Westlake Chemical Partners (NYSE:WLKP) reported second-quarter 2026 net income of $14 million, or $0.40 per unit, matching its first-quarter result as stable production and sales volumes supported the partnership’s fixed-margin business model.
President and Chief Executive Officer Jean Marc Gilson said the partnership’s Ethylene Sales Agreement with parent company Westlake Corporation continues to limit exposure to market volatility and production risks. The agreement provides a fixed margin of $0.10 per pound on 95% of the partnership’s ethylene production.
Cash Flow and Distribution Coverage
The partnership generated distributable cash flow of $18 million, or $0.50 per unit, during the quarter. That was $3 million higher than in the second quarter of 2025, which Chief Financial Officer John Bochert attributed to higher production and sales volumes as well as lower maintenance capital expenditures following the Petro 1 plant turnaround in 2025.
The trailing 12-month distribution coverage ratio improved sequentially to 1.04 times from 1.0 times, reflecting the expiration of the impact from the Petro 1 turnaround in the first half of 2025. Gilson said the quarterly coverage ratio was 1.0 time, supported by solid operating rates at OpCo’s ethylene facilities.
On Aug. 3, the partnership declared a quarterly distribution of $0.4714 per unit for the second quarter. The distribution is scheduled to be paid Aug. 28 to unitholders of record as of Aug. 13.
The payment marks the partnership’s 48th consecutive quarterly distribution since its July 2014 initial public offering, with no reductions over that period. Bochert said distributions have increased 71% from the original minimum quarterly distribution of $0.275 per unit.
- Second-quarter net income: $14 million, or $0.40 per unit
- Distributable cash flow: $18 million, or $0.50 per unit
- Quarterly distribution: $0.4714 per unit
- Trailing 12-month coverage ratio: 1.04 times
- Consolidated net sales: $297 million
Consolidated Results and Balance Sheet
Including the earnings of Westlake Chemical OpCo LP, consolidated net income totaled $82 million on consolidated net sales of $297 million during the second quarter.
At quarter-end, the partnership had $93 million of consolidated cash and cash investments with Westlake under its Investment Management Agreement. Long-term debt totaled $400 million, including $377 million at the partnership and $23 million at OpCo. Consolidated leverage stood at approximately one time, according to Bochert.
OpCo spent $12 million on capital expenditures during the quarter. Management said there are no planned turnarounds in 2026 for modeling purposes.
Revolver Extension and Market Outlook
During July, both OpCo and the partnership extended their existing revolving credit agreements with Westlake by four years through 2031. The agreements also include a 10-basis-point reduction in the associated interest rate.
Bochert said the revolving credit extension, along with the earlier extension of the Ethylene Sales Agreement, demonstrated Westlake’s commitment to OpCo’s continued operations and its role as a supplier of ethylene to Westlake’s operations.
Gilson acknowledged that conflict in the Middle East has increased volatility in chemical prices, including ethylene prices. However, he said the partnership’s contracted fixed-margin structure leaves its ethylene margins largely insulated from those market movements.
Looking ahead, management said it will evaluate growth through four potential avenues: increasing its ownership interest in OpCo, acquiring other qualified income streams, pursuing organic expansion of current ethylene facilities, and negotiating a higher fixed margin under the Ethylene Sales Agreement.
Leadership Transition
The call also marked a transition in the partnership’s finance leadership. Steve Bender, who has served as chief financial officer since the partnership’s formation more than a decade ago, is retiring next month and will serve as special advisor to the president. John Bochert has assumed the role of senior vice president and chief financial officer.
Bender said he was leaving the partnership on “very firm financial footing,” citing the recent renewals of the revolver agreements and Ethylene Sales Agreement.
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.
