Q3 2023 Delek Logistics Partners LP Earnings Call
Good day and welcome to the Delek Logistics partners third quarter 2023 conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be.
Speaker 1: Good day and welcome to the Delic Logistics Partners 3rd Quarter 2023 Conference Call. All participants will be in listen only mode. Should you need assistance please signally conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions.
The opportunity to ask questions to ask a question you May Press Star then one on the Touchtone phone to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Rosie does that click Vice President of Investor Relations. Please.
Speaker 1: To ask a question, you may press star then 1 on the touchtone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Rosie Zucklich, Vice President of Investor Relations. Please go ahead.
Go ahead.
Speaker 2: Good day and welcome to the Dellik Logistics Partners 3rd quarter earnings conference call. Participants on today's call will include Avigal Saurik, President, Joseph Israel EVP Operations, Ruben Speagle, EVP and Chief Financial Officer, and Odelli Sakazi, SVP, Dellik
Good day and welcome to the Delek Logistics partners third quarter earnings Conference call.
Based on today's call will include avid also Rick President Joseph Israel, EVP operations, Reuven, Spiegel, EVP, and Chief Financial Officer, and O Deli Suchocki SVP Delek logistics.
Speaker 2: As a reminder, this conference call will contain forward-looking statements as defined under the federal securities laws, including, without limitation, statements regarding guidance and future business outlets.
As a reminder, this conference call will contain forward looking statements as defined under the federal securities laws, including without limitation statements regarding guidance and future business outlook.
Speaker 2: These statements involve risks and uncertainties that may cause actual results to differ from our Florida Cats.
These statements involve risks and uncertainties that may cause actual results to differ from our forecast.
Speaker 2: For more information, please refer to the risk factors discussed in the company's most recently filed annual report on Form 10K and quarterly report on Form 10Q filed with the SEC, along with the press release associated with this call.
For more information please refer to the risk factors discussed in the company's most recently filed annual report on Form 10-K, and quarterly report on Form 10-Q filed with the SEC along with the press release associated with this call.
Speaker 2: The company has seen no obligation to update any forward looking statements or information, which speak as of their respective dates. I'll now turn the call over to Abigail for opening remarks. Abigail?
The company assumes no obligation to update any forward looking statements or information, which speak as of their respective Beth I'll now turn the call over to avid golfer opening remarks avid golfer.
Speaker 3: Thank you, Ozy. The ecologist, ex-partners, delivers another record quarter with over $98 million in EBITDA.
Thank you Audrey.
Delek logistics partners delivered another record quarter with over $98 million in EBITDA.
We have been pleased to see the consistent performance of our team and assets.
Speaker 3: We have been pleased to see the consistent performance of our team and us.
Well, we are very proud to be able to deliver that value back to our unit holders.
Speaker 3: We are very proud to be able to deliver that value back to our unit.
This is really a result of our dedication to the company's strategic objectives.
Speaker 3: This is a result of our dedication to the company's strategic objectives.
Speaker 3: going third-party revenues, maintaining multi-year NBC contacts and keeping a focus on growth opportunities.
Growing third party revenues, maintaining multiyear NBC complex and keeping a focus on growth opportunities.
Midland gathering achieved record throughput this quarter as a result of our investment in the system.
Speaker 3: Middling gathering achieves a record throughput this quarter as a result of our investment in the system.
With the Delaware gathering system, we were able to support all objective diversifying that revenue stream and Encase, Inc. Third party business.
Speaker 3: With the Delaware Goddowing system, we are able to support our objectives, diversifying revenue stream and increasing third party business.
Speaker 3: Giving our strong performance discoters, we are confident in our ability to exceed.
Given our strong performance this quarter, we are confident in our ability to exceed.
Speaker 3: 100 million dollars in a quarterly EBITDA run rate by Q4 of this year.
$100 million in a quarterly EBITDA run rate by Q4 of this year.
Speaker 3: I'm also very proud to say that D.K.L recently received operational award of Excellence Concert from the National Safety Council, demonstrating our team dedication to safety and operational excellence.
I'm also very proud to say the detail recently received operational award of excellence concept from the National Safety Council.
Demonstrating our team's dedication to safety and operational excellence.
