CLMT - Earnings call transcript Q1 2022 | Calumet Specialty Products Partners, L.P.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Calumet Specialty Products Partners, L.P.

First Quarter 2022 Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Brad McMurray in Investor Relations. Please go ahead.

Brad McMurray

morning. Good joining our for earnings quarter today call. us you first for XXXX Thank today's Borgmann, Chairman. Development; are CFO; me and Solutions; call With on Performance EVP Todd of Products EVP Brands; Montana/Renewables Marc Lawn, EVP Mawer, Bruce of CEO; and Obermeier, Corporate Executive Scott Steve Specialty and Fleming, Donargo, Vincent

as press provide statements. differ Please well refer Before we that latest everyone morning, forward-looking remind our was during this this the our expectations. them the various a partnership's release results with proceed, I'll call, that issued to we that and cause our SEC may of list filings to actual may as from for affect factors

can our that this Relations now I'll the slides our pass the be the website may hours. in which download to a accompany section be that, Also, will the site of at Investor replay made within a webcast few Todd. on www.calumetspecialty.com. of remarks on You available accessed call today's call, call conference With

Todd Borgmann

Brad, good Thanks, morning. and

Let's X. Slide on start

quarter business The our Calumet, we at and busy here one progressing a all are fronts. on was first

in in from Specialty to longstanding remediate believe And nothing diesel you our couple successfully internal re-segment team and people smooth see First, what shortly. and the area Products business quarter and of leading It's business with to critical the team business. cost to business for start on Vince and and transition Chief two ultimately, built depth front. hear I'm is the that last let great for competitive been competitive focused in to and to we've advantaged changed. also organization. we the Vince and able couple the breadth to a simple seen Vince, we diesel recognize months. of on Talent system. out a built has structures thank unique a broader have our committed under and we mentioned wonderful we just providing have on have competitively location of built quarter. to are past It's lasting renewable have CFO, in moves our Last our a you'll MRL. us are people we a is model businesses. One past first-class play renewable Steve entire been our and want a play our will also throughout advantage, We've over I of to talent the people recruit strategy legacy our leadership. Both reinforce have me a the We're Calumet business has is competitive appropriate introduce for access creating years how now capital. a been on We Officer, people Accounting leadership, unique permanent able were year new as pleased is leverage, capital on growth and material him carry developed. other advantages independent as weakness his this early

exceptional Our built is nearly a brand, base. business customer asset Specialty world-class a Products base, irreplicable on one that's and

very of short commodity this and on from update which material high Solutions somberly quarter, of bond the and oil first quarter supply we has challenges, $XX.X cost to has thereby the separate, are crisis. rapidly to XXXX clearly history. were by impacted quarterly quarter $XXX and Performance While advantage the a specialty event cost-effectively, first stressed direct markets, not impacted an exacerbated lag mentioning feedstocks in post the asphalt ended chain and to our where margins manage which we rising talk impact a business proud started the COVID global the a such but their once a our I'll Other of short-term typically secure our to to maturities Calumet of of attacks were over We the barrel humanitarian around the strategically and a the remaining disaster delevering allowed of lines again the effectively in that crude is be focus to expect are on Specialty business. incredibly back to in challenging Ukraine. remiss businesses provide largest specialty the changing expedite businesses first competitive most flexible we Specialty environment in north December barrel is it's This dollar business in to also a of and they that million EBITDA we these Calumet's of these posted own of of 'XX The specialty globe. linked market portion process without and most price a an business certainly million product already Notes, $XXX liquidity. think equitize recovery Brands with face which of adjusted is on In energy high segment The Montana/Renewables increase quality oil about but environment. refinancing $XX pricing on highlight quarter recapitalization. average supply shortly. as I'd hard control. Unfortunately, our produce that little from the $XX us to multi-year the Calumet and include our ran felt regimes. Products the and ensuring too, prominent. were in of Crude Ukraine Russia, the

tweaked we during this over crude versus feedstocks will Of fuel internally degree were process always core flexibility that control we we to we that differentiator. course, which and and conditions have operation limit the strength our shift and be margins we In focus, in and is Specialty the intermediates. to max we're fuels integrate specialty significant Products When nothing third-party environment, amount market intermediates yields, and generated during our fuels match we core mix on our COVID, fuels process but cash. business and current a to mode the optimization, flexibility and and focus to and Calumet feed process. also make minimize of

