PARR - Earnings call transcript Q1 2024 | Par Pacific Holdings, Inc.

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Operator

Good day, and welcome to the Par Pacific First Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Ashimi Patel, Vice President of Investor Relations. Please go ahead.

Ashimi Patel

Danielle. you, Thank Pacific's Par earnings call. conference Welcome first to quarter

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

forward-looking forward-looking materially Before we begin, of and forward-looking uncertainties, that statements. to our future change actual from performance are to may not They and statements. are risks may subject subject comments statements are Any today note these include differ guarantees or results events. and

not them. should on investor statements, you investors for and reliance Accordingly, place to reconciliations SEC forward-looking the website our non-GAAP and undue obligation to and any update to with information. our presentation our we I disclaim on or filings revise refer additional

the Executive over and call President our Officer, Monteleone. turn Chief to I'll Will now

William Monteleone

you, morning, and good Ashimi, Thank everyone.

formation discussing I Before the company's I'm been States. our his leadership honored a guiding and and direction. the Bill many success Pate XX a fuel United to to in thank his a the leading years. upon for to over foundation as provider Western Par Bill has Pacific's partner to strong last results, and contributions want grateful and terrific quarterly force renewable build for conventional strategic

to quarterly results. Moving on

Our per net was share. first quarter $XX $X.XX adjusted adjusted income was EBITDA million and

season. profitable driving the execution Our positions Retail summer and Logistics us during business earnings contributions, refining segment in the increase units strong operational stable while delivered to production

to local support remain and details. Incremental year-over-year operating policies both low, product focused exports presently Billings appears Richard fuels refinery inventories is and supply, in more Supply-side transportation be national on expected restarting, to Chinese well our process petrochemicals. the Global limited. balanced. adequate flat are the position. improving market down of will provide further summer are

the we solve marginal the a refined likely season product summer factor elevated, as and marginal manufacturing. of markets arbitrage cost demand. between need see inflating enter to and larger In is for to to remaining costs become further the supply benefits will freight highlighting local we addition, This driving stretch

build Our rolling respectively. is building better The continue and fuel new-to-industry core food merchandise costs margin, sites. manage gross systems X% in to team retail same-store in-store focused brands to a pipeline momentum sales on service and out of growth growing X%, retail with model and

well and Our relatively the to trend towards the young million renewable agreement. above with is demonstrated on the In and markets fuel $XX the power rates. is project continues brands initiatives. as on Progress continue we potential budget in Electric be the serve, purchase renewable local received renewable hydrotreater on cogeneration time growth project fuel Hawaii, tracking progressing our by Hawaiian

larger we lower Tacoma, from assess green and high In to are opportunities. hydrogen capital return SAS pivoting the project

our we reduced cost prices. balance this Our debt positioned. $XX more far our and Thus remains year, further repurchased well of at than attractive of capital million sheet stock

With million of us sheet to liquidity, opportunistically remains strong, objectives. our $XXX more repurchase strategic and stock both balance pursue our than our allowing

crisp reliable are thoughtful execution and allocation. on we forward, Looking capital and operations, focused safe project

turn position will performance. Logistics over also strong to and our cycle. I committed returns risks are We enterprise through and operational the to managing Richard the now Refining our to generate discuss to call

Richard Creamer

Will. you, Thank

the to segment. Turning Refining

power. per seasonality day XX reduced and combined per per and XXX,XXX was costs rate for crude The quarter vacuum reflecting Hawaii, March barrels production in resolved we filling as issue XX,XXX barrels day, barrel. in throughput First was winter days $X.XX activities. throughput was our crude maintenance the In were

a operations and return to full restored demonstrated crude capability. have We

we built the inventory billings, crude second quarter elevated throughput For was seasonality, turnaround. of barrels quarter XX,XXX rates were per first day despite ahead as

were elevated pre-turnaround related increased to due costs electricity approximately costs production by OpEx. per barrel, million quarter First and $XX.XX $X

progressed has in been have The budget. turnaround is on plan to Billings crude blocks and reformer and since and turnaround on schedule April. early

are a per Wyoming, were of to Throughput quarter Refinery in has availability XX,XXX start-up record been the barrel. was excellent. operations. Shifting costs of and first $X.XX production We currently barrels stages beginning per day

Washington, day $X Finally, and barrels XX-day first XX,XXX were event. $X.XX by elevated March to per throughput due barrel, costs per million quarter planned maintenance production was approximately a in

and refineries in to operating The back full the quarter. rates second well

ahead, heading positioned summer are each Looking throughput the of optimize our to assets into season.

