Westlake Chemical Partners LP Announces First Quarter 2022 Results
Westlake Chemical Partners LP (NYSE: WLKP) reported net income of $16.2 million or $0.46 per unit for Q1 2022, a $1.1 million increase from Q1 2021. This growth stemmed from robust production volumes and solid margins on third-party sales. However, cash flows from operations decreased to $104.8 million due to payment timing. The partnership also declared a quarterly distribution of $0.4714 per unit, marking the 31st consecutive distribution. MLP distributable cash flow increased to $19.3 million, providing a coverage ratio of 1.10x for declared distributions.
- Net income increased by $1.1 million from Q1 2021, reaching $16.2 million.
- Strong production volumes following the successful turnaround of the Petro 2 ethylene facility.
- Quarterly distribution of $0.4714 per unit, representing the 31st consecutive distribution.
- MLP distributable cash flow rose to $19.3 million, a $3.1 million increase from Q1 2021.
- Cash flows from operating activities decreased by $50.6 million compared to Q1 2021.
-
Declared quarterly distribution of
per unit; 31st consecutive quarterly distribution$0.47 14
"The Partnership's performance in the first quarter of 2022 reflects strong production volumes following the turnaround of our Petro 2 ethylene facility in
On
OpCo's Ethylene Sales Agreement with Westlake is designed to provide for stable and predictable cash flows. The agreement provides that
The statements in this release and the related teleconference relating to matters that are not historical facts, such as those with respect to the ability to deliver value and cash flows, the expectation that strong production will continue and the expectation for sustained performance are forward-looking statements. These forward-looking statements are subject to significant risks and uncertainties. Actual results could differ materially, based on factors including, but not limited to, the COVID-19 pandemic and the response thereto; operating difficulties; the volume of ethylene that we are able to sell; the price at which we are able to sell ethylene; changes in the price and availability of feedstocks; changes in prevailing economic conditions; actions and commitments of
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (
Use of Non-GAAP Financial Measures
This release makes reference to certain "non-GAAP" financial measures, such as MLP distributable cash flow and EBITDA. For this purpose, a non-GAAP financial measure is generally defined by the
Westlake Chemical Partners LP Conference Call Information:
A conference call to discuss
A replay of the conference call will be available beginning two hours after its conclusion until
The conference call will also be available via webcast at: https://edge.media-server.com/mmc/p/zeeudc2d and the earnings release can be obtained via the Partnership web page at: https://investors.wlkpartners.com/corporate-profile/default.aspx.
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited) |
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|
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Three Months Ended |
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|
|
2022 |
|
2021 |
||||
|
|
|
|
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(In thousands of dollars, except per unit data) |
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Revenue |
|
|
|
|
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Net sales—Westlake Corporation ("Westlake") |
|
$ |
290,657 |
|
|
$ |
219,803 |
|
Net co-product, ethylene and other sales—third parties |
|
|
71,743 |
|
|
|
48,404 |
|
Total net sales |
|
|
362,400 |
|
|
|
268,207 |
|
Cost of sales |
|
|
270,961 |
|
|
|
180,508 |
|
Gross profit |
|
|
91,439 |
|
|
|
87,699 |
|
Selling, general and administrative expenses |
|
|
8,227 |
