Par Pacific (PARR) Q1 2025 Earnings Call May 07, 2025 10:00 AM ET Speaker0 Good day and welcome to the Par Pacific First Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would like now to turn the conference over to Ashini Patel, Vice President of Investor Relations. Please go ahead. Speaker1 Thank you, Alan. Welcome to Par Pacific's first q ...

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Par Petroleum (PARR) came out with a quarterly loss of $0.94 per share versus the Zacks Consensus Estimate of a loss of $0.77. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non- recurring items. This quarterly report represents an earnings surprise of -22.08%. A quarter ...

NEWS RELEASE PAR PACIFIC HOLDINGS REPORTS FIRST QUARTER 2025 RESULTS HOUSTON, May 6, 2025 - Par Pacific Holdings, Inc. (NYSE: PARR) ("Par Pacific" or the "Company") today reported its financial results for the quarter ended March 31, 2025. Par Pacific reported a net loss of $(30.4) million, or $(0.57) per diluted share, for the quarter ended March 31, 2025, compared to $(3.8) million, or $(0.06) per diluted share, for the same quarter in 2024. First quarter 2025 Adjusted Net Loss was $(50.3) million, compar ...

Financial Performance - Par Pacific reported a net loss of $(30.4) million, or $(0.57) per diluted share, for Q1 2025, compared to a net loss of $(3.8) million, or $(0.06) per diluted share, in Q1 2024 [2][11] - Adjusted Net Loss for Q1 2025 was $(50.3) million, a significant decline from Adjusted Net Income of $41.7 million in Q1 2024 [2][11] - Adjusted EBITDA for Q1 2025 was $10.1 million, down from $94.7 million in Q1 2024 [2][11] Refining Segment - The Refining segment reported an operating loss of $(24.7) million in Q1 2025, compared to operating income of $22.6 million in Q1 2024 [4] - Adjusted Gross Margin for the Refining segment was $104.3 million in Q1 2025, down from $207.1 million in Q1 2024 [4] - Adjusted EBITDA for the Refining segment was $(14.3) million in Q1 2025, compared to $81.3 million in Q1 2024 [4] Hawaii Operations - The Hawaii Index averaged $8.13 per barrel in Q1 2025, down from $12.07 per barrel in Q1 2024 [5][6] - Throughput in Hawaii was 79 thousand barrels per day (Mbpd) in Q1 2025, unchanged from Q1 2024 [5] - Production costs in Hawaii were $4.81 per throughput barrel in Q1 2025, slightly down from $4.89 in Q1 2024 [5] Montana Operations - The Montana Index averaged $7.07 per barrel in Q1 2025, down from $17.09 per barrel in Q1 2024 [7][8] - Throughput in Montana was 52 Mbpd in Q1 2025, compared to 53 Mbpd in Q1 2024 [7] - Production costs in Montana were $10.56 per throughput barrel in Q1 2025, down from $12.44 in Q1 2024 [7] Washington Operations - The Washington Index averaged $4.15 per barrel in Q1 2025, down from $5.16 per barrel in Q1 2024 [9][10] - Throughput in Washington was 39 Mbpd in Q1 2025, up from 31 Mbpd in Q1 2024 [9] - Production costs in Washington were $4.16 per throughput barrel in Q1 2025, down from $6.07 in Q1 2024 [9] Wyoming Operations - The Wyoming Index averaged $20.31 per barrel in Q1 2025, up from $17.23 per barrel in Q1 2024 [12][13] - Throughput in Wyoming was 6 Mbpd in Q1 2025, down from 17 Mbpd in Q1 2024 [12] - Production costs in Wyoming were $34.35 per throughput barrel in Q1 2025, significantly higher than $7.86 in Q1 2024 [12] Retail Segment - The Retail segment reported operating income of $16.0 million in Q1 2025, compared to $11.0 million in Q1 2024 [14] - Adjusted Gross Margin for the Retail segment was $39.8 million in Q1 2025, up from $37.1 million in Q1 2024 [14] - Retail segment Adjusted EBITDA was $18.6 million in Q1 2025, compared to $14.1 million in Q1 2024 [15] Liquidity and Capital Management - As of March 31, 2025, Par Pacific's cash balance was $133.7 million, with gross term debt of $642.4 million [18] - The company repurchased $51 million of common stock during Q1 2025, representing a 5% reduction in shares outstanding [3][19] - Net cash used in operations totaled $(1.4) million for Q1 2025, compared to net cash provided by operations of $25.4 million in Q1 2024 [17]

