WLKP - Earnings call 4 2023 | Westlake Chemical Partners LP

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Operator

Good afternoon. Thank you for standing by. Welcome to the Westlake Chemical Partners Fourth Quarter and Full Year 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, February 20, 2024.

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

Jeff Holy

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

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

the Additionally, when website. to cash referring MLP we are distributable to on refer flow. Definitions flow, terms Partnership's we Chemical these Partners' cash Westlake of distributable available are

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

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

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

Albert Chao

everyone, Thank joining you you, fourth Jeff. Good our year thank to and discuss XXXX for afternoon, full and us quarter results.

results despite planned evident market sponsor, as distributions production we including the this morning's income investment-grade XXXX. XXXX full delivered and was sustained for of insulating margin This year Partners stable stability Westlake structure, other per annual we demonstrate our million cash conditions $XXX full unitholders. weak manufacturing financial agreement million $X.XX with release, results Westlake from or income, industrial XX% in XXXX, and flows. to reported solid to year, net our sales generated In macroeconomic volatility OpCo from press the particularly for $XX continues This combined produces unit. Consolidated us our year and of earnings risks. predictable fixed and was Partners' Westlake net production for each ethylene demand,

for by generated deliver the sales our our flow cash fixed fee-based with ethylene forms Westlake us unitholders. stable The foundation margin value to contract long-term to

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

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

Steven Bender

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

for net Partnership $XX million $X Partners net expense. million million for quarter $X interest XXXX was of the of of flow compared higher by income capital higher primarily XXXX to of and $XX $XX by decreased XXXX $XX lower XXXX decreased net cash quarter distributable million. cash fourth of million of quarter This higher compared by to income quarter driven due distributable maintenance flow million to primarily interest The income spending $X fourth Westlake expense. million Fourth fourth

full result higher to ethylene million. due interest lower Kentucky the Calvert the year income $XX of the per or of at income XXXX in attributable The in to a expense. year For and to decreased turnaround income maintenance of decrease XXXX, sales net partnership City, was full million of of $XX net by compared as net unit OpCo's May unit XXXX $X.XX $XX million

and year million in compared -- of higher million full of $XX million of flow cash MLP cash by due distributable for full full $XX to to spending, part XXXX the decreased year year expense. City combination $XX of capital Calvert turnaround higher Our distributable of XXXX interest a of the a result maintenance MLP flow as

X.XXx. XXXX was for coverage distribution year Our the

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

XX Partnership $X.XXX per XXXX, XX, distributions fourth $X.XXXX distributions XXXX. IPO February has quarterly unit. February quarter will be On of have a Partnership's original of our distribution unit of distribution since quarter respect announced quarterly the unitholders, with XX paid and The made our XXXX, grown XXXX. per Since of the quarterly unitholders to distribution on fourth record Partnership's consecutive we January to minimum XX% in to we X, the

our the and flows. fee-based flow in today's to earnings of cash differentiated cash and economic consistency predictable Partnership's is The continues beneficial prove environment by

the cumulative in July our distribution back we capital maintained the need Looking sustain X.Xx, access coverage the without of ratio Partnership's to nearly a we to were and flows, in have cash since our IPO stability XXXX, distribution of markets. current able

one we we modeling funded impacted we the commence Louisiana. is has where Westlake second result. fully been is we this period For turnaround Petro planned and coverage such XXXX, this a to to have one, turnaround And been ethylene charge X approximately Charles, XX we in our half is then the and unit scheduled similar the turnaround of last the ratio This in turnaround, In The expect amount the had years projected purposes, this at in cost begin planned for has as turnaround. XXXX Lake turnaround a prior distribution days. of in recovering. included would as reserved and for have

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

Albert Chao

you, Thank Steve.

our the are quarter whole. of pleased the financial ethylene operational predictable associated as demonstrate provisions The agreement protective model with a We and cash with our cash partnership's stability and long-term partnership provide its and sales year the that a flows through a and and fourth business flows. performance benefit earnings

agreement fee-based tightening interest a and of The rates structure of production. negatively ethylene. Federal for reserves prices flow cash impact of selling in for policy, ethylene While predictable monetary nature with OpCo's XXXX for XX% sales a our demand as result provides of Westlake increasing

in cash overall were market a relatively flows insulated from As XXXX. result, the earnings volumes, weakness and OpCo sales

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

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

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

much you full earnings year listening fourth Thank and call. to very XXXX for our quarter

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

Jeff Holy

Thank you, Albert.

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

take now Daniel, we questions. will

Operator

from our TPH. [Operator Instructions] And with Blair first Matthew question comes

Matthew Blair

Steve. and Albert

to current your down believe. I coverage is So LTM X.XXx,

your below And around still improve to it's of Or is coverage? sort So just any is course of business? require Xx. overall target X.Xx? this changes like, this part normal to I think the going Is it's your on

Steven Bender

impacting Yes. and with on coverage. see many maintenance and to years, year through We over basis, as that year Matthew, it's this to with this to we and see will years. of maintain our going outages target this X our subsequent And that mentioned expect at but coverage, impact I our had turnarounds turnaround a be complete we've recover in that able this impact unit continue the XXXX, been after but target target we as and I over forward cumulative a X.Xx go the earlier Calvert get into turnaround course, would remains we I always these remarks, expect prepared that coverage to we production time. have in will we some of City, going on impact our fully and in Petro that move later turnaround forward. we have to

Matthew Blair

that was volumes required parent, of XXXX? the agreement then from there stability all Sounds contracted Westlake the Did good. the And you take-or-pay a sort in take payment? Westlake. of of any with the Or shortfall highlighted -- of OpCo

Steven Bender

No, we it no took all whatsoever. production that was shortfall planned for there and contracted the XXXX,

Operator

remarks. at would now over to closing for turn no it time. Jeff I'm further questions Holy showing back I to this like

Jeff Holy

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

Operator

conference participating. call. for today's concludes This you Thank

may disconnect. You now

Westlake Chemical Partners (WLKP) 20 Feb 242023 Q4 Earnings call transcript