Delek Logistics Partners LP (DKL) 2024 Q1 法說會逐字稿

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek Logistics Partners first quarter 2024 earnings conference call.

您好，感謝您的支持。我叫雷吉娜，今天我將擔任你們的會議操作員。此時此刻，我歡迎大家參加德勒物流合作夥伴 2024 年第一季財報電話會議。

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Rosie to click, Vice President, Investor Relations. Please go ahead.

所有線路均已靜音，以防止任何背景噪音。演講者發言後，將進行問答環節。（操作員指示）我現在想將會議轉交給投資者關係副總裁羅西點擊。請繼續。

Good morning, and welcome to the Delek Logistics Partners first quarter earnings conference call. Participants on today's call will include Avigal Soreq, President; Joseph Israel, EVP Operations; Reuven Spiegel, EVP and Chief Financial Officer; and Odely Sakazi, SVP, Delek Logistics.

早安，歡迎參加德勒物流夥伴第一季財報電話會議。今天電話會議的參與者包括總裁 Avigal Soreq； Joseph Israel，營運執行副總裁； Reuven Spiegel，執行副總裁兼財務長；以及 Delek Logistics 資深副總裁 Odely Sakazi。

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. These statements involve risks and uncertainties that may cause actual results to differ from our forecast.

提醒一下，本次電話會議將包含聯邦證券法定義的前瞻性聲明，包括但不限於有關指導和未來業務前景的聲明。這些陳述涉及風險和不確定性，可能導致實際結果與我們的預測不同。

For more information, please refer to the risk factors discussed in the Partnership'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. The Partnership assumes no obligation to update any forward-looking statements or information which speak as of their respective dates.

欲了解更多信息，請參閱合夥企業最近向 SEC 提交的 10-K 表格年度報告和 10-Q 表格季度報告以及與本次電話會議相關的新聞稿中討論的風險因素。合夥企業不承擔更新截至各自日期的任何前瞻性陳述或資訊的義務。

I'll now turn the call over to Avigal for opening remarks. Avigal?

現在我將把電話轉給阿維加爾致開幕詞。阿維加爾？

Thank you, Rosy. Delek Logistics Partners reported a strong first quarter. We once again exceeded $100 million of quarterly EBITDA. I'm pleased with our consistent performance. We saw continued strong performance from our Midland Gathering operations and our operation in the Delaware basins have started to exceed our expectations on a consistent basis. This validates our strong position in the Permian Basin. We have come a long way with DKL.

謝謝你，羅西。Delek Logistics Partners 公佈第一季業績強勁。我們的季度 EBITDA 再次突破 1 億美元。我對我們一貫的表現感到滿意。我們看到我們的米德蘭集採業務持續表現強勁，我們在特拉華盆地的業務已開始持續超出我們的預期。這證實了我們在二疊紀盆地的強勢地位。我們與 DKL 一起取得了長足的進步。

Delek logistics started back in 2012. It's a classic drop-down story. It has evolved into something bigger. We started to develop third-party business back in 2016, focusing in the Midland and the Delaware Basins. Today, approximately 50% of our EBITDA is from third-party business.

Delek 物流始於 2012 年。這是一個經典的下拉式故事。它已經演變成更大的東西。我們早在 2016 年就開始開發第三方業務，專注於米德蘭和特拉華盆地。如今，我們約 50% 的 EBITDA 來自第三方業務。

Our growth efforts have been focused on gathering and processing segments. Our Midland Gathering system is premier asset in the heart of the Midland Basin. We've built a system organically. It's now gathered up to 230,000 barrels per day and has around 350,000 of dedicated acreage contracted until 2030. It's an attractive asset that provide the growth engine of our Midland midstream operations.

我們的成長努力主要集中在收集和加工領域。我們的米德蘭採集系統是米德蘭盆地中心的首要資產。我們有機地建構了一個系統。目前，該公司每天的產量高達 23 萬桶，並在 2030 年之前簽訂了約 35 萬桶的專用面積合約。這是一項有吸引力的資產，為我們米德蘭中游業務提供成長引擎。

Moving to the Delaware Gathering business. We've built this business inorganically and organically, the system provides complete crude, gas and water gathering to our customers. We have significant growth opportunities in our system.

轉向特拉華聚會業務。我們以無機和有機的方式建立了這項業務，該系統為我們的客戶提供完整的原油、天然氣和水收集。我們的系統擁有巨大的成長機會。

On the capital structure, we improved Delek Logistics' financial strength and flexibility. Reuven will speak to this. The debt and equity offering improved our liquidity to approximately $800 million. I'm proud of the team for their successfully executing these transactions.

