Delek Logistics Partners LP (DKL) Reports Q3 2023 Earnings: Net Income Drops to $34.8 Million
Delek Logistics Partners LP (NYSE:DKL) reports Q3 2023 net income attributable to all partners of $34.8 million, down from $44.7 million in Q3 2022.
Record EBITDA of $98.2 million, up from $89.0 million in the same quarter last year.
Distributable cash flow of $61.4 million with a coverage ratio of 1.35x.
43 consecutive quarters of distribution growth with a recent increase to $1.045/unit.
On November 7, 2023, Delek Logistics Partners LP (NYSE:DKL) announced its financial results for the third quarter of 2023. The company reported a net income attributable to all partners of $34.8 million, a decrease from $44.7 million in Q3 2022. This decrease was primarily driven by higher interest expense, partially offset by lower general and administrative expenses. Despite the decrease in net income, the company achieved a record EBITDA of $98.2 million, up from $89.0 million in the same quarter last year.
Financial Highlights
Delek Logistics Partners LP (NYSE:DKL) reported a distributable cash flow of $61.4 million in Q3 2023, compared to $65.6 million in Q3 2022. The company also delivered 43 consecutive quarters of distribution growth with a recent increase to $1.045/unit. The total cash distribution declared to all partners for Q3 2023 was approximately $45.6 million, resulting in a distributable cash flow coverage ratio of 1.35x.
As of September 30, 2023, Delek Logistics had total debt of approximately $1.74 billion and cash of $4.2 million. Additional borrowing capacity, subject to certain covenants, under the $900.0 million revolving credit facility was $89.0 million. The total leverage ratio as of September 30, 2023 of approximately 4.55x was within the requirements of the maximum allowable leverage ratio under the credit facility.
Operational Performance
Delek Logistics Partners LP (NYSE:DKL) saw increased contributions from the Delek Permian Gathering system, Delaware Gathering system, terminalling and marketing rate increases, and continued strong throughput on joint venture pipelines. However, these were partially offset by increased operating expenses.
EBITDA in the Gathering and Processing Segment for Q3 2023 was $52.9 million, down from $56.6 million in Q3 2022. The Wholesale Marketing and Terminalling Segment saw an increase in EBITDA to $28.1 million in Q3 2023 from $20.3 million in Q3 2022. The Storage and Transportation Segment also saw an increase in EBITDA to $17.9 million in Q3 2023 from $14.6 million in Q3 2022.
Looking Forward
President of Delek Logistics' general partner, Avigal Soreq, stated,
Delek Logistics delivered another record quarter. We see significant value in gathering and processing in the Permian and are investing in the continued growth of our business. With its premier Permian location and by consistently delivering safe, reliable operations and stable cash flows, Delek Logistics is a great value opportunity."
Despite the decrease in net income, the company's record EBITDA and consistent growth in distribution demonstrate its resilience and potential for future growth. As Delek Logistics continues to invest in its operations and expand its business, it remains a promising opportunity for value investors.
Explore the complete 8-K earnings release (here) from Delek Logistics Partners LP for further details.
This article first appeared on GuruFocus.
