Westlake Chemical Partners LP (WLKP) Bundle
A Brief History of Westlake Chemical Partners LP
Formation and Initial Public Offering
Westlake Chemical Partners LP was formed in March 2014 to operate, acquire, and develop ethylene production facilities and related assets. The Partnership completed its initial public offering (IPO) on August 4, 2014, issuing 12,937,500 common units representing limited partner interests.
Financial Performance Overview
As of September 30, 2024, Westlake Chemical Partners reported a net income of $104.1 million on net sales of $277.0 million for the third quarter of 2024. This represents an increase in net income of $23.2 million compared to $80.9 million in net income on net sales of $321.7 million for the third quarter of 2023.
For the nine months ended September 30, 2024, net income was $281.8 million on net sales of $845.8 million, up from $247.6 million on net sales of $893.5 million for the same period in 2023.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income | $104.1 million | $80.9 million | $281.8 million | $247.6 million |
| Net Sales | $277.0 million | $321.7 million | $845.8 million | $893.5 million |
| Income from Operations | $109.7 million | $86.2 million | $298.4 million | $264.9 million |
| Gross Profit | $116.9 million | $93.0 million | $320.4 million | $286.8 million |
| EBITDA | $139.1 million | $115.7 million | $386.8 million | $349.9 million |
Operational Highlights
In the third quarter of 2024, Westlake's gross profit margin increased to 42.2% from 28.9% in the third quarter of 2023, primarily due to lower ethane feedstock costs and natural gas prices. The Partnership also recognized insurance recoveries of approximately $6.2 million related to a business interruption claim associated with Hurricane Laura.
Distributions and Cash Flow
The Partnership declared a quarterly cash distribution of $0.4714 per unit payable on November 27, 2024, which equates to approximately $16.6 million per quarter or $66.4 million annually based on the number of common units outstanding as of September 30, 2024.
For the nine months ended September 30, 2024, MLP distributable cash flow increased by $5.7 million to $51.9 million from $46.2 million in the prior year, mainly due to increased earnings at OpCo and lower maintenance capital expenditures.
Balance Sheet Overview
| Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $1,294.7 million | $1,316.8 million |
| Total Liabilities | $456.9 million | $460.6 million |
| Total Equity | $837.8 million | $856.3 million |
Debt and Financial Obligations
As of September 30, 2024, the Partnership had long-term debt payable to Westlake amounting to $399.7 million. The weighted average interest rate on this debt was 7.2%.
Accounts payable—Westlake stood at $14.8 million, while accounts payable—third parties were $17.1 million.
A Who Owns Westlake Chemical Partners LP (WLKP)
Ownership Structure
Westlake Chemical Partners LP (WLKP) has a defined ownership structure, primarily comprising common units held by public and private investors, along with units held by its general partner, Westlake Chemical Corporation.
| Ownership Type | Units Outstanding | Percentage Ownership |
|---|---|---|
| Common Unitholders - Publicly and Privately Held | 21,112,943 | 60.0% |
| Common Unitholder - Westlake Chemical Corporation | 14,122,230 | 40.0% |
| Total Units Outstanding | 35,235,173 | 100% |
Financial Performance Indicators
As of the third quarter of 2024, Westlake Chemical Partners LP reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income | $104.1 million | $80.9 million | +29.0% |
| Net Sales | $277.0 million | $321.7 million | -13.8% |
| Income from Operations | $109.7 million | $86.2 million | +27.3% |
| EBITDA | $139.1 million | $115.7 million | +20.2% |
Distribution Details
The cash distributions declared for the third quarter of 2024 are summarized below:
| Period | Distribution Declared | Net Income | Excess of Distribution |
|---|---|---|---|
| Q3 2024 | $16.6 million | $18.1 million | $1.5 million |
| Q3 2023 | $16.6 million | $13.2 million | -$3.4 million |
Liquidity and Capital Resources
As of September 30, 2024, the cash and cash equivalents totaled:
| Cash and Cash Equivalents | Amount |
|---|---|
| Total Cash and Cash Equivalents | $60.2 million |
| Invested Cash under Investment Management Agreement | $109.5 million |
Westlake Chemical Partners LP maintains a revolving credit facility with Westlake, with outstanding borrowings reported at:
| Credit Facility | Amount | Maturity Date |
|---|---|---|
| OpCo Revolver | $22.6 million | July 12, 2027 |
Overall, the ownership and financial performance of Westlake Chemical Partners LP reveal a stable partnership structure, solid income growth, and effective distribution strategies, underpinned by substantial liquidity and financing arrangements.
