Westlake Chemical Partners (WLKP) 21 Feb 232022 Q4 Earnings call transcript

Good afternoon. Thank you for standing by. Welcome to the Westlake Chemical Partners Fourth Quarter and Full Year 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.

conference recorded this XXXX. February reminder, a is today, being XX, As

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

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

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

refer we are Additionally, Chemical Definitions to to Westlake cash flow, website. MLP terms of these distributable partnership's referring cash Partners' the are distributable flow. on when available we

subject to learn could about differ on available to website. our encourage risks certain based well Relations We forward-looking to suggest contain topics predictions forward-looking that going will our to is cautionary statements factors by which uncertainties. made assumptions actual or results the statements are also you to lead as management's reviewing management on the currently management. by in and These and more are discuss Today, available that thus information filings, is beliefs, expectations that or information regulatory our as Investor

call the of section hours available Partners web be full X The available results. at after Westlake is of issued release can This details be website. call. and operating Release replay of beginning the A year partnership’s via the replay page morning, This and accessed quarter press our Press conclusion today's wlkpartners.com. in our financial this will with of a XXXX fourth document

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

over I'd Albert. the Chao. call to turn Albert to Now, like

XXXX. Thank you, joining for net year income full and fourth us thank year afternoon discuss Partners net In OpCo press was or everyone, year unit. Westlake full and $XXX XXXX Good Consolidated $XX Jeff. you million release of including $X.XX per quarter for to results. million this morning's full reported XXXX, income, our the

agreement stability margin results from to flows. market cash the Westlake other us annual from and investment insulating Westlake fixed stable Partners’ financial predictable sponsor etherlink grade our earnings of our generated planned and demonstrate produces structure This each combined volatility with risks. continue sales for production production XX% year,

This margin long-term was unitholders. ethylene heightened etherlink cash our as XXXX, for to in distributions results we flow volatility the deliver to evident foundation unitholders. The macroeconomic by Westlake margining fee-based to us our despite solid generated fixed forms contract value with sales our sustained delivered and and stable

reductions. consecutive for Steve financial XXth provide detail more now without IPO to over our quarter a is distribution the distribution July our operating XXXX to of quarter. I call quarter's This any since and on to results turn in like would the

Steve.

$X.XX XXX XXXX, afternoon unit. $X.XX reported million net million. we Thank million was net Partners per or income, consolidated on morning's $XX earnings, partnership flow cash distributable OpCo’s per press The income you, of Westlake sales good release, million this XX for of of net had Albert, Consolidated In the $XX and including everyone. unit. quarter or quarter fourth

a ago decreased Westlake unplanned to from income compared year deficiency other XXXX, outage. benefited period, of quarter $XX fee In for attributable certain $XX net recovery well of of partners costs from by an income million. million, as million net the as buyer fourth XX to Westlake larger the XXXX quarter partnership Fourth the

million $XX quarter to $XX maintenance increased of quarter of of fourth capital receivables million, cash due flow spending Westlake. flow distributable cash the fourth to for XXXX, of million, the Distributable timing of XXXX due compared by to lower from $X and certain

weaker For net $XX year XXXX $XX net higher a million. income full margins interest XXXX, in unit decrease compared of expense. The third-party to $X.XX million income decreased attributable million partnership $XX and due income to the of per full was of year or by to sales net

Despite XXXX by of sales and cash XXXX flow the full MLP income the for million coverage of and our $XX was flow year million rates, year headwinds, to full weaker distributable from third-party net compared of distribution million X.XXx. our increased $X XXXX $XX the cash distributable margins higher MLP interest for

million. Turning in the quarter, agreement balance cash investments to our at fourth had sheet cash balance cash end in attention Westlake consolidated $XXX the the flows we who are management of totaling investment with

to end quarter, the other The of of sales ethylene agreement. XX representing obligations terms had fee received deficiency and certain Westlake deficiency production buyer fourth was OpCo fee January, the buyer loss in At the the of under for the payment of a cost. recovery million, XXXX

partnership million our Long-term the was maintained million OpCo with expenditures. a at XXXX, debt metrics in leverage consolidated In the leverage at of $XX strong $XXX capital quarter spent We the at of of remaining approximately which Xx. end million the OpCo. ratio $XXX and was was $XX

our our distributions the $XX.XX January minimum partnership's On quarter distribution the we've $XX.X of with of consecutive XXXX. original XXXX, the unit. to XX unit since quarterly Since and we partnership distribution fourth of quarterly distributions per has respect made in XX% XX, XXXX, per grown a IPO announced to unitholders, quarterly

