HF Sinclair(DINO)2024-10-31 17:11Financial Data and Key Metrics - Q3 2024 net loss attributable to shareholders was 0.40 per diluted share, impacted by special items totaling 97 million, or 760 million, or 316 million, down from 708 million, including 124 million, with full-year 2024 guidance of 75 million in growth capital [27][28] Business Segment Performance Refining - Adjusted EBITDA for Refining was 1 billion in Q3 2023, driven by lower margins in West and Mid-Con regions [21] - Crude oil charge averaged 607,000 barrels per day, up from 602,000 barrels per day in Q3 2023, due to improved reliability and reduced turnaround activities [22] - Jet production reached a quarterly record, and Woods Cross refinery set a record for premium production [9] Renewables - Adjusted EBITDA for Renewables was 5 million in Q3 2023, despite record sales volumes of 69 million gallons [23] - Operating expenses per gallon reached the lowest level, with efforts focused on reducing high-cost inventories and increasing low CI feedstock mix [10][11] Marketing - Marketing segment EBITDA was 21 million in Q3 2023, driven by higher margins [24] - Added 22 net new branded sites in Q3 2024, with a total of 46 branded sites added year-to-date [11][12] Lubricants and Specialties - Lubricants and Specialties EBITDA was 118 million in Q3 2023, primarily due to a 112 million in Q3 2024, up from 222 million to shareholders in Q3 2024 through share repurchases and dividends, with a total of $3.9 billion returned since the Sinclair acquisition in March 2022 [16][17] - The company is focused on improving reliability, optimizing its portfolio, and returning excess cash to shareholders [106][107] - Strategic initiatives include expanding the marketing business, optimizing the lubricants and specialties segment, and leveraging midstream assets for growth [12][13][78] Management Commentary on Market Conditions - Management highlighted the weakening global refining margins but emphasized the strength of the diversified portfolio, particularly in Marketing, Midstream, and Lubricants and Specialties [7] - The company remains committed to maintaining a strong balance sheet and investment-grade credit rating while returning cash to shareholders [17][31] - Management expects 2025 to be closer to mid-cycle margins, with demand outpacing supply and supportive market conditions [67][70] Q&A Session Highlights Cash Allocation and Balance Sheet Management - The company plans to maintain a strong balance sheet and continue returning cash to shareholders, with a focus on dividends and buybacks [31][32] Refining Operations and Reliability - Improved reliability and operational efficiency have contributed to lower operating expenses and higher throughput [34][35] Marketing Business Growth - The marketing business is seen as a key growth area, with strategic advantages in logistics and brand value [38][39][40] Lubricants and Specialties Performance - The lubricants business has shown resilience, with underlying growth driven by operational efficiencies and new product offerings [44][45][46] Renewable Diesel and Market Dynamics - The company is focused on optimizing feedstock and reducing costs in the renewable diesel business, with expectations of higher LCFS credit prices in 2025 [71][73] Midstream Growth Opportunities - Midstream is viewed as a growth engine, with opportunities for organic growth and potential bolt-on acquisitions [78][80][81] Demand and Market Outlook - Management expects demand to outpace supply in 2025, with regional advantages in the Pacific Northwest and Southwest [83][84][85] Refining Capture Rates - The company is focused on optimizing jet production, premium production, and heavy oil upgrading to improve refining capture rates [96][97] Inorganic Growth in Lubricants - While the focus is on organic growth, the company is open to bolt-on acquisitions in the fragmented lubricants market [100][102]