- Declared quarterly distribution of $0.4714 per unit; 36th
consecutive quarterly distribution
Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership")
today reported net income attributable to the Partnership in the
second quarter of 2023 of $11.9 million, or $0.34 per limited
partner unit, a decrease of $4.5 million compared to second quarter
2022 net income of $16.4 million. The reduction in Partnership net
income in the second quarter of 2023 compared to the second quarter
of 2022 was the result of lower production volumes, due to the
planned Calvert City maintenance turnaround, and higher interest
expense. Cash flows from operating activities in the second quarter
of 2023 were $98.5 million, a decrease of $22.4 million compared to
second quarter 2022 cash flows from operating activities of $120.9
million. The decrease was primarily due to lower net income at
OpCo. For the three months ended June 30, 2023, MLP distributable
cash flow was $15.0 million, a decrease of $4.6 million compared to
second quarter 2022 MLP distributable cash flow. The decrease in
MLP distributable cash flow was primarily attributable to impacts
from the Calvert City turnaround and higher interest expense.
Second quarter 2023 net income attributable to the Partnership
of $11.9 million decreased by $3.0 million compared to first
quarter 2023 net income of $14.9 million due to impacts from the
Calvert City turnaround. Second quarter 2023 cash flows from
operating activities of $98.5 million decreased by $46.4 million
compared to first quarter 2023 cash flows from operating activities
of $144.9 million due to lower net income at OpCo and cash costs
associated with the Calvert City turnaround. Second quarter 2023
MLP distributable cash flow of $15.0 million decreased by $2.6
million compared to first quarter 2023 MLP distributable cash flow
of $17.6 million, primarily due to lower net income at OpCo.
"As expected, the Partnership's net income and distributable
cash flow in the second quarter of 2023 were below both the prior
year and prior quarter levels due to the planned maintenance
turnaround at Calvert City, which only occurs roughly every seven
years. While costs to perform the maintenance were fully paid for
by reserves from our ethylene sales agreement with Westlake, the
reduced production volume at Calvert City for the duration of the
turnaround negatively impacted our sales volume, net income and
distributable cash flow," said Albert Chao, President and Chief
Executive Officer. "Due to the strong efforts of OpCo's employees,
the Calvert City turnaround was completed on schedule during the
second quarter. Looking forward, we expect distributable cash flow
to improve in the second half of 2023 from second quarter levels
now that our maintenance work is behind us. We remain excited about
the strong underlying fundamentals of the Partnership and the
stability provided to our financial results by our ethylene sales
agreement that provides a fixed margin on 95% of our
production."
On August 1, 2023, the Partnership announced that the Board of
Directors of Westlake Chemical Partners GP LLC had approved a
quarterly distribution for the second quarter of 2023 of $0.4714
per unit to be payable on August 25, 2023 to unitholders of record
as of August 11, 2023, representing the 36th consecutive quarterly
distribution to our unitholders. MLP distributable cash flow
provided trailing twelve-month coverage of 1.05x the declared
distributions for the second quarter of 2023.
OpCo's Ethylene Sales Agreement with Westlake is designed to
provide for stable and predictable cash flows. The agreement
provides that 95% of OpCo's ethylene production is sold to Westlake
for a cash margin of $0.10 per pound, net of operating costs,
maintenance capital expenditures and reserves for future turnaround
expenditures.
