On August 6, 2024, Westlake Chemical Partners LP (WLKP, Financial) released its 8-K filing detailing the financial performance for the second quarter of 2024. Westlake Chemical Partners LP is a key player in the U.S. chemical industry, focusing on ethylene production through its subsidiary, OpCo. The company operates three ethylene production facilities located in Calvert City, Kentucky, and Lake Charles, Louisiana.
Performance and Challenges
Westlake Chemical Partners LP reported a net income attributable to the Partnership of $14.4 million, or $0.41 per limited partner unit, for the second quarter of 2024. This represents an increase of $2.5 million compared to the second quarter of 2023, where net income was $11.9 million. However, the earnings per share (EPS) fell short of the analyst estimate of $0.44. The revenue for the quarter stood at $284.2 million, surpassing the estimated $270.00 million.
Despite the positive revenue growth, the company faced challenges, including higher selling, general, and administrative expenses, which impacted the net income compared to the first quarter of 2024. The net income for Q2 2024 decreased by $0.4 million from Q1 2024's $14.8 million.
Financial Achievements
Westlake Chemical Partners LP achieved significant milestones in the second quarter of 2024. The company declared a quarterly distribution of $0.4714 per unit, marking the 40th consecutive quarterly distribution. The cash flows from operating activities increased to $121.9 million, up by $23.4 million compared to the same period in 2023. This increase was primarily driven by higher net income and favorable working capital changes.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $284.2 million | $264.2 million |
| Gross Profit | $101.2 million | $87.7 million |
| Net Income | $14.4 million | $11.9 million |
| EPS | $0.41 | $0.34 |
Balance Sheet and Cash Flow
As of June 30, 2024, Westlake Chemical Partners LP reported total assets of $1.29 billion, with cash and cash equivalents amounting to $66.0 million. The total liabilities stood at $453.5 million, while the total equity was $834.8 million. The company generated $226.5 million in net cash from operating activities for the first half of 2024, compared to $243.4 million in the same period of 2023.
Commentary and Future Outlook
We are pleased with the Partnership's performance for the second quarter of 2024. During the second quarter, we benefitted from improved third-party ethylene sales prices and margins, which supported the growth in our MLP distributable cash flow," said Albert Chao, Executive Chairman.
Looking ahead, the company is preparing for a planned maintenance turnaround at its Petro 1 ethylene unit, scheduled to begin later in the third quarter of 2024. While this turnaround is expected to temporarily impact earnings and cash flows, the outlook for third-party ethylene sales prices and margins remains positive.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Westlake Chemical Partners LP for further details.
