Delek Logistics Partners LP (DKL) 2024 Q2 法說會逐字稿

Thank you for standing by. My name is Joel, and I will be your conference operator today. At this time, I would like to welcome everyone to the Delek Logistics Partners Q2 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be question-and-answer session. (Operator Instructions).

謝謝你的支持。我叫喬爾，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夥伴第二季財報電話會議。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。（操作員說明）。

I would now like to turn the conference over to Robert Wright, Deputy CFO. You may begin.

我現在想將會議交給副首席財務官羅伯特·賴特 (Robert Wright)。你可以開始了。

Good morning, and welcome to the Delek Logistics Partners second quarter earnings conference call. Participants joining me 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二季財報電話會議。參加今天電話會議的與會者包括總裁 Avigal Soreq； Joseph Israel，營運執行副總裁； Reuven Spiegel，執行副總裁兼財務長；以及德勒物流資深副總裁 Odely Sakazi。

As a reminder, this conference call will contain forward-looking statements as defined under the federal securities laws, including 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.

欲了解更多信息，請參閱該合夥企業最近向 SEC 提交的 10-K 表年度報告和 10-Q 表季度報告中討論的風險因素，以及與本次電話會議相關的新聞稿。該合作夥伴不承擔更新任何前瞻性陳述或資訊的義務。

I will 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, Robert. Delek Logistics Partners had another record quarter. We reported $102.4 million quarterly adjusted EBITDA. I am pleased with our continued performance. We have made several announcements today. DKL is a premier full-service crude water and natural gas provider in the prolific Permian Basin. And the transaction we have announced today will significantly enhance our position.

謝謝你，羅伯特。德勒物流合作夥伴公司 (Delek Logistics Partners) 的季度業績再創新高。我們公佈的季度調整後 EBITDA 為 1.024 億美元。我對我們持續的表現感到滿意。我們今天發布了幾項公告。DKL 是多產的二疊紀盆地首屈一指的全方位服務原油和天然氣供應商。我們今天宣布的交易將顯著增強我們的地位。

First, let's talk about the contract between DKL, DK and Wink to Webster pipeline. We announced an amend and extent of the contract between DKL and DK. The extensions remove an overhang on the DKL unit. It moves away from a month-to-month to contract terms of up to seven years.

首先，我們來談談DKL、DK和Wink到Webster管道之間的合約。我們宣布了 DKL 和 DK 之間合約的修改和範圍。擴展件消除了 DKL 單元上的懸垂部分。它從按月簽訂的合約期限改為長達七年的合約期限。

These amendments allow us to acquire DK's interest in the W2W pipeline without significant strain on our balance sheet. W2W is a premier crude oil pipeline backed by investment grade counterparties. It increases the overall asset quality at DKL and enhance DKL Permian position.

這些修改使我們能夠收購 DK 在 W2W 管道中的權益，而不會對我們的資產負債表造成重大壓力。W2W 是由投資等級交易對手支持的首要原油管道。它提高了 DKL 的整體資產品質並增強了 DKL 二疊紀的地位。

Second DKL announcement today is the investment in the new gas processing plant. This plant is highly subscribed and is estimated to generate cash on cash returns of more than 20%. We are looking to complete the plant during the first half of 2025.

DKL 今天發布的第二項公告是投資新的天然氣加工廠。該工廠認購率很高，預計現金回報率將超過20%。我們希望在 2025 年上半年完工該工廠。

The last transaction DKL announced today is the acquisition of H2O Midstream for $160 million of cash and $70 million preferred. The transaction is immediately accretive to DKL on an EBITDA and free cash flow basis. The acquired asset fits very well within DKL existing footprint.

DKL 今天宣布的最後一筆交易是以 1.6 億美元現金和 7,000 萬美元優先股收購 H2O Midstream。該交易將立即為 DKL 帶來 EBITDA 和自由現金流的增值。所收購的資產非常適合 DKL 現有的足跡。

As such further expand our capabilities to be a comprehensive provider of midstream services in the Permian Basin. Once this transaction are complete in the first half of 2025, a majority of DKL EBITDA will be from non-related parties, making DKL mostly independent midstream company.

