PARR - Earnings call 3 2023 | Par Pacific Holdings, Inc.

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Operator

Good morning, and welcome to the Par Pacific Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. And now I would like to turn the conference over to Ashimi Patel, Director of Investor Relations. Please go ahead.

Ashimi Patel

Thank you, Marliese. third conference Pacific's Par to quarter call. earnings Welcome

and Pate, Officer; and Will me of Financial today President; Executive William are Refining EVP Creamer, SVP Joining Monteleone, Chief Shawn and Richard Logistics. Officer; Chief Flores,

information. these Before to statements, differ we today forward-looking or to guarantees statements. over call change undue Any and forward-looking reliance we our statements. filings reconciliations on forward-looking Chief I'll subject of to and and our our presentation materially to additional SEC future investor statements results subject events. them. are disclaim website uncertainties, may to should Officer, you They now are are any include investors refer turn forward-looking the and William obligation not to Pate. our note non-GAAP with update the begin, that from I and Executive comments on not may performance revise actual Accordingly, or risks for our and place

William Pate

you, of quarterly which net million. $XX of our by System, result quarter of accretive morning. third Key to our the of illustrated Thank recorded adjusted $XXX this capital record objectives. and Logistics comparable earnings our Billings was with share, EBITDA Billings and include structure The contributed Billings quarter integration income EBITDA share quarter improved results ownership quarterly principal above was more per Ashimi. million. We full outstanding first achievement highlights impact the you of adjusted third of record pleased and Refining of XX% We're $X.XX in adjusted This than XXXX.

throughput acquisition quarterly operations. this acquisition XX,XXX per target principal regard, XX,XXX day. noted, we with annual previously our is reliable our objective In above per day to of barrels barrels exceeded throughput consistent, As through increase

acquisition our of ahead activities overhead to well commercial target synergies also are and corporate due reductions. We

strong on strong the units street to solid of rising profits refining due conditions. prices Despite our operational wholesale excellent other operational board, retail team to same-store Across system pressures flawless favorable commercial continued and recorded growth market the and post and continues to profitability. execution. margins, and near logistics our Our execution exhibit sales

earnings, With also capital strong we structure. improved the our

and our build facilities During the liquidity, while stock. debt also we intermediation able one million of common of were repurchasing to reduce refinance $XX quarter, our

We rent At sheet have point, balance obligations have strong with our other growth initiatives. retired also than limited pursuing all financial prior our in obligations. year this investing assets a and strategic base we

successfully are our engineering SAF growth green on also tested the moving low-cost, we're high-return In focused forward and front, co-feeding with operation, Tacoma, hydrogen On we renewables the units. and we projects. our of

remain fuels In Hawaii, on with continue expand sustainability project. to this goals. critical long-term Overall, invest schedule sector our aligning renewable and our with we we in

be gasoline continue driving season. strong distillate to enter have of with As conclusion the cracks cracks our winter, and markets we declined the across the summer

While well above cracks, Rockies Rockies Upper to remain the due decline Wyoming demand. in markets have Billings strong our profiles in seasonality winter Gulf Coast

turn leaves commercial our it our Hawaii detailed the However, and operational winter provide to to well quarters. operations us orientation continue seasonality, a I'll will performance. to analysis for and over distillate winter the to reduce strong our of positioned of call sensitivity Will now the

William Monteleone

our barrel, per quarterly $XX.XX production Hawaii, third barrels barrel. $X.XX consistent day. barrels units guidance. and were was contribution full day contribution. financial delivered per season, reliability crude a throughput included differential quarter quarterly day, and The you, averaged XX,XXX Thank $X.XX Index XX,XXX costs per Total of In barrel, per Singapore barrels Bill. Refining business per was The driving our throughput per quarter peak record billings Logistics XXX,XXX a strong during with and which asset landed was

average between our Hawaii expect quarter barrel. differential to fourth and per crude We $X $X.XX

barrel a Capture combined per was maintenance. the and throughput despite XX,XXX reflecting reversion team improved during spread In typical throughput XX%, to asphalt record capture XX,XXX unfavorable capture a third Washington, The production range The to hedging barrels quarter. pro the the mentioned per per XX%, costs quarter $X.XX Third to impacting netbacks. driving forma day, was set quarterly lag, to day approximately per reflecting rising and $XX per quarter averaged Index barrels price Wyoming costs of previously prices crack index $X.XX P&W barrel. barrel. production were

