Delek Logistics Partners, LP (NYSE: DKL) ("Delek Logistics") today announced its financial results for the third quarter 2023, with reported net income attributable to all partners of $34.8 million, or $0.80 per diluted common limited partner unit. This compares to net income attributable to all partners of $44.7 million, or $1.03 per diluted common limited partner unit, in the third quarter 2022. The decrease in net income attributable to all partners was driven by higher interest expense, partially offset by lower general and administrative expenses. Net cash provided in operating activities was $46.8 million in the third quarter 2023 compared to net cash provided by operating activities of $164.4 million in the third quarter 2022. Distributable cash flow was $61.4 million in the third quarter 2023, compared to $65.6 million in the third quarter 2022.
For the third quarter 2023, earnings before interest, taxes, depreciation and amortization ("EBITDA") was $98.2 million compared to $89.0 million in the third quarter 2022.
"Delek Logistics delivered another record quarter," said Avigal Soreq, President of Delek Logistics' general partner. "We see significant value in gathering and processing in the Permian and are investing in the continued growth of our business. With its premier Permian location and by consistently delivering safe, reliable operations and stable cash flows, Delek Logistics is a great value opportunity."
"In October, the Board approved the 43rd consecutive increase in the quarterly distribution to $1.045 per unit. Given its portfolio, Delek Logistics is well positioned to exceed $100 million quarterly run-rate EBITDA and support on-going distributions," Mr. Soreq concluded.
Distribution and Liquidity
On October 25, 2023, Delek Logistics declared a quarterly cash distribution of $1.045 per common limited partner unit for the third quarter 2023. This distribution will be paid on November 13, 2023 to unitholders of record on November 6, 2023. This represents a 1.0% increase from the second quarter 2023 distribution of $1.035 per common limited partner unit, and a 5.6% increase over Delek Logistics' third quarter 2022 distribution of $0.990 per common limited partner unit. For the third quarter 2023, the total cash distribution declared to all partners was approximately $45.6 million, resulting in a distributable cash flow coverage ratio of 1.35x.
As of September 30, 2023, Delek Logistics had total debt of approximately $1.74 billion and cash of $4.2 million. Additional borrowing capacity, subject to certain covenants, under the $900.0 million revolving credit facility was $89.0 million. The total leverage ratio as of September 30, 2023 of approximately 4.55x was within the requirements of the maximum allowable leverage ratio under the credit facility.
Consolidated Operating Results
Third quarter 2023 EBITDA of $98.2 million benefited from increased contribution from the Delek Permian Gathering system, Delaware Gathering system, terminalling and marketing rate increases and continued strong throughput on joint venture pipelines, partially offset by increased operating expenses as compared to EBITDA of $89.0 million in the third quarter 2022. Net income attributable to all partners for the third quarter 2023 of $34.8 million reflected a decrease of $9.8 million compared to the third quarter 2022.
Gathering and Processing Segment
EBITDA in the third quarter 2023 was $52.9 million compared with $56.6 million in the third quarter 2022. The decrease was primarily driven by a one-time credit received in the third quarter of 2022. Excluding this, third quarter 2023 results were higher than last year, due to increased throughput from our Permian assets.
Wholesale Marketing and Terminalling Segment
EBITDA in the third quarter 2023 was $28.1 million, approximately in line with third quarter 2022 EBITDA of $20.3 million. The increase was primarily due to higher terminalling utilization and improved wholesale margins.
Storage and Transportation Segment
EBITDA in the third quarter 2023 was $17.9 million compared with $14.6 million in the third quarter 2022. The increase was primarily due to increased storage and transportation rates.
Investments in Pipeline Joint Ventures Segment
During the third quarter 2023, income from equity method investments was $9.3 million compared to $8.6 million in the third quarter 2022.
Corporate
EBITDA in the third quarter 2023 was a loss of $10.0 million million compared to a loss of $11.0 million in the third quarter 2022.