On October 25th although both are directed at booked five 6% increase in the quarterly distribution from prior year to $1 four and half cents per limited partner unit for the Delta quarter of this year.
Speaker 3: On October 25, our Board of Directors approved 5.6% increase in the quarterly distribution from prior year to $1.00 and 4.5 cents per limited partner unit for the third quarter of this year.
Highlighting our commitment to increasing the quarterly distribution.
I will now ended over to ward.
Thank you Avi go.
Speaker 4: Thank you Avigal. Total EBITDA for DKL was $98 million for the third quarter of 23, compared with $89 million for the same period in 22.
Total EBITDA for <unk> was 98 million for the third quarter of 23, compared with 89 million for the same period in 'twenty two for.
Speaker 4: For the third quarter of 23, distributable cash flow was $61 million and the DCF coverage ratio was 1.35 times.
For the third quarter of twenty-three distributable cash flow was 61 million in the DCF coverage ratio was 1.35 times.
Speaker 4: For the gathering and processing segment, EB-DADD squatter was 53 million.
But the gathering and processing segment EBITDA this quarter was 53 million maybe.
Speaker 4: The EBDA for the third quarter of 22 was 57 million, which benefited from one time credit. Excluding this, third quarter 23 results were higher than last year, due to increased throughput from our premium asset.
The EBITDA for the third quarter of 22 was $57 million, which benefited from a onetime credit. Excluding this third quarter twenty-three results were higher than last year due to increased throughput from our Permian assets.
Speaker 4: Through put of Midland gathering average approximately 250,000 barrels per day for the third quarter, more than twice the average of 121,000 barrels per day in the third quarter of 22.
Throughput of Midland gathering averaged approximately 250000 barrels per day for the third quarter more than twice the average of 121000 barrels per day in the third quarter of 'twenty two.
The wholesale marketing and Terminalling segment, EBITDA was $28 million for the quarter compared with $20 million in the third quarter of 'twenty two.
Speaker 4: The wholesale marketing and terminal-length segment EBDA was 28 million for the quarter, compared to 20 million in the third quarter of 2020.
The increase was due to higher utilization in our Terminalling operations and improved margins in wholesale.
Speaker 4: The increase was due to higher utilization in our terminal operations and improved margins in wholesale.
Speaker 4: The storage and transportation segment EBDA was 18 million in the quarter, compared with 15 million in the third quarter of 22. This segment benefited from recent industry-wide feat escalation.
The storage and transportation segment, EBITDA was $18 million in the quarter compared with $15 million in the third quarter of 22. This segment benefited from recent industry wide feet Escalations.
Speaker 4: And lastly, the investment in pipeline John Venture segment contributed 9 million toward the second quarter of 23, slightly up from third quarter of 22. Moving on to...
And lastly, the investment in pipeline joint venture segment contributed $9 million toward the second quarter of 'twenty three slightly up from third quarter of 'twenty two.
Moving onto capital expenditures third quarter twenty-three capital spending was $15 million most of that spend was for growth projects, namely advancing new connection in both the Midland and Delaware gathering systems for.
Speaker 4: Third quarter 23 capital spending was $15 million. Most of that spend was for growth projects, namely advancing new connection in both the Midland and Delaware gathering systems.
Speaker 4: For 23, we expect capital expense to be in the range of 85 to 90 million, with approximately 10 million of growth to be partially funded by the producers. Including this, net capital expenditures for the year is in the range of 75 to 80 million. With that, we can open the
For 'twenty three we expect capital expense to be in the range of $85 million to $90 million with approximately $10 million of growth Capex will be partially funded by the producers, including this net capital expenditures for the year is in the range of $75 million to $80 million.
With that we can open the call for questions.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys. If at any time. Your question has been addressed and you would like to withdraw your question. Please press star.
Speaker 1: We will now begin the question and the answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then
And then too.
Speaker 1: Our first question comes from Doug Irwin with Citi. Please go ahead.
Our first question comes from Doug Irwin with Citi. Please go ahead.
Speaker 5: I have some questions. I just want to start with Permian volumes. We've got some really strong results in the mid one that's quarter. If you look at the Delaware, it lagged a little bit. I'm just curious and abandoned to some of the same issues around extreme heat and compression constraints that we heard some peers talk about this cycle. And if so, I think that she's been resolved. Hi, Doug.