As operating volume reliability, our seen recorded MRL on we to a Vince our But through in first this, first production We'll Vince? and our turn quarter bit. assets take with I'll the the results. call largest an are utilization over facilities to the three good you update at in quarter, we've with do over high wrap years. in first,

Vincent Donargo

this look I analysts and Todd. and all with investors to forward Thanks, you our in role. meeting working

X. Slide to Moving

the Products $XX.X flat is first Our generated in Solutions million sequentially. which segment EBITDA Specialty quarter, and adjusted in

increased were a mentioned, the of the continued deliver quarter, in fuel challenged same these to The $XX to through a European advantage job global gas over demand meaningful rapidly passing barrel per and throughout up and specialty margins favorable significantly the we team did material from Todd the pleased spike we market margin quarter higher costs, SPS of well-positioned as producers. great to for costs. is provide As as a record prices ended feed of the industry time, face cost environment. ultimately, At benefit the to keep with US

the priced margin largest it the Asphalt SPS prior is challenge experienced month delivery. to in as segment the

than was material a the per there challenge, which that. For highest the we and $XX priced $XXX barrel approximately this and crude when asphalt barrel, to margins example, Despite we've March than metric. a was in is seen reporting March per asphalt fuels point was when $XX increased which higher more barrel, since crude started

time secondary a throughout in planned April, plants March, Our lubes focus on and prepared we quarter. also the completed for ran on and in was Shreveport, budget. very Late turnaround at well that

we which of During improvements the reinforced is turnaround, the high utility call. our reliability also system, return the last on mentioned we one targeted

segment have backlog dominated team to and Unfortunately, following on market business our we had reduced. make catch offering, the latest and Slide EBITDA the larger thought to a gallon end national business see PB went team a in regional pricing, chain has to can our X, this new as Performance to campaign seeing Brands light we headlines in quarter, the we caught increases year, in $X.X is the the a in at marketing marketing from On and could Brands the the strong backlog. you larger also catch increase, TruFuel our We our which a that was We this in container. accomplish a Last we past up in saw generated of lag normalcy over been that just to slightly strong Supply to were we Performance back X, reach when price able up the formulated response to program. were we products. is demand with QX with adjusted XXXX. dent Slide this tunnel of supply but announcing demand recently launched tremendous X.X price and and size we reported this continue million. chain expect feedstock Demand up. cost Moving

real industry. shipping is Our lubricant particular in BioMax is the BioMax a was high-performance for environmentally that promise. designed brand friendly showing

ISOXXXXX year. been certified. and loss reputation, changing Also industries. high-performance sustainable performance. all traditional Most favorably in more customers was no brands This solutions commitment early-stage its over have no offering. a by BioMax and a quarter, of spread other as this underperformed and easy a bio-based to performance progressing have and environmental and the that surprised an became in world the the brand team both of gains first across XXX% However, receiving first in and their demand grew unique designation from seeing than we of recognition was then is enhancing we're lubricant XXXX, we this performance our products, task, rapidly our quarter, our last It's sold but

a Falls picture Slide that a we a the in Montana/Renewables, to abundance field. to facility. of on border which X, around our is crop sides Moving both Great Canola turn canola grows shows of

production. announced of the good roughly oil business, quarters good for significant with feedstock slate. XXXX. into Both to the margins the diesel the is we during On a represent pathway which of of in mark production. impact rising see portion a but prices business our generated for our these Fuel line canola quarter, million is adjusted of were the on expect proposal total again, Montana/Renewables season. of asphalt oil We canola's winter Recently, X, EBITDA, renewable be $X which EPA our our part quarter of Slide fourth renewable here rapidly a

We also reverses which in that on stabilizing. so normal and spring as into demand far the during saw price asphalt get crude Meaningful is the slowdown good summer. we price winter Montana expected are the in increases so quarter, typically and and

to completed this is which asphalt of Asphalt already Modified fact, we just the In extremely one forward looking the upcoming spring and Montana/Renewables summer paving over are Montana, high Falls, in upgrade and even I'll project, also awaiting extremely well. to excited asphalt Todd. as progress We're market. margins into excited the about our will the to back project season more the Great materials With Polymer the turn in for we premier which on us continues quality that call that,