between Wyoming second throughput per and XX,XXX barrels quarter, Hawaii barrels second XX,XXX quarter day, per XX,XXX we XX,XXX turnaround day, reflecting expect per per XX,XXX XX,XXX and between For between day between the Billings activities. Washington and XX,XXX XX,XXX barrels and barrels day, the and

the our call turn cover now Shawn over financial results. to to I'll

Shawn Flores

Richard. you, Thank

First and of million $XX million of year. $XXX EBITDA segment and $X.XX million quarter refining adjusted or million share. in $XX EBITDA adjusted to quarter $XX last fourth reported the adjusted per compared earnings The were

XXX%, In freight reflecting product clean land a Index in commercial the execution. elevated index resulting differential Hawaii, of the $XX.XX averaged Singapore was combined capture barrel benefits and and margin approximately per $X.XX, our was $XX per Hawaii accrue strong barrel. of

ahead and continued and per differentials with have Looking and approximately of second at our our the quarter we $XX expect barrel, we between $X.XX second crack our product to crude $X XX% per land barrel. Hawaii sales quarter, framework hedged to hedging

Rockies, margin rebounded Upper XX%, Coast market to relative In soft capture and our approximately Gulf index conditions. $XX have barrel, $X cracks $XX.XX Billings, by reflecting Coast was improving averaged gasoline respectively. diesel and Gulf per barrel, quarter-to-date, the per seasonally

XX%, billings index $X we to per the The seasonal expect margin by second Gulf In to to Wyoming, reflecting to quarter. relative flat remain Billings. first to gross similar barrel, as turnaround quarter impact and captured expected $X costs Coast operating was dynamics is the

utilizations particularly softer improved are were Rapid have Gulf and strong gasoline and first in barrel quarter, January. peak per City of Coast well refinery the the summer quarter-to-date, to spreads ahead reflecting the during season. weak demand $XX positioned markets Rockies we Lower

planned impact outage. PNW the per Margin per averaged the refinery including Washington, during $X barrel first from quarter. XX%, capture in $XX.XX approximate the Lastly, Index was an barrel

gasoline region. $X.XX the Looking quarter-to-date, by PNW to QX, has expanding in index improved our driven margins per barrel

reported system operating lower in segment $XX of million costs. in quarter, compared quarter adjusted to and Logistics million EBITDA $XX utilization the first reflecting the fourth The strong

EBITDA retail of prices. reported was in quarter. $XX first the due fourth compared $XX the rising growth million and expenses offset fuel the sales to $XX wholesale in compared to in first to Our quarter by the EBITDA fourth margins adjusted million in partially million softer quarter. segment Same-store Corporate $XX retail adjusted were quarter million

With the quarter of million remainder included to $X to to our in $X expenses related our Tacoma, development reduce SAF First from renewable we quarter year. green pivot renewable hydrogen spending activities. and our million the advancing larger the expect to $X for million per project

million turnaround operations totaled $XX million, expenditures. to quarter an by first trade the and excluding in related capital provided Cash outflow in receivables in a $XX million $XX working increase

billion loan, of plan smaller existing from a we to and million of Cash $XXX used to up $XXX in of related million we $XXX $XXX reducing Hawaii in expense refinancing in interest and repriced activities. In refinance the our we borrowings $X made annual cost loan totaled million liquidity oil million, crude activities CapEx. Total March, of as We $XX million with term our a $XXX April, recent further intermediation $X.X our million by million. asset-based capital combination capacity expanded investing cash intermediation. March for debt the as reduced our the under availability. was primarily XX to ABL of In

reduce expected with interest Hawaii $XX approximately improving annual per million The increase shift a Hawaii working in offset by margin year, costs to capital $XX towards costs. gross financing ABL by in million by is million partially annually $XX

an share positioned average repurchasing to per with and opportunistic approach repurchases balance our the growth driving heading our while Lastly, The into common of we've well price the summer strategic continued pursue $XX objectives quarter first million year-to-date during are to million attractive share. we stock prices. at strong at opportunistically our $XX season, sheet $XX

This you turn concludes Operator, to prepared Q&A. we'll it our remarks. for

Operator

Instructions]. [Operator

comes question from Piper from Todd first Ryan Sandler. The

Ryan Todd

could mean the of strong outlook on I on congratulations and in course of markets, tanker you're I of clean from impact including margins if you what here how about Maybe progressing Great. in you things the any Hawaii. the start, terms Hawaii in Can Asian talk see year. seeing rates the over continued performance

