Delek Logistics Partners Reports Strong Q3 Earnings

Delek Logistics Partners ((DKL)) has held its Q3 earnings call. Read on for the main highlights of the call.

Delek Logistics Partners recently held its earnings call, revealing a generally positive sentiment driven by strong financial performance. The company reported record-setting adjusted EBITDA, increased full-year guidance, and strategic moves that enhance its market position. Despite some challenges, such as a decline in Wholesale Marketing and Terminalling EBITDA, the overall outlook remains optimistic.

Record-Setting Quarterly Adjusted EBITDA

Delek Logistics Partners announced a remarkable achievement with a quarterly adjusted EBITDA of $136 million, a significant rise from $107 million in the same period last year. This record-setting performance underscores the company’s robust financial health and operational efficiency.

Increase in Full Year EBITDA Guidance

The company has raised its full-year EBITDA guidance to the upper end of the range, now projected between $500 million and $520 million. This adjustment reflects the strong progress made year-to-date and signals confidence in continued growth.

Successful Commissioning of Libby 2 Gas Plant

The Libby 2 gas plant has been successfully commissioned and is performing as expected. Plans for future expansion are underway, driven by increased demand for sour gas handling capabilities, highlighting the company’s strategic foresight.

51st Consecutive Increase in Quarterly Distribution

Demonstrating financial prudence and commitment to stakeholders, Delek Logistics Partners’ Board of Directors approved the 51st consecutive increase in the quarterly distribution to $1.12 per unit.

Strong Financial Position and Acquisition Strategy

The company maintains a robust financial position with approximately $1 billion available on credit facilities. Recent acquisitions, including H2O Midstream and Gravity Water Midstream, have been successfully integrated, further strengthening the company’s market presence.

Decrease in Wholesale Marketing and Terminalling EBITDA

Despite overall positive results, the Wholesale Marketing and Terminalling segment experienced a decline in adjusted EBITDA, dropping to $21 million from $25 million the previous year. This decrease is attributed to last summer’s amend and extend agreements.

Forward-Looking Guidance

Looking ahead, Delek Logistics Partners is optimistic about its future performance. The company anticipates continued strength in crude gathering and water gathering segments, supported by recent acquisitions. The board’s approval of another increase in quarterly distribution and the strong financial position with ample credit availability further bolster confidence in sustained growth.

In conclusion, Delek Logistics Partners’ earnings call highlighted a strong financial performance, strategic growth initiatives, and a positive outlook. The company’s record-setting adjusted EBITDA, increased guidance, and successful acquisitions paint a promising picture for stakeholders, despite some challenges in specific segments.