在資本結構上，我們提高了德勒物流的財務實力和靈活性。魯文將就此發表演說。債務和股權發行將我們的流動性提高到約 8 億美元。我為團隊成功執行這些交易感到自豪。

In May, the Board approved the 45th consecutive increase in the quarterly distribution to $1.7 per unit. Delek Logistics has shown strong track record of delivering value to our unitholders. We feel confident in our ability to maintain strong distribution to our investors.

5 月，董事會批准連續 45 次將季度分配增加至每單位 1.7 美元。Delek Logistics 在為我們的單位持有人提供價值方面表現出了良好的記錄。我們對維持對投資者的強勁分配的能力充滿信心。

I will now hand it over to Reuven.

我現在將其交給魯文。

Thank you, Avigal. Before I start the financial highlights, I wanted to give a little color on the recent debt and equity offerings. The combination of the primary equity issuance and extending our debt to 2029 improved Delek Logistics' ability to pursue its growth plans through improved leverage and financial liquidity. It also increased float in the units, attracting new investors and increasing the daily volume traded.

謝謝你，阿維加爾。在開始財務摘要之前，我想先介紹最近的債務和股票發行。首次股票發行並將債務期限延長至 2029 年相結合，提高了 Delek Logistics 透過提高槓桿率和財務流動性來實現其成長計畫的能力。它還增加了單位的流通量，吸引新投資者並增加每日交易量。

As Avigal mentioned, we increased liquidity to approximately $800 million. This was about $300 million prior to these transactions. In addition, we reduced the leverage ratio to 4.01 from 4.34 last quarter with clear pathway to continue improvement in the leverage ratio through the balance of the year.

正如 Avigal 所提到的，我們將流動性增加到約 8 億美元。在這些交易之前，該金額約為 3 億美元。此外，我們將槓桿率從上季度的 4.34 降至 4.01，並為今年餘下的時間裡繼續改善槓桿率提供了明確的途徑。

Moving on to the quarter results. The first quarter EBITDA was $101.5 million compared to $93.2 million in the same period of '23. Distributable cash flow was $68 million and the DCF coverage ratio was 1.35 times.

接下來是季度業績。第一季 EBITDA 為 1.015 億美元，而 2023 年同期為 9,320 萬美元。可分配現金流為6800萬美元，DCF覆蓋率為1.35倍。

For the gathering and processing segment, EBITDA for the quarter was $57.8 million compared to $55.4 million in the first quarter of '23. The increase was primarily due to higher throughput from Delek Logistics' Permian Basin assets.

對於收集和加工領域，本季的 EBITDA 為 5,780 萬美元，而 2023 年第一季的 EBITDA 為 5,540 萬美元。這一成長主要是由於德勒物流二疊紀盆地資產的吞吐量增加。

Wholesale marketing and terminalling EBITDA in the first quarter was $25.3 million, compared with $22 million in the prior year. The increase was primarily from higher terminalling utilization. Storage and transportation EBITDA in the quarter was $18.1 million, compared with $13.4 million in the first quarter of '23. The increase was mainly driven by higher storage and transportation rates. And lastly, the investment in pipeline joint venture segment contributed $8.5 million in this quarter, compared with $6.3 million in the first quarter of '23.

第一季批發行銷和終端 EBITDA 為 2,530 萬美元，而去年同期為 2,200 萬美元。這一增長主要來自碼頭利用率的提高。本季儲存與運輸 EBITDA 為 1,810 萬美元，而 2023 年第一季為 1,340 萬美元。這一增長主要是由於倉儲和運輸費率上升所致。最後，本季管道合資企業部門的投資貢獻了 850 萬美元，而 2023 年第一季為 630 萬美元。

Moving on to capital expenditures. The capital program for the first quarter of '24 was $15 million. Most of the spend in the quarter was for growth projects, namely advancing new connections in the Midland and Delaware Gathering Systems.

轉向資本支出。2024 年第一季的資本計畫為 1500 萬美元。本季度的大部分支出用於成長項目，即推進米德蘭和德拉瓦收集系​​統的新連接。

With that, we can open the call for questions.

這樣，我們就可以開始提問了。

We will now begin the question-and-answer session. Doug Erwin, Citigroup.

我們現在開始問答環節。道格歐文，花旗集團。

I just wanted to start with the recent offerings. Can you maybe provide a little bit more context into the decision to issue DKL equity? And then maybe if you could just talk to the flexibility and some of the growth opportunities that this increased liquidity might allow going forward? And then just to follow-up on that, as you kind of recently issued another shelf offering, are there any plans to issue more equity going forward or are you kind of comfortable with where the balance sheet is today?

我只想從最近的產品開始。您能否為發行 DKL 股權的決定提供更多背景資訊？然後，也許您可以談談這種增加的流動性可能帶來的靈活性和一些成長機會？然後，為了跟進這一點，正如您最近發行了另一份擱置產品，是否有計劃未來發行更多股權，或者您對今天的資產負債表狀況感到滿意嗎？

I will start and then Reuven can add more color into that. So our offering -- Reuven has indeed actually checked all the boxes that we need. It's improving the leverage ratio, improving availability, and get more float on the public units. So it checks many boxes to enhance the great activity that we have on the operations side. So it's a complementary action to the operation side to enhance the equity side and the balance sheet side.