per capture strong per favorable $XX.XX seasonal was a approximately Coast. Montana result the maintenance. index versus Coast $XX barrel, gross per million by coker barrel barrels Gulf to elevated impact U.S. due was Wyoming production Rockies and market costs throughput Adjusted XXX%. was XX,XXX barrel per quarterly includes and The approximately and was Gulf FIFO day conditions which margin of totaled $XX.XX $X.XX

price excited of Capture of ownership quarter strong and exceeding third in Gulf and the to system, slightly we're environment. Total operations as resourcefulness, synergies initial and into our months on expectations commercial we we day XX%, improving was expect index seasonally to X. dedication due the commercial creativity were we have asphalt what would We're teams as with the execution, are plant and reliability. rising in pleased remain Coast on below excellent. and our secondary focused Four netbacks operations been the product billing a reduced

more barrels from team's XX,XXX see above plant the strong of day. results, is per capable running the can than you operational As

objective per running Our consistently day. is above barrels XX,XXX

Looking forward, we the When of guided year. expenditures for consistent the turnaround laying we $XX Billings million reliability. we are approximately acquisition, per delivering made amortize to groundwork

the cycle. course a X- this to implies Given turnaround a million cycle, X-year $XXX approximately of over

expect During major XXXX roughly turn down years. X to between units broken the XXXX, around all we and

will turnaround, to investments making reliability. also XXXX of we improve capital $XX the be million During

investments quarter ] segment Based and on mid-cycle strong merchandise should reliability, expanding generated revenues. result [ Retail in these volumes a margin X- improvements growing modest X-year a in fuel financial in with conditions. The to payback

versus and levels. Third and XXXX fuel volumes quarter X%, same-store sales revenue X% grew merchandise respectively,

this market in Spokane site new-to-industry and initial first promising. are our opened recently also results We

the we fourth addition, online In new in Hawaii. coming have quarter one during site

we and and XX,XXX XX,XXX fourth day, XX,XXX to per barrels XX,XXX between run XX,XXX day between barrels barrels per per quarter, Montana between between For per expect XX,XXX Washington and XX,XXX Hawaii and barrels day. XX,XXX Wyoming and and the day

we barrels project of that many throughput As we day across consistently to per XXX,XXX projects portfolio, deliver high-return allow annual see will or look our capital us more.

In addition, we are Hawaii forefront The project our progressing renewable we the renewables in come the at online unit remains expect initiatives. to XXXX. and fuels

look our to results. items financial long-lead I'll over it of robust costs now of majority and of continue capacity. the equipment the per less The low on returns capital gallon to attractive $X.XX turn ordered, given project than been have review to Shawn conversion

Shawn Flores

Thank you, Will.

adjusted third $XXX and segment $X.XX the $XXX or and in share. compared EBITDA $XXX million adjusted were adjusted earnings in the per reported quarter quarterly million $XXX second quarter. million to quarter of Third record EBITDA million Refining The

third our Our a and product offset in Refining million $XX $XX million quarter results $XX Wyoming. by hedge million unfavorable loss Hawaii, in of FIFO including lag impact crack price of partially benefit

our continued approximately hedging fourth per have our at Hawaii in of quarter $XX Brent. hedged crack XX% with barrel sales framework to We premium

Our sequential a to business. second Montana increased system the million $XX across Logistics by $XX EBITDA was full in The improvement and compared third the quarter million our throughput segment driven quarter. in contribution the of quarter reported from adjusted

generated second EBITDA growing and the in prices, $XX segment quarter. our compared rising volumes stores profitability million reported merchandise fuel wholesale strong $XX of The adjusted Despite quarter in third Retail on the revenue. to million

of fourth by to cash Cash provided capital net million ending in totaled cash outflows flow totaled quarter. capital reversed for final expenditures we operations a $X million million. working most related Strong quarter the Par Cash $XX record and the drove to working during million, changes of quarter $XXX of $XX Montana. during resulted $XXX the expect million, inflow million liquidity including of third capital in an investing in the which settlement $XX from activities free inflow of

target of of focused debt we of at $XXX reducing million working streamlining gross $XXX million, midpoint on With are the cost to term our stated and capital. our

the $XXX that a refinery. support Hawaii facility During of we quarter, credit our million will letter closed

costs LC the per per crude our to year facility $X.XX barrel. expect approximately $X We reduce or million funding by