Company Overview - Par Pacific Holdings, Inc. is a growing energy company headquartered in Houston, Texas, providing both renewable and conventional fuels to the western United States [4] - The company owns and operates 219,000 barrels per day (bpd) of combined refining capacity across four locations in Hawaii, the Pacific Northwest, and the Rockies [4] - Par Pacific has an extensive energy infrastructure network, including 13 million barrels of storage and various transportation assets such as marine, rail, rack, and pipeline [4] - The company operates the Hele retail brand in Hawaii and the "nomnom" convenience store chain in the Pacific Northwest [4] - Par Pacific also owns 46% of Laramie Energy, LLC, a natural gas production company focused on Western Colorado [4] Upcoming Financial Events - Par Pacific will release its first quarter 2025 results after the New York Stock Exchange closes on May 6, 2025 [1] - A conference call for investors is scheduled for May 7, 2025, at 9:00 a.m. Central Time (10:00 a.m. Eastern) [2] - The live audio webcast and related presentation materials will be available on Par Pacific's website [2] Replay Information - A replay of the conference call will be available shortly after the call, accessible by dialing the provided toll-free numbers [3] - The passcode for the replay is 2659885, and it will be available until May 21, 2025 [3]

Par Petroleum (PARR) shares ended the last trading session 6.8% higher at $13.80. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 2% loss over the past four weeks.Par Petroleum's stock price increase is mainly because the company is well-positioned to benefit from current market conditions. With crude oil prices falling, Par Petroleum, which refines and sells oil, positions itself to gain. The recent drop in crude ...

Group 1: Analyst Ratings and Estimates - Goldman Sachs analyst Neil Mehta revised ratings and estimates for several major American oil companies, reflecting average Brent oil prices of $75/b in 2025 and 2026, consistent with the updated oil range of $65-$80/b [1] - Par Pacific Holdings, Inc. (PARR) was upgraded from Neutral to Buy, with a price forecast increase from $18 to $19, indicating strong upside potential from the Retail and Logistics segment and margin recovery expectations in Singapore [1][2] - Imperial Oil Limited (IMO) was downgraded from Neutral to Sell, with a price forecast maintained at C$90.00, despite strong operational performance at key assets [3][4] - Phillips 66 (PSX) was downgraded from Buy to Neutral, with a price forecast of $132 maintained, as the analyst monitors operational improvements amid a weaker Chemicals margin environment [5] Group 2: Earnings Estimates - For 2025-2026, PARR's EPS estimates were adjusted to $0.67 (from $0.79) and $2.97 (from $2.73), reflecting updates on commodity prices and operational metrics [3] - Imperial Oil's EPS estimates for 2025-2026 were revised to C$8.35 (from C$8.04) and C$9.06 (from C$9.65), compared to consensus estimates of C$8.23 and C$8.94, respectively [5] - Overall, Mehta's estimates for EPS in 2025 were adjusted to $7.39 (from $7.69) and $13.17 (from $12.75) for the following year [6]

