Earnings call transcript Q1 2023

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Operator

Good day. And welcome to the Delek Logistics Partners First Quarter 2023 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]

is event this note being recorded. Please now Rosy Zuklic. would like to to over conference the turn I Please ma’am. go ahead,

Rosy Zuklic

Good morning. call And Reuven Odely first Soreq, quarter Sakazi, welcome Joseph Spiegel, to the conference President; Logistics. Financial Participants Delek EVP call. SVP, and on Officer; EVP, Delek today’s Israel, will Chief Avigal earnings include Operations; Logistics and Partners

statements limitation, our As involve to business federal securities the as defined a reminder, under that future uncertainties this and differ and conference including risks call statements without may will outlook. results guidance These contain forecast. forward-looking statements actual regarding laws, cause from

For along more annual any their in report date. to which the with associated with filed report The risk filed the XX-K information, speak Form of factors XX-Q and quarterly press assumes update release information, discussed to please call. no refer obligation on on forward-looking this recently SEC company’s company respective or the most statements Form the with

I a Delaware Bear Before want Avigal? the I turn of just X our quarter. acquisition, change made X are to everyone reporting business referred remind Bear After now the Gathering Gathering. we Midland to last the Delek changed assets as naming call reorganized The we over to Gathering and to Avigal, Permian of Gathering.

Avigal Soreq

XXXX Rosy. started you, Thank Delek quarter. Logistics with record another Partners

cash continued end to is Our This made Logistics solid assets. over deliver to of we generating flow. Delek logistics investments well, million. a strong system performance contributing our to EBITDA a due $XX record develop have operation to and

Midland year, Gathering the example, than in with the doubled last an more have compared As we system. volume

operation. a Logistics continued safe the quarter, and track its In Delek record addition, of reliable during

of our achieve worked man DKL contractors and have and X with of contractors lost proud continue I am milestones. of employees As zero on employees of focus safety a end injuries. March, time million who to the extremely hours and combined

partner per to we partnership distribution first unit consecutive the distribution continuing commitment On the our to a in business. our X.X% in marks committed increase increase This confidence XX $X.XXX approved XXth, and trend. to our unitholders and quarter. April This are Directors limited quarterly quarterly for for our this our demonstrates Board of increases the

for be Logistics believe and optimistic is continue on well to We business growth. the track its record outlook continue the positioned midstream to Delek of strong

to I will it now hand over Reuven.

Reuven Spiegel

for Thank Total quarter of million you, million DKL compared the $XX XXXX, XXXX. with the Avigal. was period same for EBITDA in in $XX first

cash coverage was the first the XXXX, distributable and million For quarter $XX X.XX was flow of times. DCF ratio

EBITDA quarter which compared segment, was in by with The the Gathering strong million, contribution was as June well Midland XXXX. primarily in increase added Delaware million Gathering, driven Processing and of quarter this Gathering by $XX the the as $XX first For of System, XXXX. was

per of XXX,XXX XXX,XXX of day barrels day averaged quarter barrels the This average up Throughput an from approximately XXXX. per the XXXX. in first Gathering quarter first of was Midland for of about the

Wholesale with Marketing million and of year. segment for line quarter and in was $XX the our The EBITDA Terminalling prior

million $XX $XX Transportation EBITDA from year. quarter, primarily increase with The period this and was segment Storage utilization and of the during first The compared had fees. same million last higher

first the investment Tyler million quarter with throughput $X the Refinery of Ventures The first contributed of due XXXX. was And lastly, first the lower million of XXXX, Pipeline quarter to from the turnaround in toward $X Delek in segment compared XXXX. in Joint decrease quarter the

expect revert quarter. we forward, JV normal million to of to DKL Going $X contribution approximately levels a to

capital expenditure. to Moving

Gathering million, spending in of capital was system. Delaware million for projects, $XX XXXX quarter which growth $XX was the connections namely Midland advancing First of new and

capital outlook million. $XX For of XXXX, we our maintained with

questions. open can we With that, call for the

Operator

Thank Jenkins from with go James. Raymond Justin ahead. come question will Please you. And Instructions] [Operator the first

Justin Jenkins

Thanks. Great.

just a high but a covered good could, level for we if I questions, I think couple already probably, DK of call, bit the Avigal. on

Can operating the of volume an the operations, for happens that on price the and rig and moves are for seen. system? we both seeing have environment count changes outlook First in commodity what update just overall on the get we Permian with what you

