Delek Logistics Partners Achieves $100.9 Million Adjusted EBITDA in Q4 2023
2024-02-28
Delek Logistics Partners had its fourth quarter 2023 conference call, where key executives such as Avigal Soreq, Joseph Israel, Reuven Spiegel, and Odely Sakazi discussed various aspects of the company's performance and future prospects.
During the call, it was revealed that Delek Logistics Partners achieved an adjusted EBITDA of $100.9 million in the fourth quarter of 2023. However, the company also faced a $14.8 million goodwill impairment due to increased interest rates impacting some of their Delaware gathering and processing assets.
In January, the board of directors approved the 44th consecutive increase in the quarterly distribution, raising it to $1.055 per unit, showcasing the company's dedication to delivering value to its investors.
Delek Logistics Partners is strategically focused on expanding third-party revenues, deploying capital prudently, and exploring natural gas opportunities in the Delaware Basin, where substantial growth potential is identified.
The company's investment in the pipeline joint venture segment contributed $8.5 million in the last quarter, with a total capital program of $74 million for 2023. Looking ahead to 2024, the company anticipates a capital program of around $70 million, with a significant portion allocated to growth capital.
The Delaware gathering and processing assets have proven to be a source of further opportunities, particularly in the natural gas sector. Delek Logistics Partners achieved its target EBITDA run rate of $100 million quarterly by the end of 2023, surpassing the initial goal set upon acquiring these assets.
During the call, Odely Sakazi mentioned the acceleration of maintenance work planned for Q1, leading to improved volumes in Q4. Avigal Soreq highlighted the reduction in corporate expenses, attributing it to a company-wide cost optimization initiative and a zero-based budgeting approach with a $100 million target.
Regarding debt maturities in 2025, Reuven Spiegel disclosed plans to refinance some debt instruments in the coming months. Avigal Soreq addressed the leverage ratio, emphasizing efforts to bring it below four in the market.
In conclusion, Avigal Soreq expressed appreciation to colleagues, the board, investors, and employees for their contributions to the company's achievements. The call ended with Soreq thanking participants and announcing plans for the next quarterly meeting.
The conference call provided valuable insights into Delek Logistics Partners' financial performance, growth strategies, and operational developments, underscoring the company's commitment to enhancing shareholder value and seizing opportunities in the evolving natural gas landscape.