WLKP - Earnings call transcript Q2 2022 | Westlake Chemical Partners LP

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Operator

Good afternoon. Thank you for standing by. Welcome to the Westlake Chemical Partners Second Quarter 2022 Earnings Conference Call.

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

conference recorded this XXXX. August reminder, a is today, being X, As and would 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

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

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

note cash Chemical subject cautionary risks regulatory which thus actual by assumptions press are Relations Investor to could Westlake are issued to are based Today, that with management. being available These of call distributable flow, on call. conclusion morning, our topics forward-looking cash discuss information Partners only after flow. time you web of be information X, of Release you reported information beliefs, Additionally, we XXXX, this X Partners' reviewing of these beginning are factors to as more webcast therefore, currently as speaks a our release is wlkpartners.com. our and distributable will longer that or as as Internet available time and page when will suggest that Westlake lead made in encourage or that of Please no an uncertainties. I quarter be of at be on this results that by Replay can advise on partnership going our document live would the differ to that wlkpartners.com. Press today's to This statements expectations available available in August predictions replay at learn the page web accurate finally We that financial is statements to about any also and is website. our the filings, this call XXXX website. may This second A through our management's the management call you sensitive via information certain refer broadcast is of referring MLP section today, operating on results. system forward-looking accessed we replay. and hours contain to advised well conference the details

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

Albert Chao

stability including our consistently for stability $XX ethylene has of and when the our degree to of in predictability enabled high compared Partners sales volatility minimizes which second fixed income, Good The morning's our afternoon XXXX net for release Thank you, us results. discuss joining income Jeff. everyone, press In XXXX quarter this Partners Westlake second you reported and we thank quarter of second performance to the $XX margins, quarter consolidated $X.XX strong OpCo risks. business distributions The second XXXX. coverage. all Westlake cash units, agreement, is long per production our favorable million margin or were operating which benefited in the ethylene from of ethylene quarter impaired drove net other sales and with reliable of model across of unit. business third-party deliver up flow history Westlake the us demonstrated OpCo's market of with through million

results and now distribution our I on XXnd Steve? our since to This more to Steve would quarter. like financial over call the operating IPO. is quarter's the provide consecutive quarterly distribution for a detail turn to

Steve Bender

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

third-party in and the from production strong sales ethylene benefited early the the partnership second During quarter, profitable quarter.

quarter the Second and $XX quarter by the XXXX for benefited net distributable Distributable million million, $X flow income XXXX net lower second second quarter compared in cash that of by the million, XXXX flow offset to resulting deficiency of decreased the to fee of $XX $X quarter. from of XXXX the as of of this cost cash last of XXXX. quarter income $X Partnership Partially XXXX in second operating of a to higher production Partners Westlake for quarter partnership second from fee decreased million a volumes second outages buyer compared million buyer million year. deficiency related $XX approximately of occurred quarter significantly

future we XXXX, second since capital million below the We Yesterday, distribution of distributions has our Westlake Partnership the a with new since our quarter we to both our attention of distributions metrics at Partnership our XX.XX leverage at a cents million Westlake in in unit of and In capacity expenditures. the was each for to at balance cash consecutive $XXX management million liquidity of the second announced to and quarterly holders Each million of consolidated $XXX had of unit. strong times. with end In the to XX% leverage and which, per by quarter, ensuring the on lines period. the the agreement, needs. have the their distribution ample are spent of we quarter end OpCo with original OpCo. quarterly million, and credit Partnership's debt at the flows, investments balance through the these the was five-year per lines Consolidated investment committed OpCo respect revolving totaling $XXX with for quarterly has of and grown and consolidated Turning July, OpCo $XX XXXX, a unit Partnership cash minimum maintained a capital ratio $XXX was sheet made our XX remaining are extended $X.XX quarter second the ‘XX, million. $XX cash Partnership one July now of IPO

