DKL - Earnings call transcript Q2 2020 | Delek Logistics Partners, LP

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Delek Logistics Second Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. Please note this event is being recorded. I would now like to turn the conference over to Blake Fernandez. ahead. go Please

Blake Fernandez

good for and Delek would to like Partners' Thank us morning. on everyone results. financial joining quarter discuss this thank second you XXXX I webcast Logistics to

CEO; be on me our Chairman CFO; of other today's well will our and Joining Uzi management Spiegel, Reuven team. call general Yemin, partners as members as and

securities forward-looking term is that a this laws. As as reminder, conference statements call under may federal contain defined

or GAAP, addition review Generally release, Principles can Relations In press non-GAAP which the reporting of Accepted results. the financial which in website. financial the to found GAAP comparable Investor these to section our report with accordance we is Investors to results of financial encouraged posted non-GAAP measures in the be results, certain Accounting are reconciliation on

I being has with call over second Our less covering incorporated closing On release. and strategic earnings assuming the that made and turn reviewed prepared today's few call we into I'll the remarks press results overview, is remarks. been than are a press begin Reuven With financial are to Uzi the will market offer the information segment will will and quarter Reuven. release review

Reuven Spiegel

Blake. Thank you,

basis benefited operations, Our second performance drop-downs relatively initiatives on a from and stable baseline business quarter business the with from year-over-year contribution along asset recent asset optimization.

The prior quarter XXXX. second over XXXX, compared approximately -- period. of of quarter to year increased over Partners' cash distributable the net the in $XX was year flow the million in Our XXX% interest the income second million approximately $XX in Limited

increased the million, X% from over Based increase approximately quarterly distribution. XXXX quarterly partner August represents prior distribution of distribution the XXth available compared X.X% $X.XX represents of limited unit for times million facility. XXXX. EBITDA a XX% $XXX we At on for performance This was is quarter ratio to period. ended our higher credit to $XX of Our our our the which was be X.XX our quarter period. DCF X.XX year our had million outlook, in June and paid of times year quarter and XXXX, per a XXXX prior on the the increase second second This will and first DKL $XXX on than XXXX. consecutive is XX, XX, quarter XX, capacity June increase coverage XXXX

million Our allowable and currently which ratio $XXX the below leverage facility. credit total under was was debt X.X within total approximately the X.X our is times, times

call will to I Blake to results. over return Now the discuss the

Blake Fernandez

Thanks, Reuven.

XXXX, assets. compares million to Delek net per unit increase $XX.X $X.XX interest the all million million, in income Limited attributable $XX XXX% year, Partners' or XXXX. $XX quarter unit, was pipelines our second or recent net margin In contribution to second and prior million year-over-year. to per in including $X.XX was drop-downs the the trucking million, representing $XX.X the of $XX.X year the million primarily second of to gathering compared reported Logistics quarter asset period. second income prior and segment, in of the quarter attributable increase Permian was partners which This For to and XXXX transportation approximately in $XX.X quarter the compared

expenses decrease. margins were period. the decrease were in volumes was $XX the lower from than Terminalling of in segment in $XX $XX decreased year, year. prior primary of contribution drivers from this million year-over-year terminalling wholesale of second marketing the the second wholesale Lower XXXX Operating behind million prior in and the was the to our margin Additionally, expenses quarter million In million $X which Texas year a million quarter operating the prior year. $XX and

Throughput the second in was XXXX, West Our a a prior West year. compared to $X.XX the XX,XXX in a to down barrel of Texas margin year barrels the a quarter prior second was of day day, $X.XX period. Texas wholesale X,XXX in barrels gross the in compared barrel quarter

our the expenditures the compared year XXXX, million $X quarter discretionary quarter During income included same were $XXX,XXX oil million pipelines from approximately to Capital was prior of equity which sustaining of of approximately period. the a income $XXX,XXX joint in crude $X XXXX, spending, in $X second million, maintenance. venture in in

forecast call Uzi of year gross his XXXX, full which maintenance closing for $X I'll discretionary remarks. million CapEx. our includes the $XX million, With For expenditures and over capital to is of million that $XX turn

Uzi Yemin

Thanks increase announced volatility X% in of X.X We the everybody. Blake the delivering with performance coverage XXth delivered and date year-end. range distribution financial continued remain the this Despite macro morning quarterly this stellar consecutive in achieved We our the the exceeded original in good distribution distribution to year. quarter. second targeted in associated of growth COVID-XX, and before for confident and DKL well X.Xx guidance

We also trending expect our leverage to ratio down. continue

and levels. outlook quarter we expect progressive over Our the second positive into improvement remains the of half second year

the of optimization asset impact shippers along the and for with to giving Paline seeing Energy. improved with better are business recent asset our for outlook This increased destination points expanded recent for and the leading by as supply reach such agreement initiatives, We Jefferson drop-downs flexibility customers. their agreement crude, its

of should questions? that expansion the open the Finally With can the in Red please year. performance operator half River the enhance you for call Pipeline second

Operator

question from go first Please of Dounis The Spiro Suisse. Instructions] today Crédit [Operator ahead. comes

