- Declared quarterly distribution of $0.4714 per unit; 39th
consecutive quarterly distribution
Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership")
today reported net income attributable to the Partnership in the
first quarter of 2024 of $14.8 million, or $0.42 per limited
partner unit, which was in-line with first quarter 2023 net income
of $14.9 million. Cash flows from operating activities in the first
quarter of 2024 were $104.6 million, a decrease of $40.3 million
compared to first quarter 2023 cash flows from operating activities
of $144.9 million, due to less favorable working capital changes.
For the three months ended March 31, 2024, MLP distributable cash
flow was $16.9 million, a decrease of $0.7 million compared to
first quarter 2023 MLP distributable cash flow of $17.6 million.
The decrease in MLP distributable cash flow and associated trailing
twelve-month coverage ratio was primarily due to lower production
and sales volume.
First quarter 2024 net income attributable to the Partnership of
$14.8 million increased by $0.5 million compared to fourth quarter
2023 net income of $14.3 million, in part due to lower selling,
general and administrative expenses. First quarter 2024 cash flows
from operating activities of $104.6 million decreased by $3.1
million compared to fourth quarter 2023 cash flows from operating
activities of $107.7 million due to less favorable working capital
changes. First quarter 2024 MLP distributable cash flow of $16.9
million increased by $0.5 million compared to fourth quarter 2023
MLP distributable cash flow of $16.4 million, primarily due to
lower maintenance capital expenditures.
"Our first quarter of 2024 results were consistent with our
performance in recent quarters due in large part to the stability
provided by our ethylene supply agreement with Westlake. During the
first quarter, OpCo's ethylene units ran well and third-party
ethylene margins improved modestly due to lower feedstock and
energy costs, which allowed us to opportunistically increase our
third-party sales volume," said Albert Chao, President and Chief
Executive Officer. "We are constructive on our outlook for the
remainder of 2024 as demand from downstream ethylene derivative
products is relatively stable and feedstock and energy costs remain
at levels supporting third-party ethylene margin improvement."
On April 30, 2024, the Partnership announced that the Board of
Directors of Westlake Chemical Partners GP LLC had approved a
quarterly distribution for the first quarter of 2024 of $0.4714 per
unit to be payable on May 29, 2024 to unitholders of record as of
May 13, 2024, representing the 39th consecutive quarterly
distribution to our unitholders. MLP distributable cash flow
provided trailing twelve-month coverage of 0.93x the declared
distributions for the first quarter of 2024, which was in-line with
the trailing twelve-month coverage ratio of 0.94x at the end of the
fourth quarter of 2023. Since our IPO in July of 2014 our
cumulative coverage ratio is 1.08x.
OpCo's Ethylene Sales Agreement with Westlake is designed to
provide for stable and predictable cash flows. The agreement
provides that 95% of OpCo's ethylene production is sold to Westlake
for a cash margin of $0.10 per pound, net of operating costs,
maintenance capital expenditures and reserves for future turnaround
expenditures.
The statements in this release and the related teleconference
relating to matters that are not historical facts, such as those
with respect to the 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, our expectations regarding future interest rates, 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, pandemic infectious diseases
and the response thereto; 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;
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.
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 (100.0%) of the Partnership's distributions to
non-U.S. investors as being attributable to income that is
effectively connected with a United States trade or business.
Accordingly, the Partnership's distributions to non-U.S. investors
are subject to federal income tax withholding at the highest
applicable effective tax rate.
