PARR - Earnings call transcript Q4 2024 | Par Pacific Holdings, Inc.

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Operator

Good morning, and welcome to the Par Pacific Fourth Quarter Earnings Conference Call for 2024. [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

Thank you, Drew. fourth 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

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

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

William Monteleone

and and with Ashimi, throughput, you, was good strong in EBITDA record XXXX income adjusted share. performance per and Logistics the personal net Thank $X.XX improvements adjusted $XXX record serve. Operational and benefits challenging everyone. million our refining morning, The was the adjusted model market Retail results we in safety process a durability of refining business diversified of unique reflects EBITDA. markets and our and was

like the I Hawaii strong recognize unit. to Importantly, Refining would performance of business our

facility operational resulting incident an in Wyoming the experienced furnace. month, crude to our heater Earlier this damage

is will diligently a sub-zero was no in to nearly before the their on thankful resilience to most full are our dedication restore Richard during week. for provide for in Day. plans. The working one the temperatures the that injured team to more commend details I facility maintaining the Memorial plant Wyoming We like seriously currently operations event. entire team would and

shift moves drive declining rates from for Refining continues an dropping of refinery remain more to events an utilization margins, to global prices range. contributing policy and X several to are inward XX% gas natural increased European in to Current drive nearly of natural and low margins. a months outlook. small focus, balances Higher the resulting tight, in independent refiners now oil. encouraging gas are optimistic allowing the outsized to contributing Following Chinese cost factors curve supply Refining a demand to

challenges operational in backdrop industry Additionally, encouraging creates Altogether, than more months. reemerged following the X last have an performance impressive a XXXX. this

fuel to year in-store to sales I'd XXXX margins versus expand, to continues were over grew in and legacy few minutes Hawaii XX% XXXX driven by our contributions volumes portfolio. our in Pacific shine. This starting like adjusted our successful was on Full XX% a progress new-to-industry gross same-store sites bolstered continue deliver is and the also to Retail In-store Northwest. results. our results Notably, strong spend XXXX. segment. EBITDA up exceptional business from

We our earnings of units two, quarter. to on four, second of on and time; business, alky last projects in half a executing time several the laid reduction the safely the include we cost are focus XXXX; budget; start-up safely, Critical on focused the successful SAF Hawaii on and Wyoming turnaround executing XXXX FCC and and power key Montana that areas busy drive be enhanced year. will targets restarting unit out three, the achieving

Foundation and reflects We X the on Montana's focused the of the X in for years. efforts our execution. operations. flexibility also will always signals business next major and of this crisp reliable are enhancing competitiveness. final remain turnaround be the transition preparation towards turnaround to planned Billings safe of stages It last outage and This

Commercially, the second over been schedule deliveries poured, for we we in plan The the on X strong in start-up major are project SAF of equipment half observing anticipate and of Hawaii, months. and project. have In progressing year. on the construction interest foundations is the remains next

established Our offering emerging incentive simultaneously to markets, western programs to Asia from the carbon the us supply while to SAF benefiting fuels Pacific network enables market.

through Our balance achieve sheet remains well invest objectives refining and our cycles. us allowing positioned, to strategic

During shares balance our be of million flexibility or we X% capital prices. A allocation the us at shares attractive affords repurchased nearly sheet year, coming the the accretive and X strong over demonstrated this will outstanding years.

operations. the to Refining to I'll Richard turn our now over call discuss and Logistics

Richard Creamer

Logistics and per Thank XXX,XXX unit day. and system-wide you, Refining XXXX of HSE barrels contributed to Each reliability annual Will. business throughput performance. delivered excellent

fourth was were production a throughput costs day quarter, and strong Hawaii XX,XXX barrels per For the $X.XX per barrel.

for turnaround. We project execution during a are the debottleneck low-cost, XXXX developing high-return

$X.XX day per barrels the XX,XXX on delivered maintaining be we were to while low-cost producer Coast. work management Through was XXXX, challenging the and costs and barrel. safe production throughput per West in Washington cost the team operations,

Shifting contributed barrels period weak to per per day production $XX.XX were maintenance low Wyoming. and to during was costs XX,XXX routine scheduled barrel, the seasonally Throughput throughput.

$XX.XX in XX,XXX operational per barrel. of the and Billings production reliability were Billings, demonstrating throughput improve, to availability Finally, our investments. day quarter fourth continues costs value barrels was per

Some low have of capital a XXXX. generating results the impact on targeted Billings, of reliability had our in early investments material

Billings early unit April. the beginning As be turnaround executing Will in referenced, will FCC alky and

half We crude operate units of the the of to processing unit continue at reduced for along balance rates will the second the with the first quarter.

that partial refinery the addressing and refinery utilization summer by event and February season. there driving Memorial job led were the that that refinery I'm exceptional begin in first safe of quarter, crude ahead and injuries of by can our full the condition. the idling XX. furnace was team Day weather on to restore on an we believe following let to did secured pleased most and the rates a event responding before XX% mid-April in Wyoming assessment, targeting the Based conditions. to The midst incident no this operations, Looking the me extreme the preliminary during

operational front, to quarter see market On throughput increase the first improving due broader incentives during the we to conditions.

