Financial Data and Key Metrics Changes - Adjusted EBITDA for FY 2025 decreased by 14% to R52 billion, reflecting a challenging macroeconomic environment [16][32] - Free cash flow improved by more than 70% compared to the prior year, reaching almost ZAR 12.6 billion, driven by disciplined capital spending and lower tax payments [35][36] - Net debt was reduced to $3.7 billion, achieving the target of staying under $4 billion, marking the lowest level since 2016 [12][33] Business Line Data and Key Metrics Changes - In the South African business, adjusted EBITDA increased by 15% in mining and 35% in gas, while fuels declined by 38% due to lower refining margins and production volumes [38] - International chemicals saw adjusted EBITDA increase to $411 million, with an improved margin from 6% to 9% [23][39] - The Southern Africa value chain's breakeven price ended at $59 per barrel, supported by disciplined cost management [12][34] Market Data and Key Metrics Changes - The macroeconomic environment was highly volatile, influenced by global tariffs and geopolitical tensions, impacting various business segments differently [34] - The chemical segments benefited from stronger U.S. ethylene margins and a 5% uplift in the overall chemicals basket price [34] Company Strategy and Development Direction - The company is focused on strengthening its foundation, growing, and transforming the business, with a particular emphasis on emission reduction and renewable energy [10][46] - Strategic initiatives include optimizing asset utilization, improving profitability through market focus, and cost efficiency [23][24] - The company aims to achieve a 30% reduction in greenhouse gas emissions by 2030, with significant progress in renewable energy projects [48][51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the operating environment but expressed confidence in the execution of strategic plans [10][30] - The company is committed to improving cash generation and accelerating deleveraging while focusing on safety and customer-centric solutions [28][30] Other Important Information - The company invested R600 million in social programs and contributed R44 billion in direct and indirect taxes globally [26][27] - Recent executive leadership changes were announced, with new appointments aimed at addressing both short and long-term goals [21][22] Q&A Session Summary Question: CapEx savings and future guidance - Management explained that CapEx came in below guidance due to a rigorous approach, deferring low-risk activities to the following year, and optimizing capital spending [56][64] Question: Gas volumes and impairment calculations - Management clarified that while gas volumes from Mozambique are expected to increase, the impairment was due to changes in the WACC rate linked to country risk [58][67] Question: Outlook for chemical prices - Management indicated that the chemical basket prices are expected to remain resilient, with ongoing efforts to optimize the commercial strategy [88][96] Question: Debt reduction strategy - The company plans to prioritize deleveraging by using excess cash to reduce gross debt and improve net debt position, targeting a net debt of $3 billion by FY 2027-2028 [91][96]

A c t i o n | Asia Chemicals Industry Restructuring Taking Shape – Korea vs. China CITI'S TAKE 20 Aug 2025 17:04:41 ET │ 22 pages Reuters reported (20 Aug, link) that 10 Korean chem companies agreed to reduce naphtha cracking (NCC) capacity by ~2.7-3.7mt, representing ~21- 29% of 12.8mt total. The government expects companies to submit a plan to implement the cuts by end-2025. While the exact closures have yet to be determined, we expect this could raise industry utilisation to ~95-100% (current: ~75%; Figu ...