Refining Operations - The company processed 186.7 Mbpd of crude oil and sold 199.9 Mbpd of refined products during the year ended December 31, 2024[29]. - The Hawaii refinery has a throughput capacity of 94 Mbpd and is uniquely configured to meet the demands of the Hawaii market[32]. - The Montana refinery has a throughput capacity of 63 Mbpd and processes low-cost Western Canadian and regional Rocky Mountain crude oil[34]. - The Washington refinery has a throughput capacity of 42 Mbpd and primarily markets its products in the Pacific Northwest[37]. - The Wyoming refinery has a throughput capacity of 20 Mbpd and produces gasoline, ULSD, and jet fuel[40]. - The company consumed approximately 187 Mbpd of crude oil during the refining process in 2024, with 4% internally consumed as fuel cost[352]. Financial Performance - A $1 per barrel change in average gross refining margins would change annualized Operating income by approximately $67.2 million, based on a throughput of 187 Mbpd for the full year of 2024[349]. - A $1 change in the price of crude oil would result in a $6.6 million change to the fair value of derivative instruments and Cost of revenues (excluding depreciation)[351]. - As of December 31, 2024, the company had $1.1 billion of indebtedness subject to floating interest rates, with a 1% increase in variable rates resulting in an increase of approximately $1.7 million in Cost of revenues and $11.2 million in Interest expense per year[356]. Regulatory Compliance - The company is in substantial compliance with air pollution control requirements, but ongoing enforcement activities by the EPA may result in new regulatory and permit requirements that could involve additional costs[93]. - The company believes it has no material liability associated with any Superfund site and has not been notified of any claims under CERCLA[87]. - The company is subject to various federal and state regulations regarding the prevention of crude oil spills and believes compliance with the Oil Pollution Act will not have a material adverse effect[88]. - The company has received a letter from the EPA regarding alleged violations of air emissions limits under a consent decree, which may involve financial penalties or capital expenditure requirements[96]. - The company is required to comply with the Clean Water Act and believes it is in substantial compliance with these requirements[89]. Employee and Safety Initiatives - The company has invested in employee benefits, including a retirement savings plan with company match and extensive health and wellness benefits[105]. - The company recognizes the importance of safety and promotes a culture of continuous safety improvement across its operations[106]. - As of December 31, 2024, the company employed 1,787 employees, with 403 employees (23%) represented by the United Steelworkers Union[102]. - The refining and logistics segment employed 1,069 employees, while the retail segment had 532 employees and the corporate segment had 186 employees[102]. Market and Economic Conditions - Hawaii is projected to see a decrease of 0.6% in visitor arrivals in 2024, but an increase is expected in 2025, with a full recovery anticipated by 2027[54]. - The GDP for the State of Washington grew by 5.1% from 2023 to 2024, indicating strong economic performance[60]. - The average annual wage in Spokane, Washington, was $62,000 in the fourth quarter of 2023, indicating a robust job market[59]. - The unemployment rate in Hawaii was 3% for the first 10 months of 2024, which is 1% lower than the national average[57]. - Hawaii's construction industry reached a total value of $11.8 billion in 2023, with a 14.8% increase to $6.5 billion in the first half of 2024 compared to the same period in 2023[55]. - Construction payroll jobs in Hawaii hit a record high of 43,300 in October 2024, with private building permits increasing by 28.6% in the first 10 months of 2024[56]. - South Dakota welcomed 14.9 million visitors in 2024, resulting in visitor spending of approximately $5.1 billion, a 2.8% increase from 2023[61]. Investments and Equity - The balance of the investment in Laramie Energy was $12.5 million as of December 31, 2024, reflecting a significant equity investment[65]. - The company owns a 65% and a 40% equity investment in YELP and YPLC, respectively, as of December 31, 2024[66]. Environmental and Sustainability Efforts - The GHG emissions cap for the Hawaii refineries is set at 904,945 metric tons per year, which is 16% below the combined facility GHG emission levels of 2010[72]. - The RFS requires an increasing amount of renewable fuel to be blended into the nation's transportation fuel supply, which may reduce demand for refined transportation fuel products[77]. - The company is exposed to market risks related to the volatility in the price of RINs required to comply with the Renewable Fuel Standard, impacting revenues and costs[353]. - The company may purchase compliance credits to mitigate risks related to the Washington Climate Commitment Act and Clean Fuel Standard, based on greenhouse gas emissions[355]. - The company utilizes exchange-traded futures, options, and OTC swaps to manage commodity price risks, with open positions expiring in December 2025[350]. - The company closely monitors the creditworthiness of customers to mitigate credit risk associated with nonpayment or nonperformance[358].

