Delek Logistics Partners, LP Common Units (NYSE:DKL) Q3 2024 Earnings Call November 6, 2024 11:30 AM ET

Company Participants

Robert Wright - Deputy Chief Financial Officer
Avigal Soreq - President
Joseph Israel - Executive Vice President, Operations
Reuven Spiegel - Executive Vice President and Chief Financial Officer
Odely Sakazi - Senior Vice President

Conference Call Participants

Doug Irwin - Citi
Neal Dingmann - Truist Securities

Operator

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 DKL’s Third Quarter Earnings Call. [Operator Instructions] I would now like to turn the conference over to Robert Wright, Deputy Chief Financial Officer. You may begin.

Robert Wright

Good morning, and welcome to the Delek Logistics Partners third 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.

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. Any forward-looking statements made during today’s call involve risks and uncertainties that may cause actual results to differ materially from today’s comments. Factors that could cause actual results to differ are included in our SEC filings. The company assumes no obligation to update any forward-looking statements.

I will now turn the call over to Avigal for opening remarks. Avigal.

Avigal Soreq

Thank you, Robert. Delek Logistics Partners had another record quarter. We reported approximately $107 million in quarterly adjusted EBITDA. We are pleased with Delek Logistics continued strong performance. DKL is a premier full-service crude, natural gas and water provider in the prolific Permian basin, and our recent actions have significantly enhanced our position. In Q3 of 2024, we closed several important transactions. First, on August 5, we meant and extend contracts between DKL and DK for a period of 7 years. Second, we completed the acquisition of Delek portion in Wink to Webster Pipeline. W2W is a premier crude oil pipeline packed by investment-grade counterparties. It increases the overall asset quality at DKL and enhanced DKL permanent position. Third, on September 11, we closed the acquisition of H2 Midstream. We are excited about our combined offering in the Midland Basin.

While it’s still early, this combination is already more attractive options for our customers and is presenting several cross-sell opportunities. In the Delaware Basin, we are also making good progress on our processing plant expansion and still expect to complete the expansion on time and on budget in the first half of 2025. As discussed previously, the plant is highly touching the sky, and we are making progress on completion. We are already seeing additional opportunities around solar gas treatment. On October 29, the Board of Directors approved an increase in the quarterly distribution to $1.10 per unit. We are very excited about the prospect of Delek Logistics. DKL is seeing several organic and inorganic growth opportunities, and we are taking prudent approach to growth. DKL has shown a strong track record of delivering value to unitholders. We expect to continue on our value creation test moving forward, and we will continue to grow our distribution in the future.