Westlake Chemical Partners LP Announces Second Quarter 2024 Results
-
Declared quarterly distribution of
$0.47 14
Second quarter 2024 net income attributable to the Partnership of
"We are pleased with the Partnership's performance for the second quarter of 2024. During the second quarter, we benefitted from improved third-party ethylene sales prices and margins, which supported the growth in our MLP distributable cash flow. Last month, Westlake Chemical Partners GP LLC, the general partner of the Partnership, implemented a succession plan that included the appointment of Jean-Marc Gilson as President, CEO and director of our general partner. We are pleased to welcome Jean-Marc to the Partnership as he continues implementing our strategy of long-term value creation," said Albert Chao, Executive Chairman. "Looking ahead to the second half of 2024, preparations are well underway for our planned maintenance turnaround at our Petro 1 ethylene unit, which is scheduled to begin later in the third quarter. While the Petro 1 turnaround will have a temporary impact on our earnings and cash flows, our outlook for third-party ethylene sales prices and margins has improved and OpCo's ethylene sales agreement with Westlake will continue to support our earnings and cash flows."
On July 30, 2024, the Partnership announced that the Board of Directors of Westlake Chemical Partners GP LLC had approved a quarterly distribution for the second quarter of 2024 of
OpCo's Ethylene Sales Agreement with Westlake is designed to provide for stable and predictable cash flows. The agreement provides that
The statements in this release and the related teleconference relating to matters that are not historical facts, such as those with respect to the timing of the anticipated Petro 1 turnaround, results of our turnaround reserves and activities, our future coverage ratio, our outlook for third-party ethylene margins, our expectations regarding feedstock and energy costs, the ability to deliver value, returns, predictable cash flows and distributions to unitholders, the expectation that strong distributions will continue, and the nature of the sales agreement with Westlake, are forward-looking statements. These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to, operating difficulties; the volume of ethylene that we are able to sell; the price at which we are able to sell ethylene; changes in the price and availability of feedstocks; changes in prevailing economic conditions; actions and commitments of Westlake Corporation; actions of third parties; the timing and results of capital expenditures, including turnaround activities; inclement or hazardous weather conditions, including flooding, and the physical impacts of climate change; environmental hazards; changes in laws and regulations (or the interpretation thereof); inability to acquire or maintain necessary permits; inability to obtain necessary production equipment or replacement parts; technical difficulties or failures; labor disputes; difficulty collecting receivables; inability of our customers to take delivery; fires, explosions or other industrial accidents; our ability to borrow funds and access capital markets; and other risk factors. For more detailed information about the factors that could cause actual results to differ materially, please refer to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC in February 2024, and the Partnership's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which was filed with the SEC in May 2024.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as MLP distributable cash flow, coverage ratio and EBITDA. For this purpose, a non-GAAP financial measure is generally defined by the Securities and Exchange Commission ("SEC") as a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that (1) excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with
Westlake Chemical Partners LP
Westlake Chemical Partners is a limited partnership formed by Westlake Corporation to operate, acquire and develop ethylene production facilities and other qualified assets. Headquartered in
Westlake Chemical Partners LP Conference Call Information:
A conference call to discuss Westlake Chemical Partners' second quarter 2024 results will be held Tuesday, August 6th, 2024 at 1:00 PM Eastern Time (12:00 PM Central Time). To access the conference call, please register at: https://register.vevent.com/register/BI05d1ab2ca68249b69a922d0eae472d31. A dial-in will be provided upon registration.
The conference call will also be available via webcast at: https://edge.media-server.com/mmc/p/qjg77gba and the earnings release can be obtained via the Partnership web page at: https://investors.wlkpartners.com/corporate-profile/default.aspx.