Todd Borgmann

Vince. Thanks,

we MRL. since Let's months a and move made to spoke XX, continue progress two We've and Slide substantial with ago. half

the a Let's first talk then we'll do commercial. and project

procurement a the of hasn't to actually started need complete. done our This as about been purchases and been construction working First, efficient It and long-lead last leads and time our the able with roughly team items with get the miracles, ahead XX% the we're essentially manage. been starting of remaining We felt in chain as ahead. challenges to this team has easy, procurement field us global to all engineering variable were supply process year, has but we procurement. deliver

supply, used remember remain We'll on as On procurement day cooking by commission the the to evident timeline, commissioning Commercially, track moving in oil to that our is volume September. more focused who ahead the geographic we plant looking feeds the time feedstock over month We're our plan. on approximately advantage to as you'll geographic period call X,XXX feedstocks to of We've process, a magical becoming all during we renewable in day feedstock agreed Through loads next terms are on efforts for are use the expect advantage. barrels is we'll starting the we specific receiving of start start plant. the September. like CI not parity. what we fill late to which

and de-risk process have about identifying It's started compared about that to how where gone all this other let's in to times talent. in out headlines see We to available we ultimately had is though to phenomenal talk we we regional then of XX potential we've nervous a MRL advantage Even Last, experience RD our verified who this. the out there people the more to had scarcity And sources, the in attractive feed I So pleased have by and roughly feed a execution. our went geographic hubs. bit hired of feedstock relationships we advantaged suppliers. than reached been We as supply-demand the mentioned is earlier, we beginning. analysis how area. us through require honestly balances, we've conviction

that's We at tranche first run sight we to diesel other Canada the United has experienced Even any production committed we Canadian know day and that for facility. been we diesel year. renewable that offtakers to local and in a we're SAF, and while movers of also EPA and as makes eighth the some been meat or Great economically though proximity, to of yet, account time Falls have the in very this also you'll group immediately that for in which roughly farmers the are as locations purchasers fat sell It's we have share in the large commercial that us for canola as X,XXX has first suitable barrels high-growth happy customers, can. we are the offtake, officially is clearing aviation proposed US rest States. rational, recent names our for the of can't fuel, of than expected. identify feedstocks, nice rates too, evident get Falls a bottom and of end close RD to than day the with be to within sale note, highly canola given full supply we'll way sell we better of as quickly supply production business. Back will believe While many a they're that pathway canola-based could line the the animal the XXX to supply the short closer the expected renewable chains. a able it's other to These as demand publicly the their we've We're execute we're miles secure as clear agreements of not oilseed been reached oil rulemaking that all most companies. to from opposite. I'd XX,XXX to do with of much vendors early-stage unique the of credit-worthy inning the three recognize that to barrels markets On sustainable feel major one diesel of the as with for volume. first-class renewable our We've exported Great

from intense on leaves for than market MRL. even renewable the in the fact, just In might future. who are even Last, demand most diesel expected those we shorter thinking us that the be know foreseeable

Our capitalization plan also has advanced meaningfully.

quarter renewable since Lazard and that in optimize valuation transaction expectation third-party we the of our The engaged done was to the equity independent confirmed options. field in producers. market And formally our lead diesel

sits deleverage to to stand to call MRL, business. to and for This removing today, And $XXX with the margin like clean In project. potentially the million loan we to more have equity. provide tied all now, generate which Company. and to while specialties excess simple strategically capital, further know to With and that year optimistic operator here transformational but environment or with that we'll execute we and this to and deleveraging the lines. our a loan than sale, plan business continue the the plan and is expect staying Securing the prepay, a expect to Oaktree summary, upon, live unique a mandatory about backdrop replace permanent our at turn XXXX Operator? out term public is to execute line current the some would core would complete equity this looks funds Calumet flow capital bridge our business MRL, over truly both. I'd sit the necessary thus in right volatile also whether open our can we market cash cash equity very We debt convert world ultimately to Q&A. a transaction, raise is the as We the creates of power, that, a

Operator

from the come question [Operator Dayal will with first Instructions] ahead. Please H.C. go Amit And Wainwright.

