Westlake Chemical Partners(WLKP) - 2025 Q2 - Quarterly Results

Westlake Chemical Partners LP Second Quarter 2025 Earnings Release Financial and Operational Highlights The Partnership reported stable net income but lower cash flow in Q2 2025 due to a major facility turnaround, with results improving sequentially Second Quarter 2025 Performance vs. Prior Periods Q2 2025 net income was flat year-over-year, but cash flow declined significantly due to higher maintenance capital expenditures Q2 2025 vs. Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to Partnership | $14.6 million | $14.4 million | +$0.2 million | | Cash Flows from Operating Activities | $9.1 million | $121.9 million | -$112.8 million | | MLP Distributable Cash Flow | $15.0 million | $17.1 million | -$2.1 million | Q2 2025 vs. Q1 2025 Performance | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Net Income Attributable to Partnership | $14.6 million | $4.9 million* | +$9.7 million | | Cash Flows from Operating Activities | $9.1 million | $45.8 million | -$36.7 million | | MLP Distributable Cash Flow | $15.0 million | $4.7 million | +$10.3 million | Note: Q1 2025 Net Income calculated from Q2 increase ($14.6M - $9.7M) - The year-over-year decrease in MLP distributable cash flow was primarily due to higher maintenance capital expenditures resulting from the Petro 1 turnaround[2] - The sequential increase in net income and MLP distributable cash flow from Q1 2025 was driven by higher production and sales volume as the Petro 1 turnaround had fewer impactful days in Q2[3] Management Commentary and Outlook Management noted significant sequential improvement post-turnaround and expects a strong recovery in cash flow for the second half of 2025 - Financial results improved significantly from Q1 2025 due to higher production and sales volume at the Petro 1 facility after its turnaround[5] - Management expects distributable cash flow and the associated coverage ratio to "solidly improve in the second half of 2025 back towards our strong historical levels"[5] Distributions and Coverage Ratio The Partnership declared its 44th consecutive quarterly distribution, though the trailing twelve-month coverage ratio declined to 0.79x Key Distribution Metrics | Metric | Value | | :--- | :--- | | Quarterly Distribution per Unit | $0.4714 | | Consecutive Quarterly Distributions | 44 | | Trailing 12-Month Coverage Ratio | 0.79x | | Cumulative IPO Coverage Ratio | ~1.05x | - The decline in the trailing twelve-month coverage ratio to 0.79x from 0.82x in Q1 2025 was attributed to the planned Petro 1 turnaround[5] Financial Statements Unaudited consolidated statements show stable Q2 net income year-over-year, but a significant decrease in cash from operations Consolidated Statements of Operations Q2 2025 net sales increased, but higher cost of sales resulted in stable net income attributable to the Partnership Statement of Operations Summary | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total net sales | $297,119 | $284,168 | | Gross profit | $97,532 | $101,232 | | Income from operations | $91,232 | $93,627 | | Net income attributable to Westlake Partners | $14,558 | $14,427 | | Net income per limited partner unit | $0.41 | $0.41 | Condensed Consolidated Balance Sheets Total assets and equity remained stable as of June 30, 2025, while cash and cash equivalents decreased since year-end 2024 Balance Sheet Summary | (In thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $36,579 | $58,316 | | Total current assets | $156,524 | $240,926 | | Total assets | $1,307,187 | $1,287,956 | | Liabilities and Equity | | | | Total liabilities | $476,022 | $458,642 | | Total equity | $831,165 | $829,314 | | Total liabilities and equity | $1,307,187 | $1,287,956 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities for the first half of 2025 was significantly lower than the prior-year period Cash Flow Summary | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $54,852 | $226,461 | | Net cash provided by (used for) investing activities | $49,664 | $(19,951) | | Net cash used for financing activities | $(126,253) | $(199,130) | | Net (decrease) increase in cash | $(21,737) | $7,380 | | Cash and cash equivalents at end of period | $36,579 | $65,999 | Reconciliation of Non-GAAP Financial Measures This section provides reconciliations from GAAP figures to the Partnership's key non-GAAP performance metrics, MLP Distributable Cash Flow and EBITDA Reconciliation of MLP Distributable Cash Flow Q2 2025 MLP distributable cash flow of $15.0 million is reconciled from net income by adjusting for non-cash items and other factors MLP Distributable Cash Flow Reconciliation | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income | $85,795 | $88,026 | | Add: Depreciation, etc. | $32,872 | $29,869 | | Less: Maintenance capital expenditures | $(20,506) | $(9,306) | | Less: Distributable cash flow attributable to noncontrolling interest | $(72,758) | $(82,782) | | MLP distributable cash flow | $15,007 | $17,135 | Reconciliation of EBITDA EBITDA for Q2 2025 was $124.4 million, showing a slight year-over-year increase and a substantial sequential improvement EBITDA Reconciliation | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income | $85,795 | $88,026 | | Interest expense—Westlake | $5,907 | $6,651 | | Provision for income taxes | $205 | $207 | | Depreciation and amortization | $32,484 | $28,315 | | EBITDA | $124,391 | $123,199 | Disclosures and Other Information This section contains standard corporate disclosures, including forward-looking statements, non-GAAP measure definitions, and company information Forward-Looking Statements The company cautions that forward-looking remarks regarding future performance are subject to significant risks and uncertainties - Statements regarding future expectations, such as improved distributable cash flow and coverage ratios, are considered forward-looking and are not guarantees of future performance[7] Use of Non-GAAP Financial Measures The release defines and justifies the use of non-GAAP measures to provide supplemental information for assessing operating performance - The company uses non-GAAP measures like MLP distributable cash flow, coverage ratio, and EBITDA to provide supplemental information on business trends and performance[9] - These measures are used by management and external parties to assess operating performance, ability to service debt, and fund capital expenditures[9] Company Overview Westlake Chemical Partners LP is a limited partnership focused on operating and developing ethylene production facilities - The Partnership was formed by Westlake Corporation to operate, acquire, and develop ethylene production facilities[10] - It owns a 22.8% interest in Westlake Chemical OpCo LP, whose assets include three ethylene production facilities and a pipeline[10] Conference Call Information A conference call to discuss Q2 2025 financial results is scheduled for Tuesday, August 5, 2025, at 1:00 PM Eastern Time - A conference call to discuss Q2 2025 results is scheduled for August 5, 2025, at 1:00 PM Eastern Time[11]