Financial Data and Key Metrics Changes - Delek Logistics reported approximately 107millioninquarterlyadjustedEBITDA,anincreasefrom100.9 million in the same period of 2023, representing a growth of about 1.3% [6][16] - Distributable cash flow as adjusted was 69.5million,withaDCFcoverageratioofapproximately1.2times,expectedtoreturntoalong−termobjectiveof1.3timesinthesecondhalfof2025[16][11]−Thecompanyinitiatedastrong2025EBITDAguidanceof480 to 520million,indicatingaround2066 million, up from 53.3millioninQ42023,drivenbyhigherthroughputfromPermianBasinassets[17]−WholesalemarketingandterminallingadjustedEBITDAdecreasedto21.2 million from 28.4millionintheprioryear,primarilyduetolowerwholesalemargins[18]−StorageandtransportationadjustedEBITDAincreasedslightlyto17.8 million compared to 17.5millioninQ42023,attributedtohigherstorageandtransportationrates[18]−Investmentsinpipelinejointventurescontributed11.3 million this quarter, up from 8.5millioninQ42023,mainlyduetocontributionsfromtheWinktoWebsterdropdown[19]MarketDataandKeyMetricsChanges−ThecompanyemphasizeditsstrongpositioninthePermianBasinandhighlightedthesuccessfulacquisitionsintheMidlandBasin,whichenhanceitscompetitiveposition[9][10]−TheexpansionoftheprocessingplantintheDelawareBasinisontracktocompleteinthefirsthalfof2025,whichisexpectedtofurtherstrengthenmarketpresence[10]CompanyStrategyandDevelopmentDirection−DelekUSHoldingsisfocusedonbecomingapremierfull−servicecrude,naturalgas,andwaterproviderinthePermianBasin,withplansforcontinuedgrowthin2025[7]−ThecompanyisenhancingitseconomicseparationfromDelekUSHoldings,witha150 million buyback program authorized to enhance value for unit holders [12][13] - The board approved the 48th consecutive increase in the quarterly distribution to 1.10perunit,reflectingacommitmenttovaluecreation[13]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceintheguidanceprovided,highlightingthecompany′sgrowthtrajectoryandtheimportanceofeconomicseparationfromitssponsor[27][32]−ThemanagementnotedstrongdemandintheDelawareareaandthecomprehensiveofferingofcrude,gas,andwateraskeyfactorsdrivingfuturegrowth[44]OtherImportantInformation−ThecapitalprogramforQ4was49.4 million, with 42.1millionallocatedtothenewgasprocessingplantandtheremainderforgrowthprojects[20]−For2025,thecompanyexpectstospendapproximately75 million on completing the Lindy processing plant expansion and about $160 million on growth and maintenance projects [20] Q&A Session Summary Question: EBITDA guidance and high-end drivers - Management acknowledged the conservative guidance and discussed the potential drivers for the high end of the EBITDA range, emphasizing the company's growth and economic separation efforts [25][26] Question: Buyback program execution and funding - Management indicated that the buyback program would be executed over two years, with funding likely from free cash flow, considering the cost of capital advantages [29][33] Question: Drivers of EBITDA upside potential - Management highlighted several transactions, including the Gravity and H2O deals, as well as the Lindy plant expansion, contributing to the positive EBITDA outlook [39][40] Question: Demand and utilization of key assets - Management confirmed strong demand for assets in the Delaware area and the strategic expansion in the Midland Basin, which is expected to yield positive results [42][44]
Delek US(DK)2025-02-25 21:32