我會開始，然後魯文可以添加更多的色彩。所以我們的產品——魯文實際上已經檢查了我們需要的所有方框。它正在提高槓桿率，提高可用性，並獲得更多公共單位的流通量。因此，它檢查了許多方框，以增強我們在營運方面的出色活動。所以增強權益端和資產負債表端是營運端的一個補充動作。

On the shelf offering that we have, obviously, that's -- the best part is to have a good chunk of a offering for many reasons. Reuven, I don't know if you want to add few words into that.

顯然，在我們現有的貨架產品上，最好的部分是出於多種原因擁有大量產品。Reuven，我不知道你是否想補充幾句話。

Yeah, the equity offering actually has a history. On June 30, 2022, we closed on 3 Bear and we communicated back then to the market that we intend to finance the acquisition by $400 million of high yield and $200 million of equity issuance.

是的，股票發行其實有歷史。2022 年 6 月 30 日，我們關閉了 3 Bear，當時我們向市場傳達，我們打算透過 4 億美元的高收益債券和 2 億美元的股票發行為收購融資。

However, both high yield market and the equity issuance were shut down at the time and we had to be patient and look for the right time and the right opportunity, which we found in the last equity issuance. Given it was the first one, we couldn't go all the way to $200 million, but I think we're happy with the outcome of the first one. And I think going forward, we'll just be opportunistic about it.

但當時高收益市場和股票發行都停擺了，我們必須要有耐心，尋找合適的時機和合適的機會，我們在上次股票發行中就發現了這一點。鑑於這是第一個項目，我們無法一路達到 2 億美元，但我認為我們對第一個項目的結果感到滿意。我認為展望未來，我們只會抓住機會。

Great. That's some helpful context around 3 Bear. And then just as a follow-up, maybe pivoting to the growth outlook, could you maybe just talk about the opportunity set you're seeing from the [GNT] business moving forward as growth may be geared more towards the Delaware or the Midland? And then maybe if you could just talk about how you're thinking about organic growth versus maybe the opportunity to do some additional acquisitions moving forward?

偉大的。這是有關 3 Bear 的一些有用的背景資訊。然後，作為後續行動，也許轉向增長前景，您能否談談您從 [GNT] 業務中看到的機會集，因為增長可能更多地面向特拉華州或米德蘭？然後，也許您可以談談您如何看待有機成長以及未來進行一些額外收購的機會？

Doug, that's another great question. I will start and then I will let Odely finish the answer. So it's easier to talk about the confidence of the future for obvious reasons, but I think that we demonstrate to the market that we actually know to do both ways, inorganically and organically. We demonstrated the DPG asset in the Permian Basin can be very attractive and we developed that over time to something we are really proud of.

道格，這是另一個很好的問題。我先開始，然後讓奧德利完成答案。因此，出於顯而易見的原因，談論對未來的信心更容易，但我認為我們向市場證明，我們實際上知道要以無機和有機的方式進行這兩種方式。我們證明了二疊紀盆地的 DPG 資產非常有吸引力，隨著時間的推移，我們將其發展成為我們真正引以為傲的東西。

And we also developed the Delaware asset to -- and exceeded our expectation as well. So we have a good track record. We are in a point that we are aggressive around it, but we always want to make sure that we are doing -- whatever we are doing is they are attractive to both the DKL unitholder, but also to our shareholders.

我們還開發了特拉華州資產，並且也超出了我們的預期。所以我們有良好的記錄。我們正處於積極進取的境地，但我們始終希望確保我們正在做的事情——無論我們在做什麼，它們對 DKL 單位持有人和我們的股東都有吸引力。

Odely, please.

奧德利，請。

Good to hear from you, (inaudible) As Avigal mentioned, I think that on the inorganic, we're always optimistic and always look on opportunity and we're going to continue to do that. And obviously, it has to be something that makes sense and also accretive for us. So we always going to continue to look at it.

很高興收到你的來信，（聽不清楚）正如阿維加爾所提到的，我認為在無機方面，我們總是樂觀的，總是尋找機會，我們將繼續這樣做。顯然，它必須是有意義的並且對我們有增值作用的東西。所以我們總是會繼續關注它。

On the organic side, definitely, as you know, both the Delaware and also the Midlands are both of the location where we continue to put capital in and we see a significant opportunity from a growth opportunity standpoint.