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial
measures, such as MLP distributable cash flow 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 U.S. generally accepted
accounting principles ("U.S. GAAP") in the statement of income,
balance sheet or statement of cash flows (or equivalent statements)
of the registrant; or (2) includes amounts, or is subject to
adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated
and presented. We report our financial results in accordance with
U.S. GAAP, but believe that certain non-GAAP financial measures,
such as MLP distributable cash flow and EBITDA, provide useful
supplemental information to investors regarding the underlying
business trends and performance of our ongoing operations and are
useful for period-over-period comparisons of such operations. These
non-GAAP financial measures should be considered as a supplement
to, and not as a substitute for, or superior to, the financial
measures prepared in accordance with U.S. GAAP. We define MLP
distributable cash flow as distributable cash flow less
distributable cash flow attributable to Westlake Corporation's
noncontrolling interest in OpCo and distributions attributable to
the incentive distribution rights holder. MLP distributable cash
flow does not reflect changes in working capital balances. We
define EBITDA as net income before interest expense, income taxes,
depreciation and amortization. MLP distributable cash flow and
EBITDA are non-GAAP supplemental financial measures that management
and external users of our consolidated financial statements, such
as industry analysts, investors, lenders and rating agencies, may
use to assess our operating performance as compared to other
publicly traded partnerships, our ability to incur and service debt
and fund capital expenditures and the viability of acquisitions and
other capital expenditure projects and the returns on investment of
various investment opportunities. Reconciliations of MLP
distributable cash flow to net income and to net cash provided by
operating activities and of EBITDA to net income, income from
operations and net cash provided by operating activities can be
found in the financial schedules at the end of this press
release.
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
Houston, the Partnership owns a 22.8% interest in Westlake Chemical
OpCo LP. Westlake Chemical OpCo LP's assets consist of three
ethylene production facilities in Calvert City, Kentucky, and Lake
Charles, Louisiana, and an ethylene pipeline. For more information
about Westlake Chemical Partners LP, please visit
http://www.wlkpartners.com.
Westlake Chemical Partners LP Conference Call Information:
A conference call to discuss Westlake Chemical Partners' first
quarter 2024 results will be held Wednesday, May 1st, 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/BI945f608342d94f3bb7f420c75004538c.
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/2ry9ktig 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 March
31,
2024
2023
(In thousands of dollars,
except per unit data)
Revenue
Net sales—Westlake Corporation
("Westlake")
$
235,209
$
257,471
Net co-products, ethylene and other
sales—third parties
49,464
50,206
Total net sales
284,673
307,677
Cost of sales
182,493
201,604
Gross profit
102,180
106,073
Selling, general and administrative
expenses
7,077
7,914
Income from operations
95,103
98,159
Other income (expense)
Interest expense—Westlake
(6,581
)
(7,315
)
Other income, net
1,334
820
Income before income taxes
89,856
91,664
Provision for income taxes
210
212
Net income
89,646
91,452
Less: Net income attributable to
noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")
74,813
76,560
Net income attributable to Westlake
Partners
$
14,833
$
14,892
Net income per limited partner unit
attributable to Westlake Partners (basic and diluted)
Common units
$
0.42
$
0.42
Distributions declared per unit
$
0.4714
$
0.4714
MLP distributable cash flow
$
16,892
$
17,551
Distributions declared
Limited partner units—publicly and
privately held
$
9,950
$
9,946
Limited partner units—Westlake
6,657
6,657
Total distributions declared
$
16,607
$
16,603
EBITDA
$
124,431
$
125,615
WESTLAKE CHEMICAL PARTNERS
LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
