DINO - Earnings call transcript Q3 2024

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Operator

Welcome to HF Sinclair Corporation's Third Quarter 2024 Conference Call and Webcast. Hosting the call today is Tim Go, Chief Executive Officer of HF Sinclair. He is joined by Atanas Atanasov, Chief Financial Officer; Steve Ledbetter, VP of Commercial; Valerie Pompa, EVP of Operations; and Matt Joyce, SVP of Lubricants and Specialties. [Operator Instructions] Please note that this conference is being recorded. It is now my pleasure to turn the floor over to Craig Biery, Vice President, Investor Relations. begin. may you Craig,

Craig Biery

ending Good Quarter and morning, XXXX release the a Novi. (sic) Sinclair we to Corporation's press quarter for results Third Earnings announcing XX, morning, you, XXXX welcome XXXX. everyone, HF issued September Thank Call. This

would of the like may release, earnings hfsinclair.com. at copy our on them website a you press you If find

include judgments forward-looking summary, Before could from expectations, release in differ any time today's statement These earnings discussion may today's call we note harbor including statements regarding the the transcript. intended see the covered no reconciliations And safe made for may any disclosure our to proceed are factors on be measures. federal measures. to the with or over harbor also under the remarks, Please time-sensitive accurate non-GAAP laws. There or management are noted call that, statements the Tim. that those of Also, expectations, release. turn are results press of I'll many statements. call provisions please In webcast with predictions to security note be of cause longer GAAP replay The press to financial of rereading safe please in provided filings. information SEC at

Timothy Go

Good morning, everyone, and happy Halloween.

with especially segments. weakened. specialty business our diversified strong consistent and of earnings and from refining and We as operational marketing, businesses the by and highlight global margins performance contributions our lubricants segments financial pleased third quarter value our our in are especially in portfolio, all the and of These midstream differentiated our

earnings businesses and order and on operations. integrate safe while to and competitive strategy advantage We strengthen continue execute our our optimize our to portfolio reliable improving focusing of in power the to

today During the returns. $XXX demonstrating commitment our shareholders returned continued we in a to and million shareholder third quarterly to $X.XX announced dividend, cash quarter,

segment our turning cover it highlights to Atanas. me before let Now over

by continued improved and progress lowering continue completing as Parker our we per on utilization XXXX, of on our towards streak refinery the our target the In achieving and and our management throughput near-term on made of reliability at expenses, refining, third we've quarter cost time improving we'll of on operating we $X.XX for turnaround barrel. Year-to-date, drive focus to budget.

lowest record efforts of resulted gallon. our across a XXXX, jet in production for optimization production. Our the record per quarterly a In Woods our of quarterly achieved renewals, third fleet. the for for refinery expenses renewable And for our we sales premium operating diesel quarterly set quarter volumes a set highest record Cross and

of resulted optimization team's and continued positive reliability Our RINs another in despite headwinds prices. LCFS and credit efforts quarter weak adjusted from EBITDA

third XXXX, addition sites XX with new feedstock count business our reduce basis, one, net we renewable things year-to-date added of quarter of Our expenses. In and we branded to the store fully CI our And portfolio. strategy two, the we operating remains increase the mix; inventories; our for can on low level lower diesel three, the of in marketing, control. continued a sites. grow the high-cost net of our centered to: branded have on a to XX

the growth executing quarter third strategies reflects acquisition. strong are Our Sinclair the results since we

oil growth our continue reported over to signed XXX another & the In we we XX% Lubricants And contracts for branded FIFO quarter falling Specialties, to new and to sites. months. stores have despite XX from prices. forward, pipeline to growth continue we branded to of headwinds wholesale Looking next now expand convert target X strong annual results the

our Lubricants optimizing business. one, mix; of: two, to initiatives furthering three, and operational strategic integration our efforts continue sales efficiency, our oil Our base strengthen

third-party have integration to chain our by drive products performance as and delivered digital another tools, developed strength count continue Since million business, our over the and share to introduced the shares serve Southwest. In transportation third high-grading strong to Sinclair in and of which our and $X.X cash represents our billion shares, grow XX% we the and offerings XXXX, providing in in reduced returned for issued by growth visibility the third record have set to Rockies HEP shareholders we new efforts pipeline portfolio, share In XXXX, transactions. we crude quarter affiliate systems we volumes, we and of for growing shareholders returned to product end-use by this addition Year-to-date, supply the through structures work XX better have our supported to also and organically the business have the segment. have we markets. In Midstream million we quarter, March acquisition repurchases our Sinclair finished in $XXX quarter our dividends. manufacturing our cost of in over to both

strategy on September outstanding million we As strong and maintaining a ratio of payout long-term XX, share and credit our committed to investment-grade approximately XXXX, balance our return rating. and $XXX we have long-term sheet cash authorization, while remain repurchase

