Westlake Chemical Partners LP (NYSE: WLKP) reported net income for Q3 2024 of $18.1 million, or $0.51 per limited partner unit, marking a $4.9 million increase over Q3 2023’s net income of $13.2 million. Operating cash flow reached $126.1 million, up by $25.2 million from the $100.9 million reported in Q3 2023, driven by stronger earnings. Distributable cash flow for Q3 2024 rose to $17.9 million, an increase of $4.3 million over the $13.6 million in Q3 2023, with improved coverage ratios due to higher net income and reduced maintenance costs.
Compared to Q2 2024, Q3’s net income grew by $3.7 million, reaching $18.1 million, primarily from increased third-party ethylene sales volumes and higher margins. Q3 operating cash flow of $126.1 million represented a $4.2 million increase over Q2, while distributable cash flow rose by $0.8 million, reflecting higher profits.
“We are pleased with our Q3 2024 performance,” said CEO Jean-Marc Gilson. “With increased third-party ethylene prices and margins, we deferred our planned Petro 1 turnaround to Q1 2025 to capture favorable margins. As a result, we achieved improved distributable cash flow.” Looking ahead, Gilson noted that Q4 cash flow might moderate due to upcoming maintenance expenses for the Petro 1 unit. However, strong third-party margins and steady contract execution are expected to support cash flow and distributions to unitholders.
On October 30, 2024, the Partnership declared a Q3 distribution of $0.4714 per unit, payable on November 27, 2024, marking the 41st consecutive distribution. The trailing twelve-month coverage ratio reached 1.03x, up from 0.96x in Q2 2024, with a cumulative coverage ratio of 1.08x since the IPO.
The Partnership’s Ethylene Sales Agreement with Westlake, covering 95% of OpCo’s ethylene production, is structured to ensure stable cash flow by providing a fixed margin of $0.10 per pound, net of expenses.
Forward-Looking Statements
This release contains forward-looking statements regarding future performance, cash flow expectations, and planned maintenance activities. These projections are subject to risks, including production volumes, ethylene sales prices, operational challenges, economic conditions, weather events, and regulatory changes. Please see the Partnership’s recent SEC filings for detailed risk factors.
Non-GAAP Financial Measures
This report includes non-GAAP measures like distributable cash flow and EBITDA, providing additional insights into operational performance. Reconciliations to the nearest GAAP measures are available at the end of the release.
Westlake Chemical Partners, headquartered in Houston, owns a 22.8% interest in Westlake Chemical OpCo LP, which operates three ethylene production facilities in the U.S. For further information, visit www.wlkpartners.com.