Amit Dayal

where from perspective? to remain elevated? and be may at top morning, Good Good Can about this spreads cetera, on some capped that how the With risk bit but you're you. congratulations a to that. executing for all you respect quarters everyone. few prices, sort line additional see guys. of Thank terms color on progress, margins, the against there you are in feedstocks talk any and next of little situated et Is

Todd Borgmann

it's Todd. Amit,

specialties go where now. I if renewable diesel confident on in of think that to right Let's specialties outlook feel and we Obviously, prices in comfortable we're on pricing, where kind that's had you're very kind can with we QX. quite run But - a and start pretty feedstock then with going. at we of

made were pretty we I keep we able increases commercial the because think with progress to excellence those have we up ratably.

we we the are increases of feel confident pretty in path next at end As quarter sit those here, about quarter and and forward. the the

funny we're we same along this environment front. as margins are in of call, how process on in spread little We're pleased the QX. seeing much pleased a the mode. to sit So kind kind said can say, up for focus, to crude have held like the with with of we're We're But really we that max QX. going in where for as where crack we in bit given ride Honestly, the specialties the we're specialty but crude is here.

demand. we So confident think up. We're keep will in the specialty

add, whole you over to jump all know, don't in to to it Montana? Bruce, push you Scott, the want there foreseeable or out have and lot to able see been I changing if we've a far future. anything So don't

Bruce Fleming

Amit, it's Bruce Fleming.

the - around So that played margins that or on just price, has would like margin renewables, float has on refining. out to deck feed the that. going you and six we industry. got We've of get charts the think just the the investor oil It last a Montana/Renewables incremental in at point price spreads vegetable how I question to the and and five the above deck. has for crude all than We're feedstock is investor years. to It's And margin. fixed tripled nothing more the over done

Amit Dayal

to sort I Okay, respect efforts, clear have understood. with the you things in now. certain you And highlighted, of know guys, deleveraging

visibility the you give where up can the with to quarterly a by have, rate et With might cetera? end year you us of levels, of sense the you respect end interest

Todd Borgmann

Yes.

said, that think you quarter be in seem on us. about we're a pretty behind position, days strong super of so kind the like worrying ended I positive the of liquidity, to

So ended $XXX think quarter the I with. million we

do which holding outlook and I sits end year quarter, with ability throughout as the crack generate on expect we obviously, to pretty we some forward, our current as and say excess the environment, holds But excess first cash now, environment translate will crack as up. But looking cash. dramatically simply to we and spread improved far would is are it's on year forward, Going remaining liquidity where the we as to year, what comfortable EBITDA. this margin generate improve assumptions given say it pretty right are an

Amit Dayal

CapEx million at range for to And year, $XXX is million this Okay. spend? $XXX then the CapEx still

Todd Borgmann

we went really, done has got changed mentioned really on That in budget, April that Nothing it. well, got You on [Trayport] turnaround plan. the like with there. in

continue was forecast. forward, a to change and no that move chunk we'll but the So reasonable to

Amit Dayal

Okay. Lazard said And engaged MRL. for you've you

place? public as in your off that assume comments MRL about spinning is we potentially prior should So entity, still that own

Bruce Fleming

Amit, Bruce this again. is

a and one bought So number confirmed value. there was developments. enterprise being thinking we transaction of REG's spoke, our last mentioned that Chevron, that on Todd well by been pretty since has

public, the So value open value very We necessarily we proposition not Montana/Renewables. capital have here shareholder for our we've are Montana/Renewables Montana/Renewables highest objective. Calumet a - is in accelerated think markets of the the recapitalization. shareholders to current The that's got get kind open to probably but

test made parties. we going So to strategic of us different Lazard that third couple as suggestions be a by have been advisor a is to

Operator

from ahead. Please question with next the And is Fargo. Wells Roger Read go

Roger Read

positive. the front Is track price look on Let curious me we spreads of everything all take here. as you've the being at renewable a the three and different can look slightly segments? seen. mean I I weakening pretty diesel just the But I any for we moves outlook across crack of demand with anything the was at think some

Todd Borgmann

Yes. I'll start off and see everybody jumps response. in

we always that lot There's of that Roger. I of demand. flat as the the good, without or But to you today, driven price, pure are some of recession price that's type our so sit floating at much current of price think around. impact just and risk hear here all Specialty including move far able we crude by products, any any on process higher and risk, So a Products

areas in obviously, fact, margin demand In the segment Performance so. is strong that Brands, and highest we see as ever

