This article
was originally published by Seeking Alpha on Oct. 2
Summary: Emerge Energy Services has a solid fuel processing
and distribution business and an even better fracking sand segment. Emerge
Energy Services is flying high on the back of strong demand of proppants. Here's
what Emerge Energy Services is doing to post triple-digit earnings and
double-digit revenue growth.
Emerge Energy Services operates in two unrelated segments in
the energy space: fracking sand production and fuel processing and
distribution. The master limited partnership has been posting robust growth in
both of these segments, in terms of volume, revenues and earnings, but it's the
relatively smaller sand production business which has got everyone excited.
Why? In terms
of operating margins, the sand segment is ten times more profitable than the
fuel segment. In the first six months of this year, Emerge Energy reported sand
production operating margins of 28.2%, considerably higher than the fuel
segment margin of just 2.6%.
In the first
six months of this year, Emerge Energy has reported 48.2% growth in revenues of
the fuel segment to $430.5 million, which is impressive but is overshadowed by
the 113.2% growth in revenues from sand production to $141.8 million.
