Delek Logistics Partners LP (DKL)DKL

Delek Logistics Partners LP: A Comprehensive Overview

Company Profile:

History and Background: Delek Logistics Partners LP (DKL) is a master limited partnership (MLP) formed in 2013. It is sponsored by Delek US Holdings, Inc. (DK), a leading downstream energy company. DKL owns and operates a network of crude oil and refined products pipelines and terminals across the US, primarily in the Mid-Continent and Gulf Coast regions.

Core Business Areas: DKL operates through two segments:

• Crude Oil Logistics: This segment owns and operates a 50% interest in the Delek Crude Oil Pipeline system, which transports crude oil from Cushing, Oklahoma to the Gulf Coast.
• Refined Products Logistics: This segment owns and operates refined products pipelines and terminals with a total storage capacity of 4.8 million barrels. It also owns a 30% interest in the Big Spring Pipeline system, which transports refined products from Midland, Texas to the Phoenix, Arizona area.

Leadership and Corporate Structure: DKL is led by CEO Uzi Yemin and CFO Daniel M. Park. The General Partner of DKL is Delek Logistics GP, Inc., a wholly-owned subsidiary of DK. DKL operates as an independent MLP, with its own board of directors and management team.

Top Products and Market Share:

Top Products:

• Crude Oil Pipelines: DKL’s 50% interest in the Delek Crude Oil Pipeline provides critical infrastructure for transporting crude oil from the Mid-Continent region to refineries on the Gulf Coast.
• Refined Products Pipelines and Terminals: DKL’s network of pipelines and terminals provides storage and transportation solutions for gasoline, diesel, and jet fuel.

Market Share:

• Crude Oil Pipelines: DKL has a significant market share in the transportation of crude oil from the Mid-Continent to the Gulf Coast, which is a key refining hub in the US.
• Refined Products Pipelines and Terminals: DKL holds a strong position in the refined products market, particularly in the Mid-Continent and Gulf Coast regions.

Product Performance and Market Reception:

• DKL’s crude oil and refined products pipelines have consistently operated at high utilization rates, demonstrating strong demand for its services.
• The company has a good track record of meeting customer requirements and maintaining safe operations.

Total Addressable Market:

The total addressable market for DKL includes:

• Crude Oil Transportation: The US crude oil pipeline market is vast, with a total capacity of over 4 million miles.
• Refined Products Transportation and Storage: The US refined products pipeline and terminal market is also significant, with a total storage capacity of over 500 million barrels.

Financial Performance:

Recent Financial Statements:

• Revenue: DKL’s revenue for the first six months of 2023 was $183.5 million, compared to $137.5 million for the same period in 2022.
• Net Income: Net income for the first six months of 2023 was $15.3 million, compared to $14.5 million for the same period in 2022.
• Profit Margins: DKL’s operating margin for the first six months of 2023 was 14.5%, compared to 14.2% for the same period in 2022.
• EPS: DKL’s earnings per share (EPS) for the first six months of 2023 was $0.48, compared to $0.46 for the same period in 2022.

Year-over-Year Comparison:

• DKL’s revenue, net income, and EPS have shown consistent year-over-year growth in recent years.
• The company’s profit margins have remained relatively stable.

Cash Flow and Balance Sheet:

• DKL has a strong cash flow position, with operating cash flow of $43.1 million for the first six months of 2023.
• The company’s balance sheet is also healthy, with a current ratio of 1.25.

Dividends and Shareholder Returns:

Dividend History:

• DKL has a history of paying quarterly distributions to its unit holders.
• The current annualized distribution rate is $2.10 per unit.
• The payout ratio is approximately 60%.

Shareholder Returns:

• DKL’s total shareholder return (TSR) over the past year has been 18.7%.
• Over the past five years, DKL’s TSR has been 57.4%.