- Record quarterly net income of $25.1 million, an increase of
68% compared to second quarter 2020
- Declared quarterly distribution of $0.4714 per unit; 28th
consecutive quarterly distribution
Westlake Chemical Partners LP (NYSE: WLKP) (the "Partnership")
today reported record net income attributable to the Partnership in
the second quarter of 2021 of $25.1 million, or $0.71 per limited
partner unit, an increase of $10.2 million compared to second
quarter 2020 net income attributable to the Partnership of $14.9
million. The increase in net income was a result of higher
production, higher earnings on third-party sales as well as a buyer
deficiency fee. The buyer deficiency fee of $8.7 million is a
result of lower planned production in 2021 attributable to the
impacts of the winter storm which occurred in the first quarter and
an outage at Westlake Chemical OpCo LP ("OpCo") Petro 1 facility,
which occurred on June 25, 2021. Cash flows from operating
activities in the second quarter of 2021 were $131.7 million, an
increase of $18.9 million compared to second quarter 2020 cash
flows from operating activities of $112.8 million. For the three
months ended June 30, 2021, MLP distributable cash flow of $25.5
million increased by $8.6 million from second quarter 2020 MLP
distributable cash flow of $16.9 million. The increase in MLP
distributable cash flow was primarily attributable to the higher
production and resulting higher earnings at OpCo, partially offset
by increased maintenance costs and turnaround reserves.
Record second quarter 2021 net income attributable to the
Partnership of $25.1 million increased by $10.0 million compared to
first quarter 2021 net income attributable to the Partnership of
$15.1 million. This increase was primarily attributable to higher
production at OpCo and increased earnings on third party sales.
Second quarter 2021 cash flows from operating activities of $131.7
million decreased by $23.7 million compared to first quarter 2021
cash flows from operating activities of $155.4 million. This
decrease in cash flows from operating activities was primarily due
to the receipt of a receivable from Westlake Chemical Corporation
("Westlake Chemical") in the first quarter, partially offset by
higher earnings during the quarter. Second quarter 2021 MLP
distributable cash flow of $25.5 million increased by $9.3 million
compared to first quarter 2021 MLP distributable cash flow of $16.2
million. This increase was primarily attributable to the higher
production and earnings at OpCo.
Net income attributable to the Partnership of $40.2 million, or
$1.14 per limited partner unit, for the six months ended June 30,
2021 increased by $7.6 million compared to the first six months of
2020 net income attributable to the Partnership of $32.6 million.
The increase in net income attributable to the Partnership as
compared to the prior-year period was due to higher earnings on
ethylene sold to Westlake Chemical under the Ethylene Sales
Agreement and third parties and a buyer deficiency of $18.4 million
related to the winter storm that occurred in the first quarter of
2021, partially offset by lower ethylene production. Cash flows
from operating activities in the first six months of 2021 were
$287.1 million, an increase of $63.4 million compared to the first
six months of 2020 cash flows from operating activities of $223.7
million. This increase was primarily due to the receipt of a prior
year receivable from Westlake and higher earnings during the
period. For the six months ended June 30, 2021, MLP distributable
cash flow of $41.8 million increased by $6.6 million compared to
the first six months of 2020 MLP distributable cash flow of $35.2
million. The increase in MLP distributable cash flow as compared to
the prior-year period was primarily attributable to the
Partnership's higher earnings at OpCo, partially offset by
increased maintenance costs and turnaround reserves.
"The Partnership had a record second quarter driven by the
strong consumer markets for PVC construction materials and
polyethylene packaging, which drove the resulting demand for
ethylene. The strong demand for ethylene and the resulting robust
pricing environment drove higher margins in our second quarter 2021
third-party ethylene sales," said Albert Chao, President and Chief
Executive Officer.
OpCo's Ethylene Sales Agreement with Westlake Chemical is
designed to provide for stable and predictable cash flows. The
agreement provides that 95% of OpCo's ethylene production is sold
to Westlake Chemical for a cash margin of $0.10 per pound, net of
operating costs, maintenance capital expenditures and reserves for
future turnaround expenditures.
