NYSE:WLKP Westlake Chemical Partners Q1 2024 Earnings Report $23.05 +0.08 (+0.35%) Closing price 04/17/2025 03:58 PM EasternExtended Trading$23.05 0.00 (0.00%) As of 04/17/2025 04:05 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Westlake Chemical Partners EPS ResultsActual EPS$0.42Consensus EPS $0.43Beat/MissMissed by -$0.01One Year Ago EPS$0.42Westlake Chemical Partners Revenue ResultsActual Revenue$284.67 millionExpected Revenue$280.76 millionBeat/MissBeat by +$3.91 millionYoY Revenue GrowthN/AWestlake Chemical Partners Announcement DetailsQuarterQ1 2024Date5/1/2024TimeBefore Market OpensConference Call DateWednesday, May 1, 2024Conference Call Time1:00PM ETUpcoming EarningsWestlake Chemical Partners' Q1 2025 earnings is scheduled for Friday, May 2, 2025, with a conference call scheduled at 1:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfilePowered by Westlake Chemical Partners Q1 2024 Earnings Call TranscriptProvided by QuartrMay 1, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good afternoon and thank you for standing by. Welcome to the Westlake Chemical Partners First Quarter 2024 Earnings Conference Call. During the presentation, all participants will be in a listen only mode. After the speakers' remarks, you will be invited to participate in the question and answer session. As a reminder, this conference is being recorded today, May 1, 2024. Operator00:00:24I would now like to turn the call over to today's host, John Zeller, Westlake Chemical Partners' Vice President and Treasurer. Sir, you may begin. Speaker 100:00:35Thank you. Good afternoon, everyone, and welcome to the Westlake Chemical Partners' Q1 2024 Conference Call. I am joined today by Albert Chao, our President and CEO Steve Bender, our Executive Vice President and CFO and other members of our management team. During this call, we refer to ourselves as Westlake Partners or the Partnership. References to Westlake refer to our parent company, Westlake Corporation, and references to OpCo refer to Westlake Chemical OpCo LP, a subsidiary of Westlake and the Partnership, which owns certain Olefins assets. Speaker 100:01:12Additionally, when we refer to distributable cash flow, we are referring to Westlake Chemical Partners MLP distributable cash flow. Definitions of these terms are available on the partnership's website. Today, management is going to discuss certain topics that will contain forward looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. We encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in our regulatory filings, which are also available on our Investor Relations website. Speaker 100:01:55This morning, Westlake Partners issued a press release with details of our Q1 2024 financial and operating results. This document is available in the press release section of our webpage at wlkpartners.com. A replay of today's call will be available beginning 2 hours after the conclusion of this call. The replay can be accessed via the partnership website. Please note that information reported on this call speaks only as of today, May 1, 2024, and therefore, you are advised that time sensitive information may no longer be accurate as of the time of any replay. Speaker 100:02:34I would finally advise you that this conference call is being broadcast live through an Internet webcast system that can be accessed on our webpage at wlkpartners.com. Now, I'd like to turn the call over to Albert Chao. Albert? Speaker 200:02:50Thank you, Joe. Good afternoon, everyone, and thank you for joining us to discuss our Q1 2024 results. In this morning's press release, we reported Westlake Partners' Q1 2024 net income of $50,000,000 or $0.42 per unit. Compared to the Q4 of 2023, our Q1 sales and earnings benefited from a higher sales price for ethylene sold to Westlake per the terms of the ethylene sales agreement as well as a slight improvement in third party ethylene sales margins. The stability of Westlake Partners business model is consistently demonstrated through our fixed margin ethylene sales agreement, which minimizes market volatility and other production risks. Speaker 200:03:47The high degree of stability in cash flow when paired with the predictability of our business, has enabled us to deliver the long history of reliable distributions and coverage. This quarter's distribution is the 39th consecutive quarterly distribution since our IPO in July of 2014 without any reductions. I would now like to turn our call over to Steve to provide more detail on the financial and operating results for the quarter. Steve? Speaker 300:04:21Thank you, Albert, and good afternoon, everyone. In this morning's press release, we reported Westlake Partners' Q1 2024 net income of $15,000,000 or $0.42 per unit. Consolidated net income, including OpCo's earnings, was 90 $1,000,000 on consolidated net sales of $285,000,000 The partnership had distributable cash flows for the quarter of $17,000,000 or $0.48 per unit. Q1 2024 net income for Westlake Partners of $15,000,000 was unchanged compared to Q1 2023 partnership net income. Compared to the Q1 of 2023, the partnership was impacted by slightly lower production and sales volumes, which were offset by