Earnings call transcript Q1 2023

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

Operator

Good morning, and welcome to the Delek US Holdings 2023 First Quarter Conference Call. All participants will be in a listen-only mode for the duration of the call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please also note that this event is being recorded today.

I would now like to turn the conference over to Rosy Zuklic, Vice President of Investor Relations. ahead. go Please

Rosy Zuklic

welcome conference and Delek first US Good to earnings call. quarter morning, the

today's Avigal and Participants CEO; will Development. call on include EVP, Mark EVP, Reuven Officer; Joseph Soreq, Operations; Spiegel, Financial EVP Chief Hobbs, Corporate Israel, and President

be material the on Delek can of Investor website. Today's section the found presentation Relations US

differ today's today's contains results to may actual our We'll included comments. Slide actual and that are Harbor X cause be making well our materially from as call statement. Safe forward-looking Factors could statements as during filings. SEC here differ results in

With Avigal. that, I'll turn the call over to

Avigal Soreq

Good joining thank morning, and you us today. for

We first quarter. quarter reported generated Adjusted a Delek for $XXX US. We million, from first a record cash $XXX EBITDA strong million was operations.

$XXX by In million. addition, we consolidated reduced debt

quarter. well team in Our the executed

Refining well was this of in market to despite our QX during We XXXX. achieved Tyler plant major turnaround late are earnings With opportunities system the they not refinery themselves. quarter. in scheduled generated we positioned significant segment. until us, This We major do turnaround present have capture a as behind the turnaround the

businesses. Logistics delivered Our EBITDA. the Midland investments in This we segment have adjusted our in results the made is strong of

than As system. last we an doubled Midland year, example, the the have compared in more volume with Gathering

I We them. of minutes priorities. focused update remain on a and our every one will few on take now key to each provide an

to value sheet. and optimizing returning shareholders balance First, our

we to Holding, what of cash During we million excess $XXX committed do. the down debt. At first we quarter, Delek paid do to the US used

$XX Directors the X.X% we today Board Today, back May strong shares. in performance, second shares we million have regular approved quarter. of Also DK up the our started on -- to buying to X, of increase dividend. our Given we have repurchased the

to strategic the a to is value shareholders. long-term vision our create Second

Our dedicated. team is

are working parts of day night on and sum initiative. the the We

progress. make to continue We

make value. shareholder to good decision are We a committed long-term that drive

moved We reliable recordable on direction the has and a turnaround in first been time during safe Tyler budget. focus quarter. zero operation. key CEO on area since with becoming The the and A and right completed was

DK worked manhours end As injuries. March, time with of of and X the combined contractors zero million employees lost have

are approach We safety. our in to improve being proactive

drive and of long-term our implementing a and plans top safety are toward that reliability will developing the quartile improvement We goal performance.

Our key provide structure. will additional in improving priority remain on is effort. final this this efficiency on We Rosy our updates focused goal. cost

in To our people we must sure the accomplish make priorities, the we roles. key have right right

for strategic we several success. past made the team future months, to Over position our will addition ourselves have that

as safe Joseph welcoming veteran Please experience, is we record reliable of March, XX to today. welcomed track of years call the well-rounded Joseph and Israel EVP a Operation. industry join me operation. energy Joseph In with driving over improving of in

wealth businesses. He and future joined Patrick brings Reilly EVP Officer. His Commercial with us has background experience and Chief from best-in-class vision align for growth. well experience as of our

also strengthened our SVP, Chavez Refining Tommy joining have over us We brings years experience. Tommy XX Operation. of refining team with as

strategic on and strong team Our positioned is execute our well to plans.

Their employees. of to like also dedication I I their entire thank success. appreciate continued work together. hard team are investor to strong forward a I and our look X,XXX for closing, would and of would like our our over driving to In support. their Board future thank and effort, Directors

on over call Now, our will Joseph, the to color turn will I who operation. provide additional

Joseph Israel

future no the talent I us system Delek the family. our thrilled you, across have competitive for doubt and success. And are well Avigal. to Thank join I'm positioning strong position

going operations additional modified more the in results. performance details allowed and regarding operations reliable a visibility provide us market favorable to and forward. about slightly objective with plans our now first to safe quarter in our the will I conditions strong and format leverage provide Our deliver

Starting with our Tyler refinery.