On August 2, 2021, the Partnership announced that the Board of
Directors of Westlake Chemical Partners GP LLC had approved a
quarterly distribution for the second quarter of 2021 of $0.4714
per unit to be payable on August 26, 2021 to unitholders of record
as of August 12, 2021, representing the 28th consecutive quarterly
distribution to our unitholders. MLP distributable cash flow
provided trailing twelve-month coverage of 1.18x the declared
distributions for the second quarter of 2021.
The statements in this release and the related teleconference
relating to matters that are not historical facts, such as those
with respect to cost recovery of expenses incurred in the second
quarter of 2021, 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 Westlake Chemical Corporation; actions of third
parties; inclement or hazardous weather conditions, including
flooding, and the physical impacts of climate change; environmental
hazards; changes in laws and regulations (or the interpretation
thereof); inability to acquire or maintain necessary permits;
inability to obtain necessary production equipment or replacement
parts; technical difficulties or failures; labor disputes;
difficulty collecting receivables; inability of our customers to
take delivery; fires, explosions or other industrial accidents; our
ability to borrow funds and access capital markets; and other risk
factors. For more detailed information about the factors that could
cause actual results to differ materially, please refer to the
Partnership's Annual Report on Form 10-K for the year ended
December 31, 2020, which was filed with the SEC in March 2021.
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 (100.0%) of the Partnership's distributions to
non-U.S. investors as being attributable to income that is
effectively connected with a United States trade or business.
Accordingly, the Partnership's distributions to non-U.S. investors
are subject to federal income tax withholding at the highest
applicable effective tax rate.
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
Securities and Exchange Commission ("SEC") as a numerical measure
of a registrant's historical or future financial performance,
financial position or cash flows that (1) excludes amounts, or is
subject to adjustments that have the effect of excluding amounts,
that are included in the most directly comparable measure
calculated and presented in accordance with U.S. generally accepted
accounting principles ("U.S. GAAP") in the statement of income,
balance sheet or statement of cash flows (or equivalent statements)
of the registrant; or (2) includes amounts, or is subject to
adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated
and presented. We report our financial results in accordance with
U.S. GAAP, but believe that certain non-GAAP financial measures,
such as MLP distributable cash flow and EBITDA, provide useful
supplemental information to investors regarding the underlying
business trends and performance of our ongoing operations and are
useful for period-over-period comparisons of such operations. These
non-GAAP financial measures should be considered as a supplement
to, and not as a substitute for, or superior to, the financial
measures prepared in accordance with U.S. GAAP. We define MLP
distributable cash flow as distributable cash flow less
distributable cash flow attributable to Westlake's noncontrolling
interest in OpCo and distributions attributable to the incentive
distribution rights holder. MLP distributable cash flow does not
reflect changes in working capital balances. We define EBITDA as
net income before interest expense, income taxes, depreciation and
amortization. MLP distributable cash flow and EBITDA are non-GAAP
supplemental financial measures that management and external users
of our consolidated financial statements, such as industry
analysts, investors, lenders and rating agencies, may use to assess
our operating performance as compared to other publicly traded
partnerships, our ability to incur and service debt and fund
capital expenditures and the viability of acquisitions and other
capital expenditure projects and the returns on investment of
various investment opportunities. Reconciliations of MLP
distributable cash flow to net income and to net cash provided by
operating activities and of EBITDA to net income, income from
operations and net cash provided by operating activities can be
found in the financial schedules at the end of this press
release.
Westlake Chemical Partners LP
Westlake Chemical Partners is a limited partnership formed by
Westlake Chemical Corporation to operate, acquire and develop
ethylene production facilities and other qualified assets.
Headquartered in Houston, the Partnership owns a 22.8% interest in
Westlake Chemical OpCo LP. Westlake Chemical OpCo LP's assets
consist of three ethylene production facilities in Calvert City,
Kentucky, and Lake Charles, Louisiana and an ethylene pipeline. For
more information about Westlake Chemical Partners LP, please visit
http://www.wlkpartners.com.
