Q1 2025 Delek Logistics Partners LP Earnings Call Transcript
Key Points
- Delek Logistics Partners LP (DKL) reported a record quarterly adjusted EBITDA of approximately $117 million, keeping them on track to meet their full-year EBITDA guidance of $480 million to $520 million.
- The company has increased its economic separation from DK, with third-party contributions to cash flow rising from 70% to around 80% on a pro forma basis.
- The commissioning of the new Libby plant expansion in the Delaware Basin is underway, with expectations to fill the plant to capacity in the second half of 2025.
- The Board of Directors approved a 49th consecutive increase in the quarterly distribution to $1.11 per unit, reflecting strong financial performance.
- Recent acquisitions of H2O and Gravity have significantly enhanced DKL's competitive position in the Midland Basin, exceeding expectations and contributing to growth.
- Wholesale Marketing and Terminalling adjusted EBITDA decreased to $18 million from $25 million in the prior year, primarily due to seasonal weather impacts driving lower wholesale margins.
- Storage and Transportation adjusted EBITDA fell to $14 million compared with $18 million in the first quarter of 2024, due to renegotiation impacts.
- The company faces near-term volatility in crude prices, which could impact financial performance.
- The capital expenditure for the first quarter was high at approximately $72 million, driven by significant progress on the Libby 2 gas processing plant.
- Despite progress, the company remains dependent on third-party producer activity, which could be influenced by macroeconomic conditions.
(audio in progress) my name is Jay and I'll be a conference operator today. At this time, I would like to welcome everyone to the Delek Logistics Partners first-quarter 2025 earnings call. (Operator Instructions)
I would now like to turn the conference over to Robert Wright, Senior EVP and Chief Financial Officer. You may begin.
Good morning, and welcome to the Delek Logistics Partners first-quarter earnings conference call. Participants joining me on today's call will include Avigal Soreq, President; and Reuven Spiegel, EVP.
As a reminder, this conference call will contain forward-looking statements as defined under the federal securities laws, including statements regarding guidance and future business outlook. Any forward-looking information shared during today's call will involve risks and uncertainties that may cause actual results to differ materially from today's
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