WLKP Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $14 million, or $0.40 per unit, consistent with Q1 2026 and Q2 2025.

Consolidated Net Income: $82 million on net sales of $297 million.

Distributable Cash Flow: $18 million, or $0.50 per unit, up $3 million year-over-year due to increased production and lower maintenance costs.

Coverage Ratio: Improved to 1.04x from 1.0x, reflecting recovery from the Petro-1 turnaround.

Long-term Debt: $400 million, with a consolidated leverage ratio of approximately 1x.

Cash Balance: $93 million at the end of Q2 2026.

2Strategic Updates and Business Highlights

The partnership has maintained a stable business model with a fixed margin ethylene sales agreement, mitigating market volatility.

Successfully renewed revolver agreements and ethylene supply agreements with Westlake, extending terms through 2031 and reducing interest rates by 10 basis points.

Announced a quarterly distribution of $0.4714 per unit, marking the 48th consecutive distribution since the IPO in 2014, with a 71% increase from the original minimum distribution.

3Forward Guidance and Outlook

No planned turnarounds for 2026, indicating stable operational expectations.

The partnership is focused on long-term value creation and distribution sustainability, with potential growth opportunities through increased ownership in OpCo, acquisitions, and organic growth.

Despite geopolitical tensions affecting chemical prices, the partnership's margins remain stable due to fixed pricing agreements.

4Bad News, Challenges, or Points of Concern

The ongoing conflict in the Middle East has introduced volatility in chemical prices, which could pose risks to future earnings.

While the partnership's margins are currently insulated, any changes in market conditions could impact profitability.

Transitioning leadership with the retirement of CFO Steve Bender may present transitional challenges.

5Notable Q&A Insights

No questions were raised during the Q&A session, indicating either satisfaction with the information provided or a lack of investor concerns at this time. Overall, WLKP demonstrated solid financial performance in Q2 2026, maintaining stability amidst external challenges while positioning for future growth.