WLKP - Earnings call transcript Q4 2021 | Westlake Chemical Partners LP

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Operator

Good afternoon. And thank you for standing by. Welcome to the Westlake Chemical Partners Fourth Quarter 2021 Earnings Conference Call.

During the presentation, all participants will be in listen-only mode. After the speakers remarks, you will be invited to participate in a question-and-answer session.

conference recorded this XXXX. February reminder, a is today, being XXnd, As and will the Westlake Jeff President turn like Chemical over Vice I to host, call now to today's Partners Treasurer. Holy, you begin. Sir, may

Jeff Holy

fourth-quarter President of afternoon and everyone, CFO, Vice today to Chemical I'm Thank you. our Steve XXXX Chao, Bender, and Call. our Good Conference Albert President members management CEO. the team. and welcome Westlake other Partners, and by Executive joined our

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

as to press our of about MLP page or may the operating factors cash that the dialing information Today, We encourage Domestic certain of A in website. Release The morning, filings, of International section by callers full-year XXXX as which made more at suggest thus on which Additionally, XXXXXXX. dial by based when Investor after we this of or that and callers And These call available will February available risks The our accurate this replay. our replay uncertainties. release no web being the call that web hours a call code expectations caste and advised terms refer management. financial on these to management details beginning the time access XXXX. Westlake Wlkpartners.com. is differ the Relations today's conclusion as page discuss longer learn This could XXX-XXX-XXXX. today, system in be following document that are and on you on by advise may forward-looking assumptions to management's accessed should to of that statements our access speaks the our referring broadcast Chemical regulatory XXnd, flow. the subject accessed to finally note live is actual fourth Partners available This lead XXX-XXX-XXXX. be reported will wlkpartners.com. currently conference would is of quarter distributable you to you're call. any information our replay of as only reviewing Westlake distributable Partnership's statements is results. through two results an the at this cautionary are and replay I available Press Definitions at time-sensitive issued topics information also can available information contain we're cash be on web are numbers: may to website. that therefore, well is predictions be Please going Partners, forward-looking that beliefs, flow, Internet

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

Albert Chao

per demonstrate OpCo Partners completion The and Thank our XXXX deficiency In everyone challenges investment-grade cash by financial and of Lake certainty distributions and afternoon, produces of margin full-year sales fixed have Good from of of solid to OpCo digit sales fee-based half was deliver the sustained weather-related $X.XX flows. Westlake results record into and despite turnaround our and continue holders. to our Westlake XXXX, unit. second the long-term million other combined agreement $XX we with for our morning's production margin unit income, consolidated In million. in The each facility XXXX. insulating our annual generated generated including turnaround planned and the planned thank stable as and evident flow from to Louisiana. This Westlake the predictable contributed us two OpCo's many ethylene volatility Charles, cash delivered a production this stability stable you us press of our fee year, Westlake, plant XX% we us sponsor, $XXX foundation our Strong at you, holders, risks. market Partners to at completed and income July during X XXXX for results. fourth net value reported of third-party results earnings buyer margins ethylene Petro net unit fixed Jeff. due seen, forms IPO sales release, we to to the quarter or our in year, full-year joining our for we contract with facility of XXXX discuss

IPO. consecutive quarter. XXth the now is Steve. and stability, detail provide our financial for would reliable our I for like to to distributions. provide operating degree results distribution of call our quarterly since of high to long Steve more the distribution quarter's This over turn This and the on predictability cash flow history

Steve Bender

$XXX compared as million. as comparable million, income and you, afternoon to Thank $XX a with an buyer from quarter fourth-quarter Consolidated $XX including OpCo's well or certain of decreased cash of unit. million. of for for net million of million, income per Partnership recovery net XXXX costs Partners fourth million distributable million quarter from morning's of release, unplanned the net The $X.XX by quarter to net of good Partnership flow Albert we benefited million. Westlake was on fee of deficiency XX $XX XXXX attributable net XXXX fourth outage. Westlake was Distributable sales Partners cash flow to million $XXX $XX fourth $XX $XX this of XXXX Partnership earnings flow other of unit. distributable per had everyone. of for quarter XXXX, income cash press reported consolidated $X.XX quarter Westlake income, The In Fourth

buyer Westlake. XXXX, the $X.XX deficiency from certain Partnership million. sales margins XXXX of income as to net income per attributable of million, to The unit, million by from $XX compared net fee of due or full-year the increased $XX the well increase net record $XX strong For of was full-year recovery and costs income as to other benefits third-party

MLP to flow million million comparable cash full-year For $XX $XX was XXXX, distributable the distributable of flow cash MLP of of for the full-year XXXX.

