WLKP - Earnings call transcript Q3 2021 | Westlake Chemical Partners LP

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

Operator

Good morning. Thank you for standing by. Welcome to the Westlake Chemical Partners Third Quarter 2021 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, November 2, 2021. I would now like to turn the call over to your today’s host, Jeff Holy, Westlake Chemical Partners’ Vice President and Treasurer. begin. may you Sir,

Jeff Holy

Steve morning team. Partners’ everyone, Call. Third Albert members and today Good and Vice the and CFO; I’m welcome Westlake by other CEO; President our Chemical Quarter our Chao, our or you. Executive and President management afternoon, of to joined Bender, Thank XXXX Conference

OpCo our Partnership. Westlake or to Westlake During this ourselves to to and to refer refer Westlake as Westlake Corporation; refer which OpCo References subsidiary to parent certain Chemical call, we Partners company, Chemical or and olefins assets. LP, the Westlake of Westlake Chemical owns the references a Partnership, Chemical

to and predictions at available cash that is will the Chemical be economic management’s other may conditions, dialing of funds forward-looking management actual based markets reasonable pandemic, be the in that note webpage capital will of Today, document should Actual forward-looking is after and be reported extreme only currently third the on COVID-XX going available when (XXX) products as refer our page the the in of longer accurate could pressures, factors time an that to (XXX) difficulties, of made are this events, cash Domestic or beliefs operating and today’s actions, code weather replay Release conclusion our ability our factors, risk Partnership’s that as time-sensitive we suggest XXXX A pricing which regulatory of details cost expectations XXXXXXX. with proposed no to volume this a The wlkpartners.com. replay are price the today, Westlake of borrow distributable is XXXX, that this available you’re following uncertainties. release access call call at The governmental Additionally, at would call. including topics Please sell results. filings. call our and discussed our the discuss XXX-XXXX. on to that competitive and advised based are These are financial of XXX-XXXX. and This access in as section the issued by being of hours results callers are available operating live of many referring upon by information November information may the Definitions ethylene, changes at materially Internet X, differ flow, beginning as is Partners’ web able information accessed and access assumptions we to at sell, replay. SEC replay quarter you subject therefore, on to ethylene able prevailing a on the to finally wlkpartners.com. MLP to information can Westlake distributable any or contain website. accessed management. Partners that risks flow. and numbers. press we thus X system certain terms is the callers be we International Press I these through dial broadcast well advise morning, may conference webcast This speaks statements

the to call to Now Albert? Albert over turn like Chao. I would

Albert Chao

third press $X.XX quarter of or million income Westlake afternoon, Thank you everyone, us XXXX release, Partners’ morning third discuss Jeff. to reported joining unit. quarter Good our In good we net results. XXXX you, or and thank morning’s for per this $XX

fixed Chemical, margin turn XX% anticipate Westlake and million. stability third in which sales our risks. to OpCo’s in to During we our on facility our agreement we of our quarter. higher continue to the earnings net This results be planned in consolidated Partners’ at would now In to call the $XX income, insulating completed sponsor, over Louisiana, plant ethylene Lake of combined flows. quarter, including ethylene to demonstrate operating Steve? the certainty, the to turnaround December. production X the quarter other like Steve detail OpCo’s provide now mid-September, Westlake I stable began and market predictable contributed generated Petro with financial from each results more investment-grade production production annual from for produces us volatility for and year, cash Charles, financial

Steve Bender

morning’s net the you, per press depending quarter Partners’ cash quarter per consolidated sales was income on million and $XX $XX of on of was reported unit. including The zone Westlake in. million In net Albert, afternoon earnings morning had or unit. million. the or $XX OpCo’s good $XXX third a Partnership XXXX release, or distributable good Thank net time you’re Consolidated we million income, $X.XX this for flow $X.XX

Third of the lower turnaround XXXX. quarter of decreased to cost. at planned from compared of net lower of which maintenance third production the quarter attributable XXXX to attributable in million started buyer income higher for to $X production to quarter was Westlake recognized in XXXX the planned for of XXXX income The by The year-over-year million during million the $XX decrease by our in Petro decrease OpCo $X Distributable September fee was $XX Partners to income of and lower third cash net and million. cash turnaround net quarter million third third quarter due of decreased $XX distributable compared X, million. the flow earnings of flow deficiency XXXX $XX

XXXX investment obligations the totaling the the was through quarter, recovery. the million buyer In the the Partnership the the of production quarter, of quarter, payment under end balance Chemical These which end the be incurred OpCo in Westlake OpCo remaining the of $XX capital of At management At representing ethylene $XXX of the $XX million was for and at Westlake fee third end cash third million. at cash flows. to had third of Turning million $XX we expenditures. had debt $XXX the consolidated cash to was and cost in Long-term $XXX Chemical agreement. and the and with OpCo. deficiency agreement terms the received balance payment sales will at obligations quarter sheet our million, investments million lost

the near strong capitalization consolidated of leverage quarter we Xx debt-to-total a approximately XX%. ratio our metrics and with a ratio leverage For third maintained XXXX, of

to Albert term ethylene this of charge our in included to mentioned, and announced per unit cost sales unit, with third completed has respect currently is our -- As in ethylene $X.XXXX projected X, per a XXXX, Petro And we since undergoing grown to consecutive funded Partnership quarterly quarter $X.XXX distribution year Partnership’s currently of XX% the the distributions of of has XXXX. turnaround. agreement are our commencement unit. the September November amount XX turnaround and distributions the of we’ve we The Since the the On original been under the Westlake be of began in December. of unitholders. turnaround Chemical distributions X minimum made in we XXXX, the which this IPO quarterly

