PARR - Earnings call transcript Q2 2024 | Par Pacific Holdings, Inc.

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

Operator

Good day, and welcome to the Par Pacific Second Quarter 2024 Earnings Conference Call. [Operator Instructions] And please note that 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

Thank you, Cole. second conference Pacific's Par to quarter call. earnings Welcome

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

forward-looking Before we begin, of and forward-looking that to our future change performance are to not They on statements. are risks may subject not forward-looking subject comments statements revise are Any from today note include and and guarantees uncertainties, these or materially place and undue investors Accordingly, them. differ any reliance actual disclaim forward-looking should statements, or we obligation results statements. update events. may to

refer I SEC our the for our on non-GAAP reconciliations website information. presentation and you and our with to to filings additional investor

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

William Monteleone

and morning, Ashimi, you, good everyone. Thank

adjusted was EBITDA strong results financial income Notably, the planning million, share. and Billings planned execution. $XX reflect per $X.XX was maintenance excellent. adjusted turnaround was performance Second net These reliability crisp and quarter and

and Retail to our deliver addition, Logistics In earnings. steady continued segments

completion meet supply requiring us the the order refined months, the in in push to of imports quarter third utilization rates to in product The maintenance demand. markets to is Billings summer our and short Each demand. long-haul balance market positions of

restocking. flat refining relatively to have refined X-year lower responded end product range. in inventories had Shifting of Margins broader most environment. and mid-cycle are levels demand the for the utilization and elevated The product Global approaching inventory modest rates regions. the are combination near allowed of

the returned typical versus Coast. X Gulf largely PADD have to in Dynamics premiums

Rapid pressured inventories attractive, less as markets been Mid-Continent the However, has Southern like and Denver Rockies have City. slightly excess

enhancing respectively. growth and gain fuel systems with a to to same-store in-store is and margin, remodel manage growing and building share new-to-industry pipeline X.X%, merchandise team of sales costs and Our retail on gross of sites. focused retail better foodservice brands continue X.X% The market

local in continue we be markets well serve. brands to received young the Our

is and growth purchase code early project are initiatives renewable our budget, on initiatives are agreement our strategic the conversion power progressing. is delivering a Hawaiian reliability Electric. with encouraging fuel Hawaii, the potential In hydrotreater results. front, On towards Billings progressing generation renewable

capital, the reduced more stock. On million repurchased of $XX than debt further we our we of our and cost financial side,

balance affording the repurchase stock pursue to Our both flexibility sheet strategic strong, remains us objectives. opportunistically and our

project closing, In crisp on focused reliable and execution. we and operations are safe

Although these on and margin key flow will moderated, generate environment focus the us through strong free returns allow areas to cycle. cash has healthy

operations. turn the I'll over logistics to Richard and call now our to refining discuss

Richard Creamer

day. throughput XXX,XXX Refining on second be were we'll combined Thank barrel. production was XXXX. scheduled costs per availability. and consistent into at performance, you, Will. The and Hawaii's barrels With plan strong throughput operational was XX,XXX catalyst quarter throughput well, performed the per XXXX delivering $X.XX XX% operations segment per turnaround In extending barrels Refinery Hawaii, day,

capacity to the Shifting barrel. and per sustain day, to production XX,XXX nameplate costs team by Throughput work Wyoming quarter. per was Wyoming. a $X.XX represents barrels great new This throughout of were the record

Washington. to Moving

The barrel. per throughput production April job safely in costs an of XX,XXX outage day, March. planned restarting quarter per their $X.XX team Washington Second and barrels in was did were excellent following

and and largest on to health, schedule executed on their and, all Billings of I'm finishing record, environmental stated, the successfully turnarounds Finally, on Will meeting that pleased one as safety budget. report targets

met has exceeded or operational restart plant The went all objectives. well and

the Billings coker were Billings, per production Shawn in throughput QX barrels turnaround $XX.XX costs have and those planned day maintenance quarter, XX,XXX of and the will downtime and the We in third cover do Given barrel. per financials.

barrels per throughput and Billings XX,XXX day; XX,XXX; between per Looking and system-wide between and resulting and Wyoming between day. XX,XXX quarter, expect XX,XXX to and XX,XXX, in XX,XXX XXX,XXX XX,XXX throughput in between third we Washington the XX,XXX; barrels Hawaii between and XXX,XXX

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

Shawn Flores

you, Thank Richard.

were segment first EBITDA in Second per adjusted million $XX million quarter to or The share. $XX quarter. and adjusted $X.XX million earnings of reported the $XX $XX EBITDA adjusted Refining and million compare

the our of In landed barrel, Singapore per was $X.XX, combined a barrel. resulting averaged per in differential and $X.XX Index crude $XX.XX index Hawaii,

Hawaii margin including capture $XX of product XXX%, margin continued crack hedge was gain clean support product million from elevated a and freight.