Financial Data and Key Metrics Changes - In Q2 2025, the company generated revenues of $130 million, a decrease of 12% compared to the same period last year, primarily due to customers halting new business and canceling committed fixtures [5][6] - EBITDA for the quarter was $72 million, with adjusted EBITDA of $60 million after excluding a $12 million book gain from the sale of Navigator Venus, indicating resilience in the business [5][12] - Earnings per share was €0.31, and the company maintained a strong cash position of $287 million at the end of the quarter [6][16] Business Line Data and Key Metrics Changes - Average Time Charter Equivalent (TCE) rates were $28,216 per day, lower than the approximately $30,000 achieved in previous quarters, with utilization at 84%, also down from prior quarters [7][14] - The ethylene spot fleet was most affected, while the semi-refrigerated fleet performed better [8][12] - Throughput at the joint venture ethylene export terminal rebounded to 268,000 tonnes for the quarter, more than three times Q1 but still below full capacity [8][45] Market Data and Key Metrics Changes - The Handysize ethylene twelve-month time charter rate remained steady at around $36,000 per day, while semi-refrigerated rates dipped to about $30,000 per day, and fully refrigerated rates fell to $25,000 per day [25] - LPG exports from Iraq to Asia increased, contributing positively to the company's performance despite geopolitical challenges [10][28] - July utilization rates improved to 90%, indicating a return to more normal trading conditions [29] Company Strategy and Development Direction - The company is focusing on fleet renewal by selling older vessels and acquiring modern tonnage, with plans to sell additional older vessels in the future [9][50] - The strategic emphasis is on diversifying the fleet to mitigate risks associated with market volatility, particularly in the petrochemical and LPG sectors [26][28] - The company aims to strengthen its position in the ammonia supply chain through new vessel orders and associated time charter contracts [8][50] Management's Comments on Operating Environment and Future Outlook - Management noted that the geopolitical backdrop in Q2 was challenging but expressed optimism for Q3, expecting a return to previous operational levels [4][57] - The company anticipates continued growth in U.S. export infrastructure, which will support demand for the products transported [57] - Management highlighted the importance of a diversified customer base and operational efficiency in navigating geopolitical uncertainties [10][11] Other Important Information - The company completed a $50 million share repurchase program, buying back 3.4 million shares at an attractive price [6][41] - The balance sheet remains strong, with significant liquidity and a focus on returning capital to shareholders [17][20] - The company was included in the Russell 2000 and Russell 3000 indices, enhancing its trading liquidity and shareholder base [46][48] Q&A Session Summary Question: Outlook for Q3 and normalization of business - Management indicated that Q3 is expected to return to levels seen before Q2 disruptions, with utilization rates already improving [61][65] Question: Terminal contracts and capacity - Management refrained from disclosing specific details about contracted capacity but confirmed ongoing discussions with potential customers for additional long-term contracts [67][68] Question: Impact of tariffs and trade deals - Management expressed optimism that recent trade deals would provide clarity and stability for U.S. commodity exports, positively impacting business [85][87] Question: Financing for new builds and IMO regulations - Management is exploring various financing options for new builds and aims to secure favorable terms, while also considering the implications of new environmental regulations [88][92]

Core Viewpoint - Energy Transfer reported solid second-quarter results, with strong midstream operations despite some headwinds, indicating potential for future growth [1][15]. Financial Performance - The company generated nearly $3.9 billion in adjusted EBITDA, a 3% increase year-over-year [3]. - Distributable cash flow (DCF) decreased by 4% to nearly $2 billion, reflecting a slowdown compared to last year's growth rates of 13% in EBITDA and 10% in DCF [3]. Segment Performance - The interstate transportation and storage segments, along with midstream operations, contributed positively to earnings, while crude oil, NGL, and intrastate segments faced challenges due to lower commodity prices and higher expenses [6]. - New partnership records were set in midstream volumes, crude oil transportation (up 9%), NGL transportation (up 4%), and NGL exports (up 5%) [11]. Future Outlook - The company anticipates adjusted EBITDA to be at or slightly below the lower end of its 2025 guidance range of $16.1 billion to $16.5 billion, implying about 4% growth from last year [8]. - Several expansion projects, including the Lenorah II and Badger processing plants, are expected to provide incremental earnings in the coming quarters [9]. - Additional projects planned for 2026 and beyond, such as the Mustang Draw gas processing plant and the Hugh Brinson gas pipeline, are expected to enhance earnings growth momentum [10]. Expansion Projects - Energy Transfer has secured new expansion projects that extend its growth outlook through the end of the decade, including the Hugh Brinson Phase II and the $5.3 billion Transwestern Pipeline [12]. - Proposed projects like the Lake Charles LNG export terminal and the CloudBurst AI data center gas supply project are under development, which could further enhance long-term growth [13]. Strategic Acquisitions - The company has financial flexibility to pursue strategic acquisitions, which could bolster its growth profile [14].