Westlake Chemical Partners LP (WLKP) Mission Statement
Overview
Westlake Chemical Partners LP (WLKP) focuses on providing a sustainable and efficient supply of petrochemical products. The company's mission is to maximize unitholder value through growth and profitability while maintaining a commitment to environmental stewardship and community engagement.
Financial Performance
In the third quarter of 2024, WLKP reported a net income of $104.1 million on net sales of $277.0 million. This reflects an increase in net income of $23.2 million compared to the same period in 2023, where net income was $80.9 million on sales of $321.7 million. The increase in income was attributed to higher ethylene and co-products sales volumes and prices to third parties, alongside lower ethane feedstock costs and natural gas prices.
Key Financial Metrics
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Income (in millions) | $104.1 | $80.9 | $281.8 | $247.6 |
| Net Sales (in millions) | $277.0 | $321.7 | $845.8 | $893.5 |
| Income from Operations (in millions) | $109.7 | $86.2 | $298.4 | $264.9 |
| EBITDA (in millions) | $139.1 | $115.7 | $386.8 | $349.9 |
| Net Income per Unit | $0.51 | $0.37 | $1.35 | $1.14 |
Distribution Policy
The Partnership is committed to distributing an appropriate portion of its total operating surplus. For the three months ended September 30, 2024, distributions per common unit were $0.4714, remaining consistent with the previous year. The total cash distribution declared for the nine months ending September 30, 2024, was $1.4142 per unit.
Operational Highlights
For the nine months ended September 30, 2024, WLKP's gross profit increased to $320.4 million from $286.8 million in the same period in 2023, reflecting a gross profit margin of 37.9%. This improvement was largely due to higher sales prices and volumes to third parties and reduced feedstock costs.
Cash Flow Analysis
Net cash provided by operating activities was $352.5 million for the first nine months of 2024, compared to $344.3 million in the same period of 2023. This increase was mainly due to lower cash used for turnaround activities.
| Cash Flow Metrics | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Cash Provided by Operating Activities (in millions) | $352.5 | $344.3 |
| Net Cash Used for Investing Activities (in millions) | $50.5 | $53.1 |
| Net Cash Used for Financing Activities (in millions) | $300.4 | $290.1 |
Debt Profile
As of September 30, 2024, WLKP had outstanding borrowings under its revolving credit facility totaling $22.6 million, with an average interest rate of 7.2%. The company's total long-term debt payable to Westlake was $399.7 million.
| Debt Metrics | Amount (in millions) |
|---|---|
| Outstanding Debt | $399.7 |
| Average Interest Rate | 7.2% |
| OpCo Revolver | $22.6 |
| MLP Revolver | $377.1 |
Conclusion
The mission of Westlake Chemical Partners LP centers on sustainable growth, profitability, and commitment to environmental and community responsibilities, underpinned by solid financial performance and a clear distribution policy.
How Westlake Chemical Partners LP (WLKP) Works
Overview of Operations
Westlake Chemical Partners LP (WLKP) operates as a Delaware limited partnership focused on the acquisition and development of ethylene production facilities and related assets. As of 2024, WLKP holds a 22.8% limited partner interest in Westlake Chemical OpCo LP (OpCo), which is responsible for the operation of ethylene production facilities.