William Monteleone

It's Ryan. for Thanks comments. Will. your Sure,

margins, we're in with or ultimately, arbitrage to sympathy continue the from Singapore clear So to I Europe. Asia and we need think the on And barrels key it really watching trade things Europe. Northwest see that and to

time, biggest And the at factor. current the that's so I think

ultimately to are still you're as factor season, lower I inventories much is I Middle think going to -- for produced diesel. And exports Red And side, Russian to disruption incentives flows, well again, think Sea East longer the product with India to that typically routes Ultimately, the and to to biggest in needs on product both refining the to take compete summer as through of refined on cleared Europe. trade the which ultimately the side. get needs in that the the going is we as is driving large produce is the gasoline freight see approach need refined

ultimately, think this politics. I comes to down So fuel

here. don't I change anything a the horizon that on suggests see readily

in freight rates see And of product ultimately, stability. we're until I think refined so period a for we elevated

Northwest think overall well Singapore. I on both as Europe again, So in gives that refined as optimism product cracks, us in some

Ryan Todd

high-level you of thinking about priorities shareholder the that going expected. and than about Great, a how strategic think about And -- of bought you pace, quarter, as on cash, how just about use the of more back cash then mean, probably I you're returns Can drivers about think maybe use in few maybe how we term? shares you quite medium over we forward? talk

William Monteleone

Sure.

driven continue opportunistic value. price opportunistic approach view cadence think of us really forward ultimately, our share I to you'll or think And the cadence repurchase I price liquidity, an the fundamental of by be and that see in the So is our share approach. share outlook

And share of be conditions periods buy or to price probably in in where less you're price, see stock. you on periods our more outlook weakness see going so we'll improving aggressive. And improving in us

sensitive. So we'll be opportunistic, price continue again, and think to we're share I

the we've I as strengthened to think think looking got where allocation, point of balance flexibility broadly, ahead. we've our lot a sheet about we capital

so just at in really company, suggested. we another opportunity want we and to And it is dynamically do to question And look our repurchases we the own really share invest invest is how as in growth. I approach

in our to renewables we investing objectives, from fit and growth our include strategic continue priced. they C-store to are to addition, improve that pursue think strategic to In want attractively in the which and I acquisitions development, then extent reliability, investing refineries everything

we that that enhanced reliant carrying allows some liquidity And experiences know I'd drives past and from say, less capital ultimately returns. be shareholder excess markets, us to the it M&A all to say, on

attractive against framework. allocation how really So again, at we all ultimately, weigh repurchase to our we those the our capital about opportunity That's price. things stock think

Operator

from comes Pickering, Blair from question Tudor, next The Matthew Holt.

Matthew Blair

Great.

attribute you to So both volumes in to as merchandise markets, your well your how your individual unique as you were would exposure quite same-store versus retail? say, efforts to impressive. Hawaii much much this revenue would retail attribute How in some

William Monteleone

Will. It's a Sure, Matthew, question. it's good

this down our relatively considered Nomnom new. strength really, both think a we're in mix of some all brand that's, Hawaii, to I I think again, think, I but things comes in our also, seeing positioning

contribution the the we're retail I driving So it's that's side And a really a impressive We've balanced surface. just leadership the got across board. in-store really trends. piece, some on think relatively think new scratching in-store the I team

to And side, I beginning the base. on seeing you're And the some lower think the really fuel store. attribute I on think And again, been to focus we've strong I of yield I past, so this a us again, think would that's results. and in

Matthew Blair

being the position? then if landscape side, flip you acquiring considerable so, on about guess on follow-up the retail in mean or I that and then does the Sounds for stations? And M&A. additional more good. acquired? overall Par current refineries is interest either your And is to NOL And talk open what Could your

William Monteleone

Sure, Matthew.

synergies be the So really PADD as Again, and operations. the strategic it with in to on reach PADD X the with logistics. focus present needs alternatives, a transaction I our the really and as exceptional we an of And to opportunity. our needs think said we upper for think past, remains strong compete refining our existing in about -- it X to

$XXX that shields I next again, several as roughly And NOL, a our for And us remains gross I asset taxable value. so relates it million very strategic still I for consistent our about front. NOL the income that on of years. we're think think our valuable for focus down to It's think opportunities to

fundamental I our value I or M&A an think of about think And we're the ultimately, future on ultimately on end value. any maximizing about activity as where and think there focused that opportunities future the think at target, acquiring asset, the And shareholder where our we day, of we NOL we're business.

on a the So at appropriate end But we're value. to the we think on be I be whether shareholder specifically focused day, of wouldn't comment would target.

