Westlake Chemical Partners LP (NYSE:WLKP) today reported net income attributable to the Partnership of $8.7 million, or $0.32 per limited partner unit, for the three months ended September 30, 2016, a decrease of $1.4 million compared to third quarter 2015 net income attributable to the Partnership of $10.1 million, or $0.37 per limited partner unit. The decrease in net income attributable to the Partnership as compared to the prior-year period was primarily due to lower operating rates at Westlake Chemical OpCo LP’s (“OpCo”) Petro 1 facility in Lake Charles, Louisiana due to the planned turnaround and expansion project, which was completed in July. The third quarter 2016 results were also negatively impacted by lost production as a result of an unplanned outage at OpCo’s Calvert City, Kentucky facility.
The third quarter 2016 net income attributable to the Partnership of $8.7 million, or $0.32 per limited partner unit, decreased by $0.6 million from the second quarter 2016 net income attributable to the Partnership of $9.3 million, or $0.34 per limited partner unit. The decrease in net income was due to a decrease in sales to Westlake Chemical (“Westlake”) associated with certain cost recovery provisions in the ethylene sales agreement between OpCo and Westlake, which was partially offset by increased production at OpCo’s Petro 1 and Calvert City facilities.
On October 31, 2016, the Board of Directors of Westlake Chemical Partners GP LLC, the general partner of the Partnership, announced a quarterly distribution with respect to the third quarter of 2016 of $0.3353 per limited partner unit to be payable on November 29, 2016 to unit and IDR holders of record as of November 14, 2016. The third quarter 2016 distribution increased 12.0% compared to the third quarter 2015 distribution and 2.88% compared to the second quarter 2016 distribution.
OpCo’s sales agreement with Westlake is designed to provide for stable and predictable cash flows. The sales agreement provides that 95% of OpCo’s ethylene output is sold to Westlake for a cash margin of $0.10 per pound, net of operating costs, maintenance capital expenditures and reserves for future turnaround expenditures. Under the ethylene sales agreement with Westlake, Westlake’s obligation to purchase the annual minimum commitment under the ethylene sales agreement, which is measured at year end, is not reduced for the first 45 days following a force majeure event, such as the unplanned outage at Calvert City that began in June 2016.
“We are pleased with OpCo’s recent performance following our turnaround and expansion project, which was completed in July, and added 250 million pounds of capacity to our Petro 1 facility. We believe our upcoming 100 million pound ethylene expansion at our Calvert City facility in the first half of 2017, along with the recently completed expansion at Petro 1, support our continued increase in distributions at a low double digit growth rate to unitholders,” said Albert Chao, President and Chief Executive Officer.
Westlake Chemical Partners LP
Westlake Chemical Partners is a limited partnership formed by Westlake Chemical Corporation to operate, acquire and develop facilities for the processing of natural gas liquids as well as other qualifying activities. Headquartered in Houston, Texas, the Partnership owns a 13.3% interest in Westlake Chemical OpCo LP. Westlake Chemical OpCo LP’s assets include three facilities in Calvert City, Kentucky, and Lake Charles, Louisiana which process ethane and propane into ethylene, 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’ third quarter 2016 results will be held November 8, 2016 at 12:00 PM Eastern Time (11:00 AM 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 96257816.
A replay of the conference call will be available beginning two hours after its conclusion until 11:59 p.m. Eastern Time on November 15, 2016. To hear a replay, dial (855) 859-2056 or (404) 537-3406 for international callers. The replay passcode is 96257816.
The conference call will also be available via webcast at: http://edge.media-server.com/m/p/pgrx3b72 and the earnings release can be obtained via the Partnership web page at: http://westlakepartners.investorroom.com/news-events