Westlake Chemical Partners LP Announces Third Quarter 2024 Results
-
Celebrated 10th anniversary as a publicly traded master limited partnership having grown the quarterly distribution
71% since IPO -
Declared quarterly distribution of
$0.47 14
Third quarter 2024 net income attributable to the Partnership of
"We are pleased with the Partnership's performance for the third quarter of 2024. During the quarter, third-party ethylene sales prices and margins improved to their highest quarterly average in years, in part due to weather events and production outages at other producers. In an effort to better capture these attractive third-party margins we opportunistically made the decision to defer the planned turnaround at our Petro 1 ethylene unit to the first quarter of 2025 while also shifting third-party sales volumes planned for later in the year into the third quarter. As a result, we were pleased with the improvement in our third quarter distributable cash flow compared to recent quarters," said Jean-Marc Gilson, President and Chief Executive Officer. "Looking ahead to the remainder of 2024, with most of our planned third-party ethylene sales volumes for the year already booked, and as maintenance capital spending increases to support the upcoming Petro 1 turnaround in early 2025, we expect some moderation in our distributable cash flow in the fourth quarter. However, the improved outlook for third-party ethylene margins and continued execution of our ethylene sales contract with Westlake position us well for continued predictable cash flow and distributions to our unitholders, which we have demonstrated since our IPO ten years ago."
On October 30, 2024, the Partnership announced that the Board of Directors of Westlake Chemical Partners GP LLC had approved a quarterly distribution for the third 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 June 30, 2024, which was filed with the SEC in August 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' third quarter 2024 results will be held Tuesday, November 5th, 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/BId643f8e14d904c4dbc8954f14daeb022. 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/sdd3kqrb 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")
|
||||||||||||||||
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||||||||||||||||
|
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Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars, except per unit data) |
||||||||||||||
Revenue |
|
|
|
|
|
|
|
|
||||||||
Net sales—Westlake Corporation ("Westlake") |
|
$ |
215,799 |
|
|
$ |
289,303 |
|
|
$ |
690,535 |
|
|
$ |
771,349 |
|
Net co-products, ethylene and other sales—third parties |
|
|
61,196 |
|
|
|
32,361 |
|
|
|
155,301 |
|
|
|
122,169 |
|
Total net sales |
|
|
276,995 |
|
|
|
321,664 |
|
|
|
845,836 |
|
|
|
893,518 |
|
Cost of sales |
|
|
160,052 |
|
|
|
228,683 |
|
|
|
525,481 |
|
|
|
606,742 |
|
Gross profit |
|
|
116,943 |
|
|
|
92,981 |
|
|
|
320,355 |
|
|
|
286,776 |
|
Selling, general and administrative expenses |
|
|
7,254 |
|
|
|
6,741 |
|
|
|
21,936 |
|
|
|
21,884 |
|
Income from operations |
|
|
109,689 |
|
|
|
86,240 |
|
|
|
298,419 |
|
|
|
264,892 |
|
Other income (expense) |
|
|
|
|
|
|
|
|
||||||||
Interest expense—Westlake |
|
|
(6,698 |
) |
|
|
(6,437 |
) |
|
|
(19,930 |
) |
|
|
(19,869 |
) |
Other income, net |
|
|
1,325 |
|
|
|
1,272 |
|
|
|
3,916 |
|
|
|
3,153 |
|
Income before income taxes |
|
|
104,316 |
|
|
|
81,075 |
|
|
|
282,405 |
|
|
|
248,176 |
|
Provision for income taxes |
|
|
216 |
|
|
|
222 |
|
|
|
633 |
|
|
|
607 |
|
Net income |
|
|
104,100 |
|
|
|
80,853 |
|