Operator

from next Sachs. Goldman Neil question comes The from Mehta

Ashimi Patel

Neil, your line through. not is coming

Neil Mehta

better? that is Ashimi,

Ashimi Patel

Yes.

Neil Mehta

Great. Okay.

see have a out So the we're run first Margins like Asia. lot how our to you cut And is then softened how see is get towards your perspective trending way up the Asian that love question the Hawaii in playing on summer? the of just market do base we just levels certainly Asia as on seems into there, region? and relative you Would out?

William Monteleone

refiners Thanks, Neil. of you approaching out the agree Asia I fuel simpler X-X-X and tend in gross or of negative there with approaching Sure. like as crack $XX, naphtha that look margin kind a assessment oil. to Singapore secondary your the at we're That levels. products

perspective, think supply that from again, exists. support side So I again, I that think

is Asia that view given still you And I is, the that see ultimately freight where as you'll the barrel when the approach that, Europe And you think quite our think clear I expensive. to marginal needs think market re-emerge. trend from about to summer. Again, it's

And so continue direction. products flow I to you're going in to think, ultimately, see, that

that barrel Hawaii marginal and to the As again, major freight factor. I imported a think still is Hawaii, to relates is

as refined there So our trends the we elevated. and think freight the rates, about and capture Hawaii basis again, local remain product

the to to barrel continued trade where between product last cost in is we've several the been and quarters. over think per see $XX I range, they've freight refined which consistent $X

Neil Mehta

time little the on And is spend just Yes. follow-up more Rockies. a the maybe bit

direction a allude fact to moving to softer it right the but be you for start quarter, the was the the seem did region. things in think in I

of should So how much on just what carry your and transient perspective that was XQ. we into

William Monteleone

Sure. Yes.

as we some PADD again, saw, I rates think say, the I January while through first refining really really first the the been It's steady for in improvement a think complex first quarter. with on a steady And utilization the we that's And in Shawn that, we this. case. time top with being saw improvement pretty in I'd trough quarter. strong of referenced the substantial move X

and Again, So as through little that And signals of trends moved steady I -- again, bit April think into into we've continued, was rebalancing the May. upward that a Neil, happening.

weakness So again, January-specific I'd really a being point the to some event. of as

Operator

The Royall next from JPMorgan. question comes from John

John Royall

on new the effectively on the of the green at Could renewable table go pivot detail some work? you into the side? the What's the you is project off out called scope Tacoma And here? hydrogen

William Monteleone

John, it's Will.

a really think at capital project kind high effort we've think sits, the significant difficult the project. fund in types level, more necessary generate the a a renewables policy scoping to we we for returns this of think difficult I given of So area. that and doesn't spent higher-risk larger more project are And this and backdrop where is that and environment also today

the so about again, investing or in talked above fuel And and I've And our in at there we way renewables past need again, think to conventional there. I investing the business. view ultimately, about think the returns on we be our think

backdrop really and change think the hydrogen with for I green project so the SAF that's the pairs project. the And

I deferred. And the scope So about that's think of looking I advantages work, at we as think we have Tacoma the currently again, again, in then been logistically. we're think

either future. distribute Again, prepared that our lower ultimately, and/or we've thinking right in tankage so way we significant about assets carbon got to and great capabilities utilize fuels logistics rail to are access, the produce the deepwater

John Royall

given on And cost so new only then and your is carrying more its just savings some sheet? balance helpful. the inventories in less at Hawaii, encompassed That's the facility under from of inventories on there being crude just understand, the we intermediation the deal

eventually think further? finance as no necessity going this and your agreement even intermediation should term? for as a a costs longer business reducing step of to towards of should this Or think more And we Hawaii kind of we of your

Shawn Flores

John, it's Shawn.