at between the $X.XX and have XX% our the crack hedged differential we quarter approximately an we barrel. Looking expect to crude ahead $XX quarter, of per barrel, third $X.XX and third Hawaii per to sales of average land

In benefits the per differentials. strong in clean Coast Billings, our Gross seasonally Rockies was our cost reflecting averaged crude index $XX.XX Gulf lag XX%, and from Upper U.S. differentials product barrel. margin of capture

the margin by driven the from products. and an sales activities, crude unit $XX approximate was reduced turnaround backdrop improved purchased Offsetting million product higher clean impact

ahead and of heavy approximately in $X reflecting Cost quarter-to-date. barrel, differentials Looking during Coast Billings, clean by per premiums to second Gulf the the the slightly differentials quarter tighter product crude above third thin to to trending expected strong, third quarter. quarter remained are increase QX levels crude the in

a As inventory feedstock under pricing Billings accounting. X FIFO from lag quarter by typically crude in cost reminder, our will

million Third to maintenance related costs on the $X reflect quarter will activities operating the coker an to incremental $X unit. million

Rockies. returned spreads index In strengthen have into levels. and Gulf XX%, quarter, summer to the typical third the to to product the Local clean Coast Coast Wyoming, reflecting demand continues softer capture premiums the Gulf was Southern in to

second the lower heavy Washington, PNW Index narrow by Margin XX%, margins. in averaged was $XX.XX secondary per differentials crude driven barrel Lastly, quarter. capture product and in the

product accounting. improved with heavy price. under quarter-to-date, barrel, which Prompt widened decline to ahead, at per secondary Looking is $X more recent in provide flat also the diffs have have to Washington expected benefits margins crude LIFO immediate

Billings in Logistics in quarter adjusted the to the $XX second quarter, the slightly to segment to related pipeline turnaround. million EBITDA due compare $XX reported The of million first throughput down reduced

continued and fuel Retail in reported during to the revenue. by EBITDA and growth retail quarter Our fuel driven $XX million million margins adjusted Strong volumes in first second segment was $XX compare the of same-store quarter. performance expanded merchandise

compared million quarter in first second $XX and million by Reduced the EBITDA costs. lower adjusted activity to the development were in quarter. costs renewable employee and driven $XX expenses Corporate were

the including operations capital second of totaled temporary quarter outflow million a during in cash Net to in $XX related expenditures a turnaround million, million. $X deferred increase $XX working and inventories used

these the million second was quarter. items, $XX Excluding from during cash operations

investing Cash million, totaled activities expenditures, million tax used including distribution Laramie. $XX $X.X in annual $XX by million of offset capital from partially

ABL under decreased $XXX recently intermediation million, a ABL to activities. completed inventory with working Hawaii, crude-only expanded offset of in and liabilities total in replacing of intermediation. $XXX million. an by the legacy the In We Moving by a financing capital refinancing the with borrowings intermediation combination connection the funding refinancing, increase

refinancing cost funding $XX approximately the per Hawaii previously expected is million As reduce to announced, by year.

year-to-date August We equivalent share quarter the XX% X. million approach of completing $XX to shares last outstanding. with X.X Since our to through continued acquisition Billings million our June, the second of have current or $XXX repurchases shares million repurchased we total and opportunistic a during

as With $XXX cash are strong priorities, Total positioned repurchases. our June approach opportunistic in in a million, share growth balance to and strategic $XXX million an sheet, advance was liquidity of while of we availability. XX $XXX made maintaining up million well to

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

Operator

Neil our [Operator today Mehta Instructions] will Sachs. from And with come first question Goldman

Adam Alexander Wijaya

our Wanted result, margins. Asia get on demand more is thoughts recent for had to as Mehta. Neil a your Singapore Adam disappointing key around Singapore a This conversations on and, And focus area first margins. Wijaya centered on of

it indicators, in on a And margins seen based you've tick over the weeks. looks like power market recent up

coming you the that are demand? months? what margin over And of terms So you do guys environment in evolving see seeing real-time then how

William Monteleone

Adam. Sure,

the I Singapore So we're those Singapore hovering think and on are And barrel X.X.X. I think $XX the characterized levels mid-cycle. between we a front, for as probably $XX

I fleet margins. Asia up you're think negative gross on against looking the at levels simpler the supply refining is side, in where

like think I to respect fuel and, secondary product supply with products think, where some clean are you have So oil I naphtha. and the importantly, where margins support are side trading

I seen I between product fashion, world importantly, exports limited a of think And seeing on you've you're where still ultimately, in -- and concerns barrels Asia the think I demand some Europe. of connected China, think arbitraging operated are despite side. of Northwest the the refined out

