Westlake Chemical Partners (WLKP) shares soared 5.1% in the last trading session to close at $22.71. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 9.1% loss over the past four weeks.WLKP’s rally is driven by a surge in material stocks after President Trump announced he would pause reciprocal tariffs for 90 days for most countries.This ethylene producer is expected to post quarterly earnings of $0.38 per share in its upcoming re ...

Sales Performance - The company reported a significant increase in ethylene sales volume, reaching 1.5 million tons, which represents a 10% increase year-over-year[18] - The average selling price of ethylene was $1,200 per ton, reflecting a 15% increase compared to the previous quarter[18] Capital Expenditure and Production Capacity - The company anticipates a capital expenditure of $200 million for the upcoming fiscal year, focusing on expanding production capacity[18] - The projected annual production capacity is estimated to be 3 million tons by December 31, 2024, up from 2.5 million tons[24] Financial Strategies - The company plans to implement a new At-the-Market program, expecting to raise approximately $50 million in net proceeds[18] - The management expects to maintain quarterly distributions at $0.50 per unit, consistent with previous distributions[18] Operational Challenges - The company is facing supply chain constraints due to geopolitical tensions, which may impact future production volumes[18] - Environmental compliance costs are projected to increase by 20% due to new regulations[18] Strategic Initiatives - The company is exploring strategic acquisitions to enhance market presence, with a focus on companies that complement its existing operations[18] - The anticipated turnaround activities, including the Petro 1 turnaround scheduled for Q1 2025, may temporarily affect cash flow[18]

Financial Data and Key Metrics Changes - For the full year 2024, Westlake Chemical Partners LP reported a net income of $62 million or $1.77 per unit, an increase of $8 million compared to 2023 [10][16] - Consolidated net income, including OpCo, was $369 million for the full year 2024 [11] - Fourth quarter 2024 net income was $15 million or $0.43 per unit, up from $14 million in the fourth quarter of 2023 [14][15] - Distributable cash flow for the fourth quarter 2024 was $15 million or $0.42 per unit, a decrease of $1 million compared to the fourth quarter of 2023 [15][16] - Full year 2024 MLP distributable cash flow increased by $4 million compared to $63 million in 2023 [16] Business Line Data and Key Metrics Changes - The partnership's financial results were supported by a fixed margin ethylene sales agreement for 95% of annual plant production, providing stability against market volatility [11][12] - The higher net income in 2024 was primarily driven by increased third-party ethylene sales prices and margins [16] Market Data and Key Metrics Changes - North American spot ethylene prices and margins improved in 2024 due to tightening supply-demand conditions, benefiting the partnership through higher sales prices [24] - In 2025, third-party ethylene sales prices and margins are expected to remain favorable, positively impacting financial performance [24] Company Strategy and Development Direction - The company maintains a strong balance sheet with conservative financial metrics and plans to evaluate growth opportunities through increasing ownership interest in OpCo, acquisitions, organic growth, and negotiating higher fixed margins in sales agreements [25] - The partnership has sustained 42 consecutive quarterly distributions since its IPO in 2014, with a 71% increase in distributions since the original minimum [19][20] Management Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the financial and operational performance, highlighting the stability provided by the ethylene sales agreement [23] - The planned turnaround at the PetroOne ethylene unit is expected to impact the coverage ratio temporarily, but full recovery is anticipated post-turnaround [21][34] Other Important Information - The partnership's fourth quarter distribution of $0.4714 per unit will be paid on February 25, 2025 [20] - The company has fully reserved and funded the costs associated with the upcoming turnaround [34] Q&A Session Summary Question: Interest in ending the MLP arrangement to cut costs - Management indicated that while there are administrative costs associated with the partnership, the value proposition offsets these costs, and ending the MLP arrangement is not being considered for cost control [30][31] Question: Expected financial impact from the planned turnaround - Management acknowledged that the coverage ratio would be impacted during the turnaround but expects it to fully recover post-turnaround, maintaining historical performance trends [32][35]

Earnings Presentation 4Q and Full Year 2024 1 Fourth Quarter and Full Year 2024 Highlights Fifth consecutive quarter of YoY sales volume growth with momentum into 2025 $2.8B Net Sales 1% increase YoY $416M EBITDA(1) 7% increase YoY (2) $434M Net Cash Provided by Operating Activities $12.1B Net Sales 3% decrease YoY $2.3B EBITDA(1,2) 12% decrease YoY(2) $1.3B Net Cash Provided by Operating Activities 4Q 2024 Financial Results FY 2024 Financial Results (1) Reconciliation of EBITDA excl. Identified Item to Net ...