Financial Data and Key Metrics Changes - Westlake Partners reported a net income of $15 million or $0.41 per unit for Q2 2025, which is consistent with Q2 2024 net income [6][8] - Consolidated net income, including OpCo's earnings, was $86 million, benefiting from a $14 million protection from the ethylene sales agreement [7][8] - Distributable cash flow decreased to $15 million or $0.43 per unit, down by $2 million compared to 2024 due to higher maintenance capital expenditures [8][9] - The partnership maintained a strong cash balance of $81 million and a long-term debt of $400 million, with a consolidated leverage ratio of approximately one time [9][10] Business Line Data and Key Metrics Changes - The stability of cash flow is attributed to the fixed margin ethylene sales agreement, which minimizes market volatility and production risks [6][12] - The successful completion of the PetroR1 turnaround positions the partnership for solid earnings and cash flows in the future [11][12] Market Data and Key Metrics Changes - Global industrial and manufacturing activity has been soft in 2025, impacting the global chemical industry [11] - The ethylene sales agreement provides a predictable fee-based cash flow structure, insulating the partnership from market fluctuations [12] Company Strategy and Development Direction - The company plans to evaluate growth opportunities through four levers: increasing ownership interest in OpCo, acquiring other qualified income streams, organic growth through facility expansions, and negotiating higher fixed margins in the ethylene sales agreement [12] - The focus remains on providing long-term value and distributions to unitholders while maintaining safe operations and environmental stewardship [12] Management's Comments on Operating Environment and Future Outlook - Management noted that despite the challenging macroeconomic backdrop, financial performance and distributions will continue to be supported by the ethylene sales agreement [11][12] - There is no immediate need for Westlake Corporation to raise equity capital, indicating a stable financial position [18] Other Important Information - The partnership has made 44 consecutive quarterly distributions since its IPO in July 2014, with a 71% increase in distributions since the original minimum quarterly distribution [9][10] Q&A Session Summary Question: Will the outage impact from Q2 affect OpCo assets in Q3? - Management confirmed that the ethylene unit was not affected by the outage and is running reliably post-turnaround [17] Question: Are certain growth opportunities more appealing in the current environment? - Management indicated that there is no immediate need for capital, and the markets have contracted, making it unlikely to raise equity capital in the current year [18]

Financial Performance & Strategy - The company's Cash Improvement Plan is on track to achieve $600 million of incremental cash flow for 2025[24, 31, 36, 71] - The company is targeting $200 million in trade working capital reductions and $200 million in fixed cost reductions by the end of 2025[24] - 2025 CAPEX guidance revised down $200 million from $1.9 billion to $1.7 billion, and 2026 CAPEX is expected to be $1.4 billion[24] - The company returned over $500 million to shareholders through dividends and share repurchases during 2Q25[26, 36] - The company has $1.7 billion in cash and cash equivalents as part of $6.4 billion of available liquidity as of June 30, 2025[36] Portfolio Optimization - The company announced the planned sale of four European O&P assets[10, 13, 36, 51, 52, 71] - Portfolio optimization improves the company's cost advantage, positioning it well to serve markets from its cost-advantaged asset base in North America and the Middle East[14] - The company is rebalancing its global footprint toward cost-advantaged regions[71] Market Dynamics & Outlook - US/Canada domestic polyethylene sales grew 3.5% vs 1Q25[49] - The company is targeting approximately 85% operating rates in 3Q25 for O&P Americas and approximately 75% for O&P EAI[49, 52] - The company's 2Q25 last twelve months (LTM) cash conversion was 75%[40]

Financial Data and Key Metrics Changes - The company is targeting significant cost savings in 2025 and has reduced capital spending for 2026, indicating a cautious outlook on macroeconomic conditions [7][8] - There is an expected mid-single-digit drop in demand for the second half of the year, influenced by trade dynamics and seasonality [12][16] - The company anticipates a utilization headwind of approximately $75 million to $100 million in the second half of the year due to inventory reduction efforts [13][14] Business Line Data and Key Metrics Changes - The chemical and materials business is facing challenges due to overcapacity from China, impacting profitability [20][21] - The Methanalysis unit is performing well, with expectations of improved profitability through debottlenecking investments [30][32] - The fibers business is experiencing a decline due to tariff impacts and market demand issues, with a projected $20 million headwind from tariffs [56][91] Market Data and Key Metrics Changes - The automotive market is expected to see low single-digit declines in the back half of the year, influenced by tariff concerns and consumer behavior [50][51] - The consumer durables market is particularly affected by trade dynamics, leading to cautious purchasing behavior among customers [41][42] - The textile market has slowed down significantly due to tariffs, impacting overall demand [57][58] Company Strategy and Development Direction - The company is focusing on cash generation and cost management in response to current market uncertainties [13][17] - There is a strategic emphasis on improving the structural strength of the business and enhancing profitability through targeted investments [22][24] - The company is exploring alternative options for its Methanalysis investments, indicating a flexible approach to capital allocation [34][36] Management's Comments on Operating