The statements in this release and the related teleconference
relating to matters that are not historical facts, such as those
with respect to the ability to deliver value, returns, predictable
cash flows and distributions to unitholders, demand for ethylene
and expected margins and production volumes, contracted volumes,
the expectation that strong distributions will continue, and the
nature of the sales agreement with Westlake, are forward-looking
statements. These forward-looking statements are subject to
significant risks and uncertainties. Actual results could differ
materially, based on factors including, but not limited to, the
COVID-19 pandemic and the response thereto; operating difficulties;
the volume of ethylene that we are able to sell; the price at which
we are able to sell ethylene; changes in the price and availability
of feedstocks; changes in prevailing economic conditions, including
inflation, interest rates and possible recession; actions and
commitments of Westlake Corporation; actions of third parties;
inclement or hazardous weather conditions, including flooding, and
the physical impacts of climate change; environmental hazards;
changes in laws and regulations (or the interpretation thereof);
inability to acquire or maintain necessary permits; inability to
obtain necessary production equipment or replacement parts;
technical difficulties or failures; labor disputes; difficulty
collecting receivables; inability of our customers to take
delivery; fires, explosions or other industrial accidents; our
ability to borrow funds and access capital markets; and other risk
factors. For more detailed information about the factors that could
cause actual results to differ materially, please refer to the
Partnership's Annual Report on Form 10-K for the year ended
December 31, 2022, which was filed with the SEC in March 2023, and
Quarterly Report on Form 10-Q for the quarter ended March 31, 2023,
which was filed with the SEC in May 2023.
This release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat
one hundred percent (100.0%) of the Partnership's distributions to
non-U.S. investors as being attributable to income that is
effectively connected with a United States trade or business.
Accordingly, the Partnership's distributions to non-U.S. investors
are subject to federal income tax withholding at the highest
applicable effective tax rate.
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial
measures, such as MLP distributable cash flow and EBITDA. For this
purpose, a non-GAAP financial measure is generally defined by the
Securities and Exchange Commission ("SEC") as a numerical measure
of a registrant's historical or future financial performance,
financial position or cash flows that (1) excludes amounts, or is
subject to adjustments that have the effect of excluding amounts,
that are included in the most directly comparable measure
calculated and presented in accordance with U.S. generally accepted
accounting principles ("U.S. GAAP") in the statement of income,
balance sheet or statement of cash flows (or equivalent statements)
of the registrant; or (2) includes amounts, or is subject to
adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated
and presented. We report our financial results in accordance with
U.S. GAAP, but believe that certain non-GAAP financial measures,
such as MLP distributable cash flow and EBITDA, provide useful
supplemental information to investors regarding the underlying
business trends and performance of our ongoing operations and are
useful for period-over-period comparisons of such operations. These
non-GAAP financial measures should be considered as a supplement
to, and not as a substitute for, or superior to, the financial
measures prepared in accordance with U.S. GAAP. We define MLP
distributable cash flow as distributable cash flow less
distributable cash flow attributable to Westlake Corporation's
noncontrolling interest in OpCo and distributions attributable to
the incentive distribution rights holder. MLP distributable cash
flow does not reflect changes in working capital balances. We
define EBITDA as net income before interest expense, income taxes,
depreciation and amortization. MLP distributable cash flow and
EBITDA are non-GAAP supplemental financial measures that management
and external users of our consolidated financial statements, such
as industry analysts, investors, lenders and rating agencies, may
use to assess our operating performance as compared to other
publicly traded partnerships, our ability to incur and service debt
and fund capital expenditures and the viability of acquisitions and
other capital expenditure projects and the returns on investment of
various investment opportunities. Reconciliations of MLP
distributable cash flow to net income and to net cash provided by
operating activities and of EBITDA to net income, income from
operations and net cash provided by operating activities can be
found in the financial schedules at the end of this press
release.
Westlake Chemical Partners LP
Westlake Chemical Partners is a limited partnership formed by
Westlake Corporation to operate, acquire and develop ethylene
production facilities and other qualified assets. Headquartered in
Houston, the Partnership owns a 22.8% interest in Westlake Chemical
OpCo LP. Westlake Chemical OpCo LP's assets consist of three
ethylene production facilities in Calvert City, Kentucky, and Lake
Charles, Louisiana and an ethylene pipeline. For more information
about Westlake Chemical Partners LP, please visit
http://www.wlkpartners.com.