lower interest expense. Speaker 300:05:10Distributable cash flow of $17,000,000 for the Q1 of 2024 decreased by less than $1,000,000 compared to the Q1 of 2023 due primarily to lower production and sales volumes. Turning your attention to the balance sheet and cash flows. At the end of the Q1, we had consolidated cash balance and investments with Westlake through our investment management agreement totaling $150,000,000 Long term debt at the end of the quarter was $400,000,000 of which $377,000,000 was at the Partnership and the remaining $23,000,000 was at OpCo. In the Q1 of 2024, OpCo spent $10,000,000 on capital expenditures. We maintained our strong leverage metrics with a consolidated leverage ratio of approximately 1x. Speaker 300:06:03On April 30, 2024, we announced quarterly distribution of $0.471 per unit with respect to the Q1 of 2024. Since our IPO in 2014, the partnership has made 39 consecutivelyquarterly distributions to unitholders and we've grown distributions 71% since the partnership's original minimum quarterly distribution of $0.275 per unit. The partnership's 1st quarter distribution we paid on May 29, 2024 to unitholders of record May 13, 2024. The partnership's predictable fee based cash flow continues to prove beneficial in today's economic environment and is differentiated by the consistency of our earnings and cash flows. Looking back, since our IPO in July of 2014, we have maintained a cumulative distribution coverage of nearly 1.1 times and the partnership stability and cash flows, we have been able to sustain our current distribution without the need to access the capital markets. Speaker 300:07:08For modeling purposes, we have one planned turnaround in 2024 at our Petro-one ethylene unit in Lake Charles, Louisiana. This turnaround is scheduled to begin in the second half of twenty twenty four and is projected to last approximately 60 days. In prior years where we have had planned turnarounds such as this one, the distribution coverage ratio was impacted for the period before recovering. And for this turnaround, we would expect a similar result. The cost of this turnaround has been included in the amount we charge to Westlake and has been fully reserved and funded as we commence the turnaround. Speaker 300:07:46Now I'd like to turn the call back over to Albert to make some closing comments. Albert? Speaker 200:07:51Thank you, Steve. We are pleased with the partnership's financial and operational performance in the Q1. In particular, the recent improvement in margins of ethylene sales to third parties, primarily as a result of lower feedstock and fuel costs is encouraging following a period of low third party ethylene sales margin in 2023. While the overall global macroeconomic environment remains unpredictable, our ethylene sales agreement, which provides a predictable fee based cash flow structure from our take or pay contract with Westlake for 95% of OpCo's production will continue to deliver stable and predictable cash flows through economics, ups and downs as well as planned and unplanned turnarounds. Turning to our capital structure. Speaker 200:08:49We maintain a strong balance sheet with conservative financial and leverage metrics. As we continue to navigate market conditions, we will evaluate opportunities via our 4 levers of growth in the future, including increases of our ownership interest of OpCo, acquisitions of other qualified income streams, organic growth opportunities such as expansions of our current ethylene facilities and negotiation of a higher fixed margin in our ethylene sales agreement with Westlake. We remain focused on our ability to continue to provide long term value and distributions to our unitholders. As always, we will continue to focus on safe operations along with being good stewards of the environment where we work and live as part of our broader sustainability efforts. Thank you very much for listening to our Q1 earnings call. Speaker 200:09:52Now I'll turn the call back over to John. Speaker 100:09:55Thank you, Albert. Before we begin taking questions, I would like to remind you that a replay of this teleconference will be available 2 hours after the call has ended. We will provide instructions to access the replay at the end of the call. Andrew, we will now take questions. Operator00:10:10Thank Our first question comes from the line of Matthew Blair with TPH. Speaker 400:10:29Thank you and good morning, Albert and Steve. Speaker 300:10:33Good morning, Matthew. Yes. Good morning. Speaker 400:10:37So Albert, you mentioned at the beginning that the Q1 earnings benefited from a higher sales price to Westlake. What was the driver of the higher sales price? And does that represent a renegotiation of the fixed margin contract? Speaker 300:11:02Yes, Matthew, the reference was external third party sales that were at slightly improved margins relative to prior quarters and not to Westlake itself. That Westlake sale agreement still is in force and is unchanged, but it's just the market for 3rd party sales has improved. Speaker 400:11:22Okay. Sounds good. And then, could you talk about the outlook for coverage? You're below your 1.1 target. But I guess we would