not vis-a-vis that drivers $XX more the really fact equity the a inventory. funding the called of cost think out the we the is I facility that of ABL, savings million of year actual we're necessarily

to XXX it we're about ABL. big I intermediation amount the think But signal basis think of from of in about In fact, savings is to right a equity points the inventory way would shifting I XXX shift to funding. that

just direction the with in I of question step ABLs. Hawaii is of on a business funding think exclusively whether our this

at benefits Obviously, good this relates crude. chain think the solution our to we see intermediation in a we financing And we time, the a I provides it some intermediation supply complex in cargoes facility there. that as have with water. think

position our improves shift years evaluate ABL. that and as we'll whether the ultimately, completely liquidity it over sense makes towards But to

Operator

Gabelman TD next from The Jason comes Cowen. question from

Jason Gabelman

in us Can acquiring about it's what first prior maintenance. to of of you we the of come I then it alluded you maintenance previously improvement any And turnaround relative remind work to out Montana and your given see to eventual to want the operations. to after you some where since that Should expect just ask upcoming performing the event scope turnaround is? plant was

William Monteleone

April Jason. meet Sure, turnaround, assume the you upcoming mean I activity the referenced? when you we've Will. It's

Jason Gabelman

yes. Sorry, XQ. Yes. The Yes.

William Monteleone

Yes.

during largely, summer So ultimately, conducting we at unit, the the Optimum reformer this the hydrotreaters again, have. And pointed there. and of the position to intent on again, of elevated Richard run restart again, to port activities several and period moving activity as season. us crude the as was rates this the that Richard during is out, referenced,

into come again, again, down safety. optimize in the focus we process to ultimately and on and risks plant reliability comes safety are limit position And to our that is again, Again, quarter. So throughput us that, reliability. really push again, and ensuring this process obviously, rates third out And Montana is of the to, plan to, as and in turnaround the we focus drive the

the the XXs. the think that, can availability mechanical I plant if we low to And we've I run demonstrated think already do into

to priority. again, easy that's we've again, that's focus. So the But And do. top our got strong really think again, and team, I a not think certainly I

Jason Gabelman

what on cash Got then level can overall is for remind you and/or the sheet, us liquidity. target it. And balance the you just guys

Shawn Flores

it's Shawn. Jason,

think and and on I events minimum our outlook based discretionary dynamic targets CapEx upcoming turnaround liquidity really nondiscretionary CapEx. are

that over And time events. upcoming so will fluctuate think I depending on turnaround

Historically, we given is Safe the range. to the was that signaled business. expanded in assume $XXX higher pre-billings that our liquidity minimum that, million

our and But got will balance where a strategic repurchases. strengthened from think with we've point this share growth the additional say, allocated objectives we've needless I any liquidity sheet point, value excess And towards liquidity. to to creating shareholder be

Operator

question Gupta [Operator Instructions]. Manav from The from UBS. comes next

Manav Gupta

your remarks, between the primarily driven up, indicated prepared moved was And in the crack the understand you us think of where the strong. if strongest that I fuel X terms the are gasoline of relative in Northwest regions or and you strongest where seeing just that's vehicle gasoline. Pacific strength diesel has product jet strength, I by wondering you could you're seeing or the help

of just in X If us you how the the and dynamics are help could X the projects understand regions. walk looking

William Monteleone

Sure, Manav. Yes.

I think that, start for finding be plans. again, again, driven again, seeing think we're I production I I really and through Hawaii, ripple strength with Asian particularly to So it's Octane, on by think, And market and gasoline going to waterborne think, the we're dynamics. to going into is

So broadly what season. summer I ahead point the again, out speaking, I'd of think that's,

strength at look As regional on the seeing definitely the you gasoline Pacific Northwest, side.

the And price impacting for Northern that's, in imports. California of overall of gasoline. California significant production several amounts the -- I bringing have think, refineries that converted to clearing think renewables are I

Relative Coast renewals On coming think the to historical to seeing more Coast are the weaker. conditions, rebalance out is diesel in. of the as the exports West flip market on West side, I

in diesel again, inland for to I seasonal hyperseasonal very shift a the business, think see you Rockies, As seeing it's remain demand. gasoline into and typical rebounds still demand strong going

across system. overall, So product demand again, good think, our I seeing

Operator

over Will would This turn Chief back Monteleone, for question-and-answer like to concludes to session. the our President and remarks. Executive Officer, I conference closing

William Monteleone

optimize as is all we XX grow well enhance for we last joining great bright, we and enterprise are Thank years. the believe business I the this day. the morning. you built a us Have over have positioned our of future this to earnings and

Operator

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

disconnect. may You now

Par Pacific (PARR) 7 May 242024 Q1 Earnings call transcript