Our expected our coverage after fell and times quarter and second our quarterly turnaround, coverage is distributable to ratio flow coverage ending XX, typical Partnership's cash target June distribution times cash for below flow planned X.X the of was and times be the XX. August The will unitholders XXXX months XX, paid XXXX. on quarter second X.XX record to XX X.XX for distribution on August

our the environment differentiated mindful we by The to broad while As will flow forward, we Partnership’s delivers the the of unitholders. economic in earnings look predictable of consistency Partnership thesis, provides fee-based cumulative XXXX, to our distribution as of conditions distribution (ph) continue excess [extend] market maintained with value today's and able cash cash in ratio remaining a stability benefits IPO times our in capital without we current and have flow, distribution of access need coverage to our Since flows. to cash markets. and X.X and any were the Partnership's July we maintain the

we turnarounds during XXXX. no have modeling For planned purposes,

is will first turnaround our which on our half ethylene planned and additional provide the next of City, Calvert XXXX Our at turnaround facility Kentucky, planned for we in planning. once City complete Calvert details the is currently we

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

Albert Chao

half our believe of needs packaging. parent demand by We ethylene, and Thank market remain you, about of Partnership's rest robust downstream demand End- products financial and optimistic the the year. in continue these operational should Steve. we driven year through by the Westlake. strong, first the derivatives the performances fundamentals use was consumer through The performances for and

Partnership sales cash our forecastable Our provides its will the the of continues leverage flow flows. We ethylene fee-based sales balance predictable from unitholders, with and per insulated Westlake conservative cash from these metrics. are continue fixed margin market agreement financial receive of price When agreement, or cash providing to sales insulated pound, XX% volatility. to cash ethylene market that deliver which its and margins a ratable and to for predictable of ensures flows a consistent a with maintain current ethylene ethylene structure the contract production net strong $X.XX sheet XX% low, OpCo's

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

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

to Now the back call I'll Jeff. turn over

Jeff Holy

Thank Albert. you,

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

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

Operator

Holt and first line Our Thank of Blair the Matthew of Pickering, comes question you. from Tudor, Instructions] [Operator Company.

open. is line Your

Matthew Blair

Good morning, Albert Steve. and

Albert Chao

Good morning, Matthew.

Matthew Blair

now. MLP had a you no drops down for while So with a drop little

you in looking could on M&A about are potential your at external talk you growth external efforts opportunities? how if So active and

Steve Bender

to So, to marketplace to Albert growth providing noted, in And sales of ethylene just be to as be able able Matthew, available that so, stand We we and grow opportunities or a amount streams, to in we looking or of interested do noted remarks, that do his as but drop the when ready. be about at stand organic on levers growth. know, to you to right those. we mechanisms achieve opportunity continue opportunities kind our certainly income fixed additional continue see all to ready the down, are providing to us. been right in agreement is higher either really value those margin as it's negotiating the And that in capital increases certainly four you the quite right of

Matthew Blair

far the crackers quarter? just for unplanned in third then, And been are be good. thanks running of? so you any Sounds there downtime on aware talk we Could about should how turnarounds. the Has guidance the the

Albert Chao

downtime. been There's no unplanned

of of sort, the As of other operating flows. demonstrate or outages, it the been see able have we And have for the tools unplanned quarter whether freezes to strongly ethylene within about sales we've it be and buyer with variety we And cash second all whether mechanism be strong there should performed unplanned provide throughout how that they and deficiency rates. quarter, any other remember, a you that provisions agreement very second XXXX events. stability or earnings that any outages was you think the in

as providing such of that kind stability. So flow these, times income that the Partnership in may we're very stable even with and concern of to be macroeconomically comfortable of the continues be business cash quite in

Matthew Blair

Great. you. Thank

Steve Bender

You're welcome.

Operator

at the over any Sir? Instructions] for to Thank this you. time, Holy turn And to I'd Jeff remarks. [Operator like call back

Jeff Holy

Thank us conference you. participating join discuss in for Will you for to XXXX hope you will call our results. quarter next our today's Thank call. third

Operator

Westlake in Quarter Conference Partners Chemical participating today's for Second Earnings you Thank Call.

and ended XX:XX As a will Tuesday, be for replay Time call available accessed XXXX. via the Eastern be can two has until hours this X, Goodbye. on Partnership accessed after August The call may beginning replay reminder, be the website. PM

Westlake Chemical Partners (WLKP) 2 Aug 222022 Q2 Earnings call transcript