expect the coverage to improve next quarter as you roll off the Calvert City turnaround from Q2 2023. Speaker 400:11:43Is that how you're looking at it as well? Speaker 300:11:47Yes, Matthew. I do expect that the coverage will trend higher as we'd roll off that turnaround from last year. And of course, we've had with this planned turnaround this year, 3 consecutive years of turnaround. So you're right, we'll see improvement in Q2. And I would expect as we enter the second half of twenty twenty four, that coverage will also be impacted as we do the turnaround for Petro 1. Speaker 300:12:13But as in prior years, we have a rebound of coverage. And as you know, we have ample capacity under our reserves to be able to continue to make distribution. So I don't see any issues with those issues. Speaker 400:12:32Sounds good. Thank you. You're welcome. Operator00:12:35Thank you. One moment please for our next question. Our next question comes from the line of Salvator Tiano with Bank of America Securities. Speaker 500:12:49Thank you very much. So my first question is, as you think about the options to either expand the company or its earnings. And you mentioned that you can consider projects to expand ethylene capacity or even M and A. Does any of this would make sense if you still get $0.10 per pound from Westlake? Or does it have to be accompanied by a better margin in your agreement with the sponsor? Speaker 300:13:23No, it doesn't have to necessarily be a different margin associated with those sales to Westlake. Rather it just has to do with the valuation we receive for those units and the valuation of that transaction in any undertaking. So whether it is an increase in ownership of OpCo or acquisition of other assets such as LACC or any other asset. It just revolves around the valuation of those transactions will drive the value and therefore the ability to grow the earnings and therefore distributions. Speaker 500:14:03Okay, perfect. And with regard to, I guess, sustainability, I know many of the companies, petrochemical companies are looking to a lot of things, including some options for the ethylene crackers, like refined them or using hydrogen. I understand that obviously you would have to work with Westlake Corporation for that. But is it something that would make sense for the specific assets that are included into Westlake Partners? Speaker 300:14:36Yes. And so we do have an ongoing, very public statement about reducing our Scope 1 and Scope 2 emissions. And so as we think about the Scope 1 emissions, we certainly continue to invest in capital that allow us to reduce those Scope 1 emissions. As we think about Scope 2 emissions, we'll certainly look at opportunities to invest or undertake transactions that allow us to also reduce those Scope 2 emissions. As you might have seen, Westlake Corporation has made good strides in reducing its Scope 1 emissions. Speaker 300:15:14And certainly part of that is attributable to the efforts of the ethylene crackers. Great. Speaker 500:15:21Thank you very much. Speaker 300:15:23You're welcome. Operator00:15:24Thank you. At this time, the Q and A session has now ended. I will now turn the call back over to John Zeller. Speaker 100:15:33Thank you again for participating in today's call. We hope you will join us for our next conference call to discuss our Q2 2024 results. Operator00:15:44Thank you for participating in today's Westlake Chemical Partners First Quarter 2024 Earnings Conference Call. As a reminder, this call will be available for replay beginning 2 hours after the call has ended and may be accessed until 11:59 p. M. Eastern Time on Wednesday, May 15, 2024. The replay can be accessed via the partnership website. Operator00:16:08Goodbye.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallWestlake Chemical Partners Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Westlake Chemical Partners Earnings HeadlinesWestlake Chemical Partners Announce First Quarter 2025 Earnings Conference CallApril 17 at 9:40 AM | gurufocus.comHead-To-Head Survey: Keyuan Petrochemicals (OTCMKTS:KEYP) and Westlake Chemical Partners (NYSE:WLKP)April 15, 2025 | americanbankingnews.com$2 Trillion Disappears Because of Fed's Secretive New Move$2 trillion has disappeared from the US government's books. The reason why is a new, secretive move being carried out by the Fed that has nothing to do with lowering or raising interest rates... but could soon have an enormous impact on your wealth.April 19, 2025 | Stansberry Research (Ad)3 Dividend Stocks Yielding Over 8% With Rock-Solid FinancialsApril 11, 2025 | 247wallst.comWestlake Chemical Partners (WLKP) Moves 5.1% Higher: Will This Strength Last?April 10, 2025 | msn.comWestlake Chemical Partners LP Filed Annual ReportMarch 5, 2025 | businesswire.comSee More Westlake Chemical Partners Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Westlake Chemical Partners? