Q3 2024 Delek Logistics Partners LP Earnings Call Transcript
Key Points
- Delek Logistics Partners LP (DKL) reported a record quarterly adjusted EBITDA of approximately $107 million, indicating strong financial performance.
- The company successfully completed several important transactions, including the acquisition of a portion in the Wink to Webster pipeline, enhancing asset quality and positioning in the Permian Basin.
- DKL increased its quarterly distribution to $1.10 per unit, reflecting confidence in future cash flows and commitment to returning value to unit holders.
- The integration of H2 Midstream is complete, providing bundling sales opportunities and enhancing customer discussions.
- DKL has a strong liquidity position with approximately $780 million available post-recent equity offering, supporting future growth initiatives.
- Wholesale marketing and terminaling adjusted EBITDA decreased to $24.7 million from $28.1 million in the prior year, primarily due to lower wholesale margins.
- The distributable cash flow coverage ratio was approximately 1.1 times, below the long-term objective of 1.3 times, indicating potential pressure on cash flow coverage.
- Midwin volumes saw a decline this quarter, attributed to project timing and consolidation in the GP landscape, which could impact future throughput.
- Capital expenditures for the third quarter were significant at $65.2 million, with a large portion allocated to the new gas processing plant, indicating high ongoing investment requirements.
- The company is managing leverage as it enters a core spending period, which could impact financial flexibility if not carefully balanced.
Thank you for standing by. my name is Jay and I will be your conference operator today. At this time. I would like to welcome everyone to the DKL's third quarter earning's call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Well, I let's turn the conference over to Robert Wright, Deputy Chief Financial Officer. You may begin.
Good morning and welcome to the Delek Logistics Partners third quarter earnings conference call participants. Joining me on today's call will include Avigal Soreq President, Joseph Israel, EVP Operations, Reuven Spiegel EVP and Chief Financial Officer and Odely Sakazi SVP Delic Logistics. As a reminder, this conference call will contain forward-looking statements as final
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