So and of impacting elevated net a has think throughput of to Asian ultimate no rates cost market. the the incentive And driver arbitrage, I inputs side I think again, freight limited refining major up further. Northeast with ratchet and supply that's both the the in changes

Adam Alexander Wijaya

Got it.

is Okay. see far good is That's super on capital guess, in question The helpful. XQ. into on returns. buybacks which just to thus really buyback the And came number next and my then good continued progress quarter, I this to strong see

share context to wanted return refining in expectations where I team's margin also and the of prices the on capital get as well. So thoughts environment updated current the the

William Monteleone

Adam. Sure,

the approach our remain we'll we our our share influenced our And cash our and, cadence, how price So value I is to ultimately, be ultimately, it. think think the think relative share repurchase going generation, on intrinsic outlook, position. opportunistic by liquidity about in to view of I

So those that, continue at deliver to consistent repurchase ultimately, think, we'll work look cadence to shareholder I returns. and, share driving factors with a maximum all is

Operator

next John from JPMorgan. will question Our Instructions] come with [Operator Royall

John Royall

Billings. So my first question is on

XXXX behind sounds it now got it like work You've the and went you, well. quite

how about compares in have work? in Can for this the XXXX and and scope talk cost scheduled it work to you you year's

William Monteleone

John. Sure,

first And was the this messaged, turn I over major completed work again, in major the unit and a Billings around year intent 'XX 'XX think our every with step that of direction. to refinery. we've the really as was is course in right the

Billings, about when think, million turnaround $XXX over you ultimately, roughly period. look to at a expected amortized cycle it's I X-year our in X-

I and spend in million for million And think between that again, $XX total you to us expect amount so, $XX can the range.

which to to solid we an probably is of cracker, incremental focusing there's And cat get we're work the on out the for million 'XX. time $XX run major that a that $XX of area ensure focus million

John Royall

of that's basis Great. Rockies Coast for Gulf then I just with your maybe and crack second was expectations sticking more the and region, hoping Rockies drivers improved and the how a the color for half. the And on little between

in market Southern well. And not noted particular, as quite is doing Will the

give on be If there, that you're some would that detail bifurcation more seeing you just can helpful.

William Monteleone

Sure.

with the typically markets. we while see see ultimately, a our Southern spreads into I rail-borne of So ultimately, I would you observation those Rockies, has amount interconnectivity expect in that didn't and imports Southern And the typically the think, you be July, significant Mid-Continent. think would Rockies to the in June fair expect

and to normalize more July during to into demand be season. balance moved rail-borne imports would higher say into PADD beginning supply later it's consistent to would with I August, peak levels. demand you've That and As X

I Northern more The the again, pronounced, Rockies, demand ultimately, served Northern principally think, is in more think, Rockies. And seasonality I is by rail.

periods. summer ultimately, system. our in And those across So that ultimately, differences. the I of the And still supply in are excess I good the demand and think, are distinctions demand we're seeing well factors biggest driving think seeing we're

Operator

And will question our with Cowen. Jason Gabelman come next from TD

Jason Gabelman

I 'XX, coker to to I go sounded to like -- on back Billings. just in wanted I be And if was heard some XQ correctly. going it to there the wanted confirm, work

initial the perhaps of and XQ part the related plan impact for how asset that saw you XQ? expect to Or this you in Was while in capture -- you something that in was year? down had to that

William Monteleone

Jason. Sure,

is typical this the to our again, lengths And consistent CapEx with fluid due our So and impacts this turnarounds. It OpEx, on maintenance not cycle plan. coker. is largely

based say So that XX-month planned reduction I material be the going we wouldn't to but a downtime interval, some a the run is ultimately, performance, was on did this time. to something X- in is accelerate it and

So to is impact. really again, this a X- XX-month

over should you think running cost costs about time an for I as frame it that so and spread really amortized out those think unit. And that

Jason Gabelman

impacting remind in then then West specifically to the Hawaii Hawaii, that cracks, export Coast And and your in results what what you exposure Can on, both kind West and just results Washington us of about you're is XQ? that thinking have Coast. you XQ from and to Okay. exposure how how impacted you that from your

William Monteleone

Pacific smaller Sure. don't a would influenced But does markets. would it the be Los tell specifically think have exposure. appropriate contract provide percentage and Northwest by Jason, percentage you to a I our Angeles index Hawaii on I that

Index, the why observing is really set So weakness Singapore. we Coast main that's summer environment are in think the reflected especially in based Singapore I is PNW That that's margin periods. said, for factor, for Hawaii unusual again, the index West our the and on

very be look difficult the value. a you the market's forward, trended. again, And that's side quantity to And frame capture more I arbitrage May where on influx standalone in a that imports look the reducing, on time think imports very them you of with equation. the Again, to appears when particularly be when gasoline ultimately, uneconomic appear has the basis do product refined of at of to given that to

That said, into marginal I being diesel market diesel and in in petroleum given barrel of consistently. exported think increases the the the West a challenging conventional the environment is renewable Coast material

and I a well positioned So emerge. when are we're opportunities to Hawaii think in operator good they as position Washington again, low-cost our ultimately in capture a business with

Jason Gabelman

Okay. sneak one in. Great. If I could more just

how As forward? you've absorbed major first the think do Billings moving and you turnaround, about gone M&A through

sounds the on retail there. business. from Are It buyer some retail environment? and you're like just M&A the your still activity more a one peers of of been There's growing broadly you still public

William Monteleone

Sure.