Washington agreement the costs ABL Washington from per $X.XX $X barrel. approximately or ABL, at we refinery we increased terminated The funding the expect October, and million by reduce capital into early $XXX In million. million working to our capacity to annual $XXX intermediation our folded

expanded all ABL refineries million and we repurchased have $XX.XX. X.X facility retail October, of X end supports mainland shares now $XX the Our at our million price business. or of Through average an

opportunistically we head the growth Operator, positioned prepared As stock Q&A. we'll into at common for you to is concludes it our our to sheet repurchasing our our balance well attractive back This achieve while prices. objectives remarks. turn new strategic year,

Operator

much. very you Thank

Todd Ryan now first will Sandler. question Ryan, please begin Our the We ahead. session. [Operator go from question-and-answer from Piper Instructions] comes

Ryan Todd

about -- capture as bit. the was margin quarter. good out mean at moving of some third numbers pieces WCS the look as you we Maybe Can quarter and starting I quite about think are a widened out, differentials fourth have talk the solid in the we

reformer You've back a up running. and got

Secondary product asphalt. trends, in particularly

So trends we in into as margin look the about how capture quarter? should think we directional fourth

Shawn Flores

hit each Yes. separately. is region This Shawn. I'll

would guidance term. the medium long starting think I XXX% to reiterate in Hawaii, our we of over capture

in then we a reformer booked activity. had pretty price on also headwind noted, quarter. you crack in As the lag sizable we And third the hedging

margin I you QX XXX% third it the would back out imply capture the that of capture gross of all think quarter. about when in

pieces there. our about Hawaii, in XXX% good moving very feel still we the guidance given So

we've asphalt. of the also And Tacoma, widening would see mid-XX% we're out in a market, be on I will to quarter. guided WCS the capture. headwinds point namely that towards boost the For to continuing Obviously, product the secondary a sort

think QX the range and unusual businesses to capture of Wyoming in not and Bill In in I of XX% Will mentioned XX% those to the Montana, it's both and QX. see both seasonality

Upper well the really quarter-to-date. say, will quite Spokane, I market fared Missoula, Although have Rockies Billings,

hold the I bit in better suspect will than Montana So capture a Wyoming.

Ryan Todd

cash generation strong really supporting reduction mean and was buyback. quarter free both flow, maybe And on That the I share in debt helpful. Okay. then was

Is how and that how forward, should returns capital going use debt then think forward? we about look you of look the balancing As shareholder you priorities cash anticipate? going reduction talk growth forward? more at you about And can we do there for

William Pate

Ryan, is really balance We got Certainly, of have I comments, lot mentioned Bill. we flexibility. as minimal have this with a prepared my this to a respect at obligations where needs. point in financial we've sheet

And growth. we really an invest repurchases, in company. to as when invest, our and to is, do look we want So the own question invest at really share to in another opportunity opportunity about that think we it's how

see in you're And is so of And time. you'll probably you'll see repurchasing over equity to less us investing that. continue locations see are improve of to some mentioned proving strengthens, And -- will from pursue our market more that's everything think be reliability. to market retail is we weaker, And as what the growth refineries, if that the I the initiatives. Will going to investing quite probably then to our strategic that successful

continue in are to markets be We that product. short

translate us And directly for improvements point. reliability at this so profitability in into

strategic obviously, we'll and to our be extent available are at And opportunities that existing looking the apparent markets. within they

Operator

And TPH. our next Matthew, you Blair Matthew proceed. from may comes from question

Matthew Blair

talk Montana. you're to order operations target changing day XX,XXX further? they'll of barrels the implementing sort strong production will in in run the Could on Congrats give of be be things examples of today XX,XXX raise you you or XX,XXX the original at to projects and about to then mark. per Could any what versus doing up moving

William Monteleone

Will. is This Matthew. Sure,

quarter, So we think And saw the we I I XX,XXX. think were June you the above as results you where see can averaged XX,XXX. we've for demonstrated,

the think We the through not can Montana mechanical it reliably story and XXs, we in doing can about availability, I it's so really the the And we've right? plant season. demonstrated run -- really in about is

expanding the have capabilities So again, focus so but much challenges areas of that past focusing where experienced the facility, reliability unplanned on on our in the you've at identification is not outages. been

I'll design -- think that just and reduce metaling from the certain of we pumps of up could this everything so pieces be improving, corrosion units will certain really compressors to it, And call risks.

the necessarily more experience So really throughput, so events. you fewer again, making comes this a sure get but of just down reengineering plant, to we not lot unplanned

Matthew Blair

side, of about Could driving retail up the you on volume X.X% then year-over-year talk that And same-store eye-popping. was gains? pretty number good. Sounds those what's

William Monteleone

Sure, Matthew, it's Will again.