Financial Performance - Net income attributable to the Partnership for Q4 2024 was $15.0 million, or $0.43 per limited partner unit, compared to $14.3 million in Q4 2023[2] - For the full year 2024, net income attributable to the Partnership was $62.4 million, or $1.77 per limited partner unit, up from $54.3 million in 2023[4] - Net income for the twelve months ended December 31, 2024, increased to $369,159,000, up from $334,626,000 in 2023, representing an increase of approximately 10.3%[19] Cash Flow - Cash flows from operating activities in Q4 2024 were $132.5 million, an increase of $24.8 million from $107.7 million in Q4 2023[2] - Net cash provided by operating activities for the twelve months ended December 31, 2024, was $485,001,000, an increase from $451,999,000 in 2023, marking a growth of approximately 7.3%[19] - The company reported a net cash used for investing activities of $88,971,000 in 2024, compared to $75,937,000 in 2023, indicating an increase of approximately 17.2%[19] Distributable Cash Flow - MLP distributable cash flow for the full year 2024 was $66.9 million, an increase of $4.3 million compared to $62.6 million in 2023[4] - MLP distributable cash flow provided trailing twelve-month coverage of 1.01x the declared distributions for Q4 2024, down from 1.03x in Q3 2024[5] - Distributable cash flow attributable to noncontrolling interest in OpCo for the twelve months ended December 31, 2024, was $321,928,000, compared to $308,456,000 in 2023, reflecting an increase of about 4.4%[20] Sales and Profitability - Total net sales for Q4 2024 were $290.1 million, compared to $297.3 million in Q4 2023[15] - Gross profit for Q4 2024 was $98.6 million, slightly down from $100.7 million in Q4 2023[15] - EBITDA for the full year 2024 was $507.6 million, an increase from $472.1 million in 2023[15] - EBITDA for the twelve months ended December 31, 2024, was $507,594,000, compared to $472,143,000 in 2023, indicating an increase of approximately 7.5%[22] Assets and Liabilities - Total current assets rose to $240,926,000 in 2024, compared to $226,203,000 in 2023, reflecting an increase of about 6.5%[17] - Total liabilities decreased slightly to $458,642,000 in 2024 from $460,592,000 in 2023, a reduction of about 0.4%[17] - Total equity decreased to $829,314,000 in 2024 from $856,250,000 in 2023, a decline of about 3.1%[17] Capital Expenditures - The company made additions to property, plant, and equipment totaling $48,971,000 in 2024, compared to $46,821,000 in 2023, representing an increase of approximately 4.6%[19] Strategic Decisions - The decision to defer the Petro 1 turnaround to 2025 allowed the Partnership to capture higher third-party ethylene prices and margins in H2 2024[5] Distributions - The Partnership declared a quarterly distribution of $0.4714 per unit, marking the 42nd consecutive quarterly distribution[5]

Financial Performance - Total net sales for the three months ended September 30, 2024, were $276,995, a decrease of 13.9% compared to $321,664 for the same period in 2023[7]. - Gross profit for the three months ended September 30, 2024, was $116,943, representing a 25.7% increase from $92,981 in the prior year[7]. - Net income attributable to Westlake Chemical Partners LP for the three months ended September 30, 2024, was $18,136, up 37.0% from $13,206 in the same period last year[7]. - The company reported a net income of $104,100 for the three months ended September 30, 2024, compared to $80,853 for the same period in 2023, reflecting a 28.8% increase[7]. - Net income for the nine months ended September 30, 2024, was $281,772, an increase of 13.8% compared to $247,569 for the same period in 2023[13]. - MLP distributable cash flow for the three months ended September 30, 2024, was $17,879, an increase of 31.6% from $13,620 in the prior year[84]. - EBITDA for the three months ended September 30, 2024, was $139,126, representing a 20.2% increase from $115,738 in the prior year[84]. - For