Westlake Chemical Partners (WLKP) Q2 2024 earnings summary

Executive summary

• Net income attributable to the partnership for Q2 2024 was $14.4 million, up $2.5 million year-over-year, driven by higher production, sales volumes, and improved third-party ethylene sales prices and margins.

• Consolidated net income, including OpCo, was $88 million on consolidated net sales of $284.2 million for Q2 2024, up from $75.3 million and $264.2 million in Q2 2023.

• EBITDA for Q2 2024 was $123.2 million, up from $108.6 million in Q2 2023; MLP distributable cash flow rose to $17.1 million.

• Achieved 40th consecutive quarterly distribution since IPO, with no reductions and a 71% increase from the original minimum quarterly distribution.

• New President and CEO, Jean-Marc Gilson, appointed, emphasizing continuity in strategy and focus on stable, predictable cash flows and distributions.

Financial highlights

• Q2 2024 net sales increased to $284.2 million, mainly due to higher sales volumes and improved third-party prices, offset by lower prices to Westlake.

• Gross profit for Q2 2024 was $101.2 million (35.6% margin), up from $87.7 million (33.2%) in Q2 2023, primarily due to lower ethane feedstock costs.

• Net income per limited partner unit was $0.41 for Q2 2024, up from $0.34 in Q2 2023.

• Distributable cash flow for Q2 2024 was $17.1 million, or $0.49 per unit, up $2 million year-over-year.

• Consolidated cash balances and investments totaled $160 million at quarter-end; long-term debt was $400 million.

Outlook and guidance

• Planned maintenance turnaround at the Petro 1 ethylene unit scheduled for late Q3 2024, expected to temporarily impact earnings and cash flows.

• Cost of turnaround fully reserved and funded; similar temporary impact to prior planned turnarounds.

• Improved outlook for third-party ethylene sales prices and margins for the second half of 2024.

• Management continues to focus on safe operations and sustainability efforts.

• Ethylene sales agreement with Westlake continues to provide stable and predictable cash flows.