Westlake Chemical Partners LP Conference Call Information:
A conference call to discuss Westlake Chemical Partners' second
quarter 2021 results will be held Tuesday, August 3, 2021 at 1:00
PM Eastern Time (12:00 PM Central Time). To access the conference
call, dial (855) 765-5686 or (234) 386-2848 for international
callers, approximately 10 minutes prior to the scheduled start time
and reference passcode 321 65 79.
A replay of the conference call will be available beginning two
hours after its conclusion until 11:59 p.m. Eastern Time on
Tuesday, August 10, 2021. To hear a replay, dial (855) 859-2056 or
(404) 537-3406 for international callers. The replay passcode is
321 65 79.
The conference call will also be available via webcast at:
https://edge.media-server.com/mmc/p/go9q47ya and the
earnings release can be obtained via the Partnership web page at:
https://investors.wlkpartners.com/corporate-profile/default.aspx.
WESTLAKE CHEMICAL PARTNERS LP
("WESTLAKE PARTNERS")
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(In thousands of dollars,
except per unit data)
Revenue
Net sales—Westlake Chemical Corporation
("Westlake")
$
240,956
$
227,431
$
460,759
$
442,259
Net co-product, ethylene and other
sales—third parties
81,273
11,069
129,677
46,790
Total net sales
322,229
238,500
590,436
489,049
Cost of sales
191,200
148,470
371,708
295,471
Gross profit
131,029
90,030
218,728
193,578
Selling, general and administrative
expenses
8,269
6,139
16,942
12,335
Income from operations
122,760
83,891
201,786
181,243
Other income (expense)
Interest expense—Westlake
(2,224
)
(3,431
)
(4,460
)
(7,381
)
Other income, net
21
123
28
708
Income before income taxes
120,557
80,583
197,354
174,570
Income tax provision
263
206
438
423
Net income
120,294
80,377
196,916
174,147
Less: Net income attributable to
noncontrolling interests in Westlake Chemical OpCo LP ("OpCo")
95,195
65,517
156,671
141,540
Net income attributable to Westlake
Partners
$
25,099
$
14,860
$
40,245
$
32,607
Net income per limited partners unit
attributable to Westlake Partners (basic and diluted)
Common units
$
0.71
$
0.43
$
1.14
$
0.93
Distributions declared per unit
$
0.4714
$
0.4714
$
0.9428
$
0.9428
MLP distributable cash flow
$
25,538
$
16,855
$
41,783
$
35,192
Distributions declared
Limited partner units—publicly and
privately held
$
9,938
$
9,933
$
19,874
$
19,867
Limited partner units—Westlake
6,657
6,657
13,314
13,314
Total distributions declared
$
16,595
$
16,590
$
33,188
$
33,181
EBITDA
$
151,483
$
109,827
$
258,058
$
233,795
WESTLAKE CHEMICAL PARTNERS
LP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
June 30, 2021
December 31,
2020
(In thousands of
dollars)
ASSETS
Current assets
Cash and cash equivalents
$
17,665
$
17,154
Receivable under the Investment Management
Agreement—Westlake
222,249
123,228
Accounts receivable, net—Westlake
66,948
108,028
Accounts receivable, net—third parties
24,962
11,029
Inventories
4,929
3,474
Prepaid expenses and other current
assets
61
392
Total current assets
336,814
263,305
Property, plant and equipment, net
1,030,016
1,050,677
Other assets, net
34,925
42,506
Total assets
$
1,401,755
$
1,356,488
LIABILITIES AND EQUITY
Current liabilities (accounts payable and
accrued liabilities)
$
48,653
$
39,754
Long-term debt payable to Westlake
399,674
399,674
Other liabilities
1,670
1,923
Total liabilities
449,997
441,351
Common unitholders—publicly and privately
held
476,076
471,701
Common unitholder—Westlake
51,103
48,270
General partner—Westlake
(242,572
)
(242,572
)
Total Westlake Partners partners'
capital
284,607
277,399