I sit today, another If that. and we favorable a to pretty as crude here, doubles the see to we But comfortable year. pretty signs think demand So with have all from right rest price revisit point now, we is. here CR may of flat where is we're rocket

Roger Read

Well, with. been lot Or comfortable was still you're a But very off-take Is on project, you not both go curious. going see it's ultimately I you said MRL should demand Continental well? obviously just if from much before, Canada, much this and the I might When that of into jumps think the the U.S. next in for anybody that about is to agreements might a as product it? coming we the more you larger giving have side. companies on the question. the way away Okay. there and the talked wait to - supply was

Bruce Fleming

Bruce. take Hey, Roger, that. I'll it's

demand. a So of is tapestry there

got rest online bunch federal of in fuel space got there you've low coming of state year, Canada You've the of next provincial, you've that. carbon overall got of course, jurisdictions a and IRFS the and umbrella

operators. fully to very you're just going names get we elected that. see recognizable to and an going blue-chip eventually to it's be And compensated our optimization off-takers that for them, interesting who that the They've are FOB. to going sophisticated signaled, to They're in actually and it's reveal when optimization I participate chance. lift So very what we're

So again. than are Sound. and offtakers. record from further surprised I'd barrels before fall miles on some Puget good that have be with XXX we think say I'll if I physical pretty partnerships we forming these been it our

Roger Read

Okay.

it reasonably expectations. consistent So sounds with prior

Okay. Well, I'll -

Bruce Fleming

Yes.

Just the clear, the for partner is that What no to thinking offering. outlook found be and the and hardware there. changed had has there we've renewable aviation on looking our capability in We for offtake is bolted we always sustainable one. change fuel and we were jet

we're something This lot much. very And So that pretty people quasi-first initiative. actually we're of with but doing pleased is a a about, are talk few mover. frankly,

Pacific mover first We think to be an we going that's the so down a road. important are vector growth in the Northwest,

Roger Read

two said, to no going Like guys. I else Yes. I'll it questions, but asks, one the was SAF. to back I leave Thanks, around if come on

Todd Borgmann

Roger. Thanks,

Operator

go Please from Goldman Sachs. from The Carly is next Davenport ahead. question

Carly Davenport

on construction pre-treatment Wanted Thanks start how for update are questions. to on Could taking give in there you the on the of an particularly costs terms MRL just tracking? timing, morning. and unit. Good the side, progress just

Bruce Fleming

Yes.

another and cost was had path The site field. in prep fabricated refinery conventional client. not It's installed Progress a is oil-water critical the some This key building is - at like tracking. level. been vessels. So simple which unit. pretty for purchasing separator process the beginning It's and the never overseas timing are

procurement regard timeline. allowed hold that in which us to So a we has got success

Carly Davenport

just of Thanks the And around was then SAF that. follow-up comments. Great. kind it. for the Got

the for other of the the I players in we've there. relative think has economics view renewable from, to bit other heard space that product out some some the that fuels a that have been more of been challenged the

from what's how of differentiated the perspective, you offering renewable versus there? of diesel AFP can the that the about can And So provide think you about piece? economics the talk should your kind we

Bruce Fleming

Sure.

The the those in leaving base renewable to first were is them the always molecules diesel. and the value that key be so is always in going production,

is winter an the sustainable and arctic is be is disposition The uplift, which spec which third second uplift. Canadian a would higher oilfield, diesel,

interesting forming. places the pricing that's still physical The an jet we've is with is So to three but the the seriatim, about got question molecule. That industry fuel sustainable go one.

bespoke think the knows offtake definitely jet is I around emerging this way segment. got for their partner and that we've the an

to exceed it revenues. is renewable our Falls. The So don't, we've keys fact we're to renewable of planning Great diesel optionality physical competitive in the stays advantage look, one that got we And the in diesel. if the

Operator

The is next ahead. go Brody question of you. Gregg Thank Bank from from Please America.

Gregg Brody

Good say. morning, hear I or nice new should team and team the to guys, the revised

Todd Borgmann

Hi, Gregg.