As I that quarterly on also Board payable record November XXXX. XX, of per a X, Directors declared $X.XX holders dividend we on regular our of mentioned share, December earlier, announced of XXXX, to

me us we forward, reliable Atanas. cyclical cash let shareholders. our continued our to over and turn strong generate business believe committed safe improving to diversified to the Looking and portfolio remain and to flows attractive operations, our call that, we With returns positions through

Atanas Atanasov

Tim, and morning, you, Thank everyone. good

million. Let's by per financial million to net shareholders reflect attributable begin Today, $XX net special Sinclair reported items by of quarter share. These $X.XX collectively loss highlights. negative HF Sinclair's reviewing results that or diluted HF income third $XXX we decreased

for industry net the or refined higher gross quarter offset the EBITDA third driven adjusted day $XX for these diluted in oil quarter both This turnaround segment, third Mid-Con per regions compared of quarter the high compared and activities refining the to $X.XX billion EBITDA XXX,XXX to compared XXXX. by as billion This averaged or per product was of a for compared our were adjusted supply a third West barrels the primarily segment, global and of was share volumes. Crude quarter barrels despite per sales quarter in EBITDA of partially at third reliability This income refinery was increased $XXX XXXX. diluted million, of same share $X sales $XXX third third margins the across Excluding XXXX. In to refineries million. primarily charge quarter million million to $X.X our lower indicator income quarter to net XXXX. In XXXX. in in adjusted was for XXX,XXX adjusted quarter $X.XX third result of lower the primarily third improved the which day $X the our $XX Adjusted decreased to $XXX third increase $X margins decrease quarter in compared result the million the of period items, was and for the third of was optimization by volumes in XXXX. million the reported of we to million quarter quarter compared adjusted feedstock of Renewables third due per decrease for

volumes were million quarter gallons compared third XX sales of the third gallons for million for quarter Total as the XXXX. to XX

driven million XXXX. of for $XX XXXX. reported compared This was by in Our of primarily the higher $XX quarter to of quarter EBITDA third the quarter margins the for third million third Marketing increase segment

oil driven underlying Specialties in $XX $XXX million. quarter compared in million partially This inventory the FIFO $XX a primarily of in third integration of reported to FIFO third offset the for million mix EBITDA consumption of charge of and Our $XX improvements quarter Lubricants EBITDA of base 'XX 'XX quarter of the the was decrease in third by sales by quarter from $XX sales increased of high-priced benefit business, million quarter to a third volumes, the and the for third optimization feedstock XXXX. including million segment compared

higher third primarily segment from Sinclair in EBITDA third the which the of third HF provided quarter and XXXX. Net cash volumes $XX the $XXX driven the for totaled million $XXX turnaround year. $XXX of includes tariffs quarter. in expenditures This operations period last capital in Midstream spend to increase adjusted Our reported by million, by quarter. same revenues the higher totaled million compared of quarter of increased million million in $XXX was

approximately undrawn XX, $X.XX As of $XXX HB a credit balance and the facility of liquidity $X.X total which September our unsecured on HF stood credit facility. at billion billion, availability cash XXXX, $X.XX million billion, includes Sinclair's

we net debt-to-cap XX, a billion XX% of of September ratio have of $X.X outstanding As debt and of ratio with debt-to-cap XX%. a

catalysts. go With million we through approximately and guidance XXXX, respect capital, full Let's items. some to spending year spend capital still turnarounds in including sustaining to for $XXX expect

growth expect we million spend our business to addition, in investments capital segments. $XX In across

take some expect our the refinery. and between For run from crude per audience. planned our Dorado the refining fourth barrels to of at in quarter ready day XXXX, XXX,XXX now We're to the El of segment, which reflects we oil turnaround questions XXX,XXX

Operator

[Operator Instructions]

is Piper Our Ryan Todd from with coming first question Sandler.