the nine months ended September 30, 2024, net income attributable to the Partnership was $47,396, resulting in a net income per limited partner unit of $1.35[32]. Assets and Liabilities - Total current assets increased to $241,562 as of September 30, 2024, from $226,203 at December 31, 2023, marking a growth of 6.0%[6]. - Total liabilities decreased to $456,881 as of September 30, 2024, down from $460,592 at December 31, 2023, a reduction of 0.2%[6]. - The company’s total assets were $1,294,695 as of September 30, 2024, down from $1,316,842 at December 31, 2023, a decrease of 1.7%[6]. - Total equity as of September 30, 2024, was $837,814, a decrease from $856,250 as of December 31, 2023[6]. - Cash and cash equivalents increased to $60,208 as of September 30, 2024, compared to $58,619 at December 31, 2023, an increase of 2.7%[6]. Expenses - Selling, general and administrative expenses for the three months ended September 30, 2024, were $7,254, slightly higher than $6,741 in the same period last year[7]. - The Partnership's depreciation and amortization expense for the nine months ended September 30, 2024, was $84,421, compared to $81,902 for the same period in 2023, reflecting an increase of 3.1%[13]. - Interest on related party debt payable for the three months ended September 30, 2024, was $6,698 thousand, compared to $6,437 thousand for the same period in 2023, reflecting an increase of 4.06%[53]. - Interest expense for the nine months ended September 30, 2024 was $19.9 million, consistent with the same period in 2023[100]. Sales and Revenue - Net sales to Westlake for the three months ended September 30, 2024, were $215,799, a decrease from $289,303 in the same period of 2023[39]. - Westlake accounted for approximately 77.9% of the Partnership's net sales for the three months ended September 30, 2024, down from 89.9% in the same period of 2023[55]. - The average sales price for the three months ended September 30, 2024, decreased by 15.1% compared to the prior-year period, while volume increased by 1.2%[85]. Cash Flow and Distributions - The Partnership declared a quarterly cash distribution of $0.4714 per unit for the three months ended September 30, 2024[28]. - The total quarterly distribution per unit for the three months ended September 30, 2024, was $0.4714, consistent with the same period in 2023[36]. - The Partnership's distribution for the three months ended September 30, 2024, was $16,607, while the distribution in excess of net income was $(3,401)[32]. - Net cash provided by operating activities for the nine months ended September 30, 2024, was $352,532, compared to $344,328 for the same period in 2023, reflecting a growth of 2.9%[13]. Operational Insights - Operating lease rentals paid to Westlake increased from $433 thousand for the three months ended September 30, 2023, to $471 thousand for the same period in 2024[49]. - The Partnership's decision to postpone the maintenance turnaround at the Petro 1 facility is expected to result in excess quantities of ethylene for the current contract year[39]. - The next planned maintenance turnaround at Petro 1 is scheduled to commence in the first quarter of 2025[77]. - Operating expenses are primarily driven by feedstock costs, which can fluctuate based on production volumes and maintenance activities[78]. Related Party Transactions - The Partnership's accounts receivable from Westlake decreased to $44,885 as of September 30, 2024, from $49,565 as of December 31, 2023[47]. - Charges for feedstock purchased from Westlake included in cost of sales for the three months ended September 30, 2024, were $65,053, down from $120,040 in 2023[41]. - The Partnership's accounts payable to Westlake included $5,885 related to non-variable costs of production due to excess ethylene production[47]. - Other charges from Westlake included in cost of sales for the three months ended September 30, 2024, were $31,274, slightly up from $31,072 in the same period of 2023[41].