a executed XX-day successfully mentioned, Avigal turnaround. oil-to-oil team major As the

capture Beyond approximately scope and plan per reliability forward. cost with the of FCC an estimated routine margin the mainly $XXX $X.XX going million. and barrel our DHT consistent yield maintenance at with projects, improvement improvement included around upgrades, Turnaround was

turnaround, in to the per first barrels per per the in expenses approximately total were and was in of was throughput quarter day. Production accelerated barrel the quarter $X.XX approximately XX,XXX operating barrel, maintenance Tyler Due expected including barrel, the $XX.XX $X.XX XX,XXX in margin throughput estimated due the barrels per to and to per $X.XX OpEx second total back the turnaround. the day $X.XX to to normal XX,XXX barrel. is range in is In the to Tyler go range, of per quarter,

approximately barrels in the quarter throughput day. first XX,XXX total Dorado, per El was In

$XX.XX throughput per Estimated XX,XXX barrels day were production operating per was margin and expenses for quarter the is second to XX,XXX range. barrel. barrel, Our the $X.XX per in

throughput XX,XXX Big approximately barrel, quarter margin the quarter for for day. $XX.XX day expenses barrel after The of consistent XX,XXX the plan at per of maintenance total completing estimated maintenance throughput approximately per is work $X.XX per second including barrels In barrels was was with and approximately April. barrel, the in activities. month Spring, were per per $X.XX Production operating

XX,XXX throughput Krotz In day. total approximately barrels was per Springs,

in was barrels day per range. $X.XX XX,XXX throughput maintenance per the to per units. operating our barrel key margin per the and $XX.XX including in production in barrel, reformer and Planned barrel, Our $X.XX XX,XXX expenses quarter second our were is

barrels quarter. quarter day is approximately compared system to barrels XXX,XXX in in range day the per throughput in second estimated the Overall, per XXX,XXX with the XXX,XXX first

to our margin and We follow. capture to compliance as focus performance reliability top we environmental continue and expect safety, priorities, cost and on

conditions, the specifically demand day are products favorable our an be strong is dynamics crude and going Delek, As system. to far as pricing oil refinery Gasoline for and, in across U.S. market inland for to the tight good summer is

over the Rosy for the will variance. call financial I to turn now

Rosy Zuklic

Joseph. you, Thank

X. Slide on Starting

income quarter the of was $X.XX $X.XX per million. operations $XX $XX $XXX $XXX and million. from Cash of first million net income adjusted per For US was Delek share, XXXX, net or had share. Adjusted was flow million or EBITDA

quarter adjusted our of waterfall of quarter was EBITDA The of last in provide the from primarily XXXX. refining. by over On significant improvement first a segment to Slide fourth higher results quarter the from X, we XXXX

positioned Avigal quarter, during capture As and market mentioned, well to favorable we're operated Joseph conditions. and the we

contributed corporate a benefit G&A over primarily costs. due last addition, to quarter, lower In million $XX

For slide your in have a waterfall the backup. we reference, year-over-year provided

X in during to flow. Moving to million operating the The discuss the Slide cash from million quarter. in $XXX $XX operations. cash built cash We reflects strong activities

the during the cash approximately inflow expenditures, the turnaround. refinery In quarter, timing $XXX activities partially approximately capital the Financing debt include is Tyler being [$XX events during Investing $XXX year-end by includes quarter majority events. it million addition, for timing the the call. (ph) million of $XXX million of of primarily two cash paydown for the disclosed with offset for earnings year-end the activities million] fourth associated

estimate. On show compared Slide first our full with quarter we X, year capital expenditures

will heavily first year. of capital We be half XXXX, approximately the weighted $XXX still estimate the at million. For the remain to full to expense year

out Slide Delek Logistics on Delek Net between debt and is X. broken

the $XXX During improved debt quarter, improved net million, consolidated million. US, Delek and approximately Logistics, excluding $XXX Delek

items The second slide XXXX. covers last of the quarter outlook for

million net to D&A provided, million million. million addition between interest $XX operating million; and we the $XX $XX we million; be expect Joseph G&A $XX throughput be and $XX to and $XXX In expect guidance to and expense to expenses be between to between $XX million; million and be $XXX between

the expense, debt of cost we of significant. facilities, refinanced Prior our non-cash fourth financing we XXXX, quarter have was deferred various updated interest guidance include the impact to deferred For when to less financing costs.