Ryan Todd

Maybe quarter. in question, a terms of cash of Congrats first kind allocation. all, the on of

sheet. balance great a got You've

of attractive the You've in level maintained shareholder an quarter. returns

As managing we and how forward, debt? returns to how the possibility versus think we balance if trade-offs about margins stay increasing approach the sheet of debt going expect the you should shareholder the manage you between net weak, or

Timothy Go

Yes. Ryan, this is Tim.

ask right Let to jump Atanas me in.

Atanas Atanasov

doing shareholders. maintain to weakness. We and basis, would at XXX% thank return as to net in XX-month [indiscernible] our environment, history I sheet our That shareholders. net we're cash to strong you very a weakened well our return, XX% rating, able this shareholders. We're maintain to coupled XX% We Brian, under differentiator owing cash conservative look as grade our key we're to were debt you investment can competitive the crack believe and for year is to able buybacks leverage us dividend, balance our committed what our if return a continued total -- question. X return still sheet we're maintain with with of prudently continue balance our to point we're and your we believe at which a a year-to-date priorities. certainly And at Xx. a of cash for in at trailing to on

Timothy Go

is our we this this be remember, Tim. that where flow having our Yes. of the in one to HEP in jump bought cash year, And times we was going I'll for cash reasons And was last portfolio for within knew that Ryan, business and the flow. free just say, like better.

very it. so happy did for that better we're And positioned we're we and

Ryan Todd

on efforts And working a I still talk I can reliability, are a operations. made further throughput maybe are on reliability well in terms as areas refining to year-end. expect about should we quarter, we that trend focused mean forward? then the you continued on? a in of what's still the improvements strong what What very maybe operational question strong improve just you've that mean, Great. of you're was look

Timothy Go

for Thanks question. Ryan. the Yes,

improving and to it that our fruits years, the several been starting As focusing to reliability ship. our core has of is you last on the know, for here good priority see labor

comment. to Valerie ask So me let

Valerie Pompa

Yes.

we've focused our We're remember, each we've the last turnarounds heavy improvements. making had about talked strategy years, heavy So turnaround those before. few -- and on of

reliability And with on turnaround turnarounds this so working. turnaround. getting in we've addressing the PARCO it's capital, very as completed. every year right It our the performance putting the We're opportunities. right predictable scope, is and we're demonstrated and We're those

working what's operating maintenance We're at efficiency and equipment -- our costs ground the also drive floor, strive, to lowering improvements technology-driven technology a our of to our also We doing dividends working of our that's and -- efficiency in improvements. terms in lot count. produce by What's is operations

we've are starting dividends. talk So to about produce talking been continue all the and to strategies of now just about

Timothy Go

also $X.XX only items in barrel. And not lower a quarter, in bit say, Ryan, even a maintenance up was our up throughput, than is due in it showing showing up to showing OpEx performance, per though And I was OpEx we little mostly that turnaround barrel we're this the that higher just we it's had. Year-to-date, it's but would

[Audio Gap]

Manav Gupta

growing product offset the Built those understand regions business. are you pipelines, allow reason us your into you that focused your so on real pipelines, those Help to marketing that --

Timothy Go

for the Manav. question, Thanks Yes.

value Steve, that when you the with its our starting a priority. As And Sinclair of you the And them we and to was and marketing into family, little don't why bit that. legs. the merged find again, about doing benefit brought see core the more talk business really growing know, we're

Steven Ledbetter

Yes. Sure.

there SPXXXXXXXX comments, out the , and advantages believe the of Tim's Following markets are opportunity with that undervalued exploit think logistical assets, how we serve a midstream there's Steve. piece in really value here on looking we to think that connected that our producing of final is significant increase branded through to to We this I think we're in we we our and is is terms that. And brand being it. get put.

Dino. a to there's So bit of quite demand gives the that us resiliency honest, interest brand in to some for through cycle. put And be

what getting of so the on as doing should XX and with an that so will we we Tim value X in have ground of that the out terms months. And seen coupled value we've to additional XXX more And enterprise. size mentioned far between be be earlier, an we're believe our the signed in brand, what increased of overall growth,

Timothy Go

on barrels business. noticed, is than bulk the that really that iceberg business, we're in the it, And happening barrel $XX million with million in the of comes higher as out what at branded to mid-cycle we much every you we're actually bulk our have associated started the the that and run what's a sell. that's of refining that of, place, Manav, for price. And of million at to rate tip in marketing it to the EBITDA with is because much of which segment is you're seeing uplift marginal a $XX marketing able those acquisition. really But $XX the lower barrel is only call we

see the too. so wholesale barrels is barrels segment netback also the because in And the it's what on branded refining uplifting just these of you value a really foot of reported the marketing piece

