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Westlake Chemical Partners LP (WLKP) Reports Q3 2023 Earnings, Net Income Drops to $13.2 Million

  • Westlake Chemical Partners LP (NYSE:WLKP) reported Q3 2023 net income of $13.2 million, a decrease from Q3 2022's $14.8 million.

  • Q3 2023 cash flows from operating activities were $100.9 million, a decrease of $14.6 million compared to Q3 2022.

  • The company declared a quarterly distribution of $0.4714 per unit, marking the 37th consecutive quarterly distribution.

  • MLP distributable cash flow for Q3 2023 was $13.6 million, a decrease of $3.1 million compared to Q3 2022.

Westlake Chemical Partners LP (NYSE:WLKP) released its earnings report for Q3 2023 on November 2, 2023. The company reported a net income of $13.2 million, or $0.37 per limited partner unit, a decrease from Q3 2022's net income of $14.8 million. The decrease in net income was primarily due to higher interest expense attributable to higher interest rates on floating rate debt.

Financial Performance

The company's cash flows from operating activities in Q3 2023 were $100.9 million, a decrease of $14.6 million compared to Q3 2022. This decrease was primarily due to lower net income and less favorable working capital changes. The MLP distributable cash flow for Q3 2023 was $13.6 million, a decrease of $3.1 million compared to Q3 2022. This decrease was attributable to higher interest expense and changes in the timing of maintenance capital expenditures.

Company's Outlook

Despite the decrease in net income and cash flows, the company's President and Chief Executive Officer, Albert Chao, expressed satisfaction with the company's performance. He stated,

We were pleased with the Partnership's performance in the third quarter of 2023, with net income, EBITDA and cash flow from operations all increasing from the second quarter. While distributable cash flow was sequentially lower due to the timing of maintenance capital spending, our underlying financial results and cash flows remain stable and predictable, supported by our sales agreement with Westlake that delivers a fixed margin on 95% of our production."

Consecutive Quarterly Distribution

On October 31, 2023, the company announced that the Board of Directors of Westlake Chemical Partners GP LLC had approved a quarterly distribution for Q3 2023 of $0.4714 per unit. This distribution will be payable on November 27, 2023, to unitholders of record as of November 10, 2023. This marks the 37th consecutive quarterly distribution to the company's unitholders.

Financial Statements Summary

The company's total net sales for Q3 2023 were $321.664 million, with a gross profit of $92.981 million. The income from operations was $86.240 million. The company's total assets as of September 30, 2023, were $1.341 billion, with total liabilities of $480.238 million and total equity of $861.272 million.

Conclusion

Despite the decrease in net income and cash flows, Westlake Chemical Partners LP (NYSE:WLKP) continues to maintain a stable financial performance. The company's commitment to delivering consistent returns to its unitholders is evident in its 37th consecutive quarterly distribution. The company's underlying financial results and cash flows remain stable and predictable, providing a solid foundation for future growth.

Explore the complete 8-K earnings release (here) from Westlake Chemical Partners LP for further details.

This article first appeared on GuruFocus.

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