutions segment, which processed more produced water volumes.

Strategically, NGL Energy Partners has undergone significant changes, including the sale of its refined products business and the winding down of its biodiesel operations, which were completed in April 2025. These actions are part of a broader strategy to streamline operations and focus on core segments, including Water Solutions, Crude Oil Logistics, and Liquids Logistics. The partnership also reported a gain of $55.7 million from the sale of its wholesale propane business, which is expected to positively impact future financial results.

Operationally, the partnership processed an average of 2.9 million barrels of produced water per day in the Water Solutions segment, an increase from 2.7 million barrels in the previous year. The Crude Oil Logistics segment transported 11.6 million barrels, reflecting a slight increase in activity. However, the Liquids Logistics segment experienced a decline in propane sales, attributed to the recent divestiture of its wholesale propane business. The partnership's total assets decreased to $4.3 billion from $4.6 billion, primarily due to the sale of assets and a reduction in inventory levels.

Looking ahead, NGL Energy Partners anticipates continued challenges in the market, particularly related to commodity price fluctuations and operational costs. The partnership remains focused on optimizing its asset base and enhancing operational efficiencies to improve profitability. The board of directors is also evaluating the potential reinstatement of common unit distributions, contingent on financial performance and market conditions.