Westlake Chemical Partners' Q2 2025: Unraveling Key Contradictions on Production, Growth, and Capital Needs

Ethylene unit production and turnaround impacts, distribution growth and equity capital requirements, equity capital raise and distribution growth, ethylene margin and third-party sales strategy, and distribution growth and equity capital are the key contradictions discussed in Westlake Chemical Partners' latest 2025Q2 earnings call.



Financial Performance and Distribution Stability:
- Westlake Chemical Partners LP reported second quarter 2025 net income of $15 million or $0.41 per unit, in line with the previous year's performance.
- The stability in financial performance and 44 consecutive quarterly distributions since the IPO in 2014 were attributed to the predictable fee-based cash flow structure from the take-or-pay contract with Westlake for 95% of OpCo's production.

Maintenance Capital Expenditures and Distributable Cash Flow:
- Distributable cash flow for the second quarter of 2025 decreased by $2 million compared to the second quarter of 2024, due to higher maintenance capital expenditures.
- The decrease was primarily due to the completion of a planned turnaround at the Petro 1 ethylene unit, which required additional capital investment.

Ethylene Sales Agreement and Market Insulation:
- The partnership received a $14 million benefit to OpCo from protection provided by the ethylene sales agreement, which helped insulate it from certain production shortfalls.
- This benefit highlights the strategic value of the agreement in shielding the company from market volatility and production risks.

Capital Structure and Leverage:
- At the end of the second quarter, the consolidated leverage ratio of Westlake Chemical Partners was approximately 1x.
- The strong leverage metrics reflect the company's conservative financial management approach, despite facing a challenging global macroeconomic backdrop.