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Westlake Chemical Partners and other key companies, straight to your email. Email Address About Westlake Chemical PartnersWestlake Chemical Partners (NYSE:WLKP) acquires, develops, and operates ethylene production facilities and related assets in the United States. The company's ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on either a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. Westlake Chemical Partners LP was founded in 1991 and is headquartered in Houston, Texas.View Westlake Chemical Partners ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions Ahead Upcoming Earnings Tesla (4/22/2025)Intuitive Surgical (4/22/2025)Verizon Communications (4/22/2025)Canadian National Railway (4/22/2025)Novartis (4/22/2025)RTX (4/22/2025)3M (4/22/2025)Capital One Financial (4/22/2025)General Electric (4/22/2025)Danaher (4/22/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. Start Your 30-Day Trial MarketBeat All Access Features Best-in-Class Portfolio Monitoring Get personalized stock ideas. Compare portfolio to indices. Check stock news, ratings, SEC filings, and more. Stock Ideas and Recommendations See daily stock ideas from top analysts. Receive short-term trading ideas from MarketBeat. Identify trending stocks on social media. Advanced Stock Screeners and Research Tools Use our seven stock screeners to find suitable stocks. Stay informed with MarketBeat's real-time news. Export data to Excel for personal analysis. Sign in to your free account to enjoy these benefits In-depth profiles and analysis for 20,000 public companies. Real-time analyst ratings, insider transactions, earnings data, and more. Our daily ratings and market update email newsletter. Sign in to your free account to enjoy all that MarketBeat has to offer. Sign In Create Account Your Email Address: Email Address Required Your Password: Password Required Log In or Sign in with Facebook Sign in with Google Forgot your password? Your Email Address: Please enter your email address. Please enter a valid email address Choose a Password: Please enter your password. Your password must be at least 8 characters long and contain at least 1 number, 1 letter, and 1 special character. Create My Account (Free) or Sign in with Facebook Sign in with Google By creating a free account, you agree to our terms of service. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
There are 6 speakers on the call. Operator00:00:00Good afternoon and thank you for standing by. Welcome to the Westlake Chemical Partners First Quarter 2024 Earnings Conference Call. During the presentation, all participants will be in a listen only mode. After the speakers' remarks, you will be invited to participate in the question and answer session. As a reminder, this conference is being recorded today, May 1, 2024. Operator00:00:24I would now like to turn the call over to today's host, John Zeller, Westlake Chemical Partners' Vice President and Treasurer. Sir, you may begin. Speaker 100:00:35Thank you. Good afternoon, everyone, and welcome to the Westlake Chemical Partners' Q1 2024 Conference Call. I am joined today by Albert Chao, our President and CEO Steve Bender, our Executive Vice President and CFO and other members of our management team. During this call, we refer to ourselves as Westlake Partners or the Partnership. References to Westlake refer to our parent company, Westlake Corporation, and references to OpCo refer to Westlake Chemical OpCo LP, a subsidiary of Westlake and the Partnership, which owns certain Olefins assets. Speaker 100:01:12Additionally, when we refer to distributable cash flow, we are referring to Westlake Chemical Partners MLP distributable cash flow. Definitions of these terms are available on the partnership's website. Today, management is going to discuss certain topics that will contain forward looking information that is based on management's beliefs as well as assumptions made by and information currently available to management. These forward looking statements suggest predictions or expectations and thus are subject to risks or uncertainties. We encourage you to learn more about the factors that could lead our actual results to differ by reviewing the cautionary statements in our regulatory filings, which are also available on our Investor Relations website. Speaker 100:01:55This morning, Westlake Partners issued a press release with details of our Q1 2024 financial and operating results. This document is available in the press release section of our webpage at wlkpartners.com. A replay of today's call will be available beginning 2 hours after the conclusion of this call. The replay can be accessed via the partnership website. Please note that information reported on this call speaks only as of today, May 1, 2024, and therefore, you are advised that time sensitive information may no longer be accurate as of the time of any replay. Speaker 100:02:34I would finally advise you that this conference call is being broadcast live through an Internet webcast system that can be accessed on our webpage at wlkpartners.com. Now, I'd like to turn the call over to Albert Chao. Albert? Speaker 200:02:50Thank you, Joe. Good afternoon, everyone, and thank you for joining us to discuss our Q1 2024 results. In this morning's press release, we reported Westlake Partners' Q1 2024 net income of $50,000,000 or $0.42 per unit. Compared to the Q4 of 2023, our Q1 sales and earnings benefited from a higher