DKL - Earnings call transcript Q1 2021 | Delek Logistics Partners, LP

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Operator

Good day, and welcome to the Delek Logistics' First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Blake Fernandez. Please, go ahead.

Blake Fernandez

morning. Good to Delek joining XXXX Logistics like webcast on Financial everyone discuss to Partners' thank would us for this Results. I First Quarter

our CEO; on Partners members as of me today's team. will other Uzi Joining Management call well as Chairman Rueven and Yemin, and our Spiegel, CFO; be General

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

our results. accepted Investors to the In can encouraged financial certain results accounting generally principles on press the website. financial with report non-GAAP or found which reporting be the addition non-GAAP comparable review is the accordance financial are to these of which reconciliation posted we GAAP, relations in investor in release, GAAP of results to measures section

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

Reuven Spiegel

Thank Blake. you,

drop basis XXXX. has quarter to at a first on first in of occurred the impact quarter, on from negative the pipeline. That addition a maintenance that year-over-year performance contribution the asset said, Our winter Uri Paline downs in benefited storm results in

second into normalize expect the quarter. these to factors We

partners in XX% of Net first the XXXX. cash increased compared distributable quarter Our was million all year million period. over attributable first approximately flow the approximately to prior income XXXX, the $XX to $XX in quarter of

and period. $XX unit ended the X.XX EBITDA the in distribution prior to partner of XXXX. compared year and XXXX had our a March over from quarter million We DCF on XXXX. of higher $XXX XXX XXXX, to was capacity our our ratio for fourth represents May quarter quarter increased is is represents still DKL our Our XX, the This XXXX distribution first March $X.XX the increase increase limited XX, which facility. than a paid credit increase on quarterly XX, This prior approximately was per be is quarterly XX% X.X% in the period. X.X% coverage X.XX On consecutive million, to distribution. quarter available first XXnd

total leverage ratio X.Xx, which debt and currently total within under Our is the approximately $X was credit our the billion allowable facility. X.XXx is

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

Blake Fernandez

margin asset to Transportation attributable dropped margin segment, Thanks, Reuven. the and trucking Pipelines $XX first including the contribution $XX $XX million, first in increase gathering on first contribution of March downs, May the Wholesale $XX was in XXXX quarter our on In million million compared prior system drop the and the and asset in dropped million quarter our was spring Terminalling year, XX, Marketing of This to the In quarter primarily segment, big the this year. XXXX. X, to XXXX was compared XXXX.

in sustaining $X approximately quarter payments. the was quarter crude year $X pipeline first of prior which in for compared income million $X.X equity expenditures dollars million the first our Capital the from XXXX, approximately joint XXXX, $X.X of of income oil During in million spending were to consisted $X.X ventures of and million million period. discretionary

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

Uzi Yemin

everybody. morning, good and Blake, you, Thank

as and the [indiscernible]. uptake improves the and First considering the throughout quarter impact vaccination the storm winter year energy expecting results resilient into second maintenance. Gulf along the Coast pipeline with We're were demand in quarter the improvement

to delivering distribution long of committed growth and continues Our in we XXXX. X% remain history increase another

flexibility. create and healthy remain ratios leverage and coverage distribution Our

opportunity open an Finally, the blending Hughes, please low questions? technology be Operator, can capabilities. call high pleased for agreement offers This With to spec you return that, if product we could a Baker toward capital to exclusive meet are announce that IMO utilizing scalable with successful.

Operator

Thank you.

begin first Dounis question the question-and-answer now the from Suisse. [Operator session. Instructions] go Credit will with We And Spiro Please, ahead. comes

Spiro Dounis

back the Good good are morning, which to everybody. sounds you ask I Hey. wanted Uzi, of is It like for the hear. to things about rest the outlook year. normal, getting to

at first last activity So downs were fairly quiet doing. all especially the look you for this of year, far dropped year you part our all detail, when and back

to do some what should you of form obviously of uptick know year, that drop the in see Where market those I you in level. I stand? expect So, those think growth is the still on that growth this point. activity committed yourself one table How X% to take? and do does forward the hitting we rest But from you're And turnaround-related. storm-related at and all? distribution downs goals? are

Uzi Yemin

are initiatives few coming are to next several fruition -- QX. there the over Hey, actually months Spiro, Well, that good morning.

all, the pipeline the with expansion effect a will or the next into the next to of First little where Red over during of bit come River planes quarter.

the an meaningful to DK, an is very capital-intense. Second, early just the side Hughes the be the something with that to is and And Paline together of Baker third, Paline. effect with can agreement May pipeline, not more that on coming agreement blending we start which on start have shipping

leverage three continue growth stay the very to projects say and So coverage healthy. to are that give us these ratios confidence our will organic the

nimble. side, the to very obviously, need M&A On be we

coverage the projects. growth We anything? see It's and comes something down because if are want you healthier year add Odely, to organic comes waiting But the X.X fruition. X.X during mark. if of to sideline the get leverage know I don't these on to will the now toward

Odely Sakazi

you think I No, all those hit marks.