因此，進一步擴大我們成為二疊紀盆地中游服務綜合提供者的能力。一旦這筆交易在 2025 年上半年完成，DKL 的大部分 EBITDA 將來自非關聯方，使 DKL 成為主要獨立的中游公司。

In July, the Board of Directors approved an increase in the quarterly distribution to $1.09 per unit. Delek Logistics has shown a strong track record of delivering value to unitholders.

7 月，董事會批准將季度分配增加至每單位 1.09 美元。Delek Logistics 在為單位持有人提供價值方面擁有良好的記錄。

We are excited about the announcement that we have made today and the opportunities ahead of us. I want to welcome the H2O team to the DKL family and wish them continued success and good luck.

我們對今天發布的公告以及面前的機會感到興奮。我歡迎 H2O 團隊加入 DKL 大家庭，並祝福他們繼續取得成功並祝他們好運。

I will now hand it over to Reuven.

我現在將其交給魯文。

Thank you, Avigal. As Avigal mentioned we are growing Delek Logistics with a prudent management of liquidity and leverage. The liquidity we created in the beginning of the year has allowed us to carry out a transaction we have announced today. We are also managing our leverage, which has improved to 3.81 times at the end of the second quarter of 2024 from its high point of 4.84 at the end at the end of 2022, and 4.34 at the end of 2023.

謝謝你，阿維加爾。正如 Avigal 所提到的，我們正在透過對流動性和槓桿的審慎管理來發展 Delek Logistics。我們在年初創造的流動性使我們能夠進行今天宣布的交易。我們也正在管理槓桿，槓桿率從2022年底的高點4.84和2023年底的4.34提高到2024年第二季末的3.81倍。

Moving on to our second quarter results. The second quarter adjusted EBITDA was $102.4 million, compared to $92.8 million in the same period of 2023. The distributable cash flow was $68 million and the DCF coverage ratio was 1.32 times.

接下來是我們的第二季業績。第二季調整後 EBITDA 為 1.024 億美元，而 2023 年同期為 9,280 萬美元。可分配現金流為6800萬美元，DCF覆蓋率為1.32倍。

For the Gathering and Processing segment, EBITDA for the quarter was $54.7 million, compared to $52.6 million in the second quarter of 2023. The increase was primarily due to higher throughput from Delek Logistics Permian Basin assets.

對於收集和處理部門，本季的 EBITDA 為 5,470 萬美元，而 2023 年第二季為 5,260 萬美元。這一成長主要是由於德勒物流二疊紀盆地資產吞吐量的增加。

Wholesale Marketing and Terminalling EBITDA was $30.2 million, compared to $28 million in the prior year. The increase was primarily from higher terminal and utilization. Storage and Transportation EBITDA in the quarter was $16.8 million, compared to $15 million in the second quarter of 2023. The increase was mainly driven by higher storage and transportation rates.

批發行銷和終端 EBITDA 為 3,020 萬美元，而上一年為 2,800 萬美元。這一增長主要來自終端和利用率的提高。本季儲存和運輸 EBITDA 為 1,680 萬美元，而 2023 年第二季為 1,500 萬美元。這一增長主要是由於倉儲和運輸費率上升所致。

And, lastly the investment in pipeline joint venture segment contributed $7.9 million this quarter compared to $7.3 million in the second quarter of 2023.

最後，本季管道合資企業部門的投資貢獻了 790 萬美元，而 2023 年第二季為 730 萬美元。

Moving on to capital expenditures. The capital program for the second quarter of 2014 was $10.2 million. Most of the spend in quarter was for growth projects, namely advancing new connections in the Midland and Delaware gathering system. Along with our previously announced capital budget for 2024, we expect to spend $90 million to $100 million in the second half of 2024 on new processing plant.