Q&A, we Before updates. move on few a to

process Avigal As have we and on progress cost our mentioned, made reduction improvement effort.

$XX to which this million is the is The the improvements realized G&A scheduled second We quarter, expect we completed $X see of in first of of cost year. start in phase During run a quarter, the million phase we savings, half to second rate and basis. this initiative. on G&A the next

cost on our to G&A deep a drive OpEx been has assessment and standard on dive of Part classification. industry

of This we million $X adjustment made This was quarter, costs. an adjustment between these approximately retrospective.

two years of supplemental in our provided We history slides. have

we benchmark to quarter, Krotz for reflect a the the also was during Finally, change. mix. Springs its changed product This retrospective refinery better

of disclosures of supplemental We supplemental detailed in and earnings our history slides two years have release. the in tables the provided

the open now will questions. line for We

Operator

Please [Operator session. this we will Neil At Instructions] which Goldman from will question. Sachs. time, come ahead your We take the will Mehta go with first our begin now question, question-and-answer with

Neil Mehta

congrats that's here than even in the when segment. was to I better you so in where our like Krotz, want looks G&A, adjust in for start captures but on thanks particular, progress on Refining and and good well. at some quarter, expected much It model, Tyler it this off Yeah, the as was

business, anything that And a can about so if you're in of just through? could a strength environment we're now improvements. were bit you flow of in capture refining in QX, the underlying that we seeing where do than tougher And on curious margin little terms think in you talk

Avigal Soreq

thank you and for Hey, with experienced we morning. It's Thanks the Neil. initiatives. Avigal. good the a Yes, question, progress Good support. our for have

all, the team we always is a that is self-reliable we a had think key around have operation extremely that. And focused of First I driver.

that good that, a go to and So around live focus a opportunity me execution focus. allow and give projects was That's few more some turnaround the a for of Please welcome great well. and was success helped to the Joseph. that Joseph it. with us The color small him

Joseph Israel

differentials the octane the the price a our side, sales. structure. HSD capture blended this obviously Yes, We capture and the you, And and low-cost safety the know distillate oil a refineries planned standpoint more domestic our was refineries, Avigal were stayed Tyler Throughput in to Midland efficiently well all for like support four we well and morning, with on good from right the We butane reliability gasoline. favorable thank Neil. with in system fuel for quarter market capture. and good Hey, crude executed including turnaround. OpEx all a mentioned. then sourced our our range, jet under component

all So good for next forward and we are quarter looking one. in the all,

Neil Mehta

Thank you. follow-up. the And welcome, And Joseph. that's

parts You towards was update lot there talked realization, here. path the of and the a sum no about

we you things little bit what ruled different a talk out? on can about and that plan, the where ruled stand the and in you've are So

Avigal Soreq

Hey, Neil, you. thank again,

the I can chime working as on and I he on So well, can finish. extremely He's after listen, that extensively. Mark team is focused and here you very tell in

done are very, progress optimistic want and posted. being in mind We We of very our great quick, do to want I'm understand but satisfied very, right. not you anything, continue that well, that. it to make we we'll And we all keep time. those which type meaningful get is progress, The to progress, we more with very not something take And than make it. very is right. transactions about

I say to don't know, you Mark, do want anything?

Mark Hobbs

it. No, us I work evaluating. that see on out We we're articulated. well was opportunities to Neil, we think continue there that for

on pursue accretive to on focused have thing call, said fourth flexibility. I the of is businesses growth our that our all we're As and quarter positioning financial

a So that be and everything focus we to anything continues on do.

Neil Mehta

Mark. Is opportunity still that the market that, on see undervaluing? to assets? value you follow-up unlock where it fair the Just best believe what the logistics to Is quick that a say area is is you around

Mark Hobbs

we Yeah, have feel we we're trades like you that's just Neil. fair obviously not will, value statement, benchmark through look right sort now, day. if of I a a I we're value every marker, think sort how adequate And mean, to there, the our structured that business. given of out getting a midstream

Neil Mehta

team. Thanks,

Operator

will from question UBS. Please next Gupta come our with go question. with your Manav ahead And

Manav Gupta

to be much point Hey, years guys. weaker changed to understand us last asset at here. Krotz to than in of this the a X.X assets what Help competitive assets. bit the it one a has one stronger time. It's make A clearly be? follow-up of little what more your used or of X this of used