在有機方面，如您所知，德拉瓦州和中部地區都是我們繼續投入資金的地方，從成長機會的角度來看，我們看到了巨大的機會。

Specifically on the Delaware, we feel that there is a needed infrastructure pretty much in all lines on the water side, the gas and the crude. We're able to execute that across the board in all our segments in the Delaware side on DPG. And we see from our producer the continuing need specifically in the location where we have acquired acreage with the 3 Bear, from the acquisition, to continue to focus on that location on all three streams. I think this is an area where it's a very needed for continued growth that we're definitely going to continue to look on organic opportunity in all streams.

特別是在德拉瓦州，我們認為水、天然氣和原油的所有線路幾乎都需要基礎設施。我們能夠在 DPG 特拉華州的所有細分市場中全面執行該操作。我們從我們的生產商那裡看到，特別是在我們透過收購獲得 3 Bear 土地的地區，我們持續需要繼續專注於所有三個流的該地區。我認為這是一個非常需要持續成長的領域，我們肯定會繼續在所有領域尋找有機機會。

Neal Dingmann, Truist Securities.

尼爾‧丁曼 (Neal Dingmann)，Truist 證券公司。

Can you just talk about your MVC contracts, any update, particularly on Tyler or El Dorado? And then just -- again, just how the other sort of -- you're looking at other contracts, are you continuing to try to extend the duration? Or where do you sit with most of these other major prospective MVC contracts?

您能否談談您的 MVC 合約以及任何更新，特別是關於 Tyler 或 El Dorado 的合約？然後，再一次，另一種方式是，您正在考慮其他合同，您是否會繼續嘗試延長期限？或者您對大多數其他主要的潛在 MVC 合約有何看法？

So Neal, the intent of DKL is to renew this contract, and that's something that DKL is walking in.

Neal，DKL 的目的是續簽這份合同，這就是 DKL 正在做的事情。

Is there any timeline for the Tyler or El Dorado negotiations?

泰勒或埃爾多拉多談判有時間表嗎？

So obviously, that will require the conflicts committees between DK and DKL, so this is a process that -- you understand the intention.

顯然，這需要 DK 和 DKL 之間的衝突委員會，所以這是一個 - 你理解其意圖的過程。

Sure. Okay. And then just lastly, kind of bolt-on to the prior question, what kind of opportunities up by 3 Bear you seem to be advancing up there? Are there opportunities to bolt on some assets -- or I guess, maybe ask -- let me ask another way. Is there any need to bolt on any assets do you believe up there and sort of what are you doing to boost the margins in that area?

當然。好的。最後，是對先前問題的補充，在 3 Bear 的基礎上，你似乎會獲得什麼樣的機會？是否有機會增加某些資產——或者我猜，也許會問——讓我換個方式問。是否需要增加您認為在那裡的任何資產以及您正在採取哪些措施來提高該領域的利潤率？

We're not going to talk about the margin. The margin is where the margin is in this area. What I can speak that we see a significant growth and opportunities in the area, and we will elect to do something that's going to be accretive to our unitholders, we see the demand for the service that we know how to provide.

我們不會談論利潤。邊距就是這個區域的邊距所在的位置。我可以說的是，我們看到了該領域的顯著增長和機遇，我們將選擇做一些對我們的單位持有人有利的事情，我們看到了對我們知道如何提供的服務的需求。

Obviously, as I said before, we know to provide in the area crude, gas and water, that's a pretty unique value proposition. Our infrastructure in the area is in a unique strategic location. So if we see something which is synergetic and make a lot of sense with the current offering we have and the physical asset, we'll not hesitate to do something as long as it's accretive to unitholders.

顯然，正如我之前所說，我們知道在該地區提供原油、天然氣和水，這是一個非常獨特的價值主張。我們在該地區的基礎設施處於獨特的戰略位置。因此，如果我們看到某些東西具有協同效應，並且對我們現有的產品和實體資產很有意義，那麼只要它能為單位持有人帶來增值，我們就會毫不猶豫地採取行動。

Great to hear, guys. I think that's the right strategy. Thank you.

很高興聽到，夥計們。我認為這是正確的策略。謝謝。

We have no further questions at this time. I will now hand the call back to Avigal for closing remarks.

目前我們沒有進一步的問題。我現在將把電話轉回給阿維加爾進行總結發言。

So thank you. I want to thank our employees for their commitment and hard work. I want to thank to our unitholder for their trust and the interest in our partnership. I want to thank to our customers for trusting in us, and I want to talk -- to thank to our Board of Directors for their continuous support. And we'll talk next in the next quarter. Thank you.

所以謝謝。我要感謝我們的員工的奉獻和辛勤工作。我要感謝我們的單位持有者對我們合作關係的信任和興趣。我要感謝客戶對我們的信任，我想感謝我們的董事會一直以來的支持。我們將在下個季度繼續討論。謝謝。

And this will conclude our call today. Thank you all for joining, and you may now disconnect.

我們今天的電話會議到此結束。感謝大家的加入，現在可以斷開連線了。