Delek US(US:DK)2024-02-27 20:08Financial Data and Key Metrics Changes - For the fourth quarter of 2023, Delek US reported a loss of $165 million or $2.57 per share, with an adjusted net loss of $93 million or $1.46 per share and adjusted EBITDA of $61 million [30][31] - The full year 2023 adjusted EBITDA reached $950 million, indicating a strong performance [4] - The company returned $146 million to shareholders through dividends and share buybacks in 2023, with $85 million allocated for share buybacks [6][8] Business Line Data and Key Metrics Changes - The logistics segment achieved a record quarter with over $99 million in performance, while retail was down due to seasonal trends [31][17] - In refining, total throughput for El Dorado was approximately 88,000 barrels per day, with a production margin of $4.94 per barrel [11] - Big Spring's throughput was approximately 58,000 barrels per day, impacted by maintenance work [12] - Krotz Springs had a throughput of approximately 81,000 barrels per day, with a production margin of $4.93 per barrel [13] Market Data and Key Metrics Changes - The company experienced weakness in product demand consistent with seasonal trends during the quarter [3] - Asphalt marketing contributed approximately $5 million compared to $15 million in the third quarter, reflecting seasonal trends [28] Company Strategy and Development Direction - The company remains focused on operational excellence, financial strength, and shareholder returns, with a planned major turnaround of the Krotz Springs Refinery in Q4 of 2024 [7][9] - The capital program for 2024 is estimated at approximately $330 million, reflecting a reduction from 2023 levels [22][60] - The company is committed to exploring opportunities in the energy transition space, including carbon capture technology at Big Spring [50] Management's Comments on Operating Environment and Future Outlook - Management noted that 2023 was the best year on record for safety performance and emphasized the importance of operational improvements [19][20] - The company is optimistic about capturing opportunities in the refining market dynamics for 2024 [56] - Management highlighted the importance of disciplined capital allocation and maintaining a balance between financial strength and shareholder returns [49] Other Important Information - The company reduced its debt by $454 million in 2023, improving its financial position [6] - The capital expenditures for 2023 were $372 million, with 80% dedicated to sustaining and regulatory projects [60] Q&A Session All Questions and Answers Question: Update on the sum-of-the-parts unlock - Management remains committed to highlighting the intrinsic value of the business and is focused on enhancing the balance sheet and generating attractive shareholder returns [65] Question: Opportunities around energy transition and carbon capture - The Big Spring Refinery was selected for a project by the Department of Energy to advance carbon capture technology, with no material CapEx planned for 2024 [50][73] Question: Supply and marketing headwinds in Q4 - Management acknowledged the seasonal trends affecting supply and marketing but noted a positive trend correlated to seasonal driving [80] Question: Shareholder returns and buybacks outlook - The company returned $146 million to shareholders in 2023 and remains committed to shareholder returns based on free cash flow [123]