XX,XXX they will conduct maintenance planned XX,XXX barrels between will the the and first day day and operate We be per of the per will Washington XX,XXX reformer. and while Montana X barrels and expect of per for throughput the between ran Wyoming XX,XXX first during between barrels at XX,XXX XX,XXX the and Hawaii quarter. per on down XX,XXX day. year barrels approximately weeks day operate remainder

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

Shawn Flores

EBITDA $XX and Richard. or and earnings Fourth loss share. quarter million you, Full $X.XX million $XXX million and earnings million Thank $XX per per were adjusted $X.XX EBITDA were $XX adjusted and year a adjusted or share. of adjusted

a the The per price was the in $X.XX Refining to per adjusted Singapore million X.X.X and segment loss In barrel. quarter. fourth million product $XX million the and EBITDA impact compared the of adjusted of $XX $X.XX in an $X reported third Hawaii, Hawaii in million. XXX%, index $XX.XX barrel gain a averaged resulting negative a was quarter hedge of margin Hawaii and of lag $X differential crack of capture crude including EBITDA

X lower XXX%, yield refinery and favorable was imports, utilization. these Hawaii capture by reflecting driven Excluding product strong items,

land and first to per Looking quarter, the barrel. expected the between Hawaii is $X.XX differential $X.XX to crude

published costs cost indices our indices are and we ranges mainland crude for local components market of better pricing, other new January, benchmark designed regional sales. of refineries. product reflect and capture In to The new

negative $XX.XX barrel and and FIFO Our per capture million. a Wyoming was impact including XX% of $X index was

sales index range. was consistent utilizations higher the Montana, margin XX%, FIFO fourth Excluding capture was production seasonal half of In year. the guidance X our barrel, discounting costs driven quarterly impact, PADD reflecting and or by our low with $XX capture reached asphalt XX%, mix the in back of million refinery barrel. per $X.XX record a Montana $XX.XX quarter during the per averaged

are we by ahead, clean market encouraged Rockies. Looking Northern in product the the improving

over $XX January. Our to Montana by Index per improved barrel has in February compared

our product West $X.XX. index weeks. margins unplanned inventories barrel have already lifted compared Lastly, Coast $X.XX in margin refinery gross recent clean averaged Recent combined adjusted outages, Washington tight with per negative to of

in Our Washington has the February upcoming to system index our plant With approximately potential capitalize Tacoma volatility. barrel low-cost maintenance improved is by on Pacific well $X to Northwest, January. additional in positioned per margin compared activities

Moving adjusted segment. Montana. by of utilization million Logistics quarterly driven quarter Hawaii record, operating was and a system lower $XX in higher in to costs the EBITDA Fourth

driven EBITDA adjusted to the million lower $XX quarter operating quarter. in compared of and costs was during million Hawaii. expanding margins the Our segment performance fourth by in Retail third Strong Retail reported $XX fuel

third Corporate to We expenses fourth on segments, to all compared the cost remain quarter, the quarter achieve and fourth to million track $XX annual our corporate including quarter. were or the earnest EBITDA savings. million or a $XX launched million million improvement quarter. the costs $X operating reduction in to third million Total in compared a $XX and reduction $XXX during across adjusted $X initiatives in million totaled quarterly

inflow expenditures quarter and Moving the cash totaled in of to used flows. cash working $XX $XX during million operations turnaround deferred capital million. fourth $XX million, including a Net

was operations during in quarter. used Excluding fourth these items, cash million the $XX

cash to year Cash CapEx $XXX accrued used $XXX line on and primarily with deferred turnaround $XX basis, in to of on an totaled Full million million, investment guidance related a $XXX $XXX in expenditures. basis and million original activities our totaled capital million. million

Directors during shares $XX Board shares to or Full Shifting year In million stock. management up common fourth of stock approximately of of capital purchase the We to total totaled the common allocation. $XXX X reauthorized of repurchased quarter. repurchases year-end. February, million outstanding X% to million at

and adapting our to opportunistically, will flow outlook. continue to We use liquidity changes cash authority this to

through and remained well our below leverage our December X target debt XX, December of growth term and million, Xx balance strong of Retail remains total of our Gross of debt support $XXX of initiatives Logistics sheet positioned EBITDA. to liquidity With million $XXX as to which XX cycles. was the term midpoint as margin is

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

Operator

Matthew first [Operator question The Instructions] with Blair comes TPH. from

Matthew Blair

considerations about mentioned XXXX share Could what reduction? in between You incremental repurchase you talk balance and the additional debt authorization. to expect share the $XXX are how just repurchases compared the million you