|
|
281,772 |
|
|
|
247,569 |
|
Less: Net income attributable to noncontrolling interest in Westlake Chemical OpCo LP ("OpCo") |
|
|
85,964 |
|
|
|
67,647 |
|
|
|
234,376 |
|
|
|
207,585 |
|
Net income attributable to Westlake Partners |
|
$ |
18,136 |
|
|
$ |
13,206 |
|
|
$ |
47,396 |
|
|
$ |
39,984 |
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per limited partner unit attributable to Westlake Partners (basic and diluted) |
|
|
|
|
|
|
|
|
||||||||
Common units |
|
$ |
0.51 |
|
|
$ |
0.37 |
|
|
$ |
1.35 |
|
|
$ |
1.14 |
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per unit |
|
$ |
0.4714 |
|
|
$ |
0.4714 |
|
|
$ |
1.4142 |
|
|
$ |
1.4142 |
|
|
|
|
|
|
|
|
|
|
||||||||
MLP distributable cash flow |
|
$ |
17,879 |
|
|
$ |
13,620 |
|
|
$ |
51,906 |
|
|
$ |
46,156 |
|
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared |
|
|
|
|
|
|
|
|
||||||||
Limited partner units—publicly and privately held |
|
$ |
9,954 |
|
|
$ |
9,949 |
|
|
$ |
29,855 |
|
|
$ |
29,841 |
|
Limited partner units—Westlake |
|
|
6,657 |
|
|
|
6,658 |
|
|
|
19,971 |
|
|
|
19,973 |
|
Total distributions declared |
|
$ |
16,611 |
|
|
$ |
16,607 |
|
|
$ |
49,826 |
|
|
$ |
49,814 |
|
EBITDA |
|
$ |
139,126 |
|
|
$ |
115,738 |
|
|
$ |
386,756 |
|
|
$ |
349,947 |
|
WESTLAKE CHEMICAL PARTNERS LP
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|
September 30,
|
|
December 31,
|
||||
|
|
(In thousands of dollars) |
||||||
ASSETS |
|
|
|
|
||||
Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
60,208 |
|
|
$ |
58,619 |
|
Receivable under the Investment Management Agreement—Westlake |
|
|
109,540 |
|
|
|
94,444 |
|
Accounts receivable, net—Westlake |
|
|
44,885 |
|
|
|
49,565 |
|
Accounts receivable, net—third parties |
|
|
22,511 |
|
|
|
18,701 |
|
Inventories |
|
|
3,751 |
|
|
|
4,432 |
|
Prepaid expenses and other current assets |
|
|
667 |
|
|
|
442 |
|
Total current assets |
|
|
241,562 |
|
|
|
226,203 |
|
Property, plant and equipment, net |
|
|
908,992 |
|
|
|
943,843 |
|
Other assets, net |
|
|
144,141 |
|
|
|
146,796 |
|
Total assets |
|
$ |
1,294,695 |
|
|
$ |
1,316,842 |
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities (accounts payable and accrued and other liabilities) |
|
$ |
53,291 |
|
|
$ |
56,335 |
|
Long-term debt payable to Westlake |
|
|
399,674 |
|
|
|
399,674 |
|
Other liabilities |
|
|
3,916 |
|
|
|
4,583 |
|
Total liabilities |
|
|
456,881 |
|
|
|
460,592 |
|
Common unitholders—publicly and privately held |
|
|
472,296 |
|
|
|
473,513 |
|
Common unitholder—Westlake |
|
|
48,020 |
|
|
|
48,993 |
|
General partner—Westlake |
|
|
(242,572 |
) |
|
|
(242,572 |
) |
Total Westlake Partners partners' capital |
|
|
277,744 |
|
|
|
279,934 |
|
Noncontrolling interest in OpCo |
|
|
560,070 |
|
|
|
576,316 |
|
Total equity |
|
|
837,814 |
|
|
|
856,250 |
|
Total liabilities and equity |
|
$ |
1,294,695 |
|
|
$ |
1,316,842 |
|
WESTLAKE CHEMICAL PARTNERS LP
|
||||||||
|
||||||||
|
|
Nine Months Ended September 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars) |
||||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
281,772 |
|
|
$ |
247,569 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
||||
Depreciation and amortization |
|
|
84,421 |
|
|
|
81,902 |
|
Net loss on disposition and other |
|
|
2,227 |
|
|
|
4,352 |
|
Other balance sheet changes |
|
|
(15,888 |
) |
|
|
10,505 |
|
Net cash provided by operating activities |
|
|
352,532 |
|
|
|
344,328 |
|
Cash flows from investing activities |
|
|
|
|
||||
Additions to property, plant and equipment |
|
|
(35,497 |
) |
|
|
(33,979 |
) |
Investments with Westlake under the Investment Management Agreement |
|
|