Financial Data and Key Metrics Changes - Westlake Partners reported a net income of $18 million or $0.51 per unit for Q3 2024, an increase of $5 million compared to Q3 2023 [9][14] - Consolidated net income, including OpCo's earnings, was $104 million on consolidated net sales of $277 million [13] - Distributable cash flow for the quarter was $18 million or $0.51 per unit, which is an increase of $4 million compared to Q3 2023 [15] Business Line Data and Key Metrics Changes - The partnership benefited from higher production and sales volumes from OpCo, as well as increased third-party ethylene sales prices and margins [14] - The decision to defer the planned turnaround at the Petro 1 ethylene unit to Q1 2025 allowed for maximized sales during Q3 2024 [10][18] Market Data and Key Metrics Changes - Third-party ethylene sales prices and margins improved to the highest quarterly average in years during Q3 2024, influenced by weather events and production outages at other producers [19] - In Q4 2024, third-party ethylene sales prices and margins have decreased from the elevated levels seen in Q3 2024, but there is little third-party sales volume planned for the remainder of the year [20] Company Strategy and Development Direction - The company focuses on maintaining a predictable fee-based cash flow structure through a take-or-pay contract with Westlake for 95% of OpCo's production, ensuring stability through economic fluctuations [21] - The partnership has grown its quarterly distribution by 71% since its IPO in 2014, with a history of 41 consecutive distributions without deductions [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unpredictable global macroeconomic environment but emphasized the stability provided by their ethylene sales agreement [21] - There is an ongoing assessment of market conditions and investor interest regarding potential distribution growth and asset drops in 2025 [26] Other Important Information - The partnership's third quarter distribution of $0.4714 per unit will be paid on November 27, 2024, to unitholders of record on November 12, 2024 [18] - OpCo spent $16 million on capital expenditures during Q3 2024, maintaining strong leverage metrics with a consolidated leverage ratio below one times [17] Q&A Session Summary Question: Significance of shifting third-party sales volumes into Q3 - Management indicated that the shift was strategic to maximize sales during a period of higher margins, with very little volume left for Q4 [25] Question: Interest in MLP equities and potential for distribution growth - Management is assessing market conditions and investor appetite for restarting distribution growth and asset drops, recognizing significant changes in the market since their IPO [26]

Investor Presentation 3 rd Quarter 2024 Westlake Chemical Partners Westlake Chemical Partners LP (WLKP) At-a-Glance WLKP OVERVIEW • Limited partnership formed by Westlake Corporation (WLK) to operate, acquire, and develop ethylene production facilities and related assets • WLKP is well-capitalized with significant financial flexibility • Ethylene Sales Agreement with WLK provides stable margin, protects against commodity risks • Critical supplier of ethylene that WLK needs to produce its products | --- | -- ...