XX XX, X.XXx coverage XXXX, the ending the provided flow declared distributable September of cash For months distribution.

cash flow X.Xx predictable record the XX, economic will differentiated XX, and The Partnership’s today’s third distribution November quarter’s The of by XXXX. paid XXXX, our sales thus need cash distributions our November equity cash and is environment our current long-term and markets. our the while benefits the flows. targeted coverage the the capital of in provides to unitholders to consistency eliminating of sustaining distribution to agreements earnings Partnership structure ethylene fee-based level be on allowed in associated flow The ratio, at access Partnership continue

level. this since maintained cumulative targeted IPO, above coverage ratio a we Looking have our back

to I’d Now back to like some turn over Albert? make Albert comments. the to call closing

Albert Chao

Thank you, Steve.

driven and flows despite the with its by earnings associated continuing flows remain our protective agreement packaging. long-term derivative demand the business benefit and about and strong well predictable provisions Partnership’s by pleased demand outages. needs financial for The both stability the our parent planned ethylene of performance through as of robust Westlake provide unplanned cash a as and third quarter. downstream optimistic are the We model operational our in sales cash and partnership Chemical production end-use demonstrate We ethylene,

stable take-or-pay flow predictable a balance with leverage a flows. from our financial Westlake structure will ethylene of for contract sheet the fee-based agreement, We OpCo’s maintained and Chemical Our which deliver strong sales metrics. and XX% conservative production, with continue to provides cash cash predictable

ethylene focused continue on such facilities; of OpCo; interest we’ll our Westlake. current of evaluate negotiations levers conditions, ability in X expansions margin via of our streams; to market long-term qualified of our of to navigate to ethylene unitholders. growth we our remain other value fixed We higher provide ownership agreement continue opportunities a increases sales acquisitions income to in the opportunities, As our future, growth including our and with of organic

Thank live. with being the our will earnings listening work third we of always, and for you we to continue As environment good very safely quarter call. along to where stewards much operate

back call over the Jeff. turn will to I Now

Jeff Holy

Thank you, Albert.

replay that now will I call. again begin taking take provide we Before a has we number hours at X of you would this will questions. to questions, Dexter, of teleconference We’ll the be the the like ended. call after that available end remind

Operator

Instructions] Tudor, Matthew [Operator First is Pickering, Holt. from from question Blair

Matthew Blair

bit Westlake the QX? mentioned a about little in headwind You LP lasting that turnaround Should is longer. an to incremental as we think

Steve Bender

extended partnership the the any force No. from the declared Because outage, delays. company protecting majeure operating of extended a

as should there therefore, of so partnership result to the be a impact any that. And not

Matthew Blair

Okay.

make for benchmarks are restarting you’re for then And what the order good. to Sounds looking key that decision? as potential in as far distribution the growth,

Steve Bender

Yes.

So expectations. entirely the demonstrate, for hasn’t performed of performed think predictability been really I’m the I and but price to well, looking has an stability unit company’s the we’ve the and appreciation has able to it up that done

expect turnarounds been year to whether demonstration we’ve incredible and And that other unplanned when think of demonstrated so of expected. [arose]. distributions freezes that And they’ve do the number of this events, events predictability continue of the outages, we have make number certainly, or you or as performance given

to be rewards the So cash to continue to market that I with distributions able I we’ll flow and performance. growth and that do expect unit if price be think performance, then With provide accordingly. the of that predictability reflective

Matthew Blair

Okay.

a the What how see for drop-down mostly investor sense of what’s you like -- appetite equity markets? capital are about issue. -- valuation transactions? Do your sounds it So open

Steve Bender

size the valuations there assuming kinds the growth are that the distribution we’ve Given years, opportunities, distributions reasonable I capital our think over making of of view. adequate in make to been those is

need that certainly for to asset would growth of have any large size And partnerships some so scale been very, in fund not future case the certainly That today. very or may I that achievable the the capital achievable existed, the for think markets valuation been and the but to the and that we an of distributions unit I appropriate recent certainly, able scale we’ve our in the think given markets, they assuming are in provide the the price. past, growth case, in our the have over we business of

Operator

the call Holy. turn over At this time, now to has ended. Jeff back Q&A the session will I

Jeff Holy

Thank you call. again call and quarter for results. for full participating our fourth join hope next We us you’ll discuss today’s our conference in to year

Operator

in third Thank you Partners’ call. participating conference today’s earnings quarter Chemical for Westlake

Domestic call will again ended As November Tuesday, (XXX) a XXX-XXXX, callers p.m. the (XXX) after be be available XXX-XXXX. should XXX-XXXX, X, Eastern International reminder, dial and code it’s the access numbers. until may calling The following can beginning for has Goodbye. callers on XXXXXXX. this at accessed today’s conference may The XXX-XXXX. it’s accessed This be access concludes call. (XXX) (XXX) XXXX. call replay by is X replay again Time replay XX:XX the hours

Westlake Chemical Partners (WLKP) 2 Nov 212021 Q3 Earnings call transcript