Avigal Soreq

do Yeah, take Joseph, it? you to absolutely. want

Joseph Israel

the I'll a was there. as certified is plant. Talking about story It reliability, And VPP Krotz again, right is special Yes, unique place. very think just start. I a

we XQ, seen which reflected in yield. have our great So a was reliability,

In Springs, reformer Krotz addition, efficient lot catalyst components. providing very make fuel and new that Butane gasoline helps we yields blending crude our a have we unit. and really of small jet and is the a our in at

and recovering, jet So, do is Spring when Krotz well. is strong going to

us conditions So a favorable market give results. good great team,

Avigal Soreq

pricing a refinery improvement to the of ago. see over few nice the years. -- without last undermine good, Alky to return be And investment we and was we used Alky. we the Krotz have our Alky did to years cannot

Manav Gupta

Makes guys. A quick here. sense, follow-up

capture you confidence you is You us executed a mentioned have of understand like competitive? and will a little it turnaround, it more make what more you Help the at improvements XQ confidence made -- at Tyler which bit what the at this, some higher of improve gives giving Tyler looks capture. was during and that but

Joseph Israel

you, Thank have addressing remarks, we Like upgrades. in projects prepared Manav. reliability beyond said and our risk, some just done we the

feed the revamp a is one which to quality tower, significant vacuum most of the think our the I helps FCC.

So the better much conversion, with better better performing FCC is yields.

DHT liquid much In us gives and the a the swell. better addition, replaced recovery better we in that catalyst

a this is So snapshot. just story XQ we think

We side. $X.XX future. to the on -- are I probably in benefits here personally, is capture for And think those the conservative

Manav Gupta

guys. but to want one Perfect, there, it I'll do say I thing. leave

We you report And consistency. has we're more are lot this a is the what seeing the earnings feedback a getting exactly from There's way shareholders wanted. I improved lot. that they think is

who to would and more like easier involved are a reporting, you. lot consistent all those So them. I making in to understand congratulate Thank it

Avigal Soreq

point Thank you. Manav, taken.

Operator

our from And your next question. John will go J.P. with Morgan. question come with Royall ahead Please

John Royall

Hi, question. the to echo my I'd Manav's taking good on reporting. Thanks morning. like for also comments

get much through easier been it's earnings think to I on days.

assume big I quarter on and it of to So a my specifically buyback but is any do in flow a the XQ with market had cash on being allocation out perspective, despite turnaround, from color that. the first question capital

And million that's you a there if we Is still And said number? XQ-to-date is going there? then you just pace was year. think something the $XXX that for could pace on And as maybe some of comment I a million for that if Should had to $XX million robust. full good pretty forward? catch-up good the think $XX

Avigal Soreq

Obviously, on the sight quarters are or Obviously, allocation. for I bit row look Yeah. cannot from capital a now. increasing dividend fact we Thank we you, that question. lose John, for take in the will three a our four broader

the as cycle, we that number can much that's the So continue so through one. dividend are through to point see that cycle, we we as going committed and

to tier on number this Tyler us. us as to and around and XX competitive obviously as a be. shareholder the our there, are And there investors, long wanted good clearing we on see that profile buyback, ourselves to give our right? probably any we is major the sure term you we the company, risk be short turnaround a XX% Point are the We the we make and which to first You last months, can want pretty want term. -- or are two, we taking where from behind can risk a to year to with return very both on know, return significant

we that, if flex as buyback operation, going not using guidance we actively today million. change say, we I'm we're looking are are have I'm when a to But for the do gave can say to we $XX million the on $XXX tool on to still to and a that flex, solid I the going sight going it's it. and a margin

keep that's So we And at. changes, something obviously, if something back. are come looking we'll

John Royall

as And Avigal. little detail year on maybe of the the million so reduction the $XX captured you program cost just this key a $XX and million to million general? of $XX program, Thanks, of then, captured more this And in maybe the you've expect are on a year? what Great. what the far portion sources

Avigal Soreq

fine. to comment our let Reuven, Yeah, on absolutely, CFO, that, I will John. if it's

Reuven Spiegel

Avigal. Thank you,

the obviously million That on million run quarter, the between was to First G&A. in guidance first to we of fourth $XX $XX on and run and for that a of that that to number million $X around savings fourth year. late we 'XX. the OpEx initiatives and first the will $XX XX% for in quarter have $XX XX% QX/QX million between million are the The gave quarter, year million in impact we the early our materialized of is million $XXX quarter rate $XX took this in based all, divided rate

additional are year. goes throughout -- I program the the There mean

in quarter the going to We in quarter. fourth have the we're additional second and implement segments that

around effort initial are them IT are G&A them of of was some related, structure. org and not. Some The

focused and in the operation. quarter, progress it second more will the we third As be on

John Royall

you. Thank

Operator

come And our next go question Leggate will America. of ahead from Please with Doug with Bank question. your

Doug Leggate

taking for my Thank you. Thanks question.