Noncontrolling interest in OpCo
667,151
637,738
Total equity
951,758
915,137
Total liabilities and equity
$
1,401,755
$
1,356,488
WESTLAKE CHEMICAL PARTNERS
LP
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June
30,
2021
2020
(In thousands of
dollars)
Cash flows from operating
activities
Net income
$
196,916
$
174,147
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
56,244
51,844
Other balance sheet changes
33,958
(2,272
)
Net cash provided by operating
activities
287,118
223,719
Cash flows from investing
activities
Additions to property, plant and
equipment
(27,289
)
(20,595
)
Maturities of investments with Westlake
under the Investment Management Agreement
83,000
181,000
Investments with Westlake under the
Investment Management Agreement
(182,000
)
(190,000
)
Other
126
—
Net cash used for investing activities
(126,163
)
(29,595
)
Cash flows from financing
activities
Quarterly distributions to noncontrolling
interest retained in OpCo by Westlake
(127,258
)
(157,248
)
Quarterly distributions to unitholders
(33,186
)
(33,181
)
Net cash used for financing activities
(160,444
)
(190,429
)
Net increase in cash and cash
equivalents
511
3,695
Cash and cash equivalents at beginning of
period
17,154
19,923
Cash and cash equivalents at end of
period
$
17,665
$
23,618
WESTLAKE CHEMICAL PARTNERS
LP
RECONCILIATION OF MLP
DISTRIBUTABLE CASH FLOW TO NET INCOME
AND NET CASH PROVIDED BY
OPERATING ACTIVITIES
(Unaudited)
Three Months Ended March
31,
Three Months Ended June
30,
Six Months Ended June
30,
2021
2021
2020
2021
2020
(In thousands of
dollars)
Net cash provided by operating
activities
$
155,408
$
131,710
$
112,758
$
287,118
$
223,719
Changes in operating assets and
liabilities and other
(78,786
)
(11,416
)
(32,381
)
(90,202
)
(49,572
)
Net Income
76,622
120,294
80,377
196,916
174,147
Add:
Depreciation, amortization and disposition
of property, plant and equipment
28,898
28,734
26,164
57,632
52,291
Mark-to-market adjustment loss (gain) on
derivative contracts
—
—
704
—
(1,787
)
Less:
Contribution to turnaround reserves
(12,332
)
(12,463
)
(9,884
)
(24,795
)
(19,807
)
Maintenance capital expenditures
(11,743
)
(14,344
)
(8,228
)
(26,087
)
(19,349
)
Distributable cash flow attributable to
noncontrolling interest in OpCo
(65,200
)
(96,683
)
(72,278
)
(161,883
)
(150,303
)
MLP distributable cash flow
$
16,245
$
25,538
$
16,855
$
41,783
$
35,192
WESTLAKE CHEMICAL PARTNERS
LP
RECONCILIATION OF EBITDA TO
NET INCOME, INCOME FROM OPERATIONS AND NET CASH
PROVIDED BY OPERATING
ACTIVITIES
(Unaudited)
Three Months Ended March
31,
Three Months Ended June
30,
Three Months Ended March
31,
2021
2021
2020
2021
2020
(In thousands of
dollars)
Net cash provided by operating
activities
$
155,408
$
131,710
$
112,758
$
287,118
$
223,719
Changes in operating assets and
liabilities and other
(78,786
)
(11,416
)
(32,381
)
(90,202
)
(49,572
)
Net Income
76,622
120,294
80,377
196,916
174,147
Less:
Other income, net
7
21
123
28
708
Interest expense
(2,236
)
(2,224
)
(3,431
)
(4,460
)
(7,381
)
Income tax provision
(175
)
(263
)
(206
)
(438
)
(423
)
Income from operations
79,026
122,760
83,891
201,786
181,243
Add:
Depreciation and amortization
27,542
28,702
25,813
56,244
51,844
Other income, net
7
21
123
28
708
EBITDA
$
106,575
$
151,483
$
109,827
$
258,058
$
233,795
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005130/en/
(713) 585-2900 Investors—Steve Bender Media—L. Benjamin
Ederington
Westlake Chemical Partners (NYSE:WLKP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Westlake Chemical Partners (NYSE:WLKP)
Historical Stock Chart
From Apr 2023 to Apr 2024