sales price for ethylene sold to Westlake per the terms of the ethylene sales agreement as well as a slight improvement in third party ethylene sales margins. The stability of Westlake Partners business model is consistently demonstrated through our fixed margin ethylene sales agreement, which minimizes market volatility and other production risks. Speaker 200:03:47The high degree of stability in cash flow when paired with the predictability of our business, has enabled us to deliver the long history of reliable distributions and coverage. This quarter's distribution is the 39th consecutive quarterly distribution since our IPO in July of 2014 without any reductions. I would now like to turn our call over to Steve to provide more detail on the financial and operating results for the quarter. Steve? Speaker 300:04:21Thank you, Albert, and good afternoon, everyone. In this morning's press release, we reported Westlake Partners' Q1 2024 net income of $15,000,000 or $0.42 per unit. Consolidated net income, including OpCo's earnings, was 90 $1,000,000 on consolidated net sales of $285,000,000 The partnership had distributable cash flows for the quarter of $17,000,000 or $0.48 per unit. Q1 2024 net income for Westlake Partners of $15,000,000 was unchanged compared to Q1 2023 partnership net income. Compared to the Q1 of 2023, the partnership was impacted by slightly lower production and sales volumes, which were offset by lower interest expense. Speaker 300:05:10Distributable cash flow of $17,000,000 for the Q1 of 2024 decreased by less than $1,000,000 compared to the Q1 of 2023 due primarily to lower production and sales volumes. Turning your attention to the balance sheet and cash flows. At the end of the Q1, we had consolidated cash balance and investments with Westlake through our investment management agreement totaling $150,000,000 Long term debt at the end of the quarter was $400,000,000 of which $377,000,000 was at the Partnership and the remaining $23,000,000 was at OpCo. In the Q1 of 2024, OpCo spent $10,000,000 on capital expenditures. We maintained our strong leverage metrics with a consolidated leverage ratio of approximately 1x. Speaker 300:06:03On April 30, 2024, we announced quarterly distribution of $0.471 per unit with respect to the Q1 of 2024. Since our IPO in 2014, the partnership has made 39 consecutivelyquarterly distributions to unitholders and we've grown distributions 71% since the partnership's original minimum quarterly distribution of $0.275 per unit. The partnership's 1st quarter distribution we paid on May 29, 2024 to unitholders of record May 13, 2024. The partnership's predictable fee based cash flow continues to prove beneficial in today's economic environment and is differentiated by the consistency of our earnings and cash flows. Looking back, since our IPO in July of 2014, we have maintained a cumulative distribution coverage of nearly 1.1 times and the partnership stability and cash flows, we have been able to sustain our current distribution without the need to access the capital markets. Speaker 300:07:08For modeling purposes, we have one planned turnaround in 2024 at our Petro-one ethylene unit in Lake Charles, Louisiana. This turnaround is scheduled to begin in the second half of twenty twenty four and is projected to last approximately 60 days. In prior years where we have had planned turnarounds such as this one, the distribution coverage ratio was impacted for the period before recovering. And for this turnaround, we would expect a similar result. The cost of this turnaround has been included in the amount we charge to Westlake and has been fully reserved and funded as we commence the turnaround. Speaker 300:07:46Now I'd like to turn the call back over to Albert to make some closing comments. Albert? Speaker 200:07:51Thank you, Steve. We are pleased with the partnership's financial and operational performance in the Q1. In particular, the recent improvement in margins of ethylene sales to third parties, primarily as a result of lower feedstock and fuel costs is encouraging following a period of low third party ethylene sales margin in 2023. While the overall global macroeconomic environment remains unpredictable, our ethylene sales agreement, which provides a predictable fee based cash flow structure from our take or pay contract with Westlake for 95% of OpCo's production will continue to deliver stable and predictable cash flows through economics, ups and downs as well as planned and unplanned turnarounds. Turning to our capital structure. Speaker 200:08:49We maintain a strong balance sheet with conservative financial and leverage metrics. As we continue to navigate market conditions, we will evaluate opportunities via our 4 levers of growth in the future, including increases of our ownership interest of OpCo, acquisitions of other qualified income streams, organic growth opportunities such as expansions of our current ethylene facilities and negotiation of a higher fixed margin in our ethylene sales agreement with Westlake. We remain focused on our ability to continue to provide long term value and distributions to our unitholders. As always, we will continue to focus on