it's really to. I'd think X I So factors point

comparable COVID. impacted softer Hawaii I XXXX think lapping frame, time still least in was where in you're Hawaii, somewhat the some still seeing by us at periods

little a come to out the bit it So Mainland. than was slower

and attractive I rebranded Pacific benefit seeing have that there side Mainland, I again, you're That's And all the our think then the And for idiosyncratic think some an So response on Hawaii. brand of region. macro growing are the Northwest to seeing I nice region. I think secondarily, on in we're stations market. think a in we that

attractive are think major I we've both driving are factors that the nicely, X delivering. been sales I the So growth consistent growing same-store think markets and and those

Operator

question We John have JPMorgan. from Royall a from

John Royall

we've some for hoping your supply on thoughts reading you outlook are would know expect helpful. I I market So been run limits just to Do Asia? have your the be for there was in that the imports there. in crude cuts China, on there view product on Asia refining in And right And market potentially been any tighten up now.

William Pate

Bill. the export this seen there the China, quotas, to with conversions. Certainly, to is related think how imports, it's related John, what just economy cuts is consistent And managed. are which is run some in you've related but the to I ultimately of crude

And they're chain. all facilities larger then of the simpler refineries integrated refineries. come number closure the same of X online the you've years. time, to at into last in new a petrochemical X seen really [indiscernible] lending in had you've think I

a of transportation balanced a production of for market the it demand resulted change fairly to is a today to increase in lot actually we're think -- seeing reopening petrochemical while managing transportation related government to think their fuels global local is the respect in the feedstocks the consumers their local And result, refining is as I what and weak, supply terms economy I the there's complex for demand for and significant more probably of with been And chain. economy fuel. the a the

exports that a [indiscernible] the any recent the but of be years I were of year, really major So They consistent in and there's seen, tightening, know capabilities. the their mean changes. I not we've in as of have active think, to market as don't they a withdrawn export Singapore I tend terms a then through lot fairly ago. couple

out a national in exports are a into balanced the And you're product international any more managing production the in any of left results excess with they Chinese a may of market the entry so companies more rational and really And just that that all market. in of Chinese market the have. kind excess

John Royall

Really thorough couple apologies is housekeeping, Great. this expense moving on and there. but if And pieces of there, maybe one just interest helpful. then a more

Billings into annually in your you acquisition. $X about which but talked the increase from obviously savings the You moving ABL, million to did essentially in an XQ, agreement have is intermediation related

to the the minus, forward? that that $X.X $XX going million quarterly quarterly I think run million rate the about is So rate guess, Is run for intermediation. right way

Shawn Flores

John, it's Shawn.

elimination quarter to I million year, early quarterly ABL rate intermediation from think $XX going likely between the the from year, split million, to will cost but in forward expense next savings we savings as million of run get in into due next The $X really we'll fee, per as the for and funding be sales we a $XX of interest towards $XX level. flipping closer it guide is the of hold reduction million. around just interest intermediation

Operator

next Our Sachs. comes Neil from Goldman from Mehta question

Neil Mehta

timed around around the market refining M&A, a job around Bill, the opportunities margins just bolt-on And below are Billings opportunistic you've mid-cycle. there for that now? your particularly curious transaction well. other Are or opportunity what a better thoughts when great very are done right where you

William Pate

nonstrategic think is to it's for I the every with a is And might case. is asset. be as parties the think I the refinery Frankly, is profitable. as strong challenging market parting think right definitely latter who now, about with really that refinery it

in don't is been operate. I would be think think we to about to where our Pacific and want the Gulf Mid-Con, PADD and is competitive or in the IV X. The don't And other on very upper fuels want the supplying operate footprint to the want we PADD the be we thing clear just or in where transportation Rockies Coast very we've bigger. East we Coast I even

the it's get not for transactions certainly, environment to very us going so harder to that. done And But is forward. market receptive

renewables, around and in which part should people. And our earlier, and really plant our of base think way, about capital organic. think I as objectives, how putting was is asset the a and significant our It's our have of noting investing and you work most I included growth our we very if in growth. existing They're strategic about all by

Neil Mehta

a makes of lot That Yes. sense.

in the So very last years, the a stock big picture has X well. question done

sheet, how And repaired very the kind scaled balance about years. have What You footprint. you're the look setting competitive the business. this you the a of X X development like? Talk for business Phase is now refining up company's of next

William Pate

said. just I what exactly it's Well,

I think we have the footprint.

going and in that and the people, and around to the we're footprint. invest assets have We