of per and quarterly strong our $XXX ¢XX.X our quarterly announced quarter the XX% distributions Partnership respect the XXXX metrics OpCo at to grown in end certain consolidated $XX agreement, we've XX since of XXXX. distribution received million lost the payment which deficiency $XXX the ethylene cash consolidated investments fourth OpCo Westlake And a obligations consecutive of and Long-term Partnership. cash $XXX a in unit agreement ¢XX.XX under the Westlake of the IPO the at fourth the at unit management fourth totaling end $XXX to We payment of costs. representing will debt of quarterly million the million the XXXX, quarter, expenditures. $XX of obligations attention ratio million. of with per of cash unit. distribution million the the fee at with Partnership's of leverage buyer minimum recovery This was to sales quarter of had investment approximately distributions end for million flows holders, a the XXXX, sheet production the At through be maintained and and times. the Since was balance had our has spent made our original terms remaining capital with we we On one XXth, our OpCo. leverage balance on quarter, the to Turning the XXXX other January And

differentiated predictable and provided cash XXXX. X.XX was XXXX, February of cash on of markets. The XX, current access distributions. by our level Partnership's full-year cash X, distributable at times the the the X.X flow and unit while coverage, targeted fee-based XXXX, earnings consistency record agreement of holders times cash to is allowed continue For Partnership eliminating sales Partnership's equity The to the sustaining associated of our our environment, the beneficial flow distribution paid need in fourth-quarter declared thus economic our flows. The February shifts continues prove coverage the of the structure today's to ethylene to distributions and on distribution capital long-term flow

we business. this the further, Looking cumulative above target ratio of a have coverage our IPO, back our level, maintained demonstrating fortitude since

XXXX. no For modeling we turnaround purposes, have planned in

details X our currently Lake for complete facility our Charles, is which that more we planning. turnaround, Louisiana, and the once next XXXX, Our provide on in planned we will Petro is turnaround

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

Albert Chao

you, Thank Steve.

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

continue flow take-or-pay Our for of cash sales respect and deliver fee-based to contract with a flows. ethylene production, predictable provides our predictable which cash will these With from to Westlake stable agreement the XX% structure, outlook a continued for with and demand, deliver sheet strong market and a this we should in strong by We driven conservative third-party fundamentals. sales, XXXX, healthy leverage balance margins elevate feel confident our financial metrics. maintained OpCo's

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

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

the to turn over Jeff. will I Now back call

Jeff Holy

you, Albert. Thank

today's that begin Before after ended. available the remind to I questions, be teleconference would replay call we will has a like of hours two you taking

number We questions. end we the take will now the Carmen, that again will provide call. of at

Operator

standby compile you. Please roaster. while Instructions]. Thank the [Operator Q&A we

from Bank Byrne comes question America. of the Steve line with of Your

please. question, Your

Steve Byrne

the raise or the the would you funds to other if be capital expectations one half be acquire cracker. was it and back made in to to by my efficient of here, of more increased some if parents is, expansion. de So your could or crackers, ethylene, for question Holy And that you have comment for pay for expanding you more Westlake say were, about initiated parent would and into demand the low and partners a -bottleneck And capital interested integration the ethylene.

Steve Bender

So Steve, it's Steve Bender.

And got available good to you're us. we've right, several alternatives question, So

the ethylene We units. Partnership have three inside to

outside Corporation ethylene. have the also LACC the has We Westlake Partnership,

capital therefore Westlake of paths both. costs going or So depending margin the and consider and expectation Corporation and could either on the the returns,

of at it path the the expand down other down So with which impact either one the most would OpCo, a go to work is those of not which would units all, if shows ethylene Partnership, owns LACC, if path the chose with go units it three those really parent of the compelling, as function path the bottlenecking, it three facilities.

on choose depends to So they path down. go which

Steve Byrne

of me in what help to you EBITDA led better can And the understand the surge quarter?

Steve Bender

Yes.

the outage, because of driving fee the both we number ethylene. in had revenue and uptake we of the had the of growth. had issues there outage the a So and the had was because and quarter extended. of drivers. was two outage because no a We buyer was had turnaround deficiency then turnaround, that we -- We That

And fee quarter. fee maintenance deficiency course costs the during so therefore buyer the a and for a incurred of incurred shortfall

$XX both Steve, about total million. by way, in well as was the it So fee. Those quarter, the fee, the shortfall the as deficiency just buyer

Steve Byrne

Okay. Thank you.

Operator

Thank you.

Leithead Mike Our Barclays. next from comes question with

Your question, please.

Mike Leithead

Thanks. Good afternoon guys.