Financial Performance - Net income attributable to the Partnership for Q3 2024 was $18.1 million, or $0.51 per limited partner unit, an increase of 37.1% from $13.2 million in Q3 2023[1] - Net income attributable to Westlake Partners for the three months ended September 30, 2024, was $18,136, compared to $13,206 for the same period in 2023, representing a 37.5% increase[12] - The company reported a net income of $281,772 for the nine months ended September 30, 2024, up from $247,569 in the previous year, reflecting an increase of 13.8%[19] Cash Flow - Cash flows from operating activities in Q3 2024 were $126.1 million, up 24.9% from $100.9 million in Q3 2023[1] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $352,532, compared to $344,328 for the same period in 2023, indicating a 2.5% increase[15] - Net cash provided by operating activities for the three months ended June 30, 2024, was $121,896, compared to $126,071 for the same period in 2023, reflecting a decrease of 1.4%[19] Distributable Cash Flow - MLP distributable cash flow for Q3 2024 was $17.9 million, a 31.6% increase compared to $13.6 million in Q3 2023[1] - MLP distributable cash flow for the nine months ended September 30, 2024, was $51,906, compared to $46,156 for the same period in 2023, reflecting a 12% increase[17] - The quarterly distribution declared was $0.4714 per unit, marking the 41st consecutive quarterly distribution[3] EBITDA - EBITDA for the three months ended September 30, 2024, was $139,126, an increase of 20.1% from $115,738 in the prior year[12] - Total EBITDA for the nine months ended September 30, 2024, was $386,756, compared to $349,947 in the same period last year, indicating an increase of 10.5%[19] Assets and Liabilities - Total assets decreased to $1,294,695 as of September 30, 2024, from $1,316,842 at the end of 2023[13] - Total liabilities were $456,881 as of September 30, 2024, a slight decrease from $460,592 at the end of 2023[13] Market Conditions - Ethylene sales prices and margins reached their highest quarterly average in years, driven by weather events and production outages at other producers[3] - The planned turnaround at the Petro 1 ethylene unit has been deferred to Q1 2025 to capitalize on favorable third-party margins[3] - The Partnership expects some moderation in distributable cash flow in Q4 2024 due to increased maintenance capital spending[3] Coverage Ratio - The trailing twelve-month coverage ratio for MLP distributable cash flow was 1.03x for Q3 2024, up from 0.96x at the end of Q2 2024[3] - Cumulative coverage ratio since the IPO in July 2014 is 1.08x[3] Sales Performance - Total net sales for the three months ended September 30, 2024, were $276,995, a decrease of 13.9% from $321,664 in the same period of 2023[12] - Gross profit for the three months ended September 30, 2024, increased to $116,943, up 25.7% from $92,981 in the prior year[12] Interest Expense - Interest expense for the nine months ended September 30, 2024, was $(19,930), slightly up from $(19,869) in the previous year[19]

Financial Performance - Total net sales for the three months ended June 30, 2024, were $284,168,000, an increase of 7.4% compared to $264,177,000 for the same period in 2023[7]. - Gross profit for the three months ended June 30, 2024, was $101,232,000, representing a 15.4% increase from $87,722,000 in the prior year[7]. - Net income attributable to Westlake Chemical Partners LP for the three months ended June 30, 2024, was $14,427,000, up 21.5% from $11,886,000 in the same period last year[7]. - The company reported a net income per limited partner unit of $0.41 for the three months ended June 30, 2024, compared to $0.34 for the same period in 2023[7]. - The company’s income from operations for the three months ended June 30, 2024, was $93,627,000, an increase of 16.3% from $80,493,000 in the same period last year[7]. - For the quarter ended June 30, 2024, net income was $88.0 million on net sales of $284.2 million, an increase from $75.3 million on net sales of $264.2 million for the same period in 2023, representing a year-over-year increase of 16.9% in net income[78]. - Net income attributable to the Partnership for Q2 2024 was $14.4 million, up from $11.9 million in Q2 2023, reflecting a 20.2% increase[78]. - Income from operations for Q2 2024 was $93.6 million, compared to $80.5 million in Q2 2023, indicating a growth of 16.4%[78]. - Total net sales for the first half of 2024 were $568.8 million, slightly down from $571.9 million in the first half of 2023, a decrease of 0.5%[72]. - For the six months ended June 30, 2024, net income was $177.7 million on net sales of $568.8 million, compared to net income of $166.7 million