Avigal Soreq

time Yeah. this Absolutely, Justin. quarter Thanks the you for for taking thank joining the us question. and

have over the doubled. year, last more and the we our So, total production up, area, than XX%, seen in call have going Midland it, that we seen

extremely And happy are have the the results extremely of amount relationship happy the we we and that’s seeing great with trend are with producer with on we and we and a we site. the rigs see are

are that and the the encouraging operation. we really results the it’s rock and around around So seeing trend

we that a we what now That used will DPG that forward extremely Bear on a going that XX So Very to have on of performance way long that see for right. it with know the of to I us. increasing think way X and and distribution, got continue us went area we present, a Justin, good Delaware opportunity the happy and quarters in you that be good well area the a trend. to and ahead the row keep side

Justin Jenkins

one, more how backdrop here DKL like Avigal, overall my XXXX guess, the evolving second than see, I in looks broad even maybe M&A and you Perfect. just as well? first what question,

Avigal Soreq

unit great the market and hold, a forward, Bear We am consistency private find between because X sure the that. get we gap times. keep over and as performance think unit gaps really that So, is did good we have it of bridging the that is And will we going bring how forward I to that those a and encouraging of pathway because distribution and the get to a is investors demonstrated DKL the distribution, in solid area and great market. there the of public a because

Justin Jenkins

will there. leave it Great. Thanks, I Avigal.

Avigal Soreq

Thank you.

Operator

Citi. The next come question will Irwin ahead. with Doug from Please go

Doug Irwin

Thanks questions. Hey. the for

you this sheet, little trending it much just the how at Just debt kind of give is Can year? look bit quarter, a where maybe pay bit. actually of want to about and later throughout this about driven with to level increased context a maybe if see absolute maybe little the kind lower, that balance versus EBITDA leverage we the growth leverage start you moved down the talk of but by a maybe year some ability debt

Avigal Soreq

Thanks question, I Yeah. Reuven continue. will start will Doug. for and the

So project, nice for some which well the reasoning the funds draw only us capital in very EBITDA. we with for did improvement the

that good So a decision. was

down Going Doug, the for we going year, ratio pathway the forward towards see leverage a that. we good have and

if on are you well. we know, optimistic to So I want that don’t anything? add Reuven, as

Reuven Spiegel

$XX the million. expect stay say, we first of to a bit of Just our plan that guideline of $XX little annual in million and we color, of CapEx XX% was quarter within

why go that expect of and most was the draw especially every for one ratio was the growth capital reason to of the to that projects quarter. to down trend draw, leverage continue So we do

Doug Irwin

helpful. level. at one Great. around know costs. the I a That’s Then Okay. reduction maybe initiative kind DK you have just outlined cost of

into kind might as fit if seeing kind curious DKL of are where the Just any MLP opportunities well. reductions potential level that of you cost at for

Avigal Soreq

a So, question. great thanks and that’s

that? do We sure on that leading tight we that will you are and am improvement make how around over well. there say Odely, all looking of DKL business, as I productive. and of the areas focus that You want to business. Obviously, we anything are part see can some and is it more

Odely Sakazi

No. No.

For sure.

and and that right later a Just of couple are looking that capabilities the but able the are to a from doing to bit gross doing achieve efficiencies specifically opportunities little we color, sure to reflected to everything obviously year, the on also that’s give of we safe. OpEx on both we be margin, in do also make

QX. So it definitely of Reuven will primarily be the in Most capital, as applied. done was mentioned,

are as started forward, be well. So as improvement to with so going we are we OpEx to a see going that’s to move in also with lower, going result that

Doug Irwin

Thanks all That’s had. for it. time. I the Got

Avigal Soreq

you. Thank

Operator

session. ahead. [Operator like conference question-and-answer Instructions] turn back Soreq remarks. over Please to any I Avigal This the concludes go our for closing to would

Avigal Soreq

Yes.

employees their operation, I we like million is time the safe to first reliable DKL So thank remarkable looking of X really lost and hours are to and X forward injury for hit now. our mark million without the would

the quarter really and the Thank all, will next us you quarter. to call, impressive and best soon everyone So, that have and our took you after the first Board investors, enjoying we for of really employees, ride. to see time join much our so best Directors quarter time of today

Operator

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

You may now disconnect.

Rosy Zuklic	Vice President, IR
Avigal Soreq	President
Joseph Israel	Executive Vice President, Operations
Reuven Spiegel	Executive Vice President and CFO
Odely Sakazi	Senior Vice President, Delek Logistics
Justin Jenkins	Raymond James
Doug Irwin	Citi

Delek Logistics Partners (DKL) 8 May 232023 Q1 Earnings call transcript