Westlake Chemical Partners LP Conference Call Information:
A conference call to discuss Westlake Chemical Partners' second
quarter 2023 results will be held Thursday, August 3, 2023 at 1:00
PM Eastern Time (12:00 PM Central Time). To access the conference
call, it is necessary to pre-register at
https://register.vevent.com/register/BIb635b9f0d11a495fb699666f55842f0b.
Once registered, you will receive a phone number and unique PIN
number.
A replay of the conference call will be available beginning two
hours after its conclusion. The conference call and replay will be
available via webcast at
https://edge.media-server.com/mmc/p/8hay9rav.
WESTLAKE CHEMICAL PARTNERS LP
("WESTLAKE PARTNERS")
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(In thousands of dollars,
except per unit data)
Revenue
Net sales—Westlake Corporation
("Westlake")
$
224,575
$
365,112
$
482,046
$
655,769
Net co-products, ethylene and other
sales—third parties
39,602
83,673
89,808
155,416
Total net sales
264,177
448,785
571,854
811,185
Cost of sales
176,455
351,483
378,059
622,444
Gross profit
87,722
97,302
193,795
188,741
Selling, general and administrative
expenses
7,229
9,919
15,143
18,146
Income from operations
80,493
87,383
178,652
170,595
Other income (expense)
Interest expense—Westlake
(6,117
)
(2,859
)
(13,432
)
(5,058
)
Other income, net
1,061
90
1,881
65
Income before income taxes
75,437
84,614
167,101
165,602
Provision for income taxes
173
175
385
338
Net income
75,264
84,439
166,716
165,264
Less: Net income attributable to
noncontrolling interest in Westlake Chemical OpCo LP ("OpCo")
63,378
68,001
139,938
132,632
Net income attributable to Westlake
Partners
$
11,886
$
16,438
$
26,778
$
32,632
Net income per limited partner unit
attributable to Westlake Partners (basic and diluted)
Common units
$
0.34
$
0.47
$
0.76
$
0.93
Distributions declared per unit
$
0.4714
$
0.4714
$
0.9428
$
0.9428
MLP distributable cash flow
$
14,985
$
19,584
$
32,536
$
38,875
Distributions declared
Limited partner units—publicly and
privately held
$
9,946
$
9,938
$
19,892
$
19,881
Limited partner units—Westlake
6,658
6,657
13,315
13,314
Total distributions declared
$
16,604
$
16,595
$
33,207
$
33,195
EBITDA
$
108,594
$
118,482
$
234,209
$
232,951
WESTLAKE CHEMICAL PARTNERS
LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
June 30, 2023
December 31,
2022
(In thousands of
dollars)
ASSETS
Current assets
Cash and cash equivalents
$
59,434
$
64,782
Receivable under the Investment Management
Agreement—Westlake
94,230
64,996
Accounts receivable, net—Westlake
45,467
90,965
Accounts receivable, net—third parties
17,443
20,030
Inventories
3,260
4,715
Prepaid expenses and other current
assets
718
305
Total current assets
220,552
245,793
Property, plant and equipment, net
963,490
990,213
Other assets, net
151,545
135,973
Total assets
$
1,335,587
$
1,371,979
LIABILITIES AND EQUITY
Current liabilities (accounts payable and
accrued and other liabilities)
$
66,317
$
66,941
Long-term debt payable to Westlake
399,674
399,674
Other liabilities
1,638
1,656
Total liabilities
467,629
468,271
Common unitholders—publicly and privately
held
476,791
480,643
Common unitholder—Westlake
51,282
53,859
General partner—Westlake
(242,572
)
(242,572
)
Total Westlake Partners partners'
capital
285,501
291,930
Noncontrolling interest in OpCo
582,457
611,778
Total equity
867,958
903,708
Total liabilities and equity
$
1,335,587
$
1,371,979
WESTLAKE CHEMICAL PARTNERS
LP
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June