record cash on provide flows. February was environment earnings XX, XXXX paid economic our The The predictable of to Xnd, today's quarter differentiated partnership's unitholders to February the in benefits fourth and consistency continues distribution by and fee-based is XXXX. partnership's of flow cash

ratio distribution our able in since excess the flows need sustain cumulative of without of back, to access to distribution July stability our XXXX, current are partnership coverage the a Looking X.Xx, capital markets. we've IPO and in cash in maintained

begin purposes, turnaround XX This is modeling at we scheduled plan Kentucky and days. turnaround approximately City, facility. in projected Calvert to in last For is have May to one XXXX our

years, prior to reserved period planned impacted such for turnaround. turnaround the we and In ratio turnaround, had similar commence we And one, has we where this amount included is cost Westlake of recovering. turnaround we been expect been this for for has as the for in result. funded the as distribution the fully The a have do and a charge this

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

Steve. Thank you,

performance with unplanned its and whole. quarter We model business planned that predictable of are and through outages. despite The ethylene the as pleased Partnership a production provide and stability and year demonstrate associated fourth provisions the both a long sales flows, Partnership's the earnings protected flows, and through benefit operational term and our agreement a financial our cash cash

weakness the all economic for navigate sales ethylene related well-positioned While to impacted Westlake. Thus, provides ethylene to very recent negatively the are our recovery we nature has demand of of agreement costs derivatives, for these markets. sales to

predictable structure, sales for based will agreement, to contract production cash flow of with from XX% which take-or-pay stable Our our continue cash provides OpCo's and predictable deliver Westlake a fee flows. ethylene

financial leverage sheet a with Turning balance to conservative our metrics. structure. capital strong and We maintain

of navigate ethylene interest Westlake. income of increases four current of opportunities our of in and with growth we expansions continue as fixed qualified ethylene future, of will our evaluate streams, other sales in ownership to As growth the a agreement of we opportunities acquisitions OpCo, conditions, higher market including via such levers facilities, organic our negotiation margin

ability our on focused provide value to our remain We to and long-term continue distributions unitholders. to

efforts. on focus good safe of being As sustainability stewards where continue and we operations broader always, as we part work along the to environment, of will with live, our

call. listening Thank quarter fourth earnings you very our much for to

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

Thank you, Albert.

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

Advisory. James question Our comes from [indiscernible] first with Avian Instructions] [Operator

open. Your line Please go is ahead.

taking of my for Couple Thanks call. questions.

is using a the one word reattempting to facilities outage, -- that, mentioned have outage one you of are right I'm year? You going that this about your for

turnaround. it be will maintenance a So,

of? or and flow net cash what What an will estimate impact be the -- do income EBITDA on and What be? will operating have you

parent XX% we off to that because that contract, contract that And XX have May. to be the ethylene but in start $X.XX update turnaround's at will And as expected our Corporation that losing subject that we Westlake with take margin, days. so, that get closer, to are we'll pounds last expected those turnaround's

Why did year party this as any And party third what's happen third do out have to margins? outlook you with to for going margins decline?

market. that of ethylene margins were of depressed lack because selling in party the the ethylene third quarter marketplace. in into We're derivatives demand So, simply of

pullback, environment there ethylene derivatives. so, in for And related the seen was you've a macroeconomic as

that below And threshold so were historically. historical seen that therefore, we've margins

margins So were therefore, under pressure.

threshold to margins. XXXX, look looking maximize be can the consultants margin see we As $X.XX we optimize volatile $X.XX. to currently. ethylene is those we certainly look below where we'll forward, the party can ethylene and exceed optimize The could third terms when to to that in margins of we sales targeted market In look forecast are margins

that they're threshold, sales? mean won't if make that does you below So, just the

contributory we third be sales look we'll us. make if party making are net in course income we markets are of when to because we we'll are certainly that see but to those opportunistic the the to but Certainly, optimize, We'll attractive year. they sales, find can during interested

less What much don't time, quarter-on-quarter in I and what a year. that but meaningful did -- pronounced SG&A I did of notice take And to year that decline on decline happen? want had your too expenses you

some activities to have have to time of as to in the time relates time some From of it Yes. the timing in maintenance and expenses changes we peaks time, we valleys administratively. and

some the valleys year, terms incurred So, if course tend that but out, and certain have at administrative certain costs and we are impact you at the when a plant of G&A. over I to site there does it peaks look are activities that would average occur say that in

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

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

Thank fourth participating and you full quarter for earnings Partners Westlake Chemical today's in XXXX conference call. year

XX, XXXX. for call has hours on be Tuesday, Goodbye. call a and replay The website. be replay As time will partnership after assessed Eastern February reminder, PM the available by two XX:XX accessed can until beginning the ended be may this