Q1 2024 Westlake Chemical Partners LP Earnings Call Transcript
Key Points
- Westlake Chemical Partners LP reported a stable net income of $15 million for Q1 2024, consistent with Q1 2023, demonstrating financial stability.
- The partnership benefited from higher sales prices for ethylene sold to Westlake under the ethylene sales agreement, contributing to improved earnings.
- Distributable cash flow remained strong at $17 million for the quarter, supporting the 39th consecutive quarterly distribution since the IPO in 2014.
- Westlake Chemical Partners LP maintains a strong balance sheet with a consolidated leverage ratio of approximately 1 time, reflecting conservative financial management.
- The partnership has a predictable fee-based cash flow structure from a take-or-pay contract with Westlake for 95% of OpCo's production, ensuring stable and predictable cash flows.
- First Quarter 2024 net income for Westlake Chemical Partners LP was unchanged compared to first quarter 2023, indicating no growth in net income year-over-year.
- The partnership experienced slightly lower production and sales volumes compared to the previous year, which could impact future earnings if the trend continues.
- Distributable cash flow for Q1 2024 decreased slightly by less than $1 million compared to Q1 2023, due to lower production and sales volumes.
- A planned turnaround at the Petro one ethylene unit in Lake Charles, Louisiana, scheduled for the second half of 2024, is expected to impact distribution coverage ratios temporarily.
- Despite stable financial metrics, the overall global macroeconomic environment remains unpredictable, posing potential risks to future performance.
Good afternoon, and thank you for standing by, and welcome to the Westlake Chemical Partners First Quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded today, May first, 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.
Thank you. Good afternoon, everyone, and welcome to the Westlake Chemical Partners First Quarter 2024 conference call. I am joined today by Albert Chao, our President and CEO; Steve Bender, our Executive Vice President and CFO; and other members of our management team. During this call, we refer to ourselves as Westlake Partners or the Partnership References to Westlake refer to our parent company, Westlake Corporation and references to OpCo refer to Westlake Chemical OpCo LP, a subsidiary of Westlake and the Partnership, which owns certain olefins assets.
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