Manav Gupta

improved second EBITDA. adjust a business, about again, It's, When rate have it's lubes. get impact. My for fee to -- trying run on a quarter. time And $XXX pretty this the is to of improve question million strong and continued we of to here you

you -- undertaken volatile you get what is us to to EBITDA allowing doing, about $XXX of this measures despite in rate help we projects the understand that of so So some to run underlying which undertaken business. million of the is commodity have have or

Timothy Go

what's do on his really to continues job. great integration we want a poster Yes. I and business just lubes have optimization. can talk Thanks, when think really child team Manav. and It's quarter-over-quarter. on? The you to going perform Matt about what Matt, focus And our of done we

Neil Mehta

since base means we Matt But to year. the expensive in focus that inventories through develop FIFO with it, really one that our core our applications more a on we headwinds, on Manav, as quarters we've the can. which, visibility Sure. use The balance are planning place out case, after was about. older, secret of of the going that. the And to opportunities our remains sauce oils in in operational using. What past nice the the part job course, that's this here. held these done done that a lot to throughout of we've that team cost. our healthy. Actually, quarter, top business talked big housekeeping, of to And of has of replacement value job management. And of feedstock tremendous course, versus a And we've underlying gone some FIFO past but it absent very regional highest quarters and offerings us it out allowing efficiencies tend we and those that of getting a some any transportation of digital consume is, I better saw we're had we've businesses it's referred many of growth that pricing years. a get we're that new feed strongest of driven a over and in really tools

which quarter And source called new provide one tire past and rubber significant of we're this portfolio, a specialties will introduced that other extending cooling treated provide that's improvement XXXX. for under digital proud a in just a fluid American we've start technology Circasol-XXXX. test in early use ingredient the processing dielectric to in is and intended one of distillate centers market construction sales aromatic modest technology really much going that is industry. And some called industry really we in is our data for new That immersion then space. And now, tire see needed the the INNOVATE, North the extracts in we're introduced TDAE, mining right and

and see we better those our used businesses our and our serve. again, where and So grow and to new business looking different molecules can be technologies areas improve for markets to

Timothy Go

a our business But hear, our with through base lubes of -- that's integration in lot the So terms we've driving North lot good seeing. about a our driving the finished business. seeing of crack resiliency really you Matt's talking in is in in what of about Manav, oil in oil America, last as cycle. finished And can you're of a talked base good And double lubes really really growth. America several the numbers in that's lot years, and you're particular, North growth the business, digits what's for the

Operator

Our next Paul Scotiabank. question comes from with Cheng

Paul Cheng

guys to I or mean, Tim, the any core -- that may the long first like in past, this business? curious you in in it be you Can gained particular your have business run? be about the the there reason this one, what part have portfolio think off that haul, Is you mentioned the The into But So higher portfolio. core that may better valuation yes, value haul, long much may it a that long little as business someone's lubricant. in there, back you just But than, with not you everything, think that after portfolio go I any such maybe in not be you be to of And expertise be don't that's tax other added? questions? pay why is core I part I'm want first that bit the the really the could in in of and is a multiple. there be question. I X improvement and your your reason cannot

Timothy Go

made business. was credit value me the good complaint say, our And never our that only And with lubes business. we unhappy let of we Paul. question, lubes a for getting we've it's weren't been No, that just real the

maximize business shareholder conversations the we past that portfolio. to to had about proper wasn't is That in in getting someone our was better is premise lubes when value the lubes under the so else's -- the business in And portfolio. valuation

see several lubes margins that last more the of weakening. business quarters attention in the valuation you with now appreciation think can our and I over refining portfolio lately especially the has been and the getting

I seeing think appreciation you're a that our more for portfolio. lot in business

-- to business term. can the I your question see as yes, so a is, So core it answer we long

that we to We while. appreciate a for main as our and business, is grow -- grow as it going then it That's the and value yes, the as And focus shareholders our to to it. continue of what be. keep stock can continue the

Paul Cheng

and in is a that -- any peers reduction that can areas programs, cost kind initiative of there continue that basis. next to some just this question of specifically is your that that then your million second major $XXX your The Is is peers that focusing have of you guys number obviously the number on to know fares? down going us? efforts. there saving over announced calls share cost for that quantify work you that you you drive your area any Could announced morning several one years I a you're that of

Timothy Go

Obviously, her about going worried down a but is Yes, go is those bit I've there. costs. work to to versus per downturn, and finished continuing refining is down what OpEx I'll more -- yet she's doing barrel about let Valerie since be question. not is a year that ago, Paul, a little talk everyone in we good as into already our mentioned costs.