30,
2023
2022
(In thousands of
dollars)
Cash flows from operating
activities
Net income
$
166,716
$
165,264
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization
53,676
62,291
Net loss on disposition and other
725
6,801
Other balance sheet changes
22,286
(8,689
)
Net cash provided by operating
activities
243,403
225,667
Cash flows from investing
activities
Additions to property, plant and
equipment
(17,169
)
(32,334
)
Investments with Westlake under the
Investment Management Agreement
(164,116
)
(170,000
)
Maturities of investments with Westlake
under the Investment Management Agreement
135,000
147,000
Net cash used for investing activities
(46,285
)
(55,334
)
Cash flows from financing
activities
Proceeds from debt payable to Westlake
98,500
—
Repayment of debt payable to Westlake
(98,500
)
—
Quarterly distributions to noncontrolling
interest retained in OpCo by Westlake
(169,259
)
(135,818
)
Quarterly distributions to unitholders
(33,207
)
(33,203
)
Net cash used for financing activities
(202,466
)
(169,021
)
Net increase (decrease) in cash and cash
equivalents
(5,348
)
1,312
Cash and cash equivalents at beginning of
period
64,782
17,057
Cash and cash equivalents at end of
period
$
59,434
$
18,369
WESTLAKE CHEMICAL PARTNERS
LP
RECONCILIATION OF MLP
DISTRIBUTABLE CASH FLOW TO NET INCOME
AND NET CASH PROVIDED BY
OPERATING ACTIVITIES
(Unaudited)
Three Months Ended March
31,
Three Months Ended June
30,
Six Months Ended June
30,
2023
2023
2022
2023
2022
(In thousands of
dollars)
Net cash provided by operating
activities
$
144,860
$
98,543
$
120,857
$
243,403
$
225,667
Changes in operating assets and
liabilities and other
(53,408
)
(23,279
)
(36,418
)
(76,687
)
(60,403
)
Net income
91,452
75,264
84,439
166,716
165,264
Add:
Depreciation, amortization and disposition
of property, plant and equipment
27,003
27,095
31,469
54,098
65,722
Less:
Contribution to turnaround reserves
(7,306
)
(6,967
)
(7,284
)
(14,273
)
(14,488
)
Maintenance capital expenditures
(8,024
)
(6,521
)
(10,372
)
(14,545
)
(23,825
)
Distributable cash flow attributable to
noncontrolling interest in OpCo
(85,574
)
(73,886
)
(78,668
)
(159,460
)
(153,798
)
MLP distributable cash flow
$
17,551
$
14,985
$
19,584
$
32,536
$
38,875
WESTLAKE CHEMICAL PARTNERS
LP
RECONCILIATION OF EBITDA TO
NET INCOME, INCOME FROM OPERATIONS AND NET CASH
PROVIDED BY OPERATING
ACTIVITIES
(Unaudited)
Three Months Ended March
31,
Three Months Ended June
30,
Six Months Ended June
30,
2023
2023
2022
2023
2022
(In thousands of
dollars)
Net cash provided by operating
activities
$
144,860
$
98,543
$
120,857
$
243,403
$
225,667
Changes in operating assets and
liabilities and other
(53,408
)
(23,279
)
(36,418
)
(76,687
)
(60,403
)
Net income
91,452
75,264
84,439
166,716
165,264
Less:
Other income, net
820
1,061
90
1,881
65
Interest expense—Westlake
(7,315
)
(6,117
)
(2,859
)
(13,432
)
(5,058
)
Provision for income taxes
(212
)
(173
)
(175
)
(385
)
(338
)
Income from operations
98,159
80,493
87,383
178,652
170,595
Add:
Depreciation and amortization
26,636
27,040
31,009
53,676
62,291
Other income, net
820
1,061
90
1,881
65
EBITDA
$
125,615
$
108,594
$
118,482
$
234,209
$
232,951
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230730057663/en/
Contact—(713) 585-2900 Investors—Steve Bender Media—L. Benjamin
Ederington
Westlake Chemical Partners (NYSE:WLKP)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024
Westlake Chemical Partners (NYSE:WLKP)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024