So or produce up business. to Hawaii. Hawaii it's bolting in our fuels the in of it's to the the things It's like start hydrotreater conversion renewable Tacoma retail project

mentioned, business growing on and nicely very ramping building And Will it's is what As well. Northwest our retail have. we

opportunities, capital repurchasing think within I to to also the to work our of broadly, then are mean, more stock. simply there's I put asset our opportunity there opportunities work. And plenty capital to but be may logistics base, best put

Operator

question have from We from Cowen. a TD Gabelman Jason now

Jason Gabelman

ask the specific to on quarter. first wanted questions a of couple financial I

lost was You OpEx there mentioned the in down came you RIN know to that? liability. that paid profit a I side? from the outage? out in that margin And system Was mentioned opportunity much? also, then related follow-up. the impact. And if XQ of anything cash entire your But And so, if any have you I there's had on there Montana coker wondering any how

Shawn Flores

can Jason, $XX roughly was LPO outage. second both margin it's cover the to of million an your coker $XX those. Shawn. impact question on There of and the On I for million.

we obligations, inflow did of you of And of capture why settlement the reversal out, of quarter, year the would the all so on in the think quarter. during in really the working capital high referenced sort $XX fourth fourth the [indiscernible] and it And range. is of I that XX% rent this imply that when I the prior pull million of some

Jason Gabelman

Got expected next with from and take particularly both close in ability the outlook volatility Hawaii Can it. refinery on advantage early what is upside, margin the then product of to market And summer? Understood. potentially to into just about market, for year. and talk more that Coast my the the your could follow-up Tacoma another sell West more you of be

William Monteleone

Sure, Jason, Will. it's

of there broadly, some West operate. players and Pacific clearly There's of points function markets Coast that but just major really each of amount between a think integration I -- Northwest So the I down systems California. fair into there differences, together the spec across the think

I just occurring in think that to are and tangentially, you we're in think potential I participate So Coast changes the about supply going as think the demand West closures. refinery on

the our And we versus consistently say, so gasoline physical Pacific said, also manufacture, or I equipment to marine probably and way in Tacoma. to in do the best [indiscernible] do both and play pretty broadly participate about like it specific Northwest think through and Hawaii that. operate Portland that's ability That and think and spec, markets California, something the

market we'll participate So I actively think to continue as changes. that

Operator

Instructions] Gupta. [Operator we Manav now from have question And a

Manav Gupta

we months, a rebound wanted structural demand ahead? gasoline -- seasonally. you operating, anything and could you And gasoline various the act In very do about winter way that that from just levels? the I if which as you going seasonal regions mentioned issue current for a is just would demand specifically clear in that these acting you wondering be to believe you was earlier have ask feel or I seen the that's you how

William Monteleone

seen structural. we're trends operating our in seasonal haven't it's upper anything I the The say observing would that consistent Will. with are Rockies. Manav, experience we

the X better X that actively market refinery Wyoming or again, for part been our participating we've last years. So the of through in

off tapering softer. start becomes so a and little weather demand as not taper And in overall again, a also think tourism see it's to and see to -- you I just activity really unusual

on I side, seeing in demand would where cycle. we're on October you're of particularly harvest the flip frame as positive that, the in November say trends time side diesel the and you're

the markets strong nothing new. is each demand seasonality think structurally, and is our I overall, So in of

Manav Gupta

little Okay. you're a And is, about stuff tell my follow-up us you hydrogen project green quick here can doing? the more that

William Monteleone

is This Will. Manav. Sure,

that that pair a aviation with would logistics a sustainable again, developing green utilize our we're hydrogen could facility with facility particularly and it I share where have And we looking we strategic. at that think production Tacoma site assets on co-located be we that so we plant. the there are we fuel So think refinery co-locate

got access lowest on So be the in attractive should some view project credit I and decarbonizing power schemes, to that that's feedstock of ingredients a North again, in some think for focused here a America. our logistics strong is market successful cost incentive with we've strong assets

a decision. engineering place spending is on And got I competitive we've So here getting a we in project ultimately, that why the particularly and this. make worth again, we're smarter a can that's on time getting think

Operator

conference over Thank like our would you back very remarks. session. any Pate closing William much. And turn question-and-answer this concludes for to I to the

William Pate

our the very acquisition We're with adjusted of support income for want all you The trailing $X.XX thank of for the day. financial that Marliese. value created shareholders, good well you, XX-month a the accretive performance a Have I of as contribution Thank Billings your impressive just net we've units. share today. to pleased and signifies as business the our

Operator

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

disconnect. You now may

Par Pacific (PARR) 7 Nov 232023 Q3 Earnings call transcript