Valerie Pompa

and expenses operating continuing good our push towards through to staff the we And we maintenance. activities are go and get OpEx our and on activities. reliable. as maintenance that portion Again, support of our focused maintenance more those Yes. A

West across programs those we is where good and those have see in come expect the books. continue rest We OpEx, fleet. see We're to to going see starting Those off go costs are producing that to of we the faster. sites that, very the our mature more to

not In not will terms an to exact of dollar -- provide going amount, we we're that.

basis. goal have $XXX ] but first on a We our [ internal goals, is consistent

Timothy Go

lubes a things. point talked of our can That's point of couple mean we're working business part Yes. optimization out couple priority. out in the I of a other Paul. just just that like things Matt But reduce just about. integration hard And that's to refining, I'll and costs. I

If you versus $XX OpEx, look under this last think they're at year I writing year. their million

been I think and by the on bottom the hitting that efforts that's It's not have by going accident. line.

of our this if think the by per G&A, efforts Midstream's same OpEx we've optimization the going got the on. last this course, integration we to about running all then, we we're And that efforts got quarter million thing integration as year going not the look that and I demonstrate. below you ran that's have with that with $XX accident, able again, on been we've associated at barrel year. renewables what and that's lowest

we're not line reduce flagship we're a trying program. But there So doing show in the instead, to bottom what with to going we're costs. out numbers

Operator

Luggett Research. with Our Wolf next question comes from Doug

Douglas Leggate

this Tim, in of sure there's market who some credit earlier slightly on capacity seen in it's your TMX realized terms Synovus changes, market quite refining to with of but obviously, probably I'm not a wants hit. And bringing lot -- seeing the changes back of is your but one, going with availability. whiting with obviously, take running at biggest some time

So changes. should assumption you you I'm you wonder think is quarters how on to margin Are the reasonable a about I us baseline? Slide that deck. mid-cycle this risking we $XX of ago think gave some margin at million guess, that X your looking these your of gross the in latest I confident that in still reset how light assumption? would risk about just Or

Timothy Go

Yes, numbers. our you. in Doug, confident we're to from Yes, hear good mid-cycle

that So ups we But there's remember, you're right going the we're pointing that change the And out. of of be now, business cycle. know cycle. our in mid-cycle, that's doesn't And view the to as strengthening downs a below particular. that let in is numbers. our going refining do on. about little a confident is lot Steve business still cover? to the want bottom we're you mid-cycle I'll bit a our talk we've But Steve, line done There in in that. and

Steven Ledbetter

the question. for it's Sure. Thanks Doug, Steve.

think, mentioned specifically. X things You to relates supply. I One,

about that talk So a little bit. I'll

finishing the seasonal it into and in reasons. And and of coming Obviously, the we're believe around winter in think we when XXXX, we capacity and we'll refineries demand obvious and then larger we new heading driving to XXX,XXX a be we QX, terms net couple tune But maintenance. a will coming closer basis, think demand for there's all, look a of mid-cycle lot puts be off of a slump First on mid-cycle. is should balanced on demand matters. takes margin of or that. timing But we for coming But outpace of feel shutdown to 'XX, barrels environment -- normal capacity. like which around in

You there also seen impacts mentioned to we've crude TMX, and some clearly values. with regards

out $XX.XX an have the dips at we depending around obviously as look things. Just next to kind narrowed. that, think on And $XX light example, to range, you of when heavy stands several through year, that dip

we we By will slightly be dips in there are than in the and QX, have outruns of ability dips TMX, the more those compression is Parco take also less our we're how now. compressed connected our of to while to supportive have the close terms it that multiple go the a flexibility more and XXXX right it get $X -- the a the was has at out slate optimize again, example, will to But and calling those crude we're until 'XX pipeline a to bit that of year, it balance, the we're crudes looks But as Mid-Con we the mid-cycle. water, position we strip refinery. plenty production the QX next our barrels it's there. But on be will towards hubs, capacity, like Northwest, for compete barrels. And of capacity And to dock and in impact in working to see through then our believe that's well over many on roughly lot hard some 'XX. ability have balance doc, position good Pacific

