Delek Logistics Partners ((DKL)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Delek Logistics Partners was marked by a largely positive sentiment, underscoring the company’s strong financial performance and strategic achievements. Despite a minor decrease in the Wholesale Marketing and Terminalling segment’s EBITDA, the overall tone was optimistic, reflecting the company’s robust growth and strategic initiatives.
Record Quarter for Adjusted EBITDA
Delek Logistics Partners reported a record quarterly adjusted EBITDA of approximately $120 million, showcasing the company’s strong financial performance. This achievement highlights the effectiveness of Delek’s strategic initiatives and operational efficiencies.
Libby Plant Commissioning Completed
The successful commissioning of the new Libby plant was a key highlight, with expectations to reach full capacity in the second half of 2025. This development is set to enhance Delek’s operational capabilities and contribute significantly to future growth.
50th Consecutive Increase in Quarterly Distributions
In a testament to its commitment to rewarding stakeholders, Delek’s board approved an increase in quarterly distributions to $1.11 per unit, marking the 50th consecutive increase. This consistent growth in distributions reflects the company’s strong financial health and shareholder focus.
Increased Crude Gathering Volumes
Delek’s crude gathering operations have shown a significant rise in volumes, starting the second half of the year on a strong note. This increase underscores the company’s expanding footprint in the energy sector.
Successful High-Yield Notes Offering
The company successfully increased its liquidity by $700 million to over $1 billion through a high-yield notes offering. This move enhances Delek’s financial flexibility and supports its growth strategy.
Growth in Gathering and Processing Segment
The Gathering and Processing segment reported an adjusted EBITDA of $78 million, up from $55 million in the second quarter of 2024. This growth was primarily driven by the acquisitions of H2O and Gravity, highlighting Delek’s strategic expansion efforts.
Decrease in Wholesale Marketing and Terminalling EBITDA
Despite the overall positive performance, the Wholesale Marketing and Terminalling segment saw a decrease in adjusted EBITDA to $23 million from $30 million in the prior year. This decline was attributed to last summer’s amend and extend agreements.
Forward-Looking Guidance
Looking ahead, Delek Logistics Partners provided robust guidance with a projected full-year EBITDA of $480 million to $520 million. The company emphasized growth in its crude, natural gas, and water operations, particularly in the Permian Basin. The successful commissioning of the Libby plant is expected to reach full capacity in the latter half of 2025, further driving growth.
In conclusion, the earnings call for Delek Logistics Partners painted a largely positive picture of the company’s financial health and strategic direction. With record quarterly adjusted EBITDA, successful plant commissioning, and consistent distribution increases, Delek is well-positioned for continued growth. The minor setback in the Wholesale Marketing and Terminalling segment does little to overshadow the company’s overall achievements and optimistic outlook.