NuStar reports $11 million loss

Hedging losses and canceled capital projects led to a fourth-quarter loss for San Antonio-based pipeline company NuStar Energy LP.

NuStar on Friday reported a fourth-quarter loss of $11 million compared to a profit of $30.2 million for the final quarter of 2011.

NuStar said its latest results included expense items totaling $41.5 million, with about half of the total related to hedging losses on its decision to sell its 14,500-barrel-a-day refinery in San Antonio. The remaining half were related to canceled capital projects, employee benefit costs associated with an asphalt joint venture, and lease buyout expenses for NuStar’s former corporate office. The company moved to a new headquarters building last fall.

NuStar, a publicly traded master limited partnership, said its fourth-quarter revenue fell to $984.8 million compared with revenue of $1.82 billion for 2011’s final period.

Read more: NuStar shuts down some East Coast terminals, refinery

“2012 was a critical transition year for our company as we made a lot of tough decisions that put NuStar on the right track for the future,” CEO Curt Anastasio said in a statement.

“We implemented a strategic redirection away from the margin-based asphalt and fuels refining business in order to focus on growing our storage and transportation operations through internal growth projects and acquisitions.”

Anastasio added that the company is “excited about expanding our presence in the lucrative Eagle Ford shale through recently announced transactions and expansion projects in the region, all of which should have great rates of return.”

This year, NuStar plans to spend $600 million to $625 million on growth projects, most of them in the South Texas’ Eagle Ford shale, Anastasio said.

NuStar’s net loss applicable to limited partners totaled $21.2 million, or 27 cents a unit, compared to net income of $19.8 million, or 30 cents a share, for the fourth quarter of 2011.

The company’s quarterly distribution to shareholders remained at $1.095 a unit.

Excluding the special items, fourth-quarter 2012 adjusted net income applicable to limited partners would have been $19.5 million, or 25 cents a unit. That fell short of analysts’ estimates, as polled by Bloomberg News, that NuStar would report profit of 31 cents a unit.

Analysts’ estimates usually exclude special items.

For the year, NuStar reported a loss of $227 million compared with a profit of $221.6 million for 2011.