WLKP - Earnings call 3 2023 | Westlake Chemical Partners LP

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Operator

Good afternoon, and thank you for standing by. Welcome to the Westlake Chemical Partners Third Quarter 2023 Earnings Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded today, November 2, 2023.

I would now like to turn the conference over to today's host, Jeff Holy, Westlake Chemical Partners Vice President and Treasurer. begin. may you Sir,

Jeff Holy

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

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

Additionally, cash cash to flow. referring refer when distributable Westlake we to flow, we MLP distributable Chemical Partners' are

We will management's and information the as Definitions website. forward-looking discuss subject is actual or by to results Today, contain expectations of beliefs assumptions our which website. cautionary are by about predictions that thus to made to management lead on learn statements and available or that statements to forward-looking differ to available based regulatory Investor is reviewing our encourage as suggest factors could are terms these information available well on filings, our more on Relations These the management. you the Partnership's that going currently topics and uncertainties. also risks are certain

replay accurate our note Internet hours system today, via operating XXXX. Please call The you speaks would accessed this of through of Partners this available beginning advised This section an that page document be as broadcast finally press I morning, conclusion is our in after may only therefore, that of page call be release our advise website. the and the webcast may Press information as this be be you're information no today's partnership's a of the of time XXXX A issued on being replay. wlkpartners.com. web November replay Release financial longer results. live will reported This any X, third is of that Westlake time-sensitive that with at X accessed And can details call. on conference quarter call of the wlkpartners.com. available web at

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

Albert Chao

the May. production and discuss with The Good sales which following of third everyone fixed quarter for compared $X.XX joining the morning's reliable the business us agreement, has of stability the ethylene Westlake you, and demonstrated quarter City this volumes Calvert other second Thank completion and deliver our thank distributions cash XXXX flow higher release, sales minimizes production risks. The or from results. our consistently net In $XX Jeff. volatility of model history business us you of sales coverage. high turnaround enabled we afternoon our Partners of income Partners' to to degree in market long third per and margin earnings when our XXXX in press stability Westlake third quarter million Compared through and of unit. is credibility the quarter, to reported benefited

distribution quarterly in XXXX reductions. consecutive any since without XXth July the is the distribution quarter's This IPO of

to like to more over and for the results financial I would turn now on quarter. detail our Steve the to provide operating call Steve?

Steven Bender

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

XXXX compared partnership decreased of million to quarter net Partners XXXX Westlake quarter by third $XX income for million Third income $XX net of $X million.

quarter quarter third flow income XXXX, third of in of expense. spending flow weighted by as cash by cash of third higher $XX program capital Distributable to net distributable was $X third the capital in decreased a impacted to as the due interest million million compared for and than the decline higher due the of partnership to the quarter XXXX. maintenance capital is $XX timing million XXXX half increase in XXXX our expenditures. XXXX quarter to the year-over-year Compared $X change of year is the compared in to The more second maintenance million

had our consolidated flows. with the end through management was to totaling quarter At was agreement cash of investments which capital of third quarter, attention at cash balance sheet $XXX approximately on expenditures. the spent OpCo. strong and quarter our consolidated the Westlake our In of cash maintained Xx. debt million. the the Turning investment end leverage the with $XXX at and $XXX third of Long-term the was Partnership remaining OpCo and the $XX metrics million We at million ratio of million, leverage we $XX a million XXXX,

with The the per Partnership's third flow unit original have quarter On continues the XX quarter beneficial unitholders, earnings distributions to Partnership's XX% prove predictable in IPO XXXX, XXXX, our of environment third minimum Partnership our distribution and unit. of our announced The our distribution quarterly the XXXX, grown flows. consistency Since XXXX. quarterly and XX, respect October the has XX, $X.XXX made economic since we will of we by of November unitholders differentiated and on consecutive record November of $X.XXXX to in to to cash fee-based quarterly per distributions a is XX, be distribution paid Partnership's today's XXXX. cash

cash sustain to need Looking of with stability have we flow current back able the access the cash since cumulative and Xx. a partnership to And XXXX, distribution July in approximately we're distribution markets. the capital without our maintained flows, IPO the of

X is our additional mid-XXXX. turnaround unit purposes, planned once is our we details Lake Louisiana, ethylene provide turnaround the for planning. our next complete modeling at Petro on For planned which And we'll turnaround in Charles, currently

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

Albert Chao

Thank you, Steve.