WESTLAKE CHEMICAL PARTNERS LP ("WESTLAKE PARTNERS") CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars, except per unit data) |
||||||||||||||
Revenue |
|
|
|
|
|
|
|
|
||||||||
Net sales—Westlake Corporation ("Westlake") |
|
$ |
239,527 |
|
|
$ |
224,575 |
|
|
$ |
474,736 |
|
|
$ |
482,046 |
|
Net co-products, ethylene and other sales—third parties |
|
|
44,641 |
|
|
|
39,602 |
|
|
|
94,105 |
|
|
|
89,808 |
|
Total net sales |
|
|
284,168 |
|
|
|
264,177 |
|
|
|
568,841 |
|
|
|
571,854 |
|
Cost of sales |
|
|
182,936 |
|
|
|
176,455 |
|
|
|
365,429 |
|
|
|
378,059 |
|
Gross profit |
|
|
101,232 |
|
|
|
87,722 |
|
|
|
203,412 |
|
|
|
193,795 |
|
Selling, general and administrative expenses |
|
|
7,605 |
|
|
|
7,229 |
|
|
|
14,682 |
|
|
|
15,143 |
|
Income from operations |
|
|
93,627 |
|
|
|
80,493 |
|
|
|
188,730 |
|
|
|
178,652 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
||||||||
Interest expense—Westlake |
|
|
(6,651 |
) |
|
|
(6,117 |
) |
|
|
(13,232 |
) |
|
|
(13,432 |
) |
Other income, net |
|
|
1,257 |
|
|
|
1,061 |
|
|
|
2,591 |
|
|
|
1,881 |
|
Income before income taxes |
|
|
88,233 |
|
|
|
75,437 |
|
|
|
178,089 |
|
|
|
167,101 |
|
Provision for income taxes |
|
|
207 |
|
|
|
173 |
|
|
|
417 |
|
|
|
385 |
|
Net income |
|
|
88,026 |
|
|
|
75,264 |
|
|
|
177,672 |
|
|
|
166,716 |
|
Less: Net income attributable to noncontrolling interest in Westlake Chemical OpCo LP ("OpCo") |
|
|
73,599 |
|
|
|
63,378 |
|
|
|
148,412 |
|
|
|
139,938 |
|
Net income attributable to Westlake Partners |
|
$ |
14,427 |
|
|
$ |
11,886 |
|
|
$ |
29,260 |
|
|
$ |
26,778 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per limited partner unit attributable to Westlake Partners (basic and diluted) |
|
|
|
|
|
|
|
|
||||||||
Common units |
|
$ |
0.41 |
|
|
$ |
0.34 |
|
|
$ |
0.83 |
|
|
$ |
0.76 |
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per unit |
|
$ |
0.4714 |
|
|
$ |
0.4714 |
|
|
$ |
0.9428 |
|
|
$ |
0.9428 |
|
|
|
|
|
|
|
|
|
|
||||||||
MLP distributable cash flow |
|
$ |
17,135 |
|
|
$ |
14,985 |
|
|
$ |
34,027 |
|
|
$ |
32,536 |
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared |
|
|
|
|
|
|
|
|
||||||||
Limited partner units—publicly and privately held |
|
$ |
9,951 |
|
|
$ |
9,946 |
|
|
$ |
19,901 |
|
|
$ |
19,892 |
|
Limited partner units—Westlake |
|
|
6,657 |
|
|
|
6,658 |
|
|
|
13,314 |
|
|
|
13,315 |
|
Total distributions declared |
|
$ |
16,608 |
|
|
$ |
16,604 |
|
|
$ |
33,215 |
|
|
$ |
33,207 |
|
EBITDA |
|
$ |
123,199 |
|
|
$ |
108,594 |
|
|
$ |
247,630 |
|
|
$ |
234,209 |
|
WESTLAKE CHEMICAL PARTNERS LP CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
|
|
June 30,
|
|
December 31,
|
||||
|
|
(In thousands of dollars) |
||||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
65,999 |
|
|
$ |
58,619 |
|
Receivable under the Investment Management Agreement—Westlake |
|
|
94,478 |
|
|
|
94,444 |
|
Accounts receivable, net—Westlake |
|
|
39,090 |
|
|
|
49,565 |
|
Accounts receivable, net—third parties |
|
|
27,128 |
|
|
|
18,701 |
|
Inventories |
|
|
4,487 |
|
|
|
4,432 |
|
Prepaid expenses and other current assets |
|
|
944 |
|
|
|
442 |
|
Total current assets |
|
|
232,126 |
|
|
|
226,203 |
|
Property, plant and equipment, net |
|
|
912,752 |
|
|
|
943,843 |
|
Other assets, net |
|
|
143,484 |
|
|
|
146,796 |
|
Total assets |
|
$ |
1,288,362 |
|
|
$ |
1,316,842 |
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities (accounts payable and accrued and other liabilities) |
|
$ |
49,607 |
|
|
$ |
56,335 |
|
Long-term debt payable to Westlake |
|
|
399,674 |
|
|
|
399,674 |
|
Other liabilities |
|
|
4,234 |
|
|
|
4,583 |
|
Total liabilities |
|
|
453,515 |
|
|
|
460,592 |
|
Common unitholders—publicly and privately held |
|
|
471,199 |
|
|
|
473,513 |
|
Common unitholder—Westlake |
|
|
47,408 |
|
|
|
48,993 |
|
General partner—Westlake |
|
|
(242,572 |
) |
|
|
(242,572 |
) |
Total Westlake Partners partners' capital |
|
|
276,035 |
|
|
|
279,934 |
|
Noncontrolling interest in OpCo |
|
|
558,812 |
|
|
|
576,316 |
|
Total equity |
|
|
834,847 |
|
|
|
856,250 |
|
Total liabilities and equity |
|
$ |
1,288,362 |
|
|
$ |
1,316,842 |
|
WESTLAKE CHEMICAL PARTNERS LP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
|
|
Six Months Ended June 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars) |