Let It's Joe. back my Joe. see to me nice you add welcome to

Joseph Israel

you. Thank

Doug Leggate

one options the but balance question extent are this do of share that if as wonder terms midstream in mark, all, of problem, to again. soon -- playing the -- I review? if Avigal, can just the the that as out To extent of point at the could you is you the I how are sheet parts of you question sum of hit, range the the you obviously, considering as see what can, your first

Avigal Soreq

Yeah.

DKL. not much happy. a very question, both I'm going too give that and to accretive that it's DK Doug, line going So, color is you're we great that but that. to going going be sight All have sure I'm be I'm say to very a is about And to to of

Doug Leggate

part the or Okay. And is of discussion as that well not? retail,

Avigal Soreq

the first to to meaningful And what priorities. have needle being what are shareholders. we meaningful is right? we how with most priority sure most, as want we priority. do to tackle we value the is can that as we to the the work make moved And that's So, here So as first possibly creating

Doug Leggate

Understood.

one this when the Just on to Timing, would your last you market expect to able to reveal one plan? be topic.

Avigal Soreq

I aggressive want you badly badly you, more are. I'm So, and -- more than than

on So, this plain But a the requires work of some the we simple It are detail. is equation. same not and planning vanilla. side and

So, and later. sooner in we same want we the are it camp, than

optimistic. I'm So,

Doug Leggate

I I everyone follow-up We through it's Rosy, question. guess, We with to to a walk will for is think interest. already hear but would watch good it for maybe tried this. My housekeeping with Reuven, be

not Your release, break cash the don't out, working was move. in pretty the flow capital you at obviously strong, least but

more was working I the working in the is of question So this can the guess, in flow benefit, on the of reverse of something So, it flow, will the capital. cash the -- underlying one-time what a words, other an -- underlying is And importantly, nature I underlying the capital to is or more is the improvement? we the we're In look is understand what future? quarter? trying guess cash much to how

Reuven Spiegel

All right.

So, you the for question. thank

be I issue agreement had come And was the working flow reconciled is did the that, supposed quarter quarter in. fourth impacted Citi number and, that Tyler turnaround timing the reported the negative intermediation cash first in as taken that is we that the capital Other quarter the think in itself to expenditure, we quarter. the the the the one that which with January, expected. on million they number, call, of with think $XXX what was and that to the because fourth are probably capital in remember side, I a come mentioned than higher event in, was the and number on should out first

Doug Leggate

And below Reuven? the operating line,

Rosy Zuklic

difference up in activities, $XXX million. The financing right? ends the

Reuven Spiegel

Yeah.

Rosy Zuklic

that Yeah, full makes up million. the $XXX

Reuven Spiegel

Right.

Rosy Zuklic

Yeah.

Doug Leggate

Got it.

Okay. Thank you so much.

Reuven Spiegel

Appreciate you. thank it. Yeah,

Operator

Tudor, And our Please with with question Blair Matthew will ahead go question. next Pickering, come from Holt. your

Matthew Blair

talk Thanks it drivers maintenance are QX, are Hey, that environment something question. the in you cracks the around the good April at new highs, in capitalize that a on there? spring supporting Joseph, you five-year that morning. margin about take roughly southwest like or other for bit Could little five-year looks you or taking whereas most is below. And regions my the still the are averages does picture out can big strong southwest? of in even

Avigal Soreq

on micro the the our the the demand solid for results. thanks racks micro, and our world from inland about between optimistic the see strong our a Yeah, what of in be. robust, very and the the as we We on a macro discussion this strong looks netbacks is demand in and that There are see and solid and side. we different Actually, side and we the question. could see is pull

