Westlake Chemical Partners (WLKP) 3 Nov 222022 Q3 Earnings call transcript

Thank you for standing by. Welcome to the Westlake Chemical Partners Third Quarter 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen only mode. After the speakers' remarks, you will be invited to participate in the question-and-answer session.

As a reminder, this conference is being recorded today, November 3, 2022.

to Westlake call and Chemical like host to Treasurer. now Holy, Jeff Partners' would turn over the today's I Vice President Sir, begin. you may

Westlake Executive XXXX our Good Partners our today members President you. afternoon of Steve and management and Chao, to Thank Bender, CFO CEO; our other everyone, by Albert third President call. conference the quarter and I'm Vice joined team. welcome Chemical and

refer OpCo Partnership. to refer we ourselves Westlake References to certain Corporation, to the references and to Westlake subsidiary Olefins parent During OpCo this call, owns Westlake and a Partners as Partnership Westlake LP, company refer or which of assets. the to Westlake a Chemical

cash we flow, distributable cash refer to we when Westlake to MLP flow. referring Additionally, distributable are Chemical Partners'

call. replay replay wlkpartners.com. website. today's document Relations available which after available at of of will press subject via reviewing A discuss risks This Westlake management. that uncertainties. release actual statements and in information could or topics suggest is expectations are the forward-looking conclusion to our more X Today, of the assumptions to financial accessed that the will can our website. regulatory our management's The with page as the Release or third in you cautionary and to our also to is management available is web this Partners by We differ predictions to on results. Investor that section by lead well results going operating hours beginning call factors available be These forward-looking our about partnership’s learn the of are filings, made be details morning, currently Press beliefs, thus encourage as This on issued based statements information contain a and quarter XXXX certain

an accurate X, as may today, Please any therefore, system as is of be can finally note sensitive page no accessed XXXX, would that be conference of Internet wlkpartners.com. that time webcast information call replay. reported November you this web on speaks call advise through advised that information of at longer that are and our I time this only live broadcast the being on you

to to call would over turn the Chao. Albert? like Albert I Now

were Good thank us discuss sales quarter our third Westlake net market stability our $XX and unit. you In of OpCo Jeff. of agreement we $X.XX the ethylene XXXX. other Partners afternoon earnings million third results. production Consolidated you, Westlake quarter income insulates morning's Thank XXXX fixed Partners margin everyone, us joining which press or net to through $XX for risks. third this per million reported demonstrated consistently income, quarter release, and from including for is volatility, XXXX

to flow with continued generated expectations distributions long conditions. our reliable stability quarter deliver challenging coverage. line to has cash in flow benefit us industry associate The in as despite us and in arrangement with contractual and history we the of our the This cash enabled the high predictability of earnings business third a our of compared degree

which has IPO by or and This reduced never quarters has grown been our quarterly distribution Since consecutive distribution XX% XXrd since is IPO cut.

like and I financial the operating Steve the results now detail more would on safe. quarter turn over to our call provide to Steve? for to

flow income quarter million $XX higher the million fee of earnings to OpCo. to for of party quarter second benefits million cash well the quarter of third a benefited [indiscernible] sales XXXX by in by for net third $XX by unit. increased quarter revenues afternoon, of result we good third XXXX decreased X our $X of lower distributable and $X Westlake for in the distributable Albert from income to net second distributable from cash Net the as quarter partners’ in we the or of and million $XX of lower recognition to million you sales net income for of due flow of as a Westlake per $XX $X sales of million, this third of of following and million. Compared period offtake Compared third including $X million The quarter as for XXXX in or Thank everyone. a partnership was the deficiency Distributable third $XX to of $X.XX margins $X.XX these XXXX the net production quarter of OpCo as fee. complete of flow timing release compared press XXXX. million, Petro resulting quarter sales, third from the $XX the the approximately third compared Westlake per In million, reported resulting buyer had morning's optimize the cash million the planned income of the $XXX XXXX our flow of the at to quarter unit. of decreased higher the higher second party third increased a XXXX deficiency quarter of quarters on OpCo XXXX these and partners turnaround party XXXX first electing second margins by cash buyer as

end was Westlake at balance investments and the totaling remaining quarter. $XXX the quarter Agreement our the balance of cash $XXX with cash third the and was Consolidated had million end Turning through $XXX our the at flows at consolidated Management million, was the Investment We million partnership the which of attention of $XX to a million. cash and sheet at OpCo. debt

the in for of of Westlake year term. lines new a of five this call revolving for for quarter’s credit liquidity example This mentioned capital is another Westlake partnership demonstrating partnership support I As last year OpCo needs. July providing ample in their extended by in future

per third XXXX. a OpCo with On in We $XX.XX times of on quarter $XX unit of a maintained our to third leverage announced quarterly distribution consolidated the leverage Monday, million below capital with ratio metrics the strong spent respect one expenditures. we quarter