||||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
177,672 |
|
|
$ |
166,716 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
||||
Depreciation and amortization |
|
|
56,309 |
|
|
|
53,676 |
|
Net loss on disposition and other |
|
|
1,870 |
|
|
|
725 |
|
Other balance sheet changes |
|
|
(9,390 |
) |
|
|
22,286 |
|
Net cash provided by operating activities |
|
|
226,461 |
|
|
|
243,403 |
|
Cash flows from investing activities |
|
|
|
|
||||
Additions to property, plant and equipment |
|
|
(19,951 |
) |
|
|
(17,169 |
) |
Investments with Westlake under the Investment Management Agreement |
|
|
— |
|
|
|
(164,116 |
) |
Maturities of investments with Westlake under the Investment Management Agreement |
|
|
— |
|
|
|
135,000 |
|
Net cash used for investing activities |
|
|
(19,951 |
) |
|
|
(46,285 |
) |
Cash flows from financing activities |
|
|
|
|
||||
Proceeds from debt payable to Westlake |
|
|
108,000 |
|
|
|
98,500 |
|
Repayment of debt payable to Westlake |
|
|
(108,000 |
) |
|
|
(98,500 |
) |
Distributions to noncontrolling interest retained in OpCo by Westlake |
|
|
(165,916 |
) |
|
|
(169,259 |
) |
Distributions to unitholders |
|
|
(33,214 |
) |
|
|
(33,207 |
) |
Net cash used for financing activities |
|
|
(199,130 |
) |
|
|
(202,466 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
7,380 |
|
|
|
(5,348 |
) |
Cash and cash equivalents at beginning of period |
|
|
58,619 |
|
|
|
64,782 |
|
Cash and cash equivalents at end of period |
|
$ |
65,999 |
|
|
$ |
59,434 |
|
WESTLAKE CHEMICAL PARTNERS LP RECONCILIATION OF MLP DISTRIBUTABLE CASH FLOW TO NET INCOME AND NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) |
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
104,565 |
|
|
$ |
121,896 |
|
|
$ |
98,543 |
|
|
$ |
226,461 |
|
|
$ |
243,403 |
|
Changes in operating assets and liabilities and other |
|
|
(14,919 |
) |
|
|
(33,870 |
) |
|
|
(23,279 |
) |
|
|
(48,789 |
) |
|
|
(76,687 |
) |
Net income |
|
|
89,646 |
|
|
|
88,026 |
|
|
|
75,264 |
|
|
|
177,672 |
|
|
|
166,716 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation, amortization and disposition of property, plant and equipment |
|
|
28,265 |
|
|
|
29,869 |
|
|
|
27,095 |
|
|
|
58,134 |
|
|
|
54,098 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Contribution to turnaround reserves |
|
|
(11,476 |
) |
|
|
(8,672 |
) |
|
|
(6,967 |
) |
|
|
(20,148 |
) |
|
|
(14,273 |
) |
Maintenance capital expenditures |
|
|
(7,749 |
) |
|
|
(9,306 |
) |
|
|
(6,521 |
) |
|
|
(17,055 |
) |
|
|
(14,545 |
) |
Distributable cash flow attributable to noncontrolling interest in OpCo |
|
|
(81,794 |
) |
|
|
(82,782 |
) |
|
|
(73,886 |
) |
|
|
(164,576 |
) |
|
|
(159,460 |
) |
MLP distributable cash flow |
|
$ |
16,892 |
|
|
$ |
17,135 |
|
|
$ |
14,985 |
|
|
$ |
34,027 |
|
|
$ |
32,536 |
|
WESTLAKE CHEMICAL PARTNERS LP RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND NET CASH PROVIDED BY OPERATING ACTIVITIES (Unaudited) |
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
104,565 |
|
|
$ |
121,896 |
|
|
$ |
98,543 |
|
|
$ |
226,461 |
|
|
$ |
243,403 |
|
Changes in operating assets and liabilities and other |
|
|
(14,919 |
) |
|
|
(33,870 |
) |
|
|
(23,279 |
) |
|
|
(48,789 |
) |
|
|
(76,687 |
) |
Net income |
|
|
89,646 |
|
|
|
88,026 |
|
|
|
75,264 |
|
|
|
177,672 |
|
|
|
166,716 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income, net |
|
|
1,334 |
|
|
|
1,257 |
|
|
|
1,061 |
|
|
|
2,591 |
|
|
|
1,881 |
|
Interest expense—Westlake |
|
|
(6,581 |
) |
|
|
(6,651 |
) |
|
|
(6,117 |
) |
|
|
(13,232 |
) |
|
|
(13,432 |
) |
Provision for income taxes |
|
|
(210 |
) |
|
|
(207 |
) |
|
|
(173 |
) |
|
|
(417 |
) |
|
|
(385 |
) |
Income from operations |
|
|
95,103 |
|
|
|
93,627 |
|
|
|
80,493 |
|
|
|
188,730 |
|
|
|
178,652 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
|
27,994 |
|
|
|
28,315 |
|
|
|
27,040 |
|
|
|
56,309 |
|
|
|
53,676 |
|
Other income, net |
|
|
1,334 |
|
|
|
1,257 |
|
|
|
1,061 |
|
|
|
2,591 |
|
|
|
1,881 |
|
EBITDA |
|
$ |
124,431 |
|
|
$ |
123,199 |
|
|
$ |
108,594 |
|
|
$ |
247,630 |
|
|
$ |
234,209 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240806201790/en/
(713) 585-2900
Investors—Steve Bender
Media—L. Benjamin Ederington
Source: Westlake Chemical Partners