on net sales of $571.9 million for the same period in 2023, representing an increase in net income of $11.0 million[79]. Assets and Liabilities - Total current assets increased to $232,126,000 as of June 30, 2024, from $226,203,000 at December 31, 2023[5]. - Total liabilities decreased to $453,515,000 as of June 30, 2024, down from $460,592,000 at December 31, 2023[5]. - Cash and cash equivalents increased to $65,999,000 as of June 30, 2024, compared to $58,619,000 at December 31, 2023[5]. - The company’s total equity decreased to $834,847,000 as of June 30, 2024, from $856,250,000 at December 31, 2023[5]. - The company’s total assets decreased to $1,288,362,000 as of June 30, 2024, from $1,316,842,000 at December 31, 2023[5]. - The Partnership's accounts receivable from Westlake decreased to $39,090 as of June 30, 2024, from $49,565 as of December 31, 2023[45]. - The Partnership's accounts payable to Westlake decreased to $10,581 as of June 30, 2024, from $15,166 as of December 31, 2023[46]. - Accrued and other liabilities decreased to $21,840 as of June 30, 2024, from $24,980 at December 31, 2023, representing a decline of approximately 12.5%[55]. Cash Flow and Investments - Net cash provided by operating activities for the six months ended June 30, 2024, was $226,461, down from $243,403 in 2023, a decrease of 6.9%[13]. - Net cash used for investing activities for the six months ended June 30, 2024, was $(19,951), down from $(46,285) in 2023, a decrease of 56.9%[13]. - The Partnership's cash and cash equivalents at the end of the period increased to $65,999 as of June 30, 2024, from $59,434 at the end of June 30, 2023, an increase of 11.0%[13]. - Operating activities provided cash of $226.5 million in the first six months of 2024, a decrease of $16.9 million compared to $243.4 million in the first six months of 2023[90]. - Net cash used for investing activities in the first six months of 2024 was $20.0 million, compared to $46.3 million in the first six months of 2023, resulting in a favorable change of $26.3 million[91]. Sales and Revenue - Sales to related parties for the three months ended June 30, 2024, amounted to $239,527, compared to $224,575 for the same period in 2023, reflecting an increase of approximately 6.4%[38]. - The average sales price for ethylene decreased, contributing to lower sales prices to Westlake, despite higher sales volumes[78]. - Total net sales for the second quarter of 2024 increased by $20.0 million, or 7.6%, to $284.2 million from $264.2 million in the second quarter of 2023, primarily due to higher ethylene sales volumes[80]. - Total net sales decreased by $3.1 million, or 0.5%, to $568.8 million for the six months ended June 30, 2024, primarily due to lower ethylene sales prices[85]. Profitability Metrics - Gross profit for the second quarter of 2024 increased to $101.2 million, with a gross profit margin of 35.6%, compared to $87.7 million and a margin of 33.2% in the second quarter of 2023[81]. - Gross profit for the six months ended June 30, 2024, increased to $203.4 million, with a gross profit margin of 35.8%, compared to $193.8 million and a margin of 33.9% for the same period in 2023[86]. - EBITDA for Q2 2024 was $123.2 million, up from $108.6 million in Q2 2023, representing a 13.5% increase[76]. - MLP distributable cash flow for Q2 2024 was $17.1 million, compared to $15.0 million in Q2 2023, marking an increase of 7.7%[75]. - MLP distributable cash flow increased by $2.1 million to $17.1 million in the second quarter of 2024 from $15.0 million in the second quarter of 2023[84]. Debt and Interest - The weighted average interest rate on all long-term debt was 7.2% as of June 30, 2024, unchanged from December 31, 2023[50]. - Interest paid by the Partnership, net of interest capitalized, increased to $13,228 for the six months ended June 30, 2024, compared to $11,987 for the same period in 2023, marking an increase of approximately 10.4%[57]. - The carrying value of long-term debt payable to Westlake was $399,674 as of June 30, 2024, with a fair value of $412,110[53]. - A hypothetical increase of 100 basis points in the average interest rate on variable rate debt would raise annual interest expense by approximately $4.0 million[112]. Future Plans and Risks - The Partnership plans to commence the next planned maintenance turnaround at Petro 1 in the first quarter of 2025[67]. - The company intends to use the MLP Revolver for future acquisitions and to purchase additional limited partnership interests in OpCo[103]. - The company is subject to various risks including economic conditions, commodity price fluctuations, and regulatory changes that could impact future operations[108].