For the first quarter ended March 31, 2105, NYSE listed Westlake Chemical Partners (WLKP) reported net income of $8.5 million, or $0.31 per limited partner unit.
In a press release, WLKP said it achieved a MLP distributable cash flow of $9.0 million, while net sales at OpCo for the quarter stood at $258.4 million.
“OpCo's sales agreement with Westlake Chemical Corporation is designed to provide for stable and predictable cash flows,” it added.
The sales agreement provides that 95 per cent of OpCo's ethylene production is sold to Westlake Chemical Corporation for a cash margin of $0.10 per pound.
This is net of operating costs, maintenance capital expenditures and reserves for future turnaround expenditures.
On April 29, 2015, WLKP had announced that it has agreed to acquire approximately 2.7 per cent of additional interest in OpCo for $135.3 million.
“This transaction was effective April 1, 2015 and is expected to be immediately accretive to MLP distributable cash flow,” WLKP had informed.
In conjunction with this transaction, WLKP also entered into a $300.0 million revolving credit facility with a finance subsidiary of Westlake Chemical Corporation to fund acquisitions and other purposes.
On April 29, 2015, the board of directors declared a quarterly distribution of $0.2829 per unit. According to WLKP, the MLP distributable cash flow provided coverage of 1.17x the declared distributions.
“This quarter highlights the benefits of the structure of our operations and the sales contract with Westlake Chemical,” it noted.
“We are beginning to see the impact of previous internal growth initiatives coming online at our Petro 2 ethylene facility, where we set several new production records throughout the quarter,” WLKP observed.
In addition to its previously announced expansion at the Petro 1 ethylene facility in Lake Charles, WLKP said it continues to evaluate opportunities to increase the capacity and efficiency of our operations.
“The built in demand for our ethylene to serve Westlake's other businesses provide an outlet and incentive to maximize production,” CEO Albert Chao too said.
“We believe continued consistent performance regardless of volatility in oil and ethylene markets will allow us to deliver long-term growth and value to our investors," Chao also added.
