Westlake Chemical Partners (NYSE:WLKP) executives emphasized the stability of the partnership’s fixed-margin business model while reviewing fourth-quarter and full-year 2025 results, which reflected the impact of a planned turnaround at the Petro 1 ethylene facility in Lake Charles, Louisiana.
2025 results reflect planned turnaround impacts
President and CEO Jean-Marc Gilson said the partnership reported full-year 2025 net income of $49 million, or $1.38 per unit. On a consolidated basis including OpCo, net income was $299 million for the year. Gilson attributed the partnership’s overall stability to its fixed-margin Ethylene Sales Agreement, which covers 95% of annual planned production each year and is designed to insulate the business from market volatility and certain production risks.
Bender reported fourth-quarter distributable cash flow of $19 million, or $0.53 per unit. He said distributable cash flow increased by $4 million versus the prior-year quarter primarily due to lower maintenance capital expenditures, which he attributed to a shift in the timing of those cash flows to earlier in the year.
For the full year, Bender said net income decreased by $13 million compared to 2024, driven by lower production and sales volumes resulting from the planned Petro 1 turnaround. Full-year 2025 MLP distributable cash flow was $53 million, down from $67 million in 2024, which management attributed to the decline in net income. The partnership’s distribution coverage for full-year 2025 was 0.8x.
Contract renewal highlights fee-based model
Management pointed to the Ethylene Sales Agreement with parent company Westlake as a key underpinning of predictable earnings and cash flow. Bender said OpCo renewed the Ethylene Sales Agreement through 2027 during 2025, with no changes to contract terms or conditions. He said management views the renewal under unchanged terms as a sign of the importance of OpCo’s ethylene supply to Westlake’s operations and Westlake’s commitment to support OpCo’s safe and reliable operations through stable and predictable cash flows.
Gilson also highlighted the partnership’s distribution track record, noting that the fourth-quarter payout represented the 46th consecutive quarterly distribution since the partnership’s IPO in July 2014, with no reductions.
Distribution, liquidity, and leverage
Bender said the partnership announced a quarterly distribution of $0.4714 per unit with respect to the fourth quarter of 2025. The distribution was paid on February 23, 2026 to unitholders of record as of February 6, 2026. He added that distributions have grown 71% since the partnership’s original minimum quarterly distribution of $0.275 per unit.
On the balance sheet, Bender said consolidated cash and cash investments held through an Investment Management Agreement totaled $68 million at the end of the fourth quarter. Long-term debt was $400 million, including $377 million at the partnership and $23 million at OpCo. He also reported that OpCo spent $79 million on capital expenditures during 2025 and that the partnership maintained a consolidated leverage ratio below 1x.
Looking at longer-term distribution support, Bender said that since the IPO the partnership has maintained a cumulative coverage ratio of approximately 1.1x, and he said the partnership is able to sustain its current distribution without needing to access the capital markets, citing the stability of its cash flows.
Management addresses reserves and turnaround-related cash movements
During the Q&A, an analyst asked whether the partnership had drawn down amounts receivable under the Investment Management Agreement in order to pay distributions, and whether reduced balances in that category could limit future distribution coverage.
Management responded that the investment balance drawn down during 2025 reflected the cost of the maintenance turnaround. Executives explained that Westlake is invoiced monthly for planned turnaround expenses, and cash received is invested in the investment management account. The partnership then uses those accumulated funds to execute planned turnaround activity, which management said typically occurs every five to eight to nine years, depending on unit performance.
Management added that because the unit was down for maintenance during part of 2025, there was no production from that unit, which affected production and income. However, executives said the partnership also had the ability to use operating reserves, and stated that the operating surplus at the end of 2025 was approximately $74 million, which they said covers current and expected future annual distributions.
2026 outlook and growth options
Both Bender and Gilson said the partnership has no planned turnarounds in 2026. Gilson said management expects the absence of turnarounds to drive solid production and sales volume growth and a recovery in distributable cash flow and coverage ratio back toward historical levels. Management specifically said it expects the coverage ratio to rise above 1.1x, which it characterized as its target.
Gilson said management will continue evaluating opportunities using what he described as four growth “levers,” including:
- Increasing the partnership’s ownership interest in OpCo
- Acquiring other qualified income streams
- Organic growth opportunities, such as expansions of current ethylene facilities
- Negotiating a higher fixed margin in the Ethylene Sales Agreement with Westlake
In response to a question about how growth initiatives might be financed, management said that if it pursued those opportunities, it would likely do so through a “drop-down” transaction structure and finance it with external funding—debt, equity, or a combination—including the issuance of new units and potentially leveraging the balance sheet.
Gilson closed by reiterating a focus on safe operations, environmental stewardship, and sustaining long-term value and distributions for unitholders.
About Westlake Chemical Partners (NYSE:WLKP)
Westlake Chemical Partners LP (NYSE: WLKP) is a publicly traded master limited partnership sponsored by Westlake Chemical Corporation. The partnership owns, operates and acquires a portfolio of ethylene and vinyl manufacturing assets throughout the United States and the United Kingdom. As a downstream producer of basic chemicals and intermediates, WLKP supplies key industrial feedstocks to customers in a variety of end markets.
WLKP’s operations are organized into two primary segments: olefins and vinyls.