William Monteleone

the is Sure, question. Matt. for Will. This Thanks

capacity So authorization. I additional the really us. up of reauthorization I prior million We $XXX think, consumed the majority think, for the first, is opening just, had

So I into that. much read too wouldn't

be That continue working think ABL I forward way our balancing about sheet, are as repurchases is think Again, an the our inventory a have said, the about that attractive the that and continuing think will other our and well today. we balance we dynamic versus think to finance would sheet alternatives. say this. as approach cushion are like clearly capital. to I And comfortable on with to outlook hedged our we liquidity ultimately, I watching we'd balance think margin we're to we

Matthew Blair

seen contracts potential is then projects at that to the Could you recently. on a SAF the in Hawaii, anything SAF there you moving Sounds here? good. about forward giving what's And talk sales? other And between mix canceled you compared continue been project long-term we margin share expected SAF the regarding can have to fixed have some confidence

William Monteleone

Matt. Sure,

I would things through I despite of the line competitive is come the make and as about space exists, the really a the inside term, lot it say, renewable that the the think it this key our long in refinery. fence cycle to over uncertainty really of down project

to, So costs or operating would are very low relative I greenfield say, sites. our co-located

think I important that's So one factor.

when in X is substantial really here, you we've got fronts. second about advantage is The our a that think and logistics

is distribution materials. network us in our freight So here. cost then marine one the really utilize and no our to our with And and Hawaii distribution very allows attractive SAF other distribute ability and I incremental think blended to to point-of-sale, is existing pipeline

of think to day, inside At the other it I it's comes those advantage $X.XX and million substantial per on the we So a down the of end just $XX fronts have and gallon. both a right? project it's capital, part,

we as think I the drive the continue that those things ahead. again, so to across are look us space, And

merchant we're system, I own from. to to the spot got commercially, SAF monetize the while we and into for have X to placement alternatives flexibility great international. our more work with in negotiations product unique are Coast airlines, West domestic both think in a through the We've

and drive things we there earnings. will in are think value forward I project those about So the the think that in the the key what really

Operator

with next The from Royall question comes JPMorgan. John

John Royall

done this now the scheduled to So had of an I you turnaround some outage work that's opportunity 'XX. for on think while Wyoming Does that you're call that some down? last get present mentioned at work you had

just part then of to Or month XX%, in at be running helpful. what more X would on is And the a April, about ramp or that are a restart? are color X little bit take little May units longer thinking that going your to

Richard Creamer

Richard Creamer. Sure, John. is This

A Wyoming We forward in look turnaround if opportunities yet up this to at pull impact see to outage. are the definitively work there's a to 'XX taking the scope in early coming the into think little issues I need that, for away that's don't have. planning do have to it us catalyst in XXXX. going to drive We an some outage that us life that. takes from continue probably say

The second question?

William Monteleone

ramp On the up... unit

John Royall

ramp the May XX% Yes, from full. in to April,

William Monteleone

Yes.

Richard Creamer

of expect at That the start at crude will rates we unit, able maintain be continued to other that us get to April all reduced allow to rates. then the part, is rate. continue up process to and heater unit crude us the to allow up reduced to although rebuilding from for to the our That us full work at the get Yes. XX%. heater, the through run which And May main would units,

April. So we in to operate the at full of would reduced and the rates to expect able the its refinery middle be end beginning of in condition May

John Royall

my Laramie. Okay. is on then And follow-up

ago. interesting bull and that potentially than potentially now about now be thinking We're to talked maybe of monetizing that where say, Is monetizing time forming market a gas something before. it year kind around at the finds You've good time asset? more there's a gas a asset and about a divesting did, bit a case of

William Monteleone

is this Will. John,

first performing. I business mean, pleased think, I the we're So foremost, how and with is

XXX You balance cubic is place. in producing that's $XX debt can day. a position very see about a million, feet million about sheet good We net you in information they're their and a that give

it's attractive really of Laramie about, cash inventory ongoing it it's and So right? deep And some think got attributes a to locations. very to flow, has got

more your noncore some agree here to favorable the conditions are still with business. they've I in comments been So time. our macro that Laramie remains than

the I value is time. our with partners us for to over key really maximize unitholder think focus there aligning

last capital in interest space. We're it in capital and better seeing increased less So that the locations in of on than years. some seen we've I interest by on region are think the say in we interest the XXX% opportunities the business come gas formation the than I've are and the drilling got, I in seeing today, and would encouraged X certainly

a noncore mean to still it decision valuable. to us, partners not value. maximize remains I ultimately, it's unified doesn't key think there it working to drive our So we're but And with corporate

Operator

The comes Instructions] with Cowen. question next [Operator Jason from TD Gabelman