So I think ultimately, times. and think That value the our over we've core of thoughtful our I years at M&A on one competencies. active And said, an think business grown it's we're through I program. disciplined all

opportunities well the as the of all to to think in opportunity C-store And for capital pieces and us organic repurchase decision. and as opportunity set, inside our improve projects to allocation invest development I our to the think weigh our really shares to the fleet additional most We'll redeploy we'll and continue thoughtful make those refining capital I and efficiency of existing evaluate weigh the operations. try really

to seller concerns more I by the see ultimately, rational months, to last highly the value. it return a market say, which M&A becomes again, the still think said, outlook, dynamic. environment the for more likely I That influenced think makes I XX I as it's mid-cycle evident. think on it difficult So and will emerge a of framework buyer the given would -- or -- remain for you're agree is

Operator

Matthew come -- will with or question THP from Blair next our TPH. And

Matthew Blair

On arrangements? these you barrels your able the about supply And started of Coast the with for talk WCS have TMX could that on running starting Or TMX is West -- side, Washington? you availability still entirely refining refinery, up? some by WCS at you Washington are rail accrued

William Monteleone

question. the for Thanks Matthew. Sure,

Canadian we I along waterborne we So in cargoes. the ultimately, availability the of think, And increasing are grades have Coast. seeing receive West to do Washington, capability

logistics great we affords do the waterborne. so us well have as And flexibility as deliver that to both a system there rail

of beginning Ultimately, I and Canadian crude availability to think Coast the WCS alternatives. the West crude broader pricing market or impact ANS is

business. seeing that's Hawaii We opportunity for offered, Canadian a our I grades new presenting are and think lighter

time. Again, think I going to that's over be dynamic

as But Mountain in and factor, than the think a be a got test, in period learning think and the into we've that's typical I on waterborne trade May, which will cycle. good are volumes cargoes a the first really June. loaded based as winter inland seen I offer increase Trans trade barrels dynamic you've cycle, market to different the is

Matthew Blair

Sounds the trend good. Hawaii, thought And then in pretty capture encouraging. was we

think I contract. the oil a fuel from release lagged tailwind the mentioned

from clean you here? any about some the in could your particular, hedging Hawaii? But product And market? guess, tanker drivers benefit robust any pretty I talk other benefit product in from crack

Shawn Flores

$XX it's XXX% Matthew, QX hedge Shawn. out our called was million Hawaii I capture crack so the well in XXX%, -- hedge gain. above And guidance.

price release called hike benefit. the million a also out $X We in

those about of versus out clean back think of I our working product you reflective in it that QX, see. when XXX%. we're really sort sort are that And is to XXX% favor in captures the delta, continuing XXX%, think of elevated the I freight So tailwinds the that

Operator

And our Manav Gupta question will next with come UBS. from

Manav Gupta

engineering What's Sorry, of if update project. already I conducting provide design I I a could cogen an facility. on renewable this you initial there? there? the -- Hawaii's wanted over your progress updates You're missed bit Any little the just over earlier. on

William Monteleone

Manav. Sure,

second online major it's capital 'XX. And the has $XX been bring Again, ultimately, that in a targeting I project of on think So million as equipment ordered. there remains project track. we're reminder, half the to a

have begin are on of that and, necessary the X critical ahead feel again, we X from there and hand to X least line be those working and will receive I time items. providers bids in permits, that and the feedstock and confident critical but are vendors executing at on completed to with major move tanks We've think or awaiting

is. where good about feel project So we that

the through is purchase year. think, targeted completed, on with Electric, Hawaiian and that's of negotiation And something this the cogen again, renewable end moving the power by that to be agreement project, I

estimates from final there, time think I the have and power we'll agreement our make so can and, engineering And line a purchase firmer decision. on ultimately, investment

Operator

like our any Monteleone I'd remarks. question-and-answer conclude turn session. the will this Will for closing over conference to to And back

William Monteleone

Great. of us for performance in Thank operational turnaround We're strong the each activities. joining with you our today. all Have teams good and, the a well-executed pleased of particular, day.

Operator

and has time. you lines may disconnect your now conference The this today's at presentation, for Thank you attending concluded. now

Par Pacific (PARR) 7 Aug 242024 Q2 Earnings call transcript