Steve Bender

afternoon. Good

Mike Leithead

with Just overall that Partners? how the change on this going at platform think parent does earlier for you morning, Westlake all the [Indiscernible] strategy at Westlake about Corporation changes all

Steve Bender

I little a you're garbled. Mike, get question? you repeat that Could to

Mike Leithead

Yes.

that. about Sorry

at overall the how parent does on with changes about our strategy Westlake that for Partners? at think all Just the changed Westlake going all Corporation, you

Steve Bender

ethylene changes structure has change the remain essential the Corporation for and level. performance did of irrespective its the for as No, there's level, various at no at the partnership they in materials Westlake businesses demand the that parent

saw you as the to demand just strong on it in the changes resegmentation need and for the sees that did remains parent So prior occur the as XXXX. the that ethylene

Mike Leithead

a secondly, flat in relatively growth, on today? is for in it past distribution then And it play last a with now, mostly roughly dynamic sounded we the issue. are quarters, Is like few regards it right are has was looks still to restarting been valuation my fair like Great. the distribution growth where say to potential quite similar quarter we

Steve Bender

But growth stand that seen ready consistency illustrate arrangement delivering I you've capacity increase think that value interest market, apparent, to in increase certainly additional is Mike, as We well M&A opportunity. continues we said, the I the assessed value you've as of various four an reward demonstrating the have, And to with which the really predictability. and presentation margin the of results the MLP the accretive this market levers provide market are benefits as Partnership as players. OpCo, production is still a those that our the and rewarding value. as quarter

certainly to ready we stand so reward ready And the for growth. stands that if market

Operator

Mike.

Steve Bender

any there questions? Are other

Operator

right. All

Our with is Blair next Holt. question from Tudor Matthew Pickering

please. Your question,

Matthew Blair

and Steve. morning, Albert Good

Steve Bender

how Matthew, Hi, are you?

Matthew Blair

Good. spread that it is a cadence LIke be pretty obligations be QX Good. of what's as in Westlake per headwind it would repaid, evenly in much year? if that million or A the And on would LP XXX throughout for Thanks. earnings repayment? the XXXX? does unit of that out act XXXX

Steve Bender

that headwind mentioned fee of million a provide does not a and it earnings fee. Partnership. deficiency buyer up, any as I whatsoever shortfall of profile the And a made is earlier, $XXX to Yes, the

is you then extended of Westlake And of may there year margin consequence so and or higher is calendar ethylene. is. a outage take when of outage with course cost for of to deficiency already an by translates as fee production fee that be fee arises the been the That back it costs is are paid. As the out That XXXX. an over know, pass Those the any just into remains shortfall and The buyer following in Westlake spread and year XX that of partnership Corporation. new fee months associated is the has unplanned -- paid the as Corporation. the the lack

So there fee, on headwind any this is buyer nor or headwind deficiency on there shortfall the is fee. no

Matthew Blair

you do of a you think market think about all the you of you look And How availability like MLP It to you Would can feel X%. that helpful. wanted that's structure do yield's the I equity the And the stand markets Is equity wants. Steve, you cap premium averages? provide your you debt Do the recent would debt could a to? then, you Okay, if or to drop? it mentioned earlier compared XX-XX be capacity ready around how does that would assess guess you drop side? growth the capital? if on

Steve Bender

be done be mentioned of renegotiation But of And thought growth said So transaction that in price XXXX. accordingly. to with seems that certainly players reward they Matthew, market really into increases, or market we were It's function accretive relatively transaction I interest Those the it'd number or the space. about still as that, Westlake we -- transactions whether be Corporation, did an observe equity in I it the the of, could a well and that with as all $X.XX some with These of market. both unit that drop make and margin, leverage, down, were parties, of as an capacity occurred MLP can think and the we or a both that space, contract in be taps Partnership, were this discounts as rewarding acquisition at as the production a earlier, of in OpCo. we the will LACC elevated. a by for value

see And to who so if us distribution distribution. we certainly of pivot interest grow growing that to and it are back do continue their capability is then to for that those

Matthew Blair

Great. much. Thank you very

Steve Bender

welcome. You're

Operator

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

Jeff Holy

today's We our our you. call Thank you again results. XXXX in join discuss for us call. Thank participating conference to next for first-quarter you'll hope

Operator

call. for quarter you participating Partners earnings in fourth Chemical today's conference Thank Westlake

accessed XXXX. available a replay The and be Tuesday, the numbers call. has beginning call by can [Operator accessed This maybe Time Instructions]. following for conclude this PM calling the X, call on until XX:XX will after As March bye. Eastern be ended, replay reminder, hours will Good two today's

Westlake Chemical Partners (WLKP) 22 Feb 222021 Q4 Earnings call transcript