Financial Data and Key Metrics Changes - In 2024, adjusted EBITDA was $239 million, with adjusted net income reported at $21 million or $0.37 per share [7][27] - Fourth-quarter adjusted EBITDA was $11 million, with a loss of $43 million or $0.79 per share [27] - The refining segment reported an adjusted EBITDA loss of $22 million in the fourth quarter compared to an adjusted EBITDA of $20 million in the third quarter [28] Business Line Data and Key Metrics Changes - The retail segment achieved adjusted EBITDA of $22 million in the fourth quarter, up from $21 million in the third quarter, driven by expanding fuel margins and lower operating costs in Hawaii [34] - The logistics segment reported a record fourth-quarter adjusted EBITDA of $33 million, attributed to higher system utilization in Hawaii and lower operating costs in Montana [34] Market Data and Key Metrics Changes - Hawaii throughput was strong at 83,000 barrels per day, with production costs at $4.42 per barrel [19] - Washington throughput was 39,000 barrels per day, with production costs at $4.34 per barrel [19] - Wyoming throughput was 14,000 barrels per day, with production costs at $11.49 per barrel [20] - Montana throughput was 52,000 barrels per day, with production costs at $10.48 per barrel [21] Company Strategy and Development Direction - The company is focused on executing key projects to enhance earnings power, including the Montana FCC and Alky turnaround and the startup of the Hawaii SAF unit in the second half of 2025 [14][15] - The company aims to maintain a strong balance sheet to support strategic objectives and invest through refining cycles, having repurchased nearly five million shares or 9% of outstanding shares [17][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the refining outlook due to tight supply and demand balances, higher European natural gas prices, and operational challenges in the industry [10][11] - The company anticipates improving clean product markets in the Northern Rockies and expects Hawaii throughput to range between 79,000 and 82,000 barrels per day in the first quarter [25][32] Other Important Information - The company experienced an operational incident at its Wyoming facility, which is expected to restore partial operations targeting 50% utilization by mid-April and full rates before Memorial Day [9][24] - The board of directors reauthorized management to purchase up to $250 million of common stock, allowing for opportunistic repurchases [38] Q&A Session Summary Question: Share repurchase authorization and balance considerations - Management indicated that the reauthorization opens additional capacity for share repurchases, with a dynamic approach to balancing repurchases versus debt reduction [41][42] Question: Confidence in the SAF project in Hawaii - Management highlighted low operating costs and logistical advantages as key factors for confidence in the SAF project, which is expected to have flexibility in monetizing the product [44][46][49] Question: Turnaround work at Wyoming and ramp-up details - Management confirmed opportunities to pull work scope forward but noted that some catalyst life issues may still necessitate a planned outage in 2026 [54][56] Question: Monetizing the Laramie asset - Management acknowledged increased interest in the gas market and emphasized the importance of maximizing unitholder value while considering the asset's non-core status [60][61] Question: Insurance coverage for the Wyoming outage - Management stated that adequate property and PI coverage is in place, with lost profits dependent on market responses [65][68] Question: Diverging trends in Hawaii and Washington capture - Management noted strong performance in Hawaii driven by clean product freight, while Washington faced challenges due to weak asphalt demand and overall market conditions [71][74] Question: M&A opportunities - Management indicated a focus on internal execution rather than acquisitions, with a high bar for any potential M&A opportunities given current market conditions [76][77] Question: West Coast supply dynamics - Management confirmed that the Washington index improved by $7 in February and discussed potential tightness in the West Coast market due to maintenance schedules [80][84]

INVESTOR PRESENTATION I FEBRUARY 2025 Forward-Looking Statements / Disclaimers The information contained in this presentation has been prepared to assist you in making your own evaluation of the company and does not purport to contain all of the information you may consider important. Any estimates or projections with respect to future performance have been provided to assist you in your evaluation, but should not be relied upon as an accurate representation of future results. Certain statements, estimates, ...