Gregg Brody

Steve, in the all hear there room to It's I sitting you're good know probably silent. you. being somewhere and of

Stephen Mawer

Gregg. working, I'm working. I'm

Gregg Brody

products forward, product a you've in but fuel going the curious On to your side, the rates. I'm and if used hedge been this, to philosophy it's think you you're is fuel thinking about while since been what able there. about locking some of

Todd Borgmann

back environment question. have in where can a Yes. good certainly We're be we to an those happy No, conversations. it's

talk a every actually about something recently. lot it's and So more day we

did strong et they cetera, for uncertain go level ensure year. uncertainty, that to we cracks would time, opportunity Ukraine. of At long it's saw in So when to bit some margins pretty how start that an some the and started actually on spiking layering little early a the as

which and about off So we make. bid of in of our X,XXX went a barrels put is about ahead day fuels XXX perspective XX% it

too some really get backwardation that something it's honestly hard we the length the to front-month. given It's So in throughout the curve. excited might extreme add

bit So that's it's why a been normal. than harder little

to us add some cash up under our important of at we're watching It's ramp kind the that likelihood So it flow leverage of position given kind delivering. to stability the to increase closely. free it. look We're going we that to to have

and started. So, have yes, it we're watching close

Gregg Brody

you are. you mentioned - I you'll a of where beginning might know guess crisis. put is any today. pull be the take the those on market there there at disclose don't I you Q what in Ukraine your some Are market in hedges could little if

Todd Borgmann

Yes.

Gregg Brody

Are collateral any there meaningful? - do you foresee that, are that postings with

Todd Borgmann

We don't. Obviously, assets very secured positions by CPA. in hedge the are our

so prices. barrel, market, crude, but color, a to little be at give the just honest, extreme clearly will day a that current of more further a how a $XX see yes, X,XXX go they So to barrels out. bit XXX under plays Hope little under market around you

Gregg Brody

that XXXX? for of - that's is all And

Todd Borgmann

$XX year. Yes. Correct. the across flat

Gregg Brody

Got crude? you. since May be market is to relative acting credit that what's with been How shifting that market. I've happening the being stated gears, while just guy. to It's a a this asphalt the as a just products monthly fuels market up and on are a margins again well? or are lag in basis. rise put they curious, you said consistent, know going the I'm I

Todd Borgmann

all first the than was quarter, increase Yes. looked asphalt worse are. a in so it the Like We they you lag, end March. of they about price record the said, at had really

We expect margins of at molecules. value as quite under we stability look kind bit those alternative a of for those

obviously, We're coker the coming not into that short. feeding in oil over there is of the Russian was extremely Gulf cokers heavier heavy seeing Coast. some Going the feed, those molecules

in whole, month EBITDA that just expectation we is, of way able will from we don't to because So the But expect up prior. that industry event be price lag on to our bit continue is much little drag that's We'll prices a price as to that the we was asphalt. the asphalt see push crude run. a

Gregg Brody

SPS And asphalt? business, just the us, Got that is of remind how it. in much

Todd Borgmann

of do let's day asphalt day - barrels a X,XXX barrels X,XXX We SPS. say about X,XXX, in a

Gregg Brody

Got right. X,XXX believe it. it's like All X,XXX Montana? in And I or

Todd Borgmann

That's right.

Gregg Brody

you to be What to shut refinery? Montana environment, how down that's going just you're talk parts How long about within thinking model how understand Can - you this refinery. be? shut going to working about to Montana we dynamic down now just so have When the it'd the that? refining of you

Bruce Fleming

run try to We site, we're it. going is part to plan not to of in the be to The August. Bruce. need de-energize it's Gregg, so down

of We have production dis-splicing the back guys catalyst come up, for feedstock the September. or and the turnaround are we'll un-splicing, will execution so finalizing so renewable do change in I The details, have part so don't amount oil leverage inventory to build to oil We relative tankage as do our good of the plan that. we're draw have to and outage. going a size,

stick the to a If production. in figure you lost thumb month had your air,

Gregg Brody

get some 'XX. in - you can into and historically? do Do crude max And to your you just back you be been out. products you where pass Got There it it. expect said you turning it's you you Performance and Then normalcy there'll performance. believe it prices there? get challenges think margin to up was through higher maybe Or

