Executive Chairman, Westlake
Search every verified Albert Chao interview, podcast appearance, and on-the-record quote — each transcript cross-checked by AI and human review to confirm speaker identity. Albert Chao, executive chairman at Westlake, discussed the company's 2019 financial performance on a February 2020 earnings call, describing it as "a very successful year for Westlake Partners." He reported record net income of $61 million and record MLP distributable cash flow of $73 million for the 12 months ending December 31, 2019, which he attributed to record production at OpCo and higher third-party sales margins. Chao noted that the partnership's long-term ethylene sales agreement with Westlake Chemical, a take-or-pay arrangement covering 95% of sales, "protects the partnership's cash flows from the margin volatility associated with the ethylene business." He stated that the partnership continues to evaluate growth through periodic drop downs of OpCo, acquisitions of other qualified income streams, organic expansions, and negotiating a higher fixed margin in the ethylene sales agreement. In earlier years, Chao represented the Air Quality Egg community at sensor journalism workshops in 2013 and 2014, describing the project as "an experiment both scientific and social." He explained that the project uses low-cost, uncalibrated sensors to make air quality data visible, acknowledging that the sensors "constantly get criticized" for their lack of precision. Chao stated that the goal is to deploy many sensors to cover more ground and identify trends, rather than replace expensive regulatory monitors. He also participated in the T.T. Chao Symposium on Innovation, where he thanked organizers and noted that the event brought together leading innovators in energy and hosted a student forum with Nobel laureate Yuan Lee for nearly 400 Houston high school students.
“In this morning's press release we reported consolidated net income, including OpCo's earnings, of $92 million for the fourth quarter of 2019.”
“Westlake Partners' fourth quarter net income was $70 million — strong financial performance driven by continued strong operations of our facilities and the acquisition of an incremental 4.5% interest in OpCo by the partnership in the first quarter of 2019.”
“2019 was a very successful year for Westlake Partners, anchored by the record production across the OpCo facilities — these facilities consistently ran well and above industry operating rates and, combined with a sales agreement, insulate us from commodity price risk.”
“On January 27, 2020 we announced distributions of 47.14 cents per unit with respect to the fourth quarter of 2019 — a six percent annualized increase versus the third quarter and the 20th consecutive quarterly increase since our IPO in 2014.”
“For the twelve months ending December 31, 2019 the distributable cash flow provided coverage of 1.3 times the declared distributions.”
“We benefit from the long-term ethylene sales agreement with Westlake Chemical — a take-or-pay arrangement that covers 95% of our ethylene sales and protects the partnership's cash flows from the margin volatility associated with the ethylene business.”
“At the end of the fourth quarter we had a consolidated cash balance of $20 million and $163 million in cash invested with Westlake Chemical through our investment management agreement; long-term debt at the end of the quarter was $400 million.”
“We maintain strong leverage metrics with a consolidated leverage ratio below 1x and a net debt to cap ratio below 20%.”
“We continue to evaluate opportunities via our four levers of growth — periodic drop downs of OpCo into the MLP, acquisitions of other qualified income streams, organic expansions of our ethylene facilities, and negotiating a higher fixed margin in our ethylene sales agreement with Westlake.”
“We intend to maintain our top-tier distribution growth rate to unit holders and deliver long-term value while continuing to operate safely and be good stewards of the environment and the communities in which we live and work.”
“Air is invisible yet it is intricately tied to us in so many ways.”
“The Air Quality Egg as an open source project is an experiment both scientific and social.”
“We have the sensors in the outdoor egg and that transmits data to the indoor egg which is a base that then uploads that data to the internet — used to be Patch Bay, now it's Cosm.”
“These sensors are really cheap, they're uncalibrated and we constantly get criticized for this all the time — and we've made it really apparent many many times that this is not what we're trying to do.”
“Instead of one $20,000 sensor which have been deployed in New York, we have 100, 200 sensors — we can cover more ground; if one fails we have 99 more, they're available for anyone, we can place them anywhere we want.”
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