|
|
|
8,673 |
|
Income from operations |
|
|
83,212 |
|
|
|
79,026 |
|
Other income (expense) |
|
|
|
|
||||
Interest expense—Westlake |
|
|
(2,199 |
) |
|
|
(2,236 |
) |
Other income (expense), net |
|
|
(25 |
) |
|
|
7 |
|
Income before income taxes |
|
|
80,988 |
|
|
|
76,797 |
|
Income tax provision |
|
|
163 |
|
|
|
175 |
|
Net income |
|
|
80,825 |
|
|
|
76,622 |
|
Less: Net income attributable to noncontrolling interests in |
|
|
|
|
|
|
|
|
LP ("OpCo") |
64,631 |
61,476 |
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Net income attributable to |
|
$ |
16,194 |
|
|
$ |
15,146 |
|
|
|
|
|
|
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Net income per limited partners unit attributable to |
|
|
|
|
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Common units |
|
$ |
0.46 |
|
|
$ |
0.43 |
|
|
|
|
|
|
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Distributions declared per unit |
|
$ |
0.4714 |
|
|
$ |
0.4714 |
|
|
|
|
|
|
||||
MLP distributable cash flow |
|
$ |
19,291 |
|
|
$ |
16,245 |
|
|
|
|
|
|
||||
Distributions declared |
|
|
|
|
||||
Limited partner units—publicly and privately held |
|
$ |
9,943 |
|
|
$ |
9,936 |
|
Limited partner units—Westlake |
|
|
6,657 |
|
|
|
6,657 |
|
Total distributions declared |
|
$ |
16,600 |
|
|
$ |
16,593 |
|
EBITDA |
|
$ |
114,469 |
|
|
$ |
106,575 |
|
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited) |
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|
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(In thousands of dollars) |
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ASSETS |
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|
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|
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Current assets |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
19,234 |
|
|
$ |
17,057 |
|
Receivable under the Investment Management Agreement—Westlake |
|
|
111,224 |
|
|
|
106,243 |
|
Accounts receivable, net—Westlake |
|
|
109,732 |
|
|
|
142,791 |
|
Accounts receivable, net—third parties |
|
|
26,412 |
|
|
|
5,825 |
|
Inventories |
|
|
7,887 |
|
|
|
8,898 |
|
Prepaid expenses and other current assets |
|
|
238 |
|
|
|
396 |
|
Total current assets |
|
|
274,727 |
|
|
|
281,210 |
|
Property, plant and equipment, net |
|
|
1,030,571 |
|
|
|
1,043,539 |
|
Other assets, net |
|
|
149,068 |
|
|
|
155,949 |
|
Total assets |
|
$ |
1,454,366 |
|
|
$ |
1,480,698 |
|
|
|
|
|
|
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LIABILITIES AND EQUITY |
|
|
|
|
||||
Current liabilities (accounts payable and accrued liabilities) |
|
$ |
76,944 |
|
|
$ |
106,796 |
|
Current debt payable to Westlake |
|
|
377,055 |
|
|
|
— |
|
Long-term debt payable to Westlake |
|
|
22,619 |
|
|
|
399,674 |
|
Other liabilities |
|
|
1,516 |
|
|
|
1,530 |
|
Total liabilities |
|
|
478,134 |
|
|
|
508,000 |
|
Common unitholders—publicly and privately held |
|
|
481,550 |
|
|
|
481,796 |
|
Common unitholder—Westlake |
|
|
54,591 |
|
|
|
54,754 |
|
General partner—Westlake |
|
|
(242,572 |
) |
|
|
(242,572 |
) |
|
|
|
293,569 |
|
|
|
293,978 |
|
Noncontrolling interest in OpCo |
|
|
682,663 |
|
|
|
678,720 |
|
Total equity |
|
|
976,232 |
|
|
|
972,698 |
|
Total liabilities and equity |
|
$ |
1,454,366 |
|
|
$ |
1,480,698 |
|
|
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(Unaudited) |
||||||||
|
|
Three Months Ended |
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|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
|
|
(In thousands of dollars) |
||||||
Cash flows from operating activities |
|
|
|
|
||||
Net income |
|
$ |
80,825 |
|
|
$ |
76,622 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
31,282 |
|
|
|
27,542 |
|
Net loss on disposition and other |
|
|
3,962 |
|
|
|
1,462 |
|
Other balance sheet changes |
|
|
(11,259 |
) |
|
|
