Enterprise Products Partners L.P.(EPD) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2025 was $2.4 billion, with a distribution coverage ratio of 1.7 times and retained DCF of $842 million [6][14][17] - Net income attributable to common unitholders was $1.4 billion, or $0.64 per common unit, compared to $0.66 per common unit in Q1 2024 [14] - The partnership declared a distribution of $0.0535 per common unit, a 3.9% increase from Q1 2024 [15] Business Line Data and Key Metrics Changes - The company moved 13.2 million barrels of oil equivalent per day and 2 million barrels per day of liquid hydrocarbon exports [6] - PDH facilities experienced downtime, with PDH 1 down for 63 days due to unplanned maintenance, but both PDH plants are now operational [6][7] Market Data and Key Metrics Changes - The company noted a strong demand for U.S. hydrocarbons globally, particularly from China and India, despite ongoing tariff discussions [8][10] - LPG exports have not been significantly disrupted, with 85% to 90% of LPG exports contracted [22][61] Company Strategy and Development Direction - The company plans to bring online two gas processing plants in the Permian in Q3 2025 and several other projects throughout the year, indicating a focus on expanding processing and export capacity [7][16] - The management emphasized the importance of U.S. energy production and exports, aligning with the administration's pro-energy policies [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for U.S. oil, natural gas, and natural gas liquids, despite global market volatility [10][12] - The outlook for the Permian Basin remains positive, with expectations of continued production growth [35][39] Other Important Information - Total capital investments in Q1 2025 were $1.1 billion, with $964 million allocated for growth capital projects [16] - The company has returned approximately $58 billion to unitholders since its IPO in 1998 [16] Q&A Session Summary Question: Current status of U.S. LPG exports and competitive landscape - Management indicated that U.S. LPG is being rerouted effectively, with no disruptions in exports, and highlighted the capital efficiency of their expansion projects [22][23] Question: Outlook for projects coming online in 2025 - Management confirmed that many projects are expected to be fully contracted upon completion, with a rapid ramp-up in EBITDA anticipated [26][32] Question: Impact of recent market price volatility on buybacks - Management noted that excess distributable cash flow is expected to increase significantly in 2026, allowing for potential buybacks and debt paydown [53] Question: Update on PDH utilization and outlook for the segment - Both PDH plants are running well, with expectations to maintain current operational rates [43][44] Question: Global demand and potential impacts of tariff policies - Management acknowledged a demand slowdown internationally but emphasized that pricing will adjust to clear the market [61][71] Question: CapEx plans and potential adjustments due to market conditions - Management indicated that current projects are well contracted and unlikely to slow down despite tariff concerns [70][72]