Uzi Yemin

Yes.

Spiro Dounis

detail in you once timing just great. of this to out start be fee-based CapEx of this sense much Hughes us that very small kind a for being cash then front? give frame going Okay, it. number. see I can enterprise? we Or you flows mentioned there, you when the about we think of Baker DKL on guess part Any structure? a And how should and then focusing helped terms on and again to it Is around

Uzi Yemin

do do grow. Yes, it's The bells the as of but next the fee-base coming as year -- of not will bells, the more it and the more beginning more [ph] to speak. couple in already amount over quarters. will a we're in, of is details. But to coming discuss I started money the and More ready bells we continue past second for have fees optimistic It will we in X% that getting any the and We're now capabilities drop as next from very that or the quarter we quarter will even two, be and projected it's and treatment without stronger. cash and quarter Probably over more the easily we'll flow stronger blending like the placed. be of for down. get more will give that third met project

Spiro Dounis

West and that Very similar just for one marketing last on Texas see on again. wait Last strong It looks me one. We'll Okay. margins. to QX year.

for sure Texas sense just I'm of lot get and that, anything so, rest with trying if had does levels, the RINs prices West do margin but number? there's on call year? at curious RINs a these to to a levels stay that the up else that if Really just RINs' around out would these And sustainable or there you

Odely Sakazi

Hey, Spiro. It's Odely.

QX. really RINs in seeing more as better the and from you a right and really what a what mentioned, QX we've just good we're also is in As QX hedging than also becoming hedging, loss seen the on around XX,XXX from flat now we was in mentioned along but contribution production with before, throughput margin

So, coming West it's primarily from the RINs, utilization better now the with Texas also.

Spiro Dounis

you, Thank gentlemen. right. I Be All all well. had. It's

Operator

The next from Ned Baramov question go with Wells ahead. Fargo. comes Please,

Ned Baramov

good for taking Hey, morning. the Thanks question.

down by assets also the in there you this being Krotz could online, back midstream facility? has maybe With generated EBITDA a the review been the think in about of these refinery And [ph]? potential what's the assets change around how you drop approximate

Uzi Yemin

morning, Uzi. mentioned, Baker time question. for over What doing mentioned, flow Krotz free a Thanks DK and we facility there The to courts as agreement Good Hughes standpoint. and the This from we're Baker enhance now is of Hughes that ask agreement, cash the taking will places. I is other profitability Ned. the

much are going to millions. the waiting but in how it's this see is contribute, We to

amount. stay total EBITDA The how up the we're market So, doing downs drop the to if time shakes small that away And see from or the $XX it's is being. then the we a from drop drop see not down for down million.

stronger three add the the next As that growth. projects of I still that near to EBITDA will the we future. about make organic in are mentioned think earlier we But need fruition have even money to detail coming and then steps will

[ph]. to As our XX.XX we goal was said, be

now crossing, I are [indiscernible]. to getting think about close during the we next that to the leg. think achieving we need very And

Ned Baramov

is what the is What any increases. about past In Are Paline. on more latest one capacity maybe had then you this? And on talked discussions Okay. on this front? further the there the

Uzi Yemin

a is believe expand ship so capital there's that we more with starting They agreement see X. reason demand, a an we'll shipper didn't CapEx. have May ship this that how if That there's then shipper. minimum see how goes. that goes. before, new is And this no We to We'll with won't a

Ned Baramov

I if And Okay, one got maybe may. it. more,

Uzi Yemin

Please.

Ned Baramov

projects talk of Could some XXXX? growth in the maybe budget included for about your you CapEx

Uzi Yemin

the repeat question? you Can

Ned Baramov

included budget some projects you XXXX? review CapEx Could of your for expansion the in

Odely Sakazi

Ned. Odely, is This Sure.

Connection we also on the project discretionary completion the forecast and opportunity both really gave the in we on along Hughes Jefferson Specifically Jefferson around project our on DPG. and with around Paline, the the of as from what is that mentioned Baker

all business associated items are primarily forecast. the So, development those the with

Ned Baramov

you. all perfect. That's That's I Thank had.

Uzi Yemin

Ned. you, Thank

Operator

no have like Instructions] [Operator Looks questions. we further

like So, any Management this would conference now back closing remarks. session. question-and-answer the to concludes to turn our I over for

Uzi Yemin

great the for like unit it us. of like quarter I'd great listened thank one the it is. a Uri. you good the for to the each holders, company winter to the end morning. make talk to that to employees in to trust table this next everybody storm mainly, in thank I'd day. the on I'd investors what We'll thank like management I'd thank time. to general this Have But of their that Yes, despite like another call

Operator

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

Blake Fernandez	Senior Vice President of Investor Relations & Market Intelligence
Uzi Yemin	Chairman & Chief Executive Officer
Reuven Spiegel	Chief Financial Officer
Avigal Soreq	Executive Vice President & Chief Operating Officer
Spiro Dounis	Credit Suisse
Ned Baramov	Wells Fargo

Delek Logistics Partners (DKL) 5 May 212021 Q1 Earnings call transcript