Par Pacific (PARR) Q2 2025 Earnings Call August 06, 2025 10:00 AM ET Speaker0Good morning and welcome to the Par Pacific Second Quarter twenty twenty five Earnings Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Ashimi Patel, Vice President of Investor Relations. Please go ahead.Speaker1Thank you, Jason. Welcome to Par Pacific's second quarter earnings conference call. Joining me today are Will Monteleone, Presiden ...

Financial Data and Key Metrics Changes - The consolidated net loss for Q4 2024 was $41.7 million, compared to a net loss of $18.9 million in Q4 2023, reflecting significant asset impairments and acquisition-related expenses [39] - Adjusted EBITDA for Q4 2024 was negative $7.7 million, a decline from positive $3.5 million in Q4 2023 [39] - The company sold 95.1 million gallons in Q4 2024, an increase from 92.5 million gallons in Q4 2023, but the average sales price per gallon dropped to $1.88 from $2.24 [34] Business Line Data and Key Metrics Changes - The company cold idled the Magic Valley facility, leading to a significant impairment charge of $21.4 million related to this plant [38] - The Eagle Alcohol operations were rationalized, resulting in a 16% reduction in headcount and a focus on turning remaining operations into a profitable service center [16][31] - The Pekin campus production volume increased by 3.8 million gallons over the prior year, demonstrating the effectiveness of maintenance programs [27] Market Data and Key Metrics Changes - Market crush margins declined nearly $0.18, adversely impacting gross profit by $8.7 million [35] - Low carbon fuel credit prices decreased compared to the previous year but showed improvement from Q3 2024 [35] - The company began exporting certified renewable fuel to European markets in Q4 2024, anticipating further expansion in 2025 [29] Company Strategy and Development Direction - The acquisition of Alto Carbonic is expected to bolster economics and increase asset valuation at the Columbia facility, providing a stronger financial foundation [19][43] - The company is considering a range of strategic options, including asset sales and mergers, to maximize shareholder value [12][57] - Ongoing efforts include optimizing CO2 production and pursuing carbon capture and storage (CCS) projects, with a focus on securing financing and community support [22][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging market conditions in Q4 2024, with a focus on cost-saving initiatives expected to save approximately $8 million annually [18][32] - The company is optimistic about 2025, citing improved performance at the Pekin wet mill and the synergistic acquisition of the CO2 processing facility [42] - Management emphasized the importance of exceeding customer expectations and maximizing the value of specialty alcohol and essential ingredients [43] Other Important Information - The company recorded $34.6 million in repairs and maintenance expenses in line with estimates for 2024 [41] - The cash balance as of December 31, 2024, was $35 million, with total loan borrowing availability of $88 million [41] Q&A Session Summary Question: How is the company planning to balance carbon sequestration versus high-premium CO2 for the beverage industry? - Management indicated that while there are opportunities for carbon sequestration, the unique market conditions in the Pacific Northwest present a significant advantage for CO2 production [48] Question: Is the site certified for 45Q incentives? - Management stated that the facility is close to qualifying for 45Q incentives, with ongoing efforts to meet requirements [50][51] Question: What is the expected ratio of specialty alcohol sent to the EU versus domestic markets? - Management explained that pricing varies by country in the EU, and the flexibility in production allows for optimization of profitability [52][54] Question: How far along are discussions regarding asset sales or mergers? - Management confirmed that all options are being considered to maximize shareholder value, but specific details on M&A activities were not disclosed [56][57] Question: What is the timeline for the CCS project and its potential contributions? - Management indicated that the EPA permit process could take two years, with construction timelines potentially extending to 2029 or 2030 [64][66]