Alright, that's my question.
Just wanted to start with Permian volumes really strong results in the next one next quarter.
If you look at the Delaware It lagged a little bit I'm, just curious as the parameter and some of the same lessons around extreme heat and.
Compression constraints that we heard some peers talk about the cycle and so I think that she's been resolved.
Hi, Doug its other got it thanks Blair.
Jumping on the call and we will we're not going to be specific on the numbers, but we are going to give you. Some highlights we've seen and the Permian.
Speaker 3: jumping on a call, and we are not going to be specific on the numbers, but we are going to give you some highlights. We've seen the permanent...
Speaker 3: paste in our DPG legacy garden system is performing very well.
Based on our PPG legacy gathering system is performing very well and we're very pleased with the acreage we have and all of that investment over there. Although the yields are although the yields are yielding us very nicely. So that that investment is absolutely going gas we wanted on the DDG.
Speaker 3: And we are very pleased with the acreage we have and our investment over there over the years are yielding us very nicely. So that investment is absolutely going as we wanted. On the DDG, former tree bear, we are also seeing a very stable operation. We are pleased with the progress of the team and the assets.
Rebel we also seeing a very stable operation. We are pleased with the Paul but rest of the team and the assets and then you'd see them trending the right direction for sure I allowed or daily to give you a more color. If you could yeah. Thank thank you Avi go and Doug good.
Speaker 3: It's trending in the right direction for sure. I allowed Odeli to give you more color.
Speaker 6: Yeah, thank you Avigal. And Doug, good to hear you again. This is Odelli. So talking about those two segments as you mentioned around the Midland gathering, as you've seen, we got our volume almost double than last year and also exceeded last quarter. This is basically benefiting us from the previous capital deployment we had.
Good to hear you again this is a daily so talking about those two segment as he mentioned around the Midland gathering.
We got our volume almost double than last year and almost exceeded last quarter. This is basically benefiting us from the previous capital deployment, we had both D C or and also last year. So we started to benefit those on the volume side and D. P. G and also the associated infrastructure is very solid it's close to our refinery and what we.
Speaker 6: both this year and also last year, so we start to benefit those on the volume side in DPG and also the associated infrastructure is very solid, close to our refinery and what we built in recent years, so we kind of start to benefit that. And to your question around the DDG, around the Delaware Gathering assets, we still have been able to perform better than last year, but slightly lower than last quarter, and this is, I think, something that you probably also heard.
Build and there isn't a year or so have we kind of have started to benefit that and to your question around the D. G around the Delaware gathering assets, we still.
Have been able to perform better than last year, but slightly lower than last quarter and this is I think something that you probably also heard from others as we face it both us and also our producers of dwelling also the area with a lot of issue from a weather situation.
Speaker 6: from others as we face it, both us and also our producers as well, and also the area with a lot of issue from a weather situation, both from the storm impact and also excessive heat.
On the storm impact and also assess of heat during this time that impact both electricity and also availability for producer. So that's something that's kind of a impact everything with that said.
Speaker 6: during this time that impact both electricity and also availability for producers. So that's something that kind of impact everything with that said.
Yeah.
Speaker 1: This concludes our question and answer session. I would like to turn the conference back over to Abigail Souric for any closing remarks.
This concludes our question and answer session I would like to turn the conference back over to apical sore.
Rick for any closing remarks.
Thank you.
Speaker 1: We were having technical difficulties and I am bringing in Abigail Sourick for any closing remarks.
We were having technical difficulties and I am bringing in.
Abigail so work for any closing remarks.
Speaker 3: Thank you for the call. Thank you to the team over here in the room. It's prepared and worked so hard. Thank you for the both of the directors, our employees, and the unit holders. And we are very excited about where DK is and looking forward talking to you again next quarter. Thank you, Dave.
Thank you Dave for the color. Thank you to the team over here in the home.
With bear and walk through how thank you. Thank you for the board of directors, our employees and the unit holders and we are very excited about will dk lease and they are looking for award the talking to you again next quarter. Thank you Dave.
Speaker 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.