Spiro Dounis

second Hey, in in in parts get look good maybe I of on saw lot morning start nice volumes big of look and to quarter your what guys. I an back guess far took then then XQ. early and so early with a would peers like July. dip a try results the like a

appear to that to seem a don't dip. big guys take of You

curious, as the looking July? able to we're accomplish and volume thinking here, the on what near just then you're about go-forward how side like one that So far trends so are

Uzi Yemin

Spiro. morning, Good

So components your I think to have several you question.

amount the MVCs, is discussed as The past no in so at above to there. in MVCs in call back and July, now May started. in the quarter we in one the gathering it issue before almost pandemic okay are the was the first the XX%, June system, normality there we second or the -- refineries mentioned. over of the and of ran The -- gathering XX% as But In regard a dip. refineries we since existed recovered the April had it as prices to

Spiro Dounis

have And without do trending that then be any where what margins back well? negative. Great. it still RINs are go as as Look as appears the it West and case? Texas those like Is that you volumes, far sense to on see bouncing would Or been the now?

Avigal Soreq

Spiro. Good Avigal. morning It's

in decline second half the seen the then more mainly in the in We in normality. of quarter April. heat during Since seen pandemic have the QX we've and of recovery of towards a a demand July,

in unit. So that to see question recovery your we business a

Spiro Dounis

one Last for Great. me.

You there? now side? got IDRs? other least How leverage is your sooner closer one two the you those big reaching checked the boxes than EBITDA like here. that removing $XXX lot the there coverage years? about maybe have million And you to Curious started now expected. trying with are close target like you when X-year of any you next the to get than you're boxes think you at achieve X-year - side you other feel look before in at do feel to you leaning Do to a three Are check that's out, now I think

Uzi Yemin

IDRs these Well the looking all are at time. we

committed committed DKL. As we mentioned to very we are --

are X.X. of Xx to outlook for And DKL it. now year. continue so, looks the promising so part We'll look and we to The the close above for at far the second

that. will continue look to we into So

Spiro Dounis

hop will into I back guys. Thanks right. All queue. the

Operator

[Operator Instructions] The of question next Please go from Ned Baramov comes Wells ahead. Fargo.

Ned Baramov

any commitments One the any question. Jefferson the this associated with taking there CapEx is Energy. there provide for on additional on Are Thanks with value morning. of details the connecting you Good or to maybe Could Hey. agreement terminal? the arrangement? volume

Uzi Yemin

why you that? Avigal, don't take

Avigal Soreq

morning. Good Absolutely.

the would regarding disclose So But outlook see we the us have to say for system flexibility much in -- next agreement. Paline CapEx us that good it than the to allow top usually a forward. that more more one have Paline have on do will going -- destination very the allows of we not one. specific foreseeable future. for allow for it and line That's Paline that I And them

in outlook optionality us So nice and it's more a give a very strategic future. the and

Ned Baramov

on And XXXX? that the OpEx. quarter-over-quarter big assets It gathering just addition spring and that That's of question the wondering how seems sustainable despite operating of the for then is and was I expenses in declined remainder the year Okay. helpful. assets. trucking the

Odely Sakazi

Ned, Hey, question. Odely. take that it’s I'm going to

control of the as we around the look very So we affected see you And QX. cost that's -- operation. can entire obviously kind took in a QX into

million $X looking probably OpEx. the going the looking integrity As the the looking additional probably into work. to But we it's as we're some the be year, from quarter to have call on of of it extended, we're of those remainder for

improvement and going we're of year. as there's around to a an from control that very previous year, the our still QX going more But for work do with to G&A. strict the remain or of So integrity continue to remainder we it's said increasing with the but to going OpEx to be be both OpEx

Ned Baramov

one on And these the the Could contribution you provide great. assets related That's Okay. trucking from to in volume business maybe metrics for And this do then forward? offer plan quarter? me to you last going the acquisition. assets

Blake Fernandez

it's Ned, Blake. Hey,

roughly you of business going last going is So details the volume south just to the we're can quarter so. that for I probably DPG trucking maybe was the the during about just million for $X from and $X offer not question the contribution give answer to But forward. million gathering

Ned Baramov

That’s I Thank Perfect. all had. you.

Operator

to for remarks. This closing management I concludes turn over any our back would session. like the question-and-answer to conference

Uzi Yemin

was rough That environment. you. a despite macro for DKL Thank wonderful quarter the

well. this Directors day what Midstream has our thank investors employees to Obviously, our and in confidence around think work. to for you. I was the mainly like us. like of for believing their is. continue hard Have performed the I And of and great to Thank to our all who make table we'll a along their strategy segment think business. that Board you management it company the I'd very DKL grow thank soon. us I'd talk in

Operator

attending Thank presentation. conference has you The today's concluded. now for

disconnect. now may You

Blake Fernandez	Senior Vice President of Investor Relations & Market Intelligence
Uzi Yemin	Chairman and Chief Executive Officer
Reuven Spiegel	Chief Financial Officer
Avigal Soreq	Executive Vice President & Chief Operating Officer
Odely Sakazi	Vice President, Business Strategy
Spiro Dounis	Crédit Suisse
Ned Baramov	Wells Fargo

Delek Logistics Partners (DKL) 6 Aug 202020 Q2 Earnings call transcript