DKL - Earnings call transcript Q3 2021 | Delek Logistics Partners, LP

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Operator

Good morning, and welcome to the Delek Logistics' Third Quarter 2021 Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Blake Fernandez. ahead. go Please,

Blake Fernandez

would on I third thank for everyone XXXX Good webcast like to us this results. Partners' discuss joining financial morning. to Delek quarter Logistics

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

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

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

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

Rueven Spiegel

Thank Blake. you,

compared million the cash approximately distributable was of million the third $XX $XX flow quarter third XXXX quarter Our of to in in XXXX.

was which a represents X% Our third quarter, the in $XX million, year period. ratio times period. DCF compared coverage prior the increase X.XX was to X.X EBITDA times prior over

available approximately the DKL from X% At on quarter unit Xth facility. September quarterly our in on record is an XX, credit paid the approved board to million $X.XX and million of distribution to third from had the ended second holders and XX, quarter a increase to represents capacity This quarter $XXX partner increase November XXXX X.X% November a per XX. XXXX. XXXX, Our for distribution $XXX limited September on increase unit be

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

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

Blake Fernandez

integrity wholesale and margin our contribution million was line segment, million In with segment, the primarily ago. last of to expenses partially $XX and pipeline The year XXXX the to Rueven. transportation quarter terminalling pipeline $XX of $XX work. third to year. higher million by broadly to the were quarter our throughput, third XXXX, million third of the In marketing year third was the increase in contribution compared quarter in $XX related in results offset attributable pipelines was this quarter Thanks, results in margin compared

of equity million income year During $X $X.X the for prior sustaining spending, of in million quarter third approximately were which consisted the period. $X.X million in to $X expenditures was JVs the of maintenance. pipeline quarter third XXXX, Capital million of $XXX,XXX XXXX, from oil compared our approximately growth

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

Uzi Yemin

and everybody. Blake, morning you, Thank good

year. driven consistent resulting has averages. historical trending demand a coming combination for drives distribution the We're over EBITDA we DKL backdrop asset. profile commodity quarters. to on these The remains $X.XX in performance in per a deliver refining us Our keeps quarterly and expect and prices factors optimistic increase of which logistics The increase products of pace higher below by this the X% of and stable inventories industry to rates recent improved, margins, unit oil and and is the oil utilization outlook and strong the in

continues to our decline. healthy remains and coverage Our ratio distribution leverage

call operator, reflecting at a for lower for open company. in cost of With questions? all traded investor that the units DKL our confidence capital you resulting Finally, time recently highs, and please could

Operator

Thank you.

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

Spiro Dounis

Good Thanks, guys. morning operator.

Uzi Yemin

Spiro. Hi,

Spiro Dounis

start guess, want drop-down great Uzi. levels sort here. predictably, It shape, outlook. I is to back with maybe I cost seems the normal of in Hi, of like capital your

curious the cadence could to you any of drop-down, left and just there? the sort get gating thinking what's And so about kind you're just to of talk issues timing if to of how

Uzi Yemin

Great to questions, the for that Wink Spiro. The is biggest candidate Webster.

is starting we And shortly. are ramp-up – line but Our and very the partners the as period, know there's the pipeline a line, fully obviously, subscribed. you commissioning

and amount. well and XX%, $XXX We big million, exceeding is that's around said a that the XX%. our are So of – we threshold investment exceeding

look for the to need we'll very So carefully. ramp-up then it and watch at we

Spiro Dounis

Great. That's to guess, helpful space, you'd don't I M&A you color. you've be in to recent thoughts think you for and it get more system of imagine activity seen updated for proven the fit what lately. now? have expected your of the I like more to around do you'd currently love on DKL said And then looks We've midstream be call then Uzi, here would think sort appetite on assets more that. M&A, right. some come, specifically last but and you what there's that market you sort your in would And well in the

Uzi Yemin

XX you ago, because XX of cost Well, us all, ago, – first very months the our as you hard, we worked of months about know, capital. Spiro, challenged

a capital month, even around lower on on [ph] of that. and know If going as X.X%, know, side, than yesterday the equity hit, now, down been X% little leverage a every because around it's bit that the has cost it we little we're got X.X% the debt our over side you our at quarter, but of hovering look last you I

capital. cost competitive. cost of are of all We good that think we we So the around capital. about And MLPs the feel are

M&A, of in my is Now with the the the pickup you and know, part it answer Permian, activity picking you In up. asked in Permian, the second answer. the but as I'll

more a Permian. year As ago and activity than down and more was year dropped you we well But the know, MVC. little DKL ago, still in a DPG under see more to a

dedicated in more people more signing bringing people acreage rigs have wells. and and and more We

mark we see up so. So the activity the year DPG hit over XXX,XXX next maybe this or the of picking and

So if that build XXX,XXX without support XXX,XXX, build over so XXX,XXX, it or and we then much we barrels, investment. than the is that's much that more – to case, asset

of light we time, not But bright Permian. say DPG sheet, especially fact W already just and that is that to with the be about in our the assets is. you want as sure careful their to leveraging now most of know We in we the at balance to We Paline I other then, energies we that think won't the where balance the is look down, of should light future same sheet, be as the that both fact well the transformation maybe be assets we not have, cost even have the If is it's the very we capital. if -- okay, very it what you activity acquisition, light just say are W, the to the don't of and yourself a of because of an deal leveraging in the the important accretive, protect and we and synergy do thing acquisition. touch future making that of in any dropdown kind who are. organic at to table to projects ourselves, coming the to the bringing time more to leverage some will

long in it more. way, answer directly, I if I can't So I but clarify answer a didn't it

Spiro Dounis

it growth, could no, helpful more, sneak that appreciate I a good. respect if distribution, about One I was to great. No, was it's think a way X% That to on with in, for that. and framework so track it, just

have first distribution. with of guys quartile sort always kind of been You a respect grower to

think, So peers. probably I highest is among of X%, the one

to beyond, about you I of are of track? quartile longer these you guess, grow? term. distribution As you sustainable? growth still names? expect allows you just thinking be terms keeps what's curious how about thinking you're your to to I look first What Do it leverage in and growing forward What am how one on XXXX

Uzi Yemin

persistent that We We us. investors from to don't I see ago job a a this reason year Well, and the to management as returns. the investors like environment, change support Spiro. something your when growth. consistent in being treat a see year to doing for things We you the it. that we distribution. And we produce to how or It's remember note us half impacted I to see continuing our during going different this. we're the EBITDA said think – analyst any the works. grow honestly, see But I pandemic, we think and continue ago even and actually

Spiro Dounis

today all the Perfect. Thanks time. for That's I had guys.

Uzi Yemin

you, Spiro. Thank

Operator

conference Uzi like back queue. questions concludes This Yemin our any There closing for remarks. more turn are no to the to over the question-and-answer session. I'd in

Uzi Yemin

quarter. for colleagues my thank thank to like here. I'd like employees the Jason. great to our I'd you, Thank around table another

Directors. course, think like to we and DKL for new bring how I'd good of are you I'd thank also, day. our the to is. to and side. have the continues in of And it highs to making investors that us for great as great it the mainly, their employees us I like I confidence Board thank and Thank said, show company a operator midstream on

Operator

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

You may now disconnect.

Delek Logistics Partners (DKL) 5 Nov 212021 Q3 Earnings call transcript