Todd Borgmann

to We followed issue we've through, through that we up. is we think think pass feeds feedstocks we've pass caught every been up, No. as The time as and there we running. can able we're keep obviously,

through So market that pass out. XX, us feedstock given like increase the the the settle hasn't far, XXX we've day business, time such in able been lag and to to as

settled the chain. we've supply that well. Now, as got Obviously, has down

we with of anything up which kind that that forward space in as think keep add comment. Marc, the in on? can there. we we XXXX stop demand is kind more Maybe So I'll to increasing do normalcy move of of

Marc Lawn

Yes. Hi, Thanks, Todd. Greg.

the So, than out is bit of other we there supply there's anything additional sort a no, there. think of color seeing normalcy, I of don't that as surplus isn't

amount of of year, So of that's a sort and increases - not this is industry last Todd's of on reversal a a way record But facilitated large that reinforce the lubricants to already the other well. we're further for three in record material as we price point increase set was available. year going see the it to terms sudden

pass factor that that is make we to can we Todd's piece point back got lag is reaffirmed the sort So the in. that them, of

Gregg Brody

the are you EBITDA where come see can actually a - think we you in saw levels up going do to So just to XXXX? quite XQ, we bit, that means

Marc Lawn

and see terms absolute alluded see what of - of WTI an the was that an in it the time. great and is move at see yes, start point as improving based Todd so QX But increase the of in We'll definitely basically a record to we like. sort terms sorry. will at We improving that on environment this

element So markets there that of around is where uncertainty will an still volatility be. will what the and do

being through. are We confident pass prices to able XXX% the and

We'll So that's We've point. to work the that continue move our of and got start along. sort material.

Todd Borgmann

spike. pile happened Yes. so was the Gregg. primarily Obviously, on in And I'll crude that, the that run March,

time that They've are said, see been quarter, XX, lag, the by through QX early Like prices of improvement throughout in continue Marc passed XXX-day the whole point. you're but by margin feedstock we to through. So up. the kind get we'll the

in So benefit in full QX. QX, expect improvement

Gregg Brody

you that questions original how two And Are you. is just I'll And costs for expectations? any been the sort - crude of of inflationary. other to refinery to it. capital prices, turn to that's higher impacting seeing then Obviously, the your costs Got sort of business? last Montana relative inflation - parts

Bruce Fleming

they major the Montana I the take the they can fact construction general of The business means vessels, If give one that most cannot procured items the first then to - and long lead inflate I'll inflate. materials, going back we've the Todd.

the hydrogen for lump front Mostly construction to the pain, of have in procurement that We engineering and contract is complete cannot renewable a us sum what's plant, craft so activity. inflate. the field

hard if our in productivity, feel do a to see of So it that's thing. an cost be manifest wage step outlook. material presumably total site that we to to going rates, that, It's sort would change installed issue,

Todd Borgmann

of the will feel bit see the but following I business. the of rest you a everywhere, Yes. the inflation the same of we'll trends about Naturally, be market.

there. inflation far So highest prices. we the nothing should though example, it's for to advantage really kind structural gas, increasing, change natural anything international Obviously, see still as is of pretty even in of the costs relative as And dynamics, meaningfully market. a energy

that through expect play So cracks. the to for

Gregg Brody

your impacted sounds supply you Got year. chain that last issues it it. business like had Obviously, addressed

about that So see highlighting? anything that you're that's you concerned worth

Bruce Fleming

impact business, every risk. in managing just talking trying can inflationary something some name closely, impacts, and I think the lot our just generally, there it, we is the on and right Company our the unknown think now, a across team things I we're - that world is of of you But to all unknown Ukraine, environment, pretty watching business. focused day focused general out it's we're those right, about are there understand world how a mean dynamics crazy there that on and

Gregg Brody

then last And still one here. the other one

Does us IPO to So think about I around for that? I year. have this framework going I on, is now? appreciate you do is also And an right were process about sometime near to talking think what before and which conclusion. flowing next it. think just you timing the this process monetization you've how accelerate you think with hired sort And of maybe potentially Lazard Lazard

