Earnings

Delek Logistics Lifts 2026 Earnings Floor To $530 Million As Libby Construction Finishes

Profit per unit stayed flat, while a higher distribution left less cash coverage than a year earlier.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Delek Logistics Lifts 2026 Earnings Floor To $530 Million As Libby Construction Finishes

Delek Logistics Partners, which transports and processes oil and natural gas and handles wastewater, raised the floor of its 2026 adjusted earnings outlook to $530 million Friday, citing its year-to-date operations and growth projects in an 8-K earnings announcement. The new adjusted EBITDA range is $530 million–$560 million, against $520 million–$560 million previously; the measure excludes interest, taxes, depreciation and amortization and includes company adjustments.

Libby Finishes Construction, Commissioning Continues

The outlook includes approximately $15 million from this year's growth capital spending. Management expects that program to add another $60 million in adjusted EBITDA in 2027.

Avigal Soreq, president of Delek Logistics’ general partner, said: “We have completed the construction of our integrated sour gas system at the Libby Complex and are in the process of commissioning the facilities.” The system achieved its first acid gas injection during the quarter.

Delek's assets serve crude oil, natural gas, refined-fuel and water customers primarily around the Permian and Delaware basins and the Gulf Coast. Delek US Holdings owns its general partner and a majority limited partner interest and is a significant customer.

Gathering Gains Meet Offsetting Declines

Third-quarter net income was $47.4 million, compared with $45.6 million a year earlier, but diluted earnings held at $0.85 per unit. Adjusted EBITDA was almost unchanged: $142.9 million versus $142.5 million.

Higher margins pushed gathering and processing adjusted EBITDA to $88.4 million from $82.8 million. Storage and transportation contributed $19.8 million, against $19.3 million, helped by trucking volumes and margins.

Wholesale marketing and terminal operations fell to $20.9 million from $21.4 million. Delek attributed that decline to lower wholesale margins and the termination of its East Texas marketing agreement with Delek US Holdings.

Pipeline joint-venture adjusted EBITDA declined to $26.5 million from $28.4 million as lower income from Red River and other ventures outweighed an increase from W2W. The corporate adjusted EBITDA loss widened to $12.7 million from $9.3 million.

DKL units edged down 0.98% to $50.74 in Friday trading. The partnership's market value was $3.0 billion in Friday trading.

Higher Payout, Thinner Cash Coverage

Operating cash flow reached $187.9 million for the quarter, compared with $54.9 million a year earlier. Yet adjusted cash available for distributions slipped to $73.1 million from $74.1 million.

The quarterly distribution rose for the 55th consecutive quarter to $1.140 per unit, up 1.8% from $1.120 a year earlier. Adjusted distribution coverage—the ratio of available cash to payouts—fell to 1.11 times from 1.24 times.

An offering of 4,600,000 units at $50.00 each closed on August 14, 2026. Delek used the net proceeds to repay its revolving credit borrowings.

At September 30, debt totaled approximately $2.1 billion and cash was $49.0 million. The $1.3 billion revolving credit facility was fully available, with no borrowings outstanding, and the company-reported leverage ratio was approximately 3.85 times, versus 4.44 times a year earlier.

The $1.140-per-unit distribution is scheduled to be paid Tuesday.

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