Westlake Chemical Partners Q3 2024 Performance

Westlake Chemical (NYSE: WLK) Partners (NYSE: WLKP) reported a successful third quarter for 2024, with a net income of $18 million, or $0.51 per unit, showcasing an improvement from the previous year's quarter. The company experienced enhanced sales and earnings driven by higher third-party ethylene sales prices and margins.

The decision to defer a planned turnaround at the Petro 1 ethylene unit until Q1 2025 and adjust third-party sales volume resulted in the highest quarterly distributable cash flow since 2022 for Westlake Chemical Partners.

Key Takeaways

• Westlake Chemical Partners reported Q3 2024 net income of $18 million, or $0.51 per unit.
• The company saw an increase in third-party ethylene sales prices and margins.
• A planned turnaround at the Petro 1 ethylene unit was deferred to Q1 2025.
• The partnership's distributable cash flow for the quarter was $18 million.
• Quarterly distribution increased by 71% since the IPO in 2014, with 41 consecutive distributions.

Company Outlook

• The partnership expects to maintain stability through its fixed margin ethylene sales agreement.
• No planned turnarounds for the remainder of 2024 following the deferral of the Petro 1 unit's turnaround.
• The Petro 1 turnaround is scheduled to begin at the end of January 2025 and last approximately 55 days.

Bearish Highlights

• Third-party ethylene sales prices and margins have decreased in Q4 from elevated levels in Q3.
• The global macroeconomic environment remains unpredictable.

Bullish Highlights

• Westlake Partners' business model minimizes market volatility and production risk.
• The partnership has grown its quarterly distribution significantly since its IPO.
• The ethylene sales agreement ensures stable and predictable cash flows.

Misses

• Despite a strong Q3, there is little third-party sales volume planned for the rest of 2024.
• Anticipated minimal impact from lower margins in Q4 due to strategic sales volume shift.

Q&A Highlights

• The shift of third-party sales volume into Q3 was strategic to maximize margins.
• Very little third-party sales volume is planned for Q4, resulting in reduced impact from lower margins.
• The partnership is open to evaluating market interest for distribution growth and asset drops.

In summary, Westlake Chemical Partners delivered robust performance in Q3 2024, benefiting from strategic decisions that capitalized on favorable market conditions. The company remains cautiously optimistic as it navigates macroeconomic challenges while focusing on safe and sustainable operations.

InvestingPro Insights

Westlake Chemical Partners' strong performance in Q3 2024 is enhanced by a market capitalization of $796.56 million and a P/E ratio of 12.83. The company has demonstrated significant dividend growth since its IPO, with an attractive dividend yield of 8.4%. Additionally, WLKP's cash flows sufficiently cover interest payments, reinforcing the company's financial stability. Furthermore, WLKP has maintained profitability over the last twelve months, supporting consistent returns for unitholders.

For deeper analysis, InvestingPro offers additional insights for informed investment decisions in the chemical sector.

Full Transcript – Westlake Chemical Partners LP (NYSE: WLKP) Q3 2024

Operator: Good afternoon. Thank you for standing by. Welcome to the Westlake Chemical Partners' Third Quarter 2024 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 a question-and-answer session. This conference is being recorded today, November 5th, 2024.

John Zoeller: Thank you. Good afternoon everyone and welcome to the Westlake Chemical Partners' third quarter 2024 conference call.

Jean-Marc Gilson: Thank you, John. Good afternoon everyone and thank you for joining us.

Steve Bender: Thank you, Jean-Marc, and good afternoon, everyone.

Jean-Marc Gilson: Thank you, Steve. We are pleased with the partnership financial and operational performance in the third quarter.

John Zoeller: Thank you again for participating in today's call. We hope you will join us for our next conference call to discuss our fourth quarter 2024 results.

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