49,782 |
|
Net cash provided by operating activities |
|
|
104,810 |
|
|
|
155,408 |
|
Cash flows from investing activities |
|
|
|
|
||||
Additions to property, plant and equipment |
|
|
(20,342 |
) |
|
|
(12,748 |
) |
Maturities of investments with Westlake under the Investment Management Agreement |
|
|
50,000 |
|
|
|
— |
|
Investments with Westlake under the Investment Management Agreement |
|
|
(55,000 |
) |
|
|
(64,000 |
) |
Other |
|
|
— |
|
|
|
126 |
|
Net cash used for investing activities |
|
|
(25,342 |
) |
|
|
(76,622 |
) |
Cash flows from financing activities |
|
|
|
|
||||
Quarterly distributions to noncontrolling interest retained in OpCo by Westlake |
|
|
(60,688 |
) |
|
|
(62,058 |
) |
Quarterly distributions to unitholders |
|
|
(16,603 |
) |
|
|
(16,593 |
) |
Net cash used for financing activities |
|
|
(77,291 |
) |
|
|
(78,651 |
) |
Net increase in cash and cash equivalents |
|
|
2,177 |
|
|
|
135 |
|
Cash and cash equivalents at beginning of period |
|
|
17,057 |
|
|
|
17,154 |
|
Cash and cash equivalents at end of period |
|
$ |
19,234 |
|
|
$ |
17,289 |
|
|
||||||||||||
RECONCILIATION OF MLP DISTRIBUTABLE CASH FLOW TO NET INCOME |
||||||||||||
AND NET CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Three Months
|
|
Three Months Ended |
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|
|
2021 |
|
2022 |
|
2021 |
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|
|
|
|
|
|
|
||||||
|
|
(In thousands of dollars) |
||||||||||
Net cash provided by operating activities |
|
$ |
21,862 |
|
|
$ |
104,810 |
|
|
$ |
155,408 |
|
Changes in operating assets and liabilities and other |
|
|
116,532 |
|
|
|
(23,985 |
) |
|
|
(78,786 |
) |
Net Income |
|
|
138,394 |
|
|
|
80,825 |
|
|
|
76,622 |
|
Add: |
|
|
|
|
|
|
||||||
Depreciation, amortization and disposition of property, plant and equipment |
|
|
28,442 |
|
|
|
34,253 |
|
|
|
28,898 |
|
Less: |
|
|
|
|
|
|
||||||
Contribution to turnaround reserves |
|
|
(44,500 |
) |
|
|
(7,204 |
) |
|
|
(12,332 |
) |
Maintenance capital expenditures |
|
|
(46,350 |
) |
|
|
(13,453 |
) |
|
|
(11,743 |
) |
Distributable cash flow attributable to noncontrolling interest in OpCo |
|
|
(60,689 |
) |
|
|
(75,130 |
) |
|
|
(65,200 |
) |
MLP distributable cash flow |
|
$ |
15,297 |
|
|
$ |
19,291 |
|
|
$ |
16,245 |
|
|
||||||||||||
RECONCILIATION OF EBITDA TO NET INCOME, INCOME FROM OPERATIONS AND |
||||||||||||
PROVIDED BY OPERATING ACTIVITIES |
||||||||||||
(Unaudited) |
||||||||||||
|
|
Three Months
|
|
Three Months Ended |
||||||||
|
|
2021 |
|
2022 |
|
2021 |
||||||
|
|
|
|
|
|
|
||||||
|
|
(In thousands of dollars) |
||||||||||
Net cash provided by operating activities |
|
$ |
21,862 |
|
|
$ |
104,810 |
|
|
$ |
155,408 |
|
Changes in operating assets and liabilities and other |
|
|
116,532 |
|
|
|
(23,985 |
) |
|
|
(78,786 |
) |
Net Income |
|
|
138,394 |
|
|
|
80,825 |
|
|
|
76,622 |
|
Less: |
|
|
|
|
|
|
||||||
Other income (expense), net |
|
|
10 |
|
|
|
(25 |
) |
|
|
7 |
|
Interest expense |
|
|
(2,166 |
) |
|
|
(2,199 |
) |
|
|
(2,236 |
) |
Income tax provision |
|
|
(216 |
) |
|
|
(163 |
) |
|
|
(175 |
) |
Income from operations |
|
|
140,766 |
|
|
|
83,212 |
|
|
|
79,026 |
|
Add: |
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
|
25,984 |
|
|
|
31,282 |
|
|
|
27,542 |
|
Other income (expense), net |
|
|
10 |
|
|
|
(25 |
) |
|
|
7 |
|
EBITDA |
|
$ |
166,760 |
|
|
$ |
114,469 |
|
|
$ |
106,575 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006055/en/
(713) 585-2900
Investors—Steve Bender
Media—L.
Source:
FAQ
What is the net income reported by Westlake Chemical Partners for Q1 2022?
How much is the quarterly distribution declared for WLKP in May 2022?
What was the MLP distributable cash flow for Westlake Chemical Partners in Q1 2022?
How does the Q1 2022 net income compare to Q1 2021 for WLKP?