Westlake Chemical Partners LP Common Units (WLKP) Q3 2025 Earnings Call Transcript
Net Income Westlake Partners' third quarter 2025 net income was $15 million or $0.42 per unit. This was lower than the third quarter 2024 Partnership net income, partially due to lower margins on sales of ethylene to third parties.
Consolidated Net Income Consolidated net income, including OpCo's earnings, was $86 million on consolidated net sales of $309 million. No year-over-year comparison or reasons for change were provided.
Distributable Cash Flow The Partnership had distributable cash flow for the quarter of $15 million or $0.42 per unit. This decreased by $3 million compared to the third quarter of 2024 due to higher maintenance capital expenditures as a result of changes in the timing of maintenance activities in 2025 as compared to 2024.
Capital Expenditures In the third quarter of 2025, OpCo spent $30 million on capital expenditures. No year-over-year comparison or reasons for change were provided.
Cash and Cash Investments At the end of the third quarter, consolidated cash and cash investments with Westlake through the Investment Management Agreement totaled $51 million. No year-over-year comparison or reasons for change were provided.
Long-term Debt Long-term debt at the end of the quarter was $400 million, of which $377 million was at the Partnership and the remaining $23 million was at OpCo. No year-over-year comparison or reasons for change were provided.
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- Quarterly Dividend Announcement: Westlake Chemical Partners declared a quarterly dividend of $0.4714 per share, consistent with previous distributions, reflecting the company's stable cash flow and profitability, which bolsters investor confidence.
- Forward Yield: The forward yield of 8.9% offers an attractive return in the current market environment, potentially drawing in more income-focused investors seeking reliable dividend stocks.
- Record Date for Shareholders: The dividend will be payable on February 23, with a record date of February 6 and an ex-dividend date also on February 6, ensuring eligible shareholders receive their dividends promptly.
- Sales Agreement Renewal: Westlake Chemical Partners renewed its ethylene sales agreement through 2027, ensuring future revenue stability while supporting the company's long-term strategic positioning in the chemical market.

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Financial Performance: Westlake Chemical Partners (WLKP) reported a net profit margin of 4.8%, consistent with last year, but has experienced a 6.7% annual decline in earnings over the past five years, with recent negative growth.
Valuation Concerns: Shares are trading at $18.86, significantly below the fair value estimate of $49.88, indicating a notable discount compared to industry peers, which may attract value-seeking investors.
Investor Sentiment: Despite declining earnings, the company is viewed as a "safe haven" for yield due to stable cash flows and secure distribution agreements, appealing to income-focused investors amid sector volatility.
Long-term Outlook: While there are concerns about dividend sustainability and financial strength, the high quality of reported earnings and the partnership's structure provide some reassurance against cyclical downturns.

Financial Performance: Westlake Chemical Partners LP reported a net income of $15 million or $0.42 per unit for Q3 2025, with consolidated net income of $86 million on net sales of $309 million, although this was lower than the previous year due to reduced margins on ethylene sales.
Distributions and Cash Flow: The partnership announced a quarterly distribution of $0.4714 per unit, marking 45 consecutive distributions since its IPO, despite a decrease in distributable cash flow attributed to higher maintenance capital expenditures and a planned turnaround.
Operational Developments: A planned turnaround at the Petro 1 Eyne unit positively impacted sales and earnings, and the ethylene sales agreement with Westlake was renewed through 2027, ensuring stable cash flows.
Outlook and Challenges: The CEO indicated that the shortfall in distributable cash flow was temporary due to the turnaround, and future cash flows are expected to cover distributions, despite challenges from a soft global industrial environment.








