Delek Logistics Partners Reports $39M Net Income, 19% Increase in Q1 2025

Delek Logistics Partners, LP reported a net income of $39.0 million for the first quarter of 2025, reflecting a 19.0% increase from $32.6 million in the same period last year. The partnership's net revenues totaled $249.9 million, a slight decrease of 0.9% compared to $252.1 million in the first quarter of 2024. The decline in revenue was attributed to the reclassification of certain throughput fees as interest income under sales-type lease accounting, which previously contributed to revenue figures. Additionally, the assignment of the Big Spring Refinery marketing agreement to Delek Holdings in 2024 further impacted revenue, although this was partially offset by incremental revenue from the recent acquisitions of H2O Midstream and Gravity Water Intermediate Holdings, which contributed $16.5 million and $22.9 million, respectively.

The partnership's operational costs increased, with total costs of sales rising to $196.2 million from $180.6 million year-over-year. This increase was driven by higher costs in the gathering and processing segment, primarily due to the integration of H2O Midstream and Gravity operations. Operating expenses also rose significantly, up 28.4% to $40.6 million, largely due to transaction costs associated with the Gravity Acquisition. Despite these increases, the partnership's operating income was $47.6 million, down from $64.5 million in the prior year, reflecting the impact of the aforementioned factors.

Strategically, Delek Logistics has made significant moves to enhance its market position, including the completion of the Gravity Acquisition on January 2, 2025, for a total consideration of $300.8 million. This acquisition is expected to bolster the partnership's water disposal and recycling operations in the Permian Basin and the Bakken region. Additionally, on May 1, 2025, the partnership executed a series of agreements with Delek Holdings, including the transfer of the Delek Permian Gathering purchasing and blending business, which will further integrate operations and enhance revenue streams.

As of March 31, 2025, Delek Logistics had 53,440,788 common limited partner units outstanding, with a cash distribution of $1.110 per unit declared for the first quarter, representing a 3.7% increase from the previous year. The partnership's total liquidity stood at $447.0 million, primarily from unused credit commitments under its revolving credit facility. Looking ahead, Delek Logistics aims to continue expanding its operations and customer base while managing its leverage and maintaining a strong financial position amidst market uncertainties. The partnership remains focused on enhancing its environmental stewardship and reducing its carbon footprint as part of its long-term strategic objectives.