Bruce Fleming

led sense again. the to of with This capital we're engagement a is you've is that accelerating number markets Bruce had that our developed that positive that. correct. The We catalysts

entity existing business Company of it. is And So the look legally already, the way basically, put balance from you if we you just fully own which Montana/Renewables the take separated happen we still the at XXX% purpose to Oaktree a as great and was feel about is partner Montana/Renewables. good sheet the completing that that, for that moving we heard. for the was together how last year, you've launch for of all

want to from pivot the business you a which permanent to regular capital we're the As entity, mentioned. launch way the corporate Todd going

point. equity have said take that right will at always We partner an on we the

but likely will fair We operator alignment quality entertain, reasonably the like a looking partnering. for become the value, and looking things And we be anything at not these because to be also for done that get particular aspects distractions we'd can us. to be big small of

So parties. this Lazard from yes, specific the And to our next have through way think in will third very pick year, we year. useful come be suggestions not that

Operator

go question from next is ahead. the Please from Gabelman And Jason Cowen.

Jason Gabelman

my Thanks for questions. taking

that specialty in track - back I which prices on this are then I that what you've versus doing. First mean in the to Is the specialty a I them? that so XQ? improving. mentioned sense margins shook diesel give to in And the environment, to in cracks seem have going diesel out where understand, just past, us given think what you can just trends some extent be fair margins of just April

Scott Obermeier

Jason, Scott here.

still during So quarter QX today, run-up crude, of we some with we where of April $XX run-up over in What the think we're first about with is did in in of specialty at pleased the were how we've here as early our we in barrel. overall, our we price some margins compression, executed delivered but Todd increases. seen had flow-through in crude, mentioned, have the the against terms

pretty we're about and in the we're So good feeling this managing volatility today market. where at

Jason Gabelman

part accurate about just And it. on - that an Got statement just that yes. that was diesel,

Scott Obermeier

Scott Jason, here.

in diesel. business, certainly, stall some float on our oils on base like and the Other that of business of top floats top So VGO. can

only market the our the that the support that alluded So margins in fuels optionality business I of of think earlier intermediate to give our model. Todd strength serves have in and the specialty we to us

Jason Gabelman

Got it.

Steve Mawer

squishy. specialties, reality year, on oils least quite specialties looking diesel the And think market is And If in just I is, nicely. market we up of has the can special at Steve. beginning the little that base Yes. knocked honest, the end pool the what was Scott which I the mean, value this instead the to going up specialties way of of diesel I said, collect build of be was of the actually, a margin some

the businesses sure the and that play magnificent done Scott and we a And well by have I'd So optionality it optimize way. making reiterate really and crack. think specialties diesel job all team to the stable that I our of large

Jason Gabelman

of or debt $XXX to financing an helpful. make-whole extinguishment just I kind running? project of do the have And discuss once any MRL. you that with guess costs green up any you that million a then All out? do is cash there and it. the will at right, then you that's where you're costs Got on come excess with raise, Oaktree? expect that the are moving you rate MRL Can sense to could looking leave And And for

Todd Borgmann

Yes. A good question.

take feel So pile it free on. to I'll and to Bruce try

So debt on have costs been Oaktree extinguishment XX%. always

prepay, competitive of kind there before simplify, of up a So raise with project about. and positive simplify rate we'll we million what cost this as now, that. structure feedback rate. really right. that the isn't hard million, really us mandatory going of strong to not a $XX function a million pretty lot right Have But clear insurers Rate, get is comfortable on $XXX is a at kind equity convert a primary of debt have the the an lot a think this telling a We're potential markets for have far to loan. time. of but uses $XX deal, as in Obviously,

of room So buffer plenty so far cetera. $XXX do this, a just highlight that. for cash, planning et cost, to And in is million, as buffer there have a to we're bit on if excess were we construction as then of little

to So that little on too to to ourselves going the in cut excess to cash have give cut we it if - sheet, the not bit balance needed. and not base it a we're close would case, try expect some room through of flow

Operator

would our gentlemen, remarks. turn over session. and the management conference I back for to closing any concludes to question-and-answer like Ladies this

Todd Borgmann

Well, you. Thank thanks to everyone a have joining ahead, in safe go for us and your and time weekend. and great today, interest

Operator

has concluded. for you presentation. conference The now Thank today's attending

now may disconnect. You

Calumet Specialty Products Partners (CLMT) 6 May 222022 Q1 Earnings call transcript