(15,000 |
) |
|
|
(164,116 |
) |
Maturities of investments with Westlake under the Investment Management Agreement |
|
|
— |
|
|
|
145,000 |
|
Net cash used for investing activities |
|
|
(50,497 |
) |
|
|
(53,095 |
) |
Cash flows from financing activities |
|
|
|
|
||||
Proceeds from debt payable to Westlake |
|
|
163,000 |
|
|
|
155,250 |
|
Repayment of debt payable to Westlake |
|
|
(163,000 |
) |
|
|
(155,250 |
) |
Distributions to noncontrolling interest retained in OpCo by Westlake |
|
|
(250,622 |
) |
|
|
(240,333 |
) |
Distributions to unitholders |
|
|
(49,824 |
) |
|
|
(49,813 |
) |
Net cash used for financing activities |
|
|
(300,446 |
) |
|
|
(290,146 |
) |
Net increase in cash and cash equivalents |
|
|
1,589 |
|
|
|
1,087 |
|
Cash and cash equivalents at beginning of period |
|
|
58,619 |
|
|
|
64,782 |
|
Cash and cash equivalents at end of period |
|
$ |
60,208 |
|
|
$ |
65,869 |
|
WESTLAKE CHEMICAL PARTNERS LP
|
||||||||||||||||||||
|
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
121,896 |
|
|
$ |
126,071 |
|
|
$ |
100,925 |
|
|
$ |
352,532 |
|
|
$ |
344,328 |
|
Changes in operating assets and liabilities and other |
|
|
(33,870 |
) |
|
|
(21,971 |
) |
|
|
(20,072 |
) |
|
|
(70,760 |
) |
|
|
(96,759 |
) |
Net income |
|
|
88,026 |
|
|
|
104,100 |
|
|
|
80,853 |
|
|
|
281,772 |
|
|
|
247,569 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation, amortization and disposition of property, plant and equipment |
|
|
29,869 |
|
|
|
28,528 |
|
|
|
32,242 |
|
|
|
86,662 |
|
|
|
86,340 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Contribution to turnaround reserves |
|
|
(8,672 |
) |
|
|
(11,903 |
) |
|
|
(7,565 |
) |
|
|
(32,051 |
) |
|
|
(21,838 |
) |
Maintenance capital expenditures |
|
|
(9,306 |
) |
|
|
(17,753 |
) |
|
|
(22,862 |
) |
|
|
(34,808 |
) |
|
|
(37,407 |
) |
Distributable cash flow attributable to noncontrolling interest in OpCo |
|
|
(82,782 |
) |
|
|
(85,093 |
) |
|
|
(69,048 |
) |
|
|
(249,669 |
) |
|
|
(228,508 |
) |
MLP distributable cash flow |
|
$ |
17,135 |
|
|
$ |
17,879 |
|
|
$ |
13,620 |
|
|
$ |
51,906 |
|
|
$ |
46,156 |
|
WESTLAKE CHEMICAL PARTNERS LP
|
||||||||||||||||||||
|
||||||||||||||||||||
|
|
Three Months
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(In thousands of dollars) |
||||||||||||||||||
Net cash provided by operating activities |
|
$ |
121,896 |
|
|
$ |
126,071 |
|
|
$ |
100,925 |
|
|
$ |
352,532 |
|
|
$ |
344,328 |
|
Changes in operating assets and liabilities and other |
|
|
(33,870 |
) |
|
|
(21,971 |
) |
|
|
(20,072 |
) |
|
|
(70,760 |
) |
|
|
(96,759 |
) |
Net income |
|
|
88,026 |
|
|
|
104,100 |
|
|
|
80,853 |
|
|
|
281,772 |
|
|
|
247,569 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Other income, net |
|
|
1,257 |
|
|
|
1,325 |
|
|
|
1,272 |
|
|
|
3,916 |
|
|
|
3,153 |
|
Interest expense—Westlake |
|
|
(6,651 |
) |
|
|
(6,698 |
) |
|
|
(6,437 |
) |
|
|
(19,930 |
) |
|
|
(19,869 |
) |
Provision for income taxes |
|
|
(207 |
) |
|
|
(216 |
) |
|
|
(222 |
) |
|
|
(633 |
) |
|
|
(607 |
) |
Income from operations |
|
|
93,627 |
|
|
|
109,689 |
|
|
|
86,240 |
|
|
|
298,419 |
|
|
|
264,892 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation and amortization |
|
|
28,315 |
|
|
|
28,112 |
|
|
|
28,226 |
|
|
|
84,421 |
|
|
|
81,902 |
|
Other income, net |
|
|
1,257 |
|
|
|
1,325 |
|
|
|
1,272 |
|
|
|
3,916 |
|
|
|
3,153 |
|
EBITDA |
|
$ |
123,199 |
|
|
$ |
139,126 |
|
|
$ |
115,738 |
|
|
$ |
386,756 |
|
|
$ |
349,947 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241105383918/en/
(713) 585-2900
Investors—Steve Bender
Media—L. Benjamin Ederington
Source: Westlake Chemical Partners
