What Westlake Chemical Partners (WLKP) Said on Its Q3 Earnings Call

Key Points

• Third-quarter results improved: Net income was $16 million, or $0.46 per unit, while distributable cash flow rose $3 million year over year to $18 million. Trailing 12-month distribution coverage increased to 1.09 times.
• The partnership declared a quarterly distribution of $0.4714 per unit, its 49th consecutive quarterly payment without a reduction. Management said the current distribution is sustainable without accessing capital markets.
• Management expects to discuss the ethylene sales agreement with Westlake next year, before the contract expires in 2027; CEO Jean-Marc Gilson said the current $0.10 fixed margin is appropriate. Higher third-party ethylene prices in early Q4 could modestly benefit the roughly 5% of annual sales made to outside customers.

Westlake Chemical Partners NYSE: WLKP reported third-quarter 2026 net income of $16 million, or $0.46 per unit, as higher production and sales volumes lifted results from both the preceding quarter and a year earlier.

Distributable cash flow rose to $18 million, or $0.51 per unit, up $3 million from the third quarter of 2025. Senior Vice President and Chief Financial Officer Jon Baksht attributed the increase to higher production and sales volumes and lower maintenance capital expenditures.

The partnership’s trailing 12-month distribution coverage ratio improved to 1.09 times from 1.04 times in the previous quarter. Baksht said the improvement reflected the aging out of the impact of the Petro 1 turnaround in the first half of 2025.

Consolidated net income, including the earnings of Westlake Chemical OpCo LP, was $91 million on consolidated net sales of $314 million. OpCo, a subsidiary of both the partnership and parent Westlake Corporation, owns certain olefins assets.

Distribution and balance sheet

The partnership announced a quarterly distribution of $0.4714 per unit on Nov. 2. It is payable Dec. 1 to unitholders of record on Nov. 13.

President and CEO Jean-Marc Gilson said the payment marks the partnership’s 49th consecutive quarterly distribution without a reduction since its July 2014 initial public offering. Baksht said the distribution has grown 71% from the original minimum quarterly distribution of $0.2750 per unit.

Baksht said the partnership has maintained a cumulative distribution coverage ratio above 1.05 times since its IPO and can sustain its current distribution without accessing capital markets.

At quarter-end, consolidated cash and cash investments with Westlake totaled $113 million. Long-term debt was $400 million, including $377 million at the partnership and $23 million at OpCo. Baksht put the consolidated leverage ratio at approximately 1 times and said OpCo spent $12 million on capital expenditures during the quarter.

Ethylene outlook and contract talks

Gilson said third-party ethylene prices have been volatile in 2026, largely because of the ongoing conflict in the Middle East. Prices had risen so far in the fourth quarter and were above the third-quarter average, he said, potentially providing a modest benefit on the roughly 5% of annual sales made to third parties.

Management said it would continue to evaluate potential growth through increased ownership of OpCo, acquisitions of other qualified income streams, expansions of existing ethylene facilities and negotiation of a higher fixed margin under its ethylene sales agreement with Westlake.

Asked about the parent company’s incentive to increase the fixed margin, Baksht said the current contract runs through 2027 and discussions would take place next year. Gilson said he considers the current $0.10 margin appropriate and that it has provided stability for the partnership.

“We do not intend to change anything. We try to negotiate higher prices, but we are two parties at the table,” Gilson said.

Baksht said the partnership has no planned turnarounds for the remainder of 2026 or in 2027. During the question-and-answer session, Vice President of Finance and Investor Relations Jeff Holy said turnaround expenses are generally pre-funded through a reserve but still appear in the cash flow statement in the year the work occurs.

About Westlake Chemical Partners (NYSE:WLKP)

Westlake Chemical Partners LP NYSE: WLKP is a master limited partnership that owns, operates and acquires ethylene production assets. Ethylene is a basic petrochemical used in the manufacture of plastics, polymers and other industrial products.

The partnership's operations are focused on ethylene production facilities in the United States, including assets in Louisiana and Kentucky. Its ethylene is sold primarily under long-term agreements to Westlake Corporation, its primary customer and sponsor, as well as to certain third-party customers.

Westlake Chemical Partners was formed in 2014 and became a publicly traded partnership that year.

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