distribution partnership since quarterly XXXX consecutive per the minimum partnerships of $XX.X the grown XXXX has Our distributions in the XX their since to made unit. IPO quarterly XX% distributions we have unitholders, original IPO in

coverage flow for the cash X.X the November of on paid at ending XX, to to slightly due months below third times, X.XX of September XXXX, was timing holders XX, expected turnaround which is will the of target Petra year. record The distributable XX be XXXX. X as last our end distribution Our plan the quarter partnerships November unit

to cumulative to We coverage mindful continue partner excess to holders. equity in times the X.X flows, drive market sustain policy and distribution more ratio and Since value in us evaluate our the provides remaining her the looking we're outlook distribution while unit provides conditions cash in of distribution the our IPO XXXX, partnership markets. to and volatile to a of current capital with need of a our access exit July maintained to without stability we've our able

quarter for we which our is the plan Calvert turnaround first ethylene city, facility for XXXX Calvert fourth of modeling purposes, planned reminder, no next XXXX. is half maintenance currently outage planned Kentucky, in for the have a As and at our city, of

over like closing I'd to turn back to comments, the Albert? Albert to some make call

a cash to economic is consistent fee financial challenging Despite year for flows. Steve. a based macro partnership's produce. you, with stable backdrop, the the is Thank currently It performance designed

flow sales market. we faces in production, for contract insulative fee optimistic global stable delivers flows agreement the based about a cash the from up of Westlake while with business structure and predictable as fundamentals the remain consistent insulate us which provides our the potential headwinds, economy from XX% XX,XXX our to etherlink Looking our cash close and volatility

provide levers leverage financial conservative a We interest of are four negotiations navigate strong other a etherlink and current to evaluate future, balance higher ownership sales sheet metrics. will fixed distributions will the expansions growth of to unitholders. facilities, with maintain our market including long term OpCo, and with value growth the of remain etherlink ability acquisitions streams, of focus in organic agreement income conditions margin our Westlake of opportunities, opportunities. continue and to There on qualified increases Westlake such continue our in to

you we'll to on continue very operations, we always, safe being third work of stewards listening Thank for much the focus call. environment our earnings along to and where with quarter As live. good

Now call the over I'll to Jeff. turn back

you, Albert. Thank

replay to that available at call that the be provide questions, number call. taking Before a will teleconference we We'll this I'd Amber, hours ended. of has end the begin questions. like the after of two take remind we you now will

will time, and at Barclays. the conduct [Operator answer first question is question you. we Our this Michael from At session. now line open. Instructions] Michael, Thank Leithead is your

thanks. Great, guys. morning Good

else? everything volatile obviously around First more kind just just interest rates a high you a maybe of distribution question up light a about in pretty of or the ultimately bit moved have distribution lot. growing maybe thinking how you're policy out just world flush the of kind Can thoughts potentially morning, level

Yea. Mike, it's Steve. Good question.

to heard, have the growth got outline higher allow negotiating really grow we've opportunities increasing margins. levers organic that other you streams, of ownership OpCo that of acquisition As as and qualified four Albert income us

advantage in early this As through seen the the into to is why in our second the party and you higher of Capital in have market was the of moved we've equity the can quarter inflows third first you challenged take we been some that very have And which any year, see volatile. more those sales, noted been margins occur challenged. markets, to market those margins. markets

that conditions more in more stand giving conducive opportunities are the look the to distribution value So to we would that bring. for certainly us ready grow in to , that

you we So can from four levers, conditions. stand ready, market just those see it's

see that like make certainly been to that situation the challenge favorable. think current we proved the to conditions stand I that more in has ready be happen, we but

think a million And makes fee. I then, buyer Fair deficiency this enough, about sense. that quarter second, had $XX

kind corporation? I work you between a mechanics think partners is buyer just Westlake us and remind how of Westlake deficiency can the maybe refresh

Certainly, the of buyer be and in to there adjustment plan at unplanned should for XX% shortfall production acquire a in outage of given or for so any deficiency production. obligation production, up And makes that year. any is Westlake any any an point there time, to

whether And a so result of made an buyer the deficiency, therefore provides outage was production. any in that to proficient stream partnership, production changes stable that income or unplanned as buyer

from that works that perspective. at to that ultimately, the they're a revenue during that any therefore given year, new unable paid deficiency, the therefore, then of production shortfall recognition up buyer mechanic course the And beginning if year. they're make And so of

you. Got sense. it. Thank Makes

welcome. You're

turn now Holy. now Jeff At will the has I call this ended. time, Q&A to over back the session

Thank you year fourth join quarter in full to our We XXXX for our hope again us next today's conference for discuss call and participating you'll results. call.

in Earnings participating Quarter for you Thank Westlake Third Chemical today's Partner Conference Call.

reminder, after call the via accessed this XX, Partnership will has access XX:XX two the ended. XXXX. and goodbye. for Thursday, available on Thank can pm Eastern website. replay call And be until November a time maybe replay hours beginning As The you