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SEC filingWestlake Chemical Partners LP reported net sales of $1.17 billion for FY 2025, a 2.7% increase from $1.14 billion in FY 2024. Net income decreased by 19.1% to $298.6 million from $369.2 million, while net income attributable to the Partnership declined 22.0% to $48.7 million from $62.4 million. The increase in net sales was driven by higher ethylene sales prices to Westlake and a $5.8 million Buyer Deficiency Fee from the Petro 1 turnaround, partially offset by lower sales volumes due to that turnaround. Profitability was impacted by higher ethane feedstock and natural gas costs, resulting in a gross margin decline to 29.8% from 36.9%. MLP distributable cash flow decreased to $53.4 million from $66.9 million, and EBITDA declined to $450.0 million from $507.6 million. The company renewed its Ethylene Sales Agreement and Feedstock Supply Agreement through December 31, 2027.
Westlake Chemical Partners LP reported mixed financial results for FY 2025. Net sales increased by $30.8 million (2.7%) to $1,166.7 million, driven primarily by higher ethylene sales prices to Westlake and a $5.8 million Buyer Deficiency Fee resulting from the Petro 1 turnaround extending into April 2025. However, net income decreased by $70.6 million (19.1%) to $298.6 million, and net income attributable to the Partnership declined by $13.7 million (22.0%) to $48.7 million. The decrease in profitability was primarily due to lower ethylene and co-products sales volumes resulting from the Petro 1 turnaround and higher ethane feedstock and natural gas costs. Income from operations decreased by $70.8 million (18.1%) to $319.6 million. MLP distributable cash flow decreased by $13.5 million (20.2%) to $53.4 million, and EBITDA declined by $57.6 million (11.3%) to $450.0 million.
The company generates revenue primarily through its 22.8% limited partner interest in OpCo, which owns and operates ethylene production facilities. Revenue is derived from two main sources: sales to Westlake under the Ethylene Sales Agreement and third-party sales. For FY 2025, net sales to Westlake were $1,033.3 million (88.6% of total revenue), while net co-products, ethylene and other sales to third parties were $133.4 million (11.4% of total revenue). The Ethylene Sales Agreement is a long-term, fee-based agreement with a minimum purchase commitment and includes variable pricing based on OpCo's actual feedstock and natural gas costs, estimated operating costs, and a five-year average of expected future maintenance capital expenditures, plus a fixed margin of $0.10 per pound less revenue from co-products sales. The increase in net sales was primarily due to higher ethylene sales prices to Westlake and the $5.8 million Buyer Deficiency Fee, partially offset by lower sales volumes to both Westlake and third parties due to the Petro 1 turnaround.
Gross profit decreased by $71.1 million (17.0%) to $347.8 million in FY 2025, with gross margin declining to 29.8% from 36.9% in the prior year. This margin compression was primarily due to higher ethane feedstock and natural gas costs in 2025 compared to 2024. Operating margin was 27.4% for FY 2025. Selling, general and administrative expenses remained relatively consistent at $28.3 million compared to $28.5 million in the prior year. Interest expense decreased to $22.9 million from $25.7 million, primarily due to lower interest rates on outstanding debt. Other income, net decreased by $2.9 million to $2.4 million, primarily due to lower interest earned on investments with Westlake under the Investment Management Agreement. The provision for income taxes remained relatively consistent at $0.5 million.
Net cash provided by operating activities was $280.5 million in FY 2025, a decrease of $204.5 million from $485.0 million in FY 2024. The decrease was mainly due to cash used in connection with the Petro 1 turnaround, lower income from operations, and a decrease in cash provided by working capital. Net cash provided by investing activities was $31.2 million, compared to net cash used for investing activities of $89.0 million in the prior year, primarily due to a decrease in net cash invested under the Investment Management Agreement. Net cash used for financing activities was $325.7 million, primarily related to distributions of $259.2 million to the noncontrolling interest retained in OpCo by Westlake and $66.5 million to unitholders. As of December 31, 2025, total assets were $1.26 billion, with cash and cash equivalents of $44.3 million. Total liabilities were $454.2 million, and total equity was $802.4 million. The company had outstanding borrowings of $22.6 million under the OpCo Revolver and $377.1 million under the MLP Revolver, both maturing in 2027.
The company renewed its Ethylene Sales Agreement and Feedstock Supply Agreement with Westlake through December 31, 2027, providing continued revenue stability. Management expects to distribute most excess cash generated by operations to partners, with a quarterly distribution of $0.4714 per unit approved for February 2026. Capital expenditures for FY 2025 were $78.8 million, primarily related to the Petro 1 turnaround and projects to increase production capacity or reduce costs. The company maintains liquidity through cash generated from operations, revolving credit facilities, and potential equity issuances. Key risk factors include exposure to commodity price fluctuations for approximately 5% of ethylene production sold to third parties, dependence on the Ethylene Sales Agreement with Westlake, and potential impacts from maintenance turnarounds on production volumes and costs. The company plans to use the MLP Revolver to purchase additional limited partnership interests in OpCo in the future and for other acquisitions.