safe operations along with being good stewards of the environment where we work and live as part of our broader sustainability efforts. Thank you very much for listening to our Q1 earnings call. Speaker 200:09:52Now I'll turn the call back over to John. Speaker 100:09:55Thank you, Albert. Before we begin taking questions, I would like to remind you that a replay of this teleconference will be available 2 hours after the call has ended. We will provide instructions to access the replay at the end of the call. Andrew, we will now take questions. Operator00:10:10Thank Our first question comes from the line of Matthew Blair with TPH. Speaker 400:10:29Thank you and good morning, Albert and Steve. Speaker 300:10:33Good morning, Matthew. Yes. Good morning. Speaker 400:10:37So Albert, you mentioned at the beginning that the Q1 earnings benefited from a higher sales price to Westlake. What was the driver of the higher sales price? And does that represent a renegotiation of the fixed margin contract? Speaker 300:11:02Yes, Matthew, the reference was external third party sales that were at slightly improved margins relative to prior quarters and not to Westlake itself. That Westlake sale agreement still is in force and is unchanged, but it's just the market for 3rd party sales has improved. Speaker 400:11:22Okay. Sounds good. And then, could you talk about the outlook for coverage? You're below your 1.1 target. But I guess we would expect the coverage to improve next quarter as you roll off the Calvert City turnaround from Q2 2023. Speaker 400:11:43Is that how you're looking at it as well? Speaker 300:11:47Yes, Matthew. I do expect that the coverage will trend higher as we'd roll off that turnaround from last year. And of course, we've had with this planned turnaround this year, 3 consecutive years of turnaround. So you're right, we'll see improvement in Q2. And I would expect as we enter the second half of twenty twenty four, that coverage will also be impacted as we do the turnaround for Petro 1. Speaker 300:12:13But as in prior years, we have a rebound of coverage. And as you know, we have ample capacity under our reserves to be able to continue to make distribution. So I don't see any issues with those issues. Speaker 400:12:32Sounds good. Thank you. You're welcome. Operator00:12:35Thank you. One moment please for our next question. Our next question comes from the line of Salvator Tiano with Bank of America Securities. Speaker 500:12:49Thank you very much. So my first question is, as you think about the options to either expand the company or its earnings. And you mentioned that you can consider projects to expand ethylene capacity or even M and A. Does any of this would make sense if you still get $0.10 per pound from Westlake? Or does it have to be accompanied by a better margin in your agreement with the sponsor? Speaker 300:13:23No, it doesn't have to necessarily be a different margin associated with those sales to Westlake. Rather it just has to do with the valuation we receive for those units and the valuation of that transaction in any undertaking. So whether it is an increase in ownership of OpCo or acquisition of other assets such as LACC or any other asset. It just revolves around the valuation of those transactions will drive the value and therefore the ability to grow the earnings and therefore distributions. Speaker 500:14:03Okay, perfect. And with regard to, I guess, sustainability, I know many of the companies, petrochemical companies are looking to a lot of things, including some options for the ethylene crackers, like refined them or using hydrogen. I understand that obviously you would have to work with Westlake Corporation for that. But is it something that would make sense for the specific assets that are included into Westlake Partners? Speaker 300:14:36Yes. And so we do have an ongoing, very public statement about reducing our Scope 1 and Scope 2 emissions. And so as we think about the Scope 1 emissions, we certainly continue to invest in capital that allow us to reduce those Scope 1 emissions. As we think about Scope 2 emissions, we'll certainly look at opportunities to invest or undertake transactions that allow us to also reduce those Scope 2 emissions. As you might have seen, Westlake Corporation has made good strides in reducing its Scope 1 emissions. Speaker 300:15:14And certainly part of that is attributable to the efforts of the ethylene crackers. Great. Speaker 500:15:21Thank you very much. Speaker 300:15:23You're welcome. Operator00:15:24Thank you. At this time, the Q and A session has now ended. I will now turn the call back over to John Zeller. Speaker 100:15:33Thank you again for participating in today's call. We hope you will join us for our next conference call to discuss our Q2 2024 results. Operator00:15:44Thank you for participating in today's Westlake Chemical Partners First Quarter 2024 Earnings Conference Call. As a reminder, this call will be available for replay beginning 2 hours after the call has ended and may be accessed until 11:59 p. M. Eastern Time on Wednesday, May 15, 2024. The replay can be accessed via the partnership website. Operator00:16:08Goodbye.Read morePowered by