Westlake Chemical Partners LP referred to as the “Partnership,” has released its financial and operational results for the first quarter of 2025, highlighting a significant year-over-year decrease in key financial metrics due to a planned maintenance turnaround at its Petro 1 ethylene production facility in Lake Charles, Louisiana.
First Quarter 2025 Financial Performance
The Partnership reported a net income attributable to the Partnership of $4.9 million, or $0.14 per limited partner unit, marking a substantial decline from the $14.8 million reported for the first quarter of 2024. This decrease primarily stems from the planned Petro 1 turnaround, which led to lower production and sales volumes.
Cash flows from operating activities for the first quarter of 2025 amounted to $45.8 million, a decline of $58.8 million compared to the $104.6 million in the corresponding period of 2024. The reduction is attributed to lower operational throughput and increased capital expenditures associated with the maintenance activities at Petro 1.
Additionally, the Partnership’s MLP distributable cash flow for the quarter was $4.7 million, down from $16.9 million in the prior year’s first quarter. The trailing twelve-month coverage ratio dropped to 0.82x, down from 1.01x at the end of the fourth quarter of 2024. This decrease reflects the impact of both reduced ethylene output and higher maintenance spending.
Sequential Quarter Comparison
When compared to the fourth quarter of 2024, net income dropped by $10.1 million, again due to the Petro 1 turnaround. Cash flows from operating activities decreased by $86.7 million from the previous quarter’s $132.5 million, while MLP distributable cash flow decreased by $10.3 million from $15.0 million. These figures align with expectations given the scope and timing of the turnaround.
Management Commentary
Jean-Marc Gilson, President and CEO of Westlake Chemical Partners, acknowledged the anticipated dip in performance due to the planned Petro 1 shutdown. “As expected, our first quarter of 2025 distributable cash flow and associated coverage ratio were negatively impacted by the planned turnaround at our Petro 1 ethylene facility in Lake Charles, Louisiana,” said Gilson. He noted that the turnaround began at the end of January and concluded in early April, with the facility returning to full operations shortly thereafter.
Gilson expressed appreciation for the Petro 1 team, highlighting their role in the successful execution of the turnaround and commending the facility for operating continuously for over eight years prior to the maintenance shutdown. He emphasized that this operational milestone reflects the strong manufacturing culture and commitment to reliability that defines Westlake.
With no additional turnarounds planned for the near future, Gilson expressed confidence in the Partnership’s ability to return to its historical levels of strong distributable cash flow and solid coverage ratios in the upcoming quarters.
Distribution Announcement
On April 30, 2025, the Board of Directors of Westlake Chemical Partners GP LLC approved a quarterly distribution of $0.4714 per common unit for the first quarter of 2025. This distribution, payable on May 29, 2025, to unitholders of record as of May 13, 2025, represents the 43rd consecutive quarterly distribution, a testament to the Partnership’s ongoing commitment to delivering value to its investors.
While the trailing twelve-month distribution coverage fell to 0.82x due to the turnaround, the cumulative coverage ratio since the Partnership’s IPO in July 2014 remains healthy at approximately 1.06x.
Stabilizing Revenues Through Sales Agreements
The Partnership maintains a long-term Ethylene Sales Agreement with Westlake Corporation, which underpins the financial stability of its operations. Under this agreement, 95% of the ethylene produced by OpCo is sold to Westlake at a margin of $0.10 per pound, net of operating costs and maintenance capital expenditures. This agreement provides predictable cash flows and reduces exposure to market volatility.
The Partnership provided a detailed forward-looking statement section, noting that many of the expectations outlined are subject to risks and uncertainties that could cause actual results to differ materially. These include—but are not limited to—economic conditions, fluctuations in feedstock and energy costs, interest rate changes, weather events, and regulatory developments. Also noted are the potential impacts of pandemics and other unforeseen global events.
Investors are advised to consider these risks carefully and to consult the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC in March 2025, for additional details.
Tax Considerations for Non-U.S. Investors
This release is also considered a qualified notice under Treasury Regulation Section 1.1446-4(b), indicating that 100% of the Partnership’s distributions to non-U.S. investors are treated as effectively connected income with a U.S. trade or business. Consequently, such distributions are subject to federal income tax withholding at the highest applicable rate.
Use of Non-GAAP Financial Metrics
The Partnership’s financial reporting includes non-GAAP measures such as MLP distributable cash flow, coverage ratio, and EBITDA. These are intended to supplement, not replace, financial results reported under U.S. GAAP.
- MLP Distributable Cash Flow is defined as distributable cash flow less the portion attributable to Westlake Corporation’s noncontrolling interest in OpCo and incentive distribution rights.
- Coverage Ratio provides insight into the sustainability of distributions based on available cash flow.
- EBITDA is calculated as net income before interest, income taxes, depreciation, and amortization.
These non-GAAP measures provide insight into the Partnership’s operating performance and financial health and are used by management, analysts, and investors to evaluate the business.
Reconciliations of these measures to their GAAP counterparts are available in the financial schedules accompanying the press release.
Overview of Westlake Chemical Partners LP
Westlake Chemical Partners LP is a publicly traded limited partnership formed by Westlake Corporation with the aim of operating, acquiring, and developing ethylene production facilities and related assets. Headquartered in Houston, Texas, the Partnership holds a 22.8% interest in Westlake Chemical OpCo LP. The OpCo owns three ethylene production facilities located in Calvert City, Kentucky, and Lake Charles, Louisiana, as well as a dedicated ethylene pipeline.
The Partnership benefits from its integration with Westlake Corporation and its long-term sales agreements, which offer financial predictability and shield it from market fluctuations that typically affect commodity producers. These structural advantages position Westlake Chemical Partners LP as a stable and attractive investment within the chemicals sector.
The Partnership expects to return to stronger financial performance as production resumes normal levels and the impact of the Petro 1 turnaround fades. No additional maintenance shutdowns are anticipated in the near term, which should contribute to improved MLP distributable cash flow and a higher coverage ratio.
The Partnership continues to monitor market conditions, feedstock pricing, and regulatory developments that may affect its operations. Nevertheless, with a robust operating structure, strong parent company support, and a clear path toward recovery, Westlake Chemical Partners LP remains confident in its long-term strategic trajectory and ability to deliver value to its unitholders.
