Delek Logistics(US:DKL)2023-11-07 20:55Financial Data and Key Metrics Changes - Total EBITDA for Delek Logistics Partners was $98 million for Q3 2023, compared to $89 million for the same period in 2022, reflecting a year-over-year increase [20] - Distributable cash flow for Q3 2023 was $61 million, with a DCF coverage ratio of 1.35x [20] - Capital expenditures for Q3 2023 were $15 million, with expectations for total capital expenses in the range of $85 million to $90 million for the year [21] Business Line Data and Key Metrics Changes - The Storage and Transportation segment EBITDA increased to $18 million in Q3 2023 from $15 million in Q3 2022, benefiting from industry-wide fee escalations [5] - The Wholesale Marketing and Terminalling segment EBITDA rose to $28 million for the quarter, up from $20 million in Q3 2022, due to higher utilization and improved margins [10] - The Gathering and Processing segment EBITDA was $53 million for Q3 2023, compared to $57 million in Q3 2022, with the previous year benefiting from a one-time credit [20] Market Data and Key Metrics Changes - Midland Gathering throughput averaged approximately 250,000 barrels per day in Q3 2023, more than double the average of 121,000 barrels per day in Q3 2022 [10] - Performance in the Delaware Gathering assets was slightly lower than the previous quarter but still better than the same period last year, impacted by weather conditions [14] Company Strategy and Development Direction - The company aims to exceed a quarterly EBITDA run rate of $100 million by Q4 2023, supported by investments in the Midland and Delaware Gathering systems [19] - The focus remains on diversifying revenue streams and increasing third-party business, with a commitment to growth opportunities [3][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain strong performance despite challenges in the Delaware region due to weather impacts [14] - The company received an operational award of excellence from the National Safety Council, highlighting its commitment to safety and operational excellence [25] Other Important Information - The Board of Directors approved a 5.6% increase in the quarterly distribution to $1.045 per limited partner unit for Q3 2023, reflecting a commitment to increasing distributions [25] Q&A Session Summary Question: Regarding Permian volumes and performance in the Delaware region - Management acknowledged that while Midland Gathering performed strongly, Delaware Gathering faced challenges due to extreme heat and compression constraints, impacting both electricity and producer availability [12][14] Question: Insights on the performance of the Gathering and Processing segment - Management noted that the Gathering and Processing segment is benefiting from previous capital investments, with strong performance expected to continue [23][26]