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Delek Logistics Partners, LP (NYSE: DKL), based in Brentwood, Tennessee, is a dynamic publicly traded master limited partnership (MLP) established by Delek US Holdings in 2012. The company specializes in the ownership, operation, acquisition, and construction of crude oil and refined products logistics and marketing assets. A significant portion of their assets are crucial for supporting the refining operations of Delek's facilities in Tyler, Texas, and El Dorado, Arkansas.
Delek Logistics operates through several segments including Pipelines and Transportation, as well as Investments in Pipeline Joint Ventures. Their services encompass gathering, transporting, and storing crude oil, along with marketing, distributing, and storing refined products. These operations primarily serve Delek's refineries and also cater to third-party customers in the southeastern United States and West Texas.
The Pipelines and Transportation segment is the cornerstone of Delek Logistics' business, featuring pipelines, tanks, offloading facilities, and trucks that facilitate the movement and storage of crude oil and refined products. This segment is responsible for the majority of the company's revenue, showcasing their extensive infrastructure.
Recent achievements highlight Delek Logistics' proactive approach in financial management and expansion. On March 7, 2024, the company announced a public offering of $120 million in common units, with an additional option for underwriters to purchase $13.5 million more. This initiative aims to repay outstanding borrowings under its revolving credit agreement, showcasing their commitment to financial health.
In another significant move, Delek Logistics revealed the pricing of a public offering of 3,116,884 common units at $38.50 per unit on March 7, 2024. The net proceeds are intended to further strengthen their financial standing by reducing debt. Additionally, a tender offer for 6.75% Senior Notes due in 2025, announced on March 11, 2024, further emphasizes their strategic financial maneuvers.
Delek Logistics’ extensive network and joint ventures, particularly in the Permian and Delaware Basins, underline their pivotal role in the midstream energy sector. They provide a range of services including crude oil gathering, transportation, and storage, as well as wholesale marketing and terminalling, which are integral to their operations and growth strategy.
The strong backing from Delek Holdings, which owns the general partner interest and a majority limited partner interest, coupled with their significant customer relationship, adds to Delek Logistics' stability and growth potential. Investors can stay updated with the latest developments and financial performance through their investor relations webpage and news releases.
Delek US Holdings, Inc. (NYSE: DK) addressed a Section 220 request from CVR Energy, Inc., asserting its belief that CVR's activism campaign may not serve Delek's shareholders' best interests. Delek highlights a five-year total shareholder return of +92%, exceeding the 28% average of its peers. The company plans to review and respond to CVR's letter. Delek operates in refining, logistics, and retail, with a crude throughput capacity of 302,000 barrels per day and 253 convenience stores across Texas and New Mexico.
Delek Logistics Partners reported strong fourth-quarter 2020 results with a net income of $40.7 million, increasing 88% year-over-year. The company achieved a distributable cash flow of $55.9 million, up from $33.0 million, and reduced operating expenses by $7.5 million. Revenue slightly increased to $140.1 million, attributed to new asset drop downs, despite challenges in the West Texas wholesale business. A quarterly distribution of $0.910 per unit reflects a 2.8% year-over-year increase. The company anticipates continued distribution growth of 5% in 2021, demonstrating a solid operational outlook.
Delek US Holdings reported a Q4 2020 net loss of $(293.2) million, or $(3.98) per share, a sharp decline from net income of $32.7 million, or $0.44 per share, in Q4 2019. Adjusted net loss was $(204.0) million, impacted by a $126 million goodwill impairment. Adjusted EBITDA decreased to $(137.6) million from $65.4 million year-over-year. The refining segment's contribution margin fell to $(82.0) million, affected by lower crude oil differentials and crack spreads due to COVID-19. However, the logistics segment improved with a contribution margin of $62.2 million, up from $42.5 million in Q4 2019.
Delek Logistics Partners, LP (NYSE: DKL) has appointed Sherri A. Brillon to its Board of Directors, effective January 26, 2021. With over 35 years of experience in the oil and gas sector, including roles at Encana Corporation, Brillon's expertise aims to enhance the board's perspective and competitiveness. She will also serve on the Audit Committee, leveraging her extensive financial operations background. This strategic addition is anticipated to bring fresh ideas and diversity, positioning the company for future growth.
Delek Logistics Partners, LP (NYSE: DKL) announced a quarterly cash distribution of $0.91 per common limited partner unit for the fourth quarter of 2020, a 0.6% increase from Q3 2020 and a 2.8% rise from Q4 2019. This marks the 31st consecutive quarterly increase in distributions, aligning with their 5% growth target for 2020. The distribution will be payable on February 9, 2021 to unitholders on record as of February 2, 2021.
Chairman Uzi Yemin emphasized the business's stability amidst challenging market conditions.
Delek Logistics Partners, LP (NYSE: DKL) will release its fourth quarter 2020 results after market close on February 23, 2021. A conference call to discuss the results is set for 7:30 a.m. CT on February 24, 2021. Investors can access the live broadcast via DelekLogistics.com, with a replay available for 90 days. Delek US Holdings, Inc. (NYSE: DK) will also hold its earnings call on the same day at 8:30 a.m. CT, providing insights that may be relevant to Delek Logistics as a subsidiary.
Delek US Holdings reported a net loss of $(88.1) million or $(1.20) per share for Q3 2020, compared to a net income of $51.3 million or $0.68 per share a year earlier. Adjusted EBITDA fell to $21.9 million from $184.2 million. Key actions to improve cash flow include an 8% workforce reduction and 40% CAPEX cut, projected to enhance cash flow by $200 million in 2021. The company suspended dividends to maintain financial flexibility. As of September 30, 2020, cash was $808 million, with $2.47 billion debt. Refining margins plummeted, while logistics saw improved contributions.
Delek Logistics Partners reported a strong performance for Q3 2020, with net income of $46.3 million ($1.26 per unit), up 52% year-over-year. Net cash from operations was $62.3 million, while distributable cash flow reached $59.1 million. EBITDA increased by 32% to $67.8 million, driven by the drop down of new assets and reduced operating expenses. The company declared a cash distribution of $0.905 per unit, reflecting a 2.8% increase from Q3 2019. Total debt stood at approximately $1 billion with a leverage ratio of 3.9x, demonstrating financial stability and growth potential.
Delek Logistics Partners, LP (NYSE: DKL) announced a quarterly cash distribution of $0.905 per common limited partner unit for Q3 2020, reflecting a 0.6% increase from Q2 2020 and a 2.8% increase year-over-year. This marks the 30th consecutive quarterly increase in distributions, demonstrating business stability amid challenging energy conditions. The distribution is payable on November 12, 2020 to unitholders of record on November 6, 2020. Delek Logistics aims for 5% distribution growth for the year compared to 2019.
Delek US Holdings (NYSE: DK) will issue its third quarter 2020 results on November 4, 2020, after market close. A conference call to discuss these results is scheduled for 8:30 a.m. CT on November 5, 2020. Investors can access the live broadcast through the Delek US website. Additionally, Delek Logistics Partners (NYSE: DKL) will hold its own earnings call at 7:30 a.m. CT on the same day, which may offer relevant information for Delek US stakeholders.
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