轉向資本支出。2014年第二季的資本計畫為1,020萬美元。本季度的大部分支出用於成長項目，即推進米德蘭和特拉華州收集系統的新連接。加上我們先前宣布的 2024 年資本預算，我們預計在 2024 年下半年投資 9,000 萬至 1 億美元用於新加工廠。

With that, we can open the call for questions.

這樣，我們就可以開始提問了。

(Operator Instructions)

（操作員說明）

Neal Dingmann of Truist Securities.

Truist 證券公司的 Neal Dingmann。

Hi. Good afternoon guys. Thanks for the time. First question is just on the H2O Midstream acquisition which looks very attractive. Just wondered, maybe can you talk a little bit about you mentioned here about the new full suite of services how that improves sort opportunities.

你好。各位下午好。謝謝你的時間。第一個問題是關於 H2O Midstream 的收購，這看起來非常有吸引力。只是想知道，也許您可以談談您在這裡提到的新的全套服務如何提高排序機會。

I'm just wondering how that will improve as you have future customer opportunities. And then secondly, you all talked about the potential near-term costs and revenue synergies. I'd love to hear maybe more about that.

我只是想知道，當您擁有未來的客戶機會時，情況會如何改善。其次，你們都談到了潛在的近期成本和收入綜效。我很想聽聽更多相關資訊。

Absolutely, Neal. So, three aspects to that. One, the same customer you can have a more comprehensive view about deals that you are doing with customers. The second point around that is that basically the operational are on top of each other, so you can be very efficient on the way you run your operations. And the third, this infrastructure can be relevant for both services. So, this is accretive -- very accretive deal for us and it is extremely synergistic.

當然，尼爾。那麼，三個方面。第一，對於同一客戶，您可以更全面地了解與客戶進行的交易。第二點是，基本上操作是相互疊加的，因此您可以非常有效率地運行操作。第三，該基礎設施可以與這兩種服務相關。因此，這對我們來說是一項增值性的交易，而且具有極大的協同效應。

No, I would agree. And then secondly just on the new Delaware gas plant. What could the timing be? I know maybe jump in again a little bit on this one, but I like that -- I think there is a future additional gas processing opportunities you all could have around there beginning next year after you close. And I'm just wondering what how soon could you see some of those future gas opportunities? And what might that consist of?

不，我同意。其次是新的德拉瓦天然氣廠。時間可能是什麼？我知道也許會再次介入這個問題，但我喜歡這一點——我認為從明年開始，你們在關閉之後，未來可能會有額外的天然氣加工機會。我只是想知道您多久才能看到未來的天然氣機會？那可能包括什麼？

Yes. So our gas plant is completely synergistic with the current gas plant we have. We said that we're going to complete the second in the first half of 2025. And it's already been nicely subscribed. Odely, I don't know if you want to add into that.

是的。因此，我們的天然氣工廠與我們現有的天然氣工廠完全具有協同作用。我們說我們將在 2025 年上半年完成第二個專案。而且它已經被很好地訂閱了。Odely，我不知道你是否想補充這一點。

Yes just a little bit to your comments, Neal. To be honest, right now, we already have the associated need for additional capacity from what we're seeing with our producer currently and also going forward. So this is why we feel very comfortable on the volume on that new plant that is already highly subscribed as Avigal mentioned. So we see that timing pretty much as soon as possible from our stand.

是的，只是對你的評論做一點評論，尼爾。老實說，從目前和未來我們與生產商的情況來看，我們已經有了額外產能的相關需求。因此，這就是為什麼我們對新工廠的銷售感到非常滿意，正如阿維加爾所提到的那樣，該工廠已經得到了很高的認購。因此，我們會盡快從我們的展位上看到這個時機。

Great guys. Nice additions on both sides. Thank you.

很棒的傢伙。兩邊都有不錯的補充。謝謝。

Doug Irwin of Citi.