Douglas Leggate

appreciate portfolio Yes, I your renewable we're -- my to really specific follow-up I the And hope dynamics, right your on just is for to and watch going diesel. I all guess sure. But it's mix. I the confidence guess but

your of up the at end of system, you is away a year, goes or have not BTC case. in and CI we the all advantage take this set terms how see based of As -- of do more the credit system

Neil Mehta

Yes.

well. one We're goes on it comes as take I'll PTC the a and the that as away CI watching based. So very and BTC closely

continued As low very and you in through we've CI, our small better to tweaks our a mentioned, push PTU the the feedstock few CI plants. to actually sourcing capability more hard in kit get on

And we current setup. so our we compete with think could

We also markets as have has markets go for local Canada the as CI value, barrels some and to barrels able where been take ability dependent move some on not that to to we've different and low are into that there been well uplift.

some some there's that So think support with settle it's uncertainty of to we more the end the having year. And from heading out part first to into going up RINs.

associated fewer with that a happen? the how side barrels. will be that's imported this, so And does And when there then on bit of a positive -- does that And finished happen?

of supply that risk in tighten very and manage supportive So XXXX. uncertainty it that bit we'll of we're structure margin part we for the there's But and but bit watching a up closely, still the year, structure demand some a think the carefully. shows first

Timothy Go

But believe factors diesel look Doug, XXXX. end commentary you and of prices the course, market, overall renewable if PTC. the higher BTC of the around are in that's, the headed And LCFS course, at we credit

for will I that be our think business. a tailwind

over finalized months. And program producer And overall renewable maybe well. us for 'XX here the are only -- we'll in Mexico as tailwind online be up a will next RINs when our few You the Mexico. New early know being end that be we the 'XX, is prices going think given that diesel to going be at of the comes think New here LCFS we

these themselves the in that and positioned can we and we're EBITDA, current So after produce show shown X. conditions, well year next even tailwinds to for positive those low we've bottom cycle year maybe

Operator

comes Mehta Sachs. question with from Neil next Our Goldman

Neil Mehta

we capital just reasonable we some I those think think into go about sustaining. next year? $XXX as The got do which million a This as is as rate of year, moving we around growth question about How year. is next run of million first this you pieces think is And think $XX you $XXX about XXXX? million, to

Atanas Atanasov

This is Atanas.

think including ZIP I growth million the in years $XXX assumption to a some of over that is this million, CapEx code reasonable of next it. $XXX couple in

So you're I think right.

Timothy Go

in know. our as We're putting of together, Neil, budget the process you

number time. normally you official any of December not guidance to I Atanas and the is do. put what here year. coming like we think a -- we're that year. give trying peak We'll major this here signal better I no end seeing in we'll just out So But at that's next at the

Neil Mehta

us the out. helps here? And part just talk as priorities And you midstream your going the frame vehicle for or you engine of the think from around big midstream side about or that a about this how Is do it of Yes, of a business can that then can we see Perfect. business, growth? so? your year forward? business So as side next priorities the cash over be it flow free

Steven Ledbetter

after Neil, midstream this business as Steve. Yes, look I our is well.

and to As proposition We I opportunity really the starting an unlock or to is think believe the part in, go that. are go pieces the get, can kit untapped some there such. and there our and integrated we allow chain add operate of kits that really to think of we're utilization of feel see was as we like value it us there, optimize to that there we buying

things and So example because our Perfect we're and that sure we umbrella. make one now often touching the molecules early that on we under go do them focused we're are is can on getting unlock system. we how

all from asset, to our investing we're plants. the or in to through our Southwest Our system and the more barrels working alternative between Permian go transport and modes helping third-party of and that plants gathering onto way move

see as an example that opportunity. just And one we that's

we're share we where what about excited best and go things, well opportunities and as ahead for the refining pretty solutions common with common learn do of as do But So and as practices well can continue is engine, we believe think we platforms on we'll are operating do think cost something improving there a growth is some overall can between And the to midstream us. we the that and we it the midstream we focus this profile. can sector. problems. as that our that things And

Timothy Go

chime had AEP of for a Yes. would I one reasons with We ago. free year And to dividends Neil, pointing last this buying one quarter, the for that's accretion in, think the growth, business you're flow the we pay the now. going other pipeline I the too. in talked that's record cash But us And out. was quarter. was just volumes associated what about that, and