demand the performance operational our this financial steady rest about the in the for and optimistic ethylene, globally Partnership's domestic We fundamentals demand of advantage cost and the remain ethylene the year. We through with third opportunities derivatives should parent at export pleased believe for driven our Westlake. that continue quarter. are We by performance

which ethylene deliver structure Westlake and predictable as well take-or-pay and turnarounds. agreement, fee-based production to economic a OpCo's from unplanned Our will our cash continue downs XX% with cash flows for contract as sales predictable provides stable and flow of ups through planned

leverage Turning to our and capital sheet balance with financial structure. We a strong maintained conservative metrics.

evaluate we opportunities. market to conditions, continue we'll As navigate

ethylene We growth higher future, of fixed expansions ownership margin are a levers and negotiation of increases opportunities, growth of acquisition income organic with current our of of as sales in agreement streams; OpCo; in including the qualified interest of such other our ethylene X Westlake. facilities; our

unitholders. on remain to continue focused ability to distributions We our and value long-term to provide our

to will focus part efforts. of our broader along on safe the we sustainability always, being work stewards with of operations good environment where As continue as live and we

our Thank listening to third earnings you for quarter much very call.

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

Jeff Holy

you, Thank Albert.

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

Antoine, now we will take questions.

Operator

TPH. comes [Operator Instructions] question from Our Matthew first from Blair

Matthew Blair

through. but to like I little wanted would back believe expenses of Steve, It the issue, this I wanted sounded just was higher sort structurally does And CapEx a costs bit higher see timing risk would that that, Does the if current touch you're to the so, that distribution? higher inflation I half a planned that in if be be any seeing any you XXXX. mean from said or maintenance on forward? going impacts of your higher to rolling present labor

Steven Bender

consideration. it next on to capital planning as by question, taking see related a Yes. about we for regular certainly, into turnaround those continue basis because something as recall, unit. It's certainly our Westlake a OpCo. good It's not for And to budgeting year built that do may a I expenditures Matthew. our turnaround as the we ethylene very are for and risk you think the we're

relates it we two that to so offset see we're be potentially those reserve in or of cost materials, able And either turnaround accumulate should one to categories. to manpower inflation able to higher as

meet So a a see the to to don't risk to to make cash the for to requirements distribution and as be payment unitholders. the it a able ability our we distribution generate

Operator

[Operator from Our comes Morgan Stanley. from question Instructions] Vincent next Andrews

Vincent Andrews

the margin saw just -- at in looking segment. wondering Just the housing expansion you

about talk like a -- real curious And of cost, were Just that, you expansion. just the about which release margin if but seems the driver costs? lower was I It what talked the big know happen? how could that does

Steven Bender

You're products talking building segment? about in our

Vincent Andrews

Yes, exactly. Yes, exactly.

Steven Bender

Yes.

related Products And business did as margin to of able so the certainly, further And best price a could some in Westlake maintain business. into we we downstream Vincent, a prices our to the PVC expansion. Products from we the get of as this fact that expansion from market. really And Building that of consequence, saw Building came buy are those course, resin we as inputs, inputs lower lot we're

quarter-over-quarter able that You in division about the Building volumes also were Products saw by we improve to X%.

and maintain able expand in but because largely resin, challenges we've PVC we that input we're So cost, lower trying in in volume seen margin certainly Products. to to headline strength Building saw price,

Vincent Andrews

to that Okay. is and things none the that, related outlook And stuff commentary mortgage rates of then new. some of like necessarily

of tell that -- these impact So just see sort environment. overhangs the that's whether were a hey, couldn't are I from macro whether greater the signaling a more on just those you're or you issues of demand starting to of sort ongoing, sort

So would helpful. be any clarity there

Steven Bender

certainly, certainly potential X% as having even uncertainty homebuyers mortgage to months a a because course, effect we homebuyers the you will, effect of over nearly know there's if mortgage compounding the or ago. rate of year higher mortgage of many rising a to -- think And dampened concerning I effect that a is yes, XX-year the X Well, backdrop demand. macro is macro large just a of than the drop and on economies the hill is or and in climb, compounding plus rate

do of that into also underlying element play course, seasonality just think issue. demand. an terms comes this I so that's have time And year, of of a in And we

the certainly sometimes quarter as as and we QX demand. and seasonal because seasonal quarter as exists to the fourth mortgage about And generally Products, continued rates interest of the effect Building and slowdown in higher so and through into related persist rates on that effects well construction the headwinds typically for think fourth

Operator

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

Jeff Holy

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

Operator

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

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

Westlake Chemical Partners (WLKP) 2 Nov 232023 Q3 Earnings call transcript