Environment and Future Outlook - Management acknowledges significant uncertainty in demand due to trade dynamics and macroeconomic factors, emphasizing the need for cautious forecasting [10][15] - There is optimism about potential stabilization in 2026, driven by pro-growth policies and resolution of trade issues [16][17] - The management is committed to maintaining cost discipline and optimizing working capital to navigate the current challenges [45][62] Other Important Information - The company is experiencing volatility in customer demand, particularly in consumer discretionary markets, which are highly sensitive to trade conditions [70][72] - The company has a strong focus on maintaining price-cost stability in its AFP business, which has contributed to its performance [55][56] Q&A Session Summary Question: How representative of the second half should be when thinking about trough earnings levels? - Management indicated that the second half is heavily impacted by trade situations, making it a poor indicator of overall company performance [8][10] Question: How far along is the investment in the Metapasys unit? - Management confirmed that the investment is progressing well, with expectations of significant profitability improvements [18][30] Question: What triggered the change in customer dialogue in July? - Management noted that the trade pause allowed customers to reassess their inventory and demand outlook, leading to a more cautious approach [39][41] Question: Can you provide more color on the automotive end markets? - Management highlighted that while the aftermarket performed well, the interlayer business faced challenges due to production moderation in response to tariffs [49][50] Question: What is the current state of tariffs and their impact on the fibers business? - Management stated that tariffs have significantly impacted the textile market, leading to a cautious outlook for the fibers segment [56][58] Question: What are the expectations for cash flow next year? - Management indicated that while cash flow may decrease due to pulling forward cash flow this year, they expect to build off a stable platform for future growth [62][63]

Financial Data and Key Metrics Changes - The company is targeting a reduction in capital spending for 2026, indicating a focus on cost savings in 2025 as well [6][14] - There is an expected mid-single-digit drop in demand for the second half of the year, influenced by trade dynamics and seasonality [12][15] - The company anticipates a utilization headwind of approximately $75 million to $100 million in the second half of the year due to inventory reduction efforts [13][16] Business Line Data and Key Metrics Changes - The Chemical Intermediates segment is expected to improve by over $30 million, while the Specialty and Fibers segments are projected to decline by a similar amount [70] - The AFP business saw a 4% year-over-year price increase primarily driven by cost pass-through contracts [54] - The Fibers business is facing a $20 million headwind due to tariffs and a $20 million asset utilization headwind, alongside higher energy costs [95][96] Market Data and Key Metrics Changes - The automotive market is expected to see a low single-digit decline in the back half of the year, with challenges stemming from tariff impacts and consumer behavior [50][51] - The textile market has slowed down significantly due to tariffs, impacting demand and leading to a cautious approach from customers [57][58] - The company is experiencing accelerated demand in certain areas, particularly in mechanical recycling for food-grade packaging applications [35] Company Strategy and Development Direction - The company is focusing on cash generation and cost management in response to current market uncertainties [13][16] - There is an emphasis on improving the structural strength of the business, particularly in the chemical and materials segments [21][22] - The company is exploring debottlenecking investments to enhance operational efficiency and profitability in its methanol system plant [30][31] Management's Comments on Operating Environment and Future Outlook - Management highlighted the chaotic nature of the current operating environment, driven by trade dynamics and consumer caution [12][14] - There is a belief that stability may return in 2026, contingent on resolving trade issues and improving economic conditions [15][16] - The management remains cautious about predicting demand due to ongoing uncertainties in the market [40][81] Other Important Information - The company is targeting additional cost cuts of $75 million to $100 million, which will be detailed in plans for the second half of the year [103] - The methanol system plant is performing well, with expectations for increased profitability as operational efficiencies are realized [30][31] Q&A Session Summary Question: Can you help us understand how representative the second half should be when thinking about trough earnings levels? - Management indicated that the second half is heavily impacted by trade situations, making it a poor measure of overall company performance [7][10] Question: How far along is the investment in the Metapasys unit, and what gives confidence in profitability? - Management discussed ongoing challenges in the chemical and materials business but expressed optimism about improving profitability through strategic investments [20][24] Question: What triggered the change in customer dialogue in July? - Management noted that the trade pause allowed customers to reassess their inventory and demand, leading to a more cautious approach [41][42] Question: Can you provide more color on the weakness in the automotive end markets? - Management confirmed that while the aftermarket performed well, the interlayer business faced challenges due to production moderation in response to tariffs [49] Question: What is the outlook for the Fibers business next year? - Management indicated that the Fibers business is facing headwinds this year but expects stabilization