Financial Performance
For the third quarter ended September 30, 2024, WLKP reported the following financial performance metrics:
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales—Westlake | $215,799,000 | $289,303,000 | $690,535,000 | $771,349,000 |
| Net Co-products, Ethylene, and Other Sales—Third Parties | $61,196,000 | $32,361,000 | $155,301,000 | $122,169,000 |
| Total Net Sales | $276,995,000 | $321,664,000 | $845,836,000 | $893,518,000 |
| Cost of Sales | $160,052,000 | $228,683,000 | $525,481,000 | $606,742,000 |
| Gross Profit | $116,943,000 | $92,981,000 | $320,355,000 | $286,776,000 |
| Net Income Attributable to WLKP | $18,136,000 | $13,206,000 | $47,396,000 | $39,984,000 |
Balance Sheet Highlights
As of September 30, 2024, WLKP's balance sheet reflects the following:
| Assets | Amount (in thousands) |
|---|---|
| Cash and Cash Equivalents | $60,208 |
| Receivable under Investment Management Agreement | $109,540 |
| Accounts Receivable—Westlake | $44,885 |
| Accounts Receivable—Third Parties | $22,511 |
| Inventories | $3,751 |
| Total Assets | $1,294,695 |
Liabilities and Equity
As of September 30, 2024, WLKP's liabilities and equity are detailed as follows:
| Liabilities and Equity | Amount (in thousands) |
|---|---|
| Total Current Liabilities | $53,291 |
| Long-term Debt Payable to Westlake | $399,674 |
| Total Liabilities | $456,881 |
| Total Equity | $837,814 |
Distributions
For the three months ended September 30, 2024, the distribution per common unit was:
| Period | Distribution per Common Unit |
|---|---|
| Q3 2024 | $0.4714 |
| Q3 2023 | $0.4714 |
Cash Flow Summary
For the nine months ended September 30, 2024, WLKP's cash flow from operating activities was:
| Cash Flow Category | Amount (in thousands) |
|---|---|
| Net Cash Provided by Operating Activities | $352,532 |
| Net Cash Used for Investing Activities | ($50,497) |
| Net Cash Used for Financing Activities | ($300,446) |
Market Conditions
The average sales price and volume changes for the third quarter of 2024 compared to the prior year are as follows:
| Change Type | Percentage Change |
|---|---|
| Average Sales Price | -15.1% |
| Volume | +1.2% |
Conclusion
Westlake Chemical Partners LP continues to operate within the ethylene production sector, leveraging its partnership with Westlake Corporation to drive financial performance and manage operational efficiencies.
How Westlake Chemical Partners LP (WLKP) Makes Money
Revenue Generation
Westlake Chemical Partners LP primarily generates revenue through its 22.8% limited partner interest in OpCo, which is involved in the production of ethylene and related co-products. The partnership operates under a long-term, fee-based Ethylene Sales Agreement with Westlake that ensures stable revenue through minimum purchase commitments.
Financial Performance Overview
For the quarter ended September 30, 2024, Westlake Chemical Partners reported:
- Net income: $104.1 million
- Net sales: $277.0 million
- Income from operations: $109.7 million
Comparatively, for the same quarter in 2023:
- Net income: $80.9 million
- Net sales: $321.7 million
- Income from operations: $86.2 million
Quarterly Financial Data
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $104.1 million | $80.9 million |
| Net Sales | $277.0 million | $321.7 million |
| Income from Operations | $109.7 million | $86.2 million |
| Gross Profit | $116.9 million | $93.0 million |
| EBITDA | $139.1 million | $115.7 million |
Year-to-Date Financial Data
For the nine months ended September 30, 2024, the financial results were as follows:
- Net income: $281.8 million
- Net sales: $845.8 million
- Income from operations: $298.4 million
In comparison, the nine months ended September 30, 2023 showed:
- Net income: $247.6 million
- Net sales: $893.5 million
- Income from operations: $264.9 million
Year-to-Date Financial Data Comparison
| Financial Metric | 9M 2024 | 9M 2023 |
|---|---|---|
| Net Income | $281.8 million | $247.6 million |
| Net Sales | $845.8 million | $893.5 million |
| Income from Operations | $298.4 million | $264.9 million |
| EBITDA | $386.8 million | $349.9 million |
Cost Structure and Profitability
The cost of sales for the quarter ended September 30, 2024, was $160.1 million, leading to a gross profit of $116.9 million, resulting in a gross profit margin of 42.2%. In comparison, for Q3 2023, the cost of sales was $228.7 million, with a gross profit of $93.0 million and a margin of 28.9%.
Cash Flow Analysis
For the nine months ended September 30, 2024, cash flows from operating activities amounted to $352.5 million, compared to $344.3 million for the same period in 2023. The increase was attributed to lower cash used for turnaround activities.
MLP Distributable Cash Flow
MLP distributable cash flow increased by $5.7 million, reaching $51.9 million for the nine months ended September 30, 2024, compared to $46.2 million in 2023. This rise was primarily due to increased earnings at OpCo, despite higher reserves for future turnarounds.
Distributions to Unitholders
For the three months ended September 30, 2024, distributions to unitholders totaled $16.6 million, consistent with the previous year. The net income attributable to the Partnership for the same period was $18.1 million, yielding a distribution in excess of net income of $1.5 million.
Outlook and Market Conditions
Looking ahead, Westlake Chemical Partners' revenue generation will continue to be influenced by ethylene pricing, production volumes, and operational efficiency, alongside the broader market conditions affecting the chemical industry.
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Resources:
- Westlake Chemical Partners LP (WLKP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Westlake Chemical Partners LP (WLKP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Westlake Chemical Partners LP (WLKP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.