Joseph Israel

the of And lot right, the if market, is businesses. can country days. in a I this add, probably our these And you're Yeah. fortunately, strongest is the southwest where

we not number, [indiscernible] it's see Iraq coming So and Gulf to versus refining, our definitely Spring the Big can Coast, through that, and through but you the profitability. the it capture back in

insulated tight dynamics summer. are standpoint, to As a our I'll inventory within crystal system, trends are mean far in still niche to look, ball say Spring, Big trends. as and gasoline about well economic the have future from predict don't think are going we thing second the great the right? fundamentals specifically is quarter I the but Global markets. we concern, we But a favorable our

strong We demand uplift marketing April, seen into have and going the location reflect advantage. really our

and capabilities the pricing, leverage to advantage the as quarter. crude continue asphalt We capabilities we second octane now move to our

Matthew Blair

Okay.

retail Sounds a you it good. far so number that's have side, like on what rough looking volumes like X.X% were the And QX? same-store in on looks in Do your down then, QX.

Avigal Soreq

other going to higher. not side, to are QX, but are say, going we forecast give we was the So, a for merchandise on

So good. is all in doing all, retail

Matthew Blair

Okay. Thank much. you very

Operator

our And ahead come Paul Cheng will go Please from your question. question Scotiabank. with with next

Paul Cheng

guys. Hey, morning. Good

Rosy Zuklic

Good morning.

Paul Cheng

is [Indiscernible] understand and hedge report you And hopefully, about Is there, a If side maybe real simple that like it's is is One, please. you real then report that's is [real] one to So you supply, -- loss a on million. $XX you the a trades contributed just on the year that it's what just accounting, and other for gain loss barrel? actually of a of market in just questions, loss, is the the trying $XXX it have Reuven. loss? Two last in first it? million. loss how physical the the of (ph) loss physical whether the two it's Trading lost quarter, side on sort or or it a

and be And is maybe it using financial three potential question metrics not, it if is how the next is for years you in that Refining, acquisition when over would if M&A even important important? type Thank Or at Logistics Avigal second you. The of for you're is strategy looking your targets? Retail? what

Avigal Soreq

Yeah.

with your to with and the we'll tactics. question, the then talk Paul, So -- start we'll will go permission, strategic I

be to going right? seems it obviously disciplined, very we're to it is tool investors. mean But be successfully M&A, going that So, past sells M&A to And accretive when in Delek and for if very I only do good. the we're a disciplined,

synergetic period, just what's us. story. to sense, not We're to That's M&A the going and going value to we to can going to drive are do check drive end strategic, box. shareholder, makes do it of We it when

which refining accretive the retail, it's side, is XXx. more versus on Obviously,

side it's we're do M&A retail on probably going not So accretive. the to not because

but looking that's accretive make and shy not short So to be find term, that makes are the about we sense. were not in if something past, but and long we'll strategic on needs term side, the about were on it. again, obviously in and the sense we shy will the it We that

split between don't the the refining, is different Around we but of I in in the that. refining way mainly those all between have there front weird It's nothing and -- it's in the split -- Paul, technicalities me, assets.

So I can ask color. Rosy to of look to into that have with in front you it and don't come me. more back I

Paul Cheng

Can on go you any or that that refining, I ask is not if be region? you acquisition, that focusing particular interested on do are into a will there the you really region

Avigal Soreq

our So any again, it's are specific, assets add we we need and have be -- to long have, to not to sense can the to not price. going for to We're be the I something need term to think accretive going but rules going are that for bring accretive, to rush to and make that's going ourselves, make share value and going be we Paul. we

up, something rush, So right. going to but is no come there do it is if we'll

Paul Cheng

Okay. Thank you.

Avigal Soreq

Thank bet. You you.

Reuven Spiegel

Thank you, Paul.

Operator

next with your question. go Please Cowen. our come Jason with Gabelman question will from And ahead

Jason Gabelman

morning. questions. Thanks my taking Good for

Avigal Soreq

Good morning.

Jason Gabelman

previously a of on Is and Thanks. want do X:X that ratio to pay right to an debt? had in paid of capital you between allocation. lot kind debt place back a forward, do going the paydown. different appropriate And you parent down Does have in of buybacks want balance discussed kind capital plan XQ. sheet down sheet allocation, that I to excluding go And MLT you allocation balance debt, additional the debt or first a or forward? topic get you of the moving and split the

Avigal Soreq

Yeah.