and potential recovery in the following year [94][100]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was reported at $2.4 billion, with distributable cash flow (DCF) providing 1.6 times coverage and retaining $740 million of DCF [5][15][18] - Net income attributable to common unitholders remained stable at $1.4 billion for both Q2 2025 and Q2 2024, while net income per common unit increased by 3% to $0.66 [14][15] - Distributable cash flow increased by $127 million or 7% to $1.9 billion for Q2 2025, primarily due to lower sustaining capital expenditures compared to the previous year [15][17] Business Line Data and Key Metrics Changes - The company set five volumetric records, processing 7.8 billion cubic feet of natural gas per day and transporting over 1 million barrels per day of refined products and petrochemicals [5][6] - The Neches River Terminal began operations with an initial capacity to load 120,000 barrels of ethane per day, expected to reach full operational capacity in the first half of 2026 [7] Market Data and Key Metrics Changes - Export volumes rose by 5 million barrels quarter-over-quarter, but gross operating margin declined by $37 million due to market pricing and a 60% drop in spot rates [10][11] - The company noted a shift in the LPG export market, with spot terminal fees previously ranging from $0.10 to $0.15 per gallon, now facing increased competition [9][10] Company Strategy and Development Direction - The company is focused on organic growth projects worth nearly $6 billion, including gas processing plants in the Permian [6][12] - The competitive advantage lies in existing export infrastructure, allowing the company to meet customer needs through brownfield expansions [12][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic and geopolitical challenges but expressed confidence in the company's positioning to succeed despite these headwinds [5][8] - The management highlighted the importance of energy and global trade, indicating potential future challenges due to competitive pressures in the LPG export market [9][12] Other Important Information - The company declared a distribution of $0.545 per common unit for Q2 2025, a 3.8% increase from the previous year [16] - Total capital investments for 2025 were reported at $1.3 billion, with growth capital expenditures expected to remain unchanged at $4 to $4.5 billion for 2025 [17][18] Q&A Session Summary Question: How should we think about the ramp-up of $6 billion of assets coming online in the second half of 2025? - Management indicated that processing plants are expected to ramp up quickly, with high utilization rates anticipated [21][23][25] Question: Will the buyback program increase in anticipation of 2026 being a lean year? - Management confirmed that they are being opportunistic with buybacks and expect larger opportunities in 2026 as free cash flow increases [27][29] Question: How do you see the LPG export market evolving? - Management stated that they are 85-90% contracted through the end of the decade and will defend their market position [32][74] Question: What are the lessons learned from the BIS ethane incident during Q2? - Management noted that while they were largely unscathed, the incident compromised the U.S. brand for reliable supply and energy security [45][46] Question: How do you view the outlook for PDH and octane enhancement? - Operating rates for PDHs have improved, but management is still not satisfied with performance, while octane enhancement margins have normalized but remain healthy [48][49]

Summary of Conference Call Notes Industry Overview - **Industry**: APAC Energy & Chemicals - **Focus**: Impact of China's regulatory changes on refining and petrochemical sectors Key Points 1. **Assessment of Old Facilities**: Several Chinese provinces have initiated assessments of old refining and petrochemical facilities, defined as those over 20 years old or at the end of their design service life. Regulators will decide on relocation, renovation, or closure based on these assessments [1][2][3] 2. **Potential Capacity Closure**: The potential closure of Chinese refining capacity is viewed positively for non-China refiners, as it may reduce the risk of increased oil product exports from China. Companies highlighted include Reliance Industries, HPCL, and BPCL, which are rated as "Buy" [2][3] 3. **Current Capacity Statistics**: Approximately 30% of China's current crude distillation unit (CDU) capacity consists of old facilities. State-owned enterprises (SOEs) dominate this segment, typically exhibiting higher energy efficiency due to ongoing capacity upgrades [3][10] 4. **Chemical Sector Outlook**: Despite potential closures in the Chinese chemical sector, the existing surplus is expected to persist. Companies such as Lotte Chem, PTTGC, PCHEM, and Hanwha Solutions maintain "Sell" ratings due to this ongoing surplus [2][12] 5. **Chemical Capacity Data**: Old facilities account for 9-13% of mainland China's capacity in key chemical products like ethylene. However, closures would only address about 7% of the global surplus in ethylene, indicating insufficient impact on global supply-demand balance [12][15][16] Additional Insights - **Energy Efficiency Considerations**: The assessment of old facilities includes energy efficiency metrics, which are generally higher for SOEs compared to private entities [3][10] - **Market Implications**: The anticipated closures could lead to a tighter market for non-China refiners, potentially increasing their margins and market share [2][3] - **Regulatory Challenges**: The implementation of closures may face challenges without significant fiscal support and changes in local government incentives [2] Conclusion The regulatory changes in China regarding old refining and petrochemical facilities could have significant implications for both local and international markets. While the potential closure of capacity is seen as beneficial for non-China refiners, the chemical sector may continue to struggle with surplus issues.