WLKP - Earnings call transcript Q1 2024 | Westlake Chemical Partners LP

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Operator

Good afternoon, and thank you for standing by. Welcome to the Westlake Chemical Partners First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, May 1, 2024. I would now like to turn the call over to today's host, John Zoeller, Westlake Chemical Partners' Vice President and Treasurer. Sir, you may begin.

Johnathan Zoeller

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

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

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

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

Albert Chao

press the ethylene $XX sales our million well Westlake everyone, afternoon, as demonstrated has from joining Partners' or of slight Partners cash in stability risks. to Westlake XXXX first $X.XX quarter a benefited Compared quarter Good Westlake to and per sales of you of the per our first price and release, we discuss of for quarter to income ethylene XXXX us John. sales you, earnings terms unit. higher this quarter sold the fourth XXXX, ethylene net In which Thank first business for enabled coverage. as reported morning's thank margin distributions with sales sales stability of of reliable through us when paired is predictability production and improvement our agreement volatility business, fixed high deliver other the a history of our in margins. The The long market third-party to model the degree minimizes consistently agreement, flow, and ethylene results.

XXXX Steve? the more to operating quarterly provide to since quarter. over to turn now without results distribution in quarter's call any consecutive our on distribution the our XXth IPO like reductions. I the for is of financial This would detail July and Steve

Steven Bender

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

a million XXXX for was Partnership impacted net expense. Distributable decreased interest $X cash to of quarter production Partners were compared than of offset first by million sales to flow lower for unchanged sales which income. by production first XXXX income Compared partnership the XXXX, primarily first $XX and volumes, to slightly First first $XX quarter lower net compared quarter and lower of the million less by due of was of volumes. Westlake the quarter quarter XXXX to XXXX, the

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

to minimum XXXX. $X.XXX we The unit. Partnership's unit per we of grown per distribution our IPO the distributions first $X.XXXX quarter maintained respect quarterly first ratio April announced quarterly Partnership of XX, Since with XXXX, XXXX, XXXX. to distributions We the unitholders have record paid strong May of consolidated since leverage unitholders, Xx. On our distribution metrics, the XXXX, May will made of quarterly consecutive quarter XX has on XX, a distribution XX% of to with a in and approximately leverage XX, Partnership's be original

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

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

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

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

Albert Chao

Steve. Thank you,

are to pleased margin and encouraging third-party a Partnership's financial as of result feedstock the ethylene We in with particular, costs, lower the period fuel operational parties, of in on In is improvement following sales low in and performance a primarily recent the XXXX. quarter. ethylene sales first margins third

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

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

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

very on listening where our as we broader our we for you part call. always, with work to earnings environment first safe good of focus the continue operations and efforts. Thank sustainability much along quarter will of live As to being stewards

Now turn I call back to over will the John.

Johnathan Zoeller

Thank you, Albert.

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

now We will provide replay of instructions questions. we to at will the the end access take Andrew, call. the

Operator

[Operator Instructions] question comes from Our TPH. Blair the line with of first Matthew

Matthew Blair

So driver mentioned of And Westlake. price benefited earnings does the the was represent renegotiation contract? the the at a Albert, the higher fixed higher QX sales you sales What that a that beginning margin of to from price?

Steven Bender

were prior and for But market at the was sale not improved sales itself. agreement unchanged. to in external is is improved. slightly sales third-party just force relative margins Matthew, and third-party Westlake it's to quarters the reference has That Westlake still that

Matthew Blair

Okay.

But roll turnaround below QX your Is it guess, the well? would X.Xx the looking talk improve target. as City for And that good. off about outlook the from at then coverage could we XXXX. coverage? as quarter Sounds you're you I how you next Calvert You're to expect

Steven Bender

as had, with we've I the X that will Matthew. expect that course, coverage year, planned turnaround. consecutive this do off roll turnaround of higher turnaround we trend Yes, this year. And last of years from

we make able coverage. rebound as a have we'll you to under our X. as have prior to capacity will also see improvement 'XX, enter as QX. right, we impacted you're turnaround as do be So Petro know, for But And the coverage expect, in distribution. the we I reserves to half be would years, second ample we that in of continue And of

So with I issues. issues see don't any those

Operator

Bank of of question Salvator the comes from next America with Securities. Our line Tiano

Salvator Tiano

per any by the question your sponsor? of Or does earnings, in So accompanied think from the a from expand sense my you is, you even mentioned expand projects -- to that ethylene get does company margin first either pound as can this still to have or to or you the capacity its $X.XX make be and M&A, Westlake? consider about you would options agreement it if better with

Steven Bender

the those necessarily sales receive that Westlake. valuation with a those do in has No, different to undertaking. it be of it margin to for with doesn't Rather have the just associated to we any transaction and valuation units

ability an is assets ownership of in other value, or around and increase just other valuation will therefore, drive such the of it OpCo therefore, the distributions. the revolves asset, of LACC the So as transactions it whether any earnings, or acquisition and grow to those

Salvator Tiano

specific are using into with them something for that ethylene with sense make into for petrochemical And of I Westlake regard Partners? sustainability. that I looking is Corporation Westlake companies Perfect. to many have electrifying to, but their understand the hydrogen. for including you Okay. lot options work things, assets that, crackers, some are of guess, that the I it would companies, would a obviously, or know included

Steven Bender

Yes.

Scope And very public X so an about emissions. we Scope do our and X reducing statement have ongoing

about to allow reduce continue as Scope the emissions. we capital X we those in so And emissions, invest think certainly X Scope that to us

Scope undertake also we'll invest As that we X allow transactions look emissions. X to about at certainly to or think those emissions, reduce Scope opportunities us

the is ethylene Westlake of its And reducing strides X in seen, certainly, to Corporation have the good might made you has that Scope crackers. As part efforts of attributable emissions.

Operator

has the Thank session you. the turn Q&A Zoeller. John At call time, now will to ended. back I over this now

Johnathan Zoeller

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

Operator

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

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

Westlake Chemical Partners (WLKP) 1 May 242024 Q1 Earnings call transcript