I think going total record we had through. volumes

at rate. look run you our If

costs, rate is but that talked were than not And tariffs, ago. higher about higher run year lower go op as that with just also knew higher we've Our a these was that's as volumes which associated coming, EBITDA million with third-party and it we $XX volumes higher well.

portfolio. and So really midstream going several lubes multiple that a thing bright believe and years. we engine. over the we same we thing do think same those, to been is a I the marketing be growth you're has going businesses our a in midstream, for us see lubes lot how last the as about call We've talked in going to in to higher see spot you're to real what continue grow

Neil Mehta

Tim, And as talk for follow-up in engine, Is one -- mean when do a about potential that. see quick on well do midstream? Or bolt-on you you growth as that primarily you the organically? the

Timothy Go

opportunities is opportunities organic. priorities right past internally as focus talked I mean integration foundation for we've one as well. now our it, reliability, we inorganic focused that of internally think about that's be But I -- this there's I optimization. as really time, solidify for think going over and year develop and growth is modest that our Well, to focused

right our just would I now. not So priority highest say it's

highest internal for table on is sure. that the priority organic growth, Our but is

Operator

The Chen Barclays. next with comes from question Theresa

Theresa Chen

details footprint plus about your your across by to expectations your on what Steve, to more time niche and additional earlier Pacific does Northwest? land comments product said you markets for -- on I'd demand the related translate in how some supply specific to get that outpacing love demand areas over

Steven Ledbetter

of associated about. supply the the which already up with we've the cracks things a come been demand. Teresa. a What The that talked It has relatively Thanks, in have structural everyone concerned issue Yes. even is is in additional issue the some not we've Demand, of with from about demand. and been there terms markets. again, has issue flat various on has structural seen been with market,

regional see have and in We retail think are through stations. that's put continue advantages, that exploit. -- we are grow go midstream growth there are advantage markets that footprint our that there's to we can and moving that, advantages they we'll our that our there, an people areas happening optimizing that where is still branded And through our and

we pretty operate about we're so regions in. And overall that excited the

We've we'll today, out and mentioned, already also in put. honey that Pacific to have look demand growth where then the our and optimize ground, concentration and plants seen there, the we to and seen that's turtle growth of our high that local you a the as where can we've Northwest, far good between other is One the good we of regions so largest branded in Southwest. continue fill areas

Theresa Chen

on sustainable an And execution medium bring? benefit think term? incremental the it. uplift? much that financial should we thus how Got over incremental about is and far, based branded margin on does your of that rollout that that put, And How

Atanas Atanasov

Yes.

basis, go a portfolio, replacement versus between really XX% revenue up over our doesn't XXX% they're a better site a on when time, So in locations. volume that overall in we site we put see increase in fit and and new

with explicit margin better to see the run we're in sites. giving but We're rate. continues it structure guidance, so to improve And starting the not

and in $XX I is think XXXX, of on EBITDA run opportunity. seen think further what there's believe, earlier, rate Tim based mentioned we've the we million. million $XX between realistic and we

to key bulk an unlock volume better higher to a unbranded and outlet and strategy margin, from to to So continue locations, really grading value. high resilient branded the a the is

Operator

Jason Cowen comes Gabelman JD The next question with from

Jason Gabelman

your one. very accounting by looks implied like numbers. EBITDA flow well One quick above was strong, cash It what's

capital cash there something going So just wondering with a if benefit from on ops? was or else working

Atanas Atanasov

That's accurate summer the as an the is were months inventory. Atanas. this capital over Jason, tailwind down working we in observation. have did We winter working

helped us. that So

Jason Gabelman

on part supply. and call, that just bit thinking on think for it but sounds on Okay. the as the demand about to But like retail one, a is been position, quite what's And then touched this has in about secure other going of California one, we the outlets in kind Mexico then plant to and the of you Rockies your logistics refinery shutting both New I ability from the there's product further supply about hoping that could, talk west and move pushing if your to from Washington plant. was down, an in And interest the state growth footprint?