花旗銀行的道格歐文。

Hi. Thanks for the question. I just wanted to touch on the $55 million to $85 million EBITDA range you provided for the transaction this morning. I was wondering, if you could talk about some of the assumptions for high end versus the low end of that range. Is mostly dependent on some of the H2O Midstream synergies? Or are there maybe some other factors under consideration there? And then should we expect that to kind of be a good run rate for 2025? Or is that ramping overtime?

你好。謝謝你的提問。我只是想談談您今天上午為交易提供的 5500 萬至 8500 萬美元的 EBITDA 範圍。我想知道您是否可以談談該範圍的高端與低端的一些假設。主要依賴 H2O 中游的一些協同效應嗎？或者是否還有其他一些因素正在考慮中？那麼我們是否應該期望 2025 年這會是一個好的運行率？或者說是加班加點？

Okay. Great. That's helpful. I was just wondering, if you could provide a little more detail around the funding expectations for cash component of these transactions. And if I look at slide 6 in the presentation materials, it looks like maybe some units are changing hands here as part of the Wink to Webster and recontracting. Just wanted to clarify, I'm interpreting that correctly and if so, maybe get a little more detail around how that might play into the deconsolidation priorities of the DK.

好的。偉大的。這很有幫助。我只是想知道，您是否可以提供有關這些交易現金部分的融資預期的更多細節。如果我看一下簡報資料中的幻燈片 6，看起來可能有些單位在這裡易手，作為向韋伯斯特眨眼和重新簽約的一部分。只是想澄清一下，我的解釋是正確的，如果是這樣，也許可以更詳細地了解這可能如何影響 DK 的分拆優先事項。

Okay, great. That's helpful. And then I was just wondering if you could provide a little more detail around the funding expectations for the cash components of these transactions? And if I look at slide 6 in the presentation materials, it looks like maybe some units are changing hands here as part of the Wink to Webster and recontracting. Just wanted to clarify on I'm interpreting that correctly? And if so, maybe get a little more detail around how that might play into the deconsolidation priorities up at Teekay?

好的，太好了。這很有幫助。然後我想知道您是否可以提供有關這些交易現金部分的融資預期的更多細節？如果我看一下簡報資料中的幻燈片 6，看起來可能有些單位在這裡易手，作為向韋伯斯特眨眼和重新簽約的一部分。只是想澄清一下我的解釋是否正確？如果是這樣，也許可以更詳細地了解這可能如何影響 Teekay 的分拆優先事項？

Yeah. Absolutely. So there are units that are changing hands, but the net amount is not big between the companies. So it's like we exchange value from one company to another and we got it pretty tax efficient.

是的。絕對地。所以有些單位正在易手，但公司之間的淨額並不大。因此，就像我們將價值從一家公司交換到另一家公司一樣，我們得到了相當高的稅收效率。

So that's good news. So we don't need to pay a lot of attention into that part the equation. What we basically did and you can appreciate that, I'm sure, we put the right asset under the right ownership. Put W to W where it naturally belongs and a exchanges for a value that belongs to the refineries.

這是個好消息。所以我們不需要太多關注方程式的這一部分。我們基本上做了什麼，你可以理解，我確信，我們將正確的資產置於正確的所有權之下。把W放到W自然所屬的地方，a交換一個屬於煉油廠的值。

Got it. That's all for me. Appreciate the questions.

知道了。這就是我的全部。感謝您提出的問題。

Thank you.

謝謝。

With no further questions, that concludes our Q&A session. I will now turn the conference back over to CEO, Avigal Soreq, for closing remarks.

沒有其他問題，我們的問答環節就結束了。現在我將把會議轉回執行長 Avigal Soreq 致閉幕詞。

Thank you. So I would like to thank my leadership around this table, our employees, our Board of Directors, for you investors. And welcome the H2O team, to the Delek -- to the DKL family. Thank you, guys. And we'll talk next quarter.

謝謝。因此，我要感謝我在座的領導、我們的員工、我們的董事會，以及各位投資人。歡迎 H2O 團隊加入 Delek，加入 DKL 大家庭。謝謝你們，夥計們。我們將在下個季度討論。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。