Westlake Chemical Partners (WLKP) Q1 2025 earnings summary

Executive summary

• Net income attributable to the partnership for Q1 2025 was $4.9 million ($0.14 per unit), down from $14.8 million in Q1 2024, primarily due to the planned Petro 1 turnaround, which reduced production and sales volume and increased maintenance capital expenditures.

• Consolidated net income, including OpCo's earnings, was $42.3 million on consolidated net sales of $237.6 million for Q1 2025, down from $89.6 million on $284.7 million in Q1 2024.

• EBITDA for Q1 2025 was $75.0 million, compared to $124.4 million in Q1 2024.

• The business model's stability is underpinned by a fixed margin Ethylene Sales Agreement, providing predictable, fee-based cash flows and minimizing market volatility.

• The partnership has delivered 43 consecutive quarterly distributions since its IPO in 2014, with no reductions.

Financial highlights

• Net sales for Q1 2025 were $237.6 million, down from $284.7 million in Q1 2024, mainly due to lower ethylene and co-products sales volumes.

• Gross profit for Q1 2025 was $54.1 million (22.8% margin), down from $102.2 million (35.9% margin) in Q1 2024, impacted by higher ethane and natural gas costs.

• Distributable cash flow for Q1 2025 was $4.7 million, or $0.13 per unit, down $12.2 million year-over-year due to lower production and higher maintenance capital expenditures.

• Cash flows from operating activities were $45.8 million, a decrease of $58.8 million year-over-year.

• Long-term debt at quarter-end was $399.7 million, all variable rate and owed to Westlake, with a weighted average interest rate of 6.2%.

Outlook and guidance

• No further planned turnarounds are scheduled for 2025 or 2026, with the Petro 1 unit having restarted in April and ramping up to meet demand.

• Distributable cash flow and coverage ratio are expected to return to historical levels in coming quarters.

• Management remains focused on long-term value and distribution growth through organic and inorganic opportunities.

• Management expects to continue distributing most excess cash generated from operations and to fund capital expenditures primarily from external sources if needed.

• The Ethylene Sales Agreement is expected to continue providing stable, predictable cash flows despite global trade tensions and market volatility.