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Par Pacific(PARR) - 2024 Q4 - Earnings Call Transcript
PARRPar Pacific(PARR)2025-02-26 17:50
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Financial Data and Key Metrics Changes - In 2024, adjusted EBITDA was 239million,withadjustednetincomereportedat239 million, with adjusted net income reported at 21 million or 0.37pershare[7][27]−Fourth−quarteradjustedEBITDAwas0.37 per share [7][27] - Fourth-quarter adjusted EBITDA was 11 million, with a loss of 43millionor43 million or 0.79 per share [27] - The refining segment reported an adjusted EBITDA loss of 22millioninthefourthquartercomparedtoanadjustedEBITDAof22 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 22millioninthefourthquarter,upfrom22 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 33million,attributedtohighersystemutilizationinHawaiiandloweroperatingcostsinMontana[34]MarketDataandKeyMetricsChanges−Hawaiithroughputwasstrongat83,000barrelsperday,withproductioncostsat33 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 4.34perbarrel[19]−Wyomingthroughputwas14,000barrelsperday,withproductioncostsat4.34 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 10.48perbarrel[21]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonexecutingkeyprojectstoenhanceearningspower,includingtheMontanaFCCandAlkyturnaroundandthestartupoftheHawaiiSAFunitinthesecondhalfof2025[14][15]−Thecompanyaimstomaintainastrongbalancesheettosupportstrategicobjectivesandinvestthroughrefiningcycles,havingrepurchasednearlyfivemillionsharesor910.48 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]