Timothy Go

recent to jump California. this long-term supply-demand think our the And to is the able long-term the move from this becomes Las California point our about course, Woods in. before, balances it which which gasoline of short I short gets and supporting already Phoenix, I'll overall the outlook able our about We've be be that we'll go market, California. supplies benefit it out, part refinery more Mexico been Jason, West. We've Vegas to supplied is New and has Cross refinery that gasoline half in refinery in Barnes and is talked some of as it in California. those strategy is do but continue Puget Tim. you balances half make supplies consistent ability carb supplied take from as Sound take of with gasoline. But the California hopefully announcement in able our to of for Yes, that on and as to to will

gasoline they continues able regions, being be do place that. not the share that to and are California more believe beneficiaries even to as going by of though specifically our they're we're to California production in we and market market, the of reduce. We to take So that California, barrels stand to those tied benefit in

Operator

comes with Matthew TPH. Our next from Blair question

Matthew Blair

It dynamics you count the in that? even caused talk down about up year-over-year, of looks some the X% third like marketing X%. about quarter, though site was Could your were volumes that the

Steven Ledbetter

our We're sites time issue. come sites. volume and our will with higher high-grading Steve. bit in higher up. volume is This margin is this to Matt, lower-margin take that our ramp we Yes, lower and And a really a relieving of They see timing on.

timing really a the is seeing portfolio a on direct earlier, in growth Like EBITDA and margin, the in this issue already. said we're So us the result of high-grading volume. that's I

Matthew Blair

good, The did margins Sounds improve. right?

seems expectations quarter capture capture like in like into RINs here? diffs then QX. indicator, could Okay. It refining could structure. might but and blending, butane areas And from tailwinds be rates posted XX% for talk then think crude about any small there I be your fourth higher you market to headwind a the you

how in quarter? shaking So you the fourth refining see out do capture

Steven Ledbetter

the narrow turnaround. trends will I heavy one a is that, index more we're are Dorado not we're we watching. you And have heavy big -- a we've guiding that producer. traditionally capture, are our necessarily crude seen. know, do that Yes, we One on few is like in but be plant that there thing as earlier, than And watching, as El that's mentioned

push us our has we continue may we'll producing Now to we're also jet much value that those focus is production, are now. extending the continuing butane we maximizing it we offsets retail that as continue blending, to value jet and some we think as there from there. to think path calling down be that can that the the through And things right bottoms heavy take of then it and continue to don't on to But and retail. an go wholesale as premium and value of call chain and chain extending ready been our advantage can favorable area our Other oil to upgrading chain and I drive. our things it. that

Operator

next question go Stanley. Our Morgan with ahead. Joe comes from Laetsch Please

Joseph Laetsch

morning. Just question X me this from

I side? organic grow a on the is just on more So really it Or the side, inorganically side, lubricant here? I inorganic lubricant of you fragmented to growth, there think the talked on a about Are organic market. focus know pretty but is opportunities

Matt Joyce

for where question. the place you're looking think that foundation in bolt-on forward, there seeing to segment I our we best success. But that ensure this gaps really Matt here. excellent track across is foundation, may look we've as acquisitions. out nice portfolio, I have an strengths where have be some some where we established, opportunity couple solid the at record And see a to years, a of back Thanks, we're the really internally of yes, of the things appreciate that It's build we've to if and look you X Joe. organically focused past

them those future. the growth we'll and in for And look at consider

you I future. path or progress informed So in that, see and something choose it's to down and think that as when make absolutely the we plausible that go to like keep we'll

Timothy Go

Yes.

pointed industry as out, Joe, fairly is fragmented. you As you the know,

find enhance industry We have few together, to and it. needed and foundation and would some we and build are Red Sonneborn the past, But been that if looking right? consolidator continue put -- When that consider for PCLI our Matt we've to as opportunities and optimize we to Giant in portfolio. the we mentioned, integrate we years last to certainly portfolio,

Operator

turning floor back to remarks. Tim am I now closing any over for the

Timothy Go

earnings In of Novi. third demonstrate diversified results power you, portfolio. quarter summary, the Thank our our

performance these we're and focused lower line are strategic control of and are the growing conditions. and we below in improvements segments Both Refining during are our on drive priorities reliability conditions. challenging lubricants operating delivering on these costs focused bottom Renewable We and solid market segments, and what businesses. In our business specialties executing midstream better can to marketing our turnarounds mid-cycle

before. commitment employees and is are and much stronger sheet our our work hard the focus our business balance short, over of indicative our plan. In executing are these past our of few years working, and All the than of

a our two, assets; and cash have remain and joining One, you our to: our optimize new to same: shareholders. our Thank improve the great reliability, three, portfolio day. and of our excess ahead, priorities return call, integrate to for Looking

Operator

and Thank teleconference. Please have lines a today's wonderful you. conclude This time, at this day. your disconnect does

HF Sinclair (DINO) 31 Oct 242024 Q3 Earnings call transcript