March 31, 2024
December 31,
2023
(In thousands of
dollars)
ASSETS
Current assets
Cash and cash equivalents
$
55,760
$
58,619
Receivable under the Investment Management
Agreement—Westlake
94,477
94,444
Accounts receivable, net—Westlake
41,766
49,565
Accounts receivable, net—third parties
27,228
18,701
Inventories
4,860
4,432
Prepaid expenses and other current
assets
257
442
Total current assets
224,348
226,203
Property, plant and equipment, net
926,813
943,843
Other assets, net
143,915
146,796
Total assets
$
1,295,076
$
1,316,842
LIABILITIES AND EQUITY
Current liabilities (accounts payable and
accrued and other liabilities)
$
43,083
$
56,335
Long-term debt payable to Westlake
399,674
399,674
Other liabilities
4,074
4,583
Total liabilities
446,831
460,592
Common unitholders—publicly and privately
held
472,450
473,513
Common unitholder—Westlake
48,282
48,993
General partner—Westlake
(242,572
)
(242,572
)
Total Westlake Partners partners'
capital
278,160
279,934
Noncontrolling interest in OpCo
570,085
576,316
Total equity
848,245
856,250
Total liabilities and equity
$
1,295,076
$
1,316,842
WESTLAKE CHEMICAL PARTNERS
LP
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March
31,
2024
2023
(In thousands of
dollars)
Cash flows from operating
activities
Net income
$
89,646
$
91,452
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
27,994
26,636
Net loss on disposition and other
527
942
Other balance sheet changes
(13,602
)
25,830
Net cash provided by operating
activities
104,565
144,860
Cash flows from investing
activities
Additions to property, plant and
equipment
(9,773
)
(12,656
)
Investments with Westlake under the
Investment Management Agreement
—
(90,116
)
Maturities of investments with Westlake
under the Investment Management Agreement
—
103,000
Net cash used for investing activities
(9,773
)
228
Cash flows from financing
activities
Proceeds from debt payable to Westlake
54,000
39,000
Repayment of debt payable to Westlake
(54,000
)
(39,000
)
Distributions to noncontrolling interest
retained in OpCo by Westlake
(81,044
)
(88,678
)
Distributions to unitholders
(16,607
)
(16,604
)
Net cash used for financing activities
(97,651
)
(105,282
)
Net increase in cash and cash
equivalents
(2,859
)
39,806
Cash and cash equivalents at beginning of
period
58,619
64,782
Cash and cash equivalents at end of
period
$
55,760
$
104,588
WESTLAKE CHEMICAL PARTNERS
LP
RECONCILIATION OF MLP
DISTRIBUTABLE CASH FLOW TO NET INCOME
AND NET CASH PROVIDED BY
OPERATING ACTIVITIES
(Unaudited)
Three Months Ended December
31,
Three Months Ended March
31,
2023
2024
2023
(In thousands of
dollars)
Net cash provided by operating
activities
$
107,671
$
104,565
$
144,860
Changes in operating assets and
liabilities and other
(20,614
)
(14,919
)
(53,408
)
Net income
87,057
89,646
91,452
Add:
Depreciation, amortization and disposition
of property, plant and equipment
28,796
28,265
27,003
Less:
Contribution to turnaround reserves
(7,682
)
(11,476
)
(7,306
)
Maintenance capital expenditures
(11,805
)
(7,749
)
(8,024
)
Distributable cash flow attributable to
noncontrolling interest in OpCo
(79,948
)
(81,794
)
(85,574
)
MLP distributable cash flow
$
16,418
$
16,892
$
17,551
WESTLAKE CHEMICAL PARTNERS
LP
RECONCILIATION OF EBITDA TO
NET INCOME, INCOME FROM OPERATIONS AND NET CASH
PROVIDED BY OPERATING
ACTIVITIES
(Unaudited)
Three Months Ended December
31,
Three Months Ended March
31,
2023
2024
2023
(In thousands of
dollars)
Net cash provided by operating
activities
$
107,671
$
104,565
$
144,860
Changes in operating assets and
liabilities and other
(20,614
)
(14,919
)
(53,408
)
Net income
87,057
89,646
91,452
Less:
Other income, net
1,079
1,334
820
Interest expense—Westlake
(6,632
)
(6,581
)
(7,315
)
Provision for income taxes
(206
)
(210
)
(212
)
Income from operations
92,816
95,103
98,159
Add:
Depreciation and amortization
28,301
27,994
26,636
Other income, net
1,079
1,334
820
EBITDA
$
122,196
$
124,431
$
125,615
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501851812/en/
Contact—(713) 585-2900 Investors—Steve Bender Media—L. Benjamin
Ederington
Westlake Chemical Partners (NYSE:WLKP)
Historical Stock Chart
From Nov 2024 to Dec 2024
Westlake Chemical Partners (NYSE:WLKP)
Historical Stock Chart
From Dec 2023 to Dec 2024