So continue. for will thank and start Reuven you question. will I the

on So, debt. on have is the the debt, have $XXX DK sheet completely our you side, best with of Most of the DKL it. against among only as of a million and well level income our we side different peers probably balance known,

out lose game, debt. we ball high two third-party obviously, different of it's cannot we very And income. sight level So have of and

So that's behind philosophy the it.

that balanced are we the are in sticking buyback. a in reducing not approach at especially and between market of the We interest we good. are and we have that be to four environment that So said higher the we shy past a last it, continues will on and demonstrated doing months buyback to we debt

in tool past. future the will like it the used we use We in -- past that in the

can maybe to? Reuven, [indiscernible] if you want you

Reuven Spiegel

Yeah.

As we you had to of agreement quarter, debt a fourth the our recall, timing. increase the as during result intermediation

level the So we had buyback $XXX $XX down was the additional that, from a one we strong Once elevated quarter, the did two we of a we bought at And the program, very million. first that million the and going is realize plan, into support to are of Tyler range. as to we And we capital can the accomplish back the One turnaround. quarter, started $XX pay quarter, million other debt. priorities. and result expenditure of first it's which debt the original which us put mainly

Jason Gabelman

on just that. And clarifying it. one question Got

XQ between way, or high? debt buybacks do the paydown does forward, going and you balanced So expect given to just so it other swing was back debt be paydown,

Avigal Soreq

Yeah.

change versus So, change that what doesn't change, do. philosophy. we we mean the if But the didn't we'll it market not condition

As have we around said, being first the and a and it. it, we'll a keep around tier tier to philosophy return first is we great shareholder, are to

a as priority. buyback interest is. a rate taking are is Obviously, we it So, where

both So to effective we as we're as possibly can. do going

Jason Gabelman

that? doesn't than seem Understood. like to expected lower drove expenses. What lot XQ. the repeat came you It corporate my in in a follow-up is Okay. in that Those And expect on second quarter.

quarter. So Thanks. in the what variance just was wondering first the

Avigal Soreq

to that? take you do Reuven, want Yeah.

Reuven Spiegel

you. thank Yeah,

it's three a composition So, actually of numbers.

line item, efforts, is cost from million OpEx, which industry line we every review G&A our As $X reduction of to part and our we peers. practices and with in reclassified

year with which last the for that will the were the component, the the which In about directly related of efficiency fourth there the timing And remainder the is G&A impact that, to million that taken early first addition the steps cost to in in is million quarter, million. expense. quarter, have $X $X we late $XX of

Jason Gabelman

Great. Thanks.

Avigal Soreq

Thank you.

Operator

follow-up next our question go Please Cheng from Scotiabank. your a with And with Paul ahead be follow-up. will

Paul Cheng

have to Real doing similar that up of minority looking peers have considered quick. actually unitholder? out start when public's Avigal, it roll Hey, guys. or done logistics, other at ever off that, spin your to you're engines, what you things you take that two some guys that

And RIN any hedging you a in secondly, number? those about your Whether share can [indiscernible] is the meaningful you going that also do number what are the what And quarter? talk you and that is can the have forward? expense strategy

Avigal Soreq

for Yeah. follow-up. Thanks, Paul, the

back what what come that Around again asset, one. they understand we why said when everyone we we and I a we did back meaningful by going accretive with more peers good we to we share. that other have buying we we vehicle. -- the did one start Let's something much understand forward way believe that. have for -- do, have that to we'll you believe

and did others seen as that have We as successful not was they it expected.

have both DKL. we more have from meaningful to for way we So, and we leverage it, and believe DK a do a going -- be to to better that's accretive

new that around very didn't a quarter, from Regarding the this But information that. pleased guidance information you historically all are RIN, special got. the we provide we or I'm sure

right direction clarity. very moving are fast we lot of a the to So on give

Paul Cheng

right. you. All Thank

Avigal Soreq

You question. you for Thank bet. the

Operator

turn that any the for concludes like to Soreq remarks. over to question-and-answer our session. back I'd And conference Avigal closing

Avigal Soreq

Yeah.

for quarter executing. So a of Board and great the thank the Director great our and mainly investor, you, employees

Appreciate to and committed to safe return is reliable shareholders, priority time operations for it. are have first you Thank and so. do a have effort. and your great to we Our and to

Operator

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

may now your disconnect lines. You

Delek US (DK) 8 May 232023 Q1 Earnings call transcript