Delek Logistics Partners Reports Strong Q2 Earnings and Promising Future
2023-08-10
Delek Logistics Partners, an energy company specializing in the logistics and transportation of crude oil and refined products, held its second-quarter earnings conference call to discuss its financial performance. The meeting focused on the marketing and terminalling segment, storage and transportation segment, and investment in the pipeline joint venture segment. The company reported positive EBITDA growth in marketing and terminalling, consistent results in storage and transportation, and flat contributions from the pipeline joint venture.
In the second quarter of 2023, Delek Logistics Partners reported strong financial results, with $93 million of EBITDA. This indicates consistent performance and stable cash flow for the company. The growth can be attributed to the increasing production in the Permian Basin, with the Midland Gathering system volumes more than doubling from a year ago. Additionally, the Delaware Gathering assets are performing well. The company expects to exceed a $100 million quarterly EBITDA run rate by the fourth quarter of 2023, demonstrating its continued success and financial growth.
The marketing and terminalling segment saw an increase in EBITDA, driven by higher terminalling throughput in East Texas and a higher gross margin in the West Texas operation. The storage and transportation segment maintained consistent EBITDA compared to the previous year. However, the investment in the pipeline joint venture segment remained flat.
Delek Logistics Partners emphasized its commitment to sustainable growth through significant capital expenditures on growth projects. These projects include advancing new connections in the Delaware and Midland gathering systems, which are expected to contribute to the company's future success.
During the conference call, Avigal Soreq, the President of Delek Logistics Partners, expressed optimism about the positive outlook, particularly with the increasing production in the Permian Basin. He also highlighted the company's commitment to increasing the quarterly distribution, indicating confidence in its future performance.
Reuven Spiegel, the Chief Financial Officer, provided financial details during the call. He stated that the total EBITDA for logistics was $93 million for the second quarter of 2023, compared to $65 million for the same period in 2022. Spiegel emphasized the strong contributions from the Midland Gathering System and Delaware Gathering, which drove the increase in EBITDA.
Overall, the participants of the call discussed Delek Logistics Partners' strong financial performance and positive outlook. The company's focus on increasing production in the Permian Basin and its commitment to sustainable growth through capital expenditures indicate a promising future for the company.
Delek Logistics Partners operates a network of pipelines, terminals, and storage facilities across the United States. The company's primary customers are Delek US Holdings and other third-party energy companies. By charging transportation and storage fees to its customers, Delek Logistics Partners generates revenue. The company also prioritizes safety and environmental responsibility in its operations.
In conclusion, Delek Logistics Partners' second-quarter earnings call highlighted its strong financial performance, with positive EBITDA growth in the marketing and terminalling segment and consistent results in storage and transportation. The company's investment in the pipeline joint venture segment remained flat. With a focus on sustainable growth and significant capital expenditures on growth projects, Delek Logistics Partners is well-positioned for continued success in the energy sector.