Jason Gabelman

have. And if out And then also, buy cost go to insurance on the you're Wyoming outage. wanted market -- go you fronts? to asset, you're I from fully contractual covered I was may profit those and product both if you have back is lost coverage then your to the cover into ever if some the to to whatever -- fix and what shortfalls wondering

Shawn Flores

the first Jason, it's Shawn. I'll cover question.

insurance we adequate we'll get policy. and the into certain pay can out say think we won't around what But our I is specifics I thresholds. property have that BI coverage above

to CapEx intend year. we the the incremental for importantly, of within we think cost $XXX million million to $XXX I that manage guidance our provided full previously

implies February, a market of guidance. XXth lost think at think taking day about depend think over a I ran QX. through And X,XXX we the profits the the weeks. just responds day is on that for I margins how impact XX,XXX mentioned way of about that the ultimately will foregone to throughput QX barrels simplest coming our by Richard barrels

Now below rate quarter. typical for run X,XXX it's QX to our barrels X,XXX probably

will give you lost production. of And a that the so sense

guidance And against XXX% then we've of provided XX% the capture Wyoming to index.

of the of simple And lost and it. apply math that in so as thinking value production we same math how ramp we're about QX. up that's will The the

William Monteleone

don't say that comfortable on Jason, of we're front. see our Commercially, meeting contractual and obligations any concerns I'd all

Jason Gabelman

value? lower base or to you is do -- kind really able you are Hawaii question diverging Washington. capture that? guidance generate to able this helpful. right. it more of at in something And of to Is strong Hawaii levels. measuring and kind trends been there's That's structural crack? the if have other just over asset been above something driving my just a All Great. on Wondering year, Or capture, has do

then has in And weak few which conversely, Washington, a quarters. the past been earner

if some color what's shoots and on you any more around Just West green weakness the driving outages given see the Coast? that

Shawn Flores

Yes, with start Hawaii. great Jason, question. I'll

in XXX% range, our averaging the looked in the June. since so the I since we're XXX% think to is then, capture guidance. our refi if you above certainly And guidance capture stated normalized XXX% at

We the key a to clean the at is to averaging Coast, driver West freight. barrel. which Singapore is $X.XX think product look $X there I

that If I it's continue And support the by $X to in sort a to longer-term to capture think freight, to product that contractual maintain can you see average, I range. structure in the we we as level. long Hawaii, compare $X.XX given as of clean think reasonable it's our assume XXX% above

refreshed we mind, January. XX% XX% I index in Washington, our to We think updated of keep against new provided in that in index. guidance regional

then but over with in in given maintenance months. of of and and be do positioned well planned weakness Coast low Asphalt take and to general there, Pacific lot has demand continues confident the our to we're A the Northwest, seasonality just paving both and weak. that structure overall cost advantage and this to PADD feel coming X unplanned volatility West the

Jason Gabelman

helpful. one Great. just That's sneak if in Maybe quickly. I another could

Just M&A. growing the thoughts of opportunity? track I'm of M&A across your you're through seeing curious Obviously, has record acquisitions. a company areas operation on what on

William Monteleone

Sure, Jason, it's Will.

opportunity that's opportunity and of to think really this I value, shareholder be with right? internal, our where to priced, But our focus ultimately, alternatives focused share execution, compete would on cost We key we presented it think most our is our I year given a current think overall, really look is need driving right capital us. at to truly and any that's spectacular and the are now. to I of

moment. look but high clear So the say continues think would at, to I just to I at something very it be bar we again, a it's

Operator

The UBS. next Gupta with from question Manav comes

Manav Gupta

just clarification. quick a very had I

in competitor $X February think is asset. you Washington start the the at the obviously, heard of I since downtime up I say the index about that

that? If you first confirm could

play I out you also, tightness or refinery the Coast do on the could if the be mean, in months how just this scenario, down X then California West so. see And

dynamics you it? So talk you would if the about overall PADD tailwind be how that could could benefit for and X guys a

Shawn Flores

Manav, to I'll next date in the put correct. the out week sort average month pricing February, cover But or We'll a $X Yes. first full of That index we're January. question. over February is up versus so.

William Monteleone

the Pacific some Manav, at I the unplanned, also have of think And the think again, the I in Southern and demand And the larger market again, downtime in through California. there's maintenance Coast both mean, the keep think on already down the on heavy tight and of scheduled depending does supply West Northwest I impacts summer. refiners, duration again, it to I that's potential some

think going So arbitrage again, the of very problems. get solve you're quickly difficult I the think to in [indiscernible] gas. to And unplanned of to is volumes test limits built for always chain supply sort the enough I

of time over watching line the something worth what there. that certainly is lots coming But uncertainty weeks. the So on closely like looks

Operator

Monteleone concludes for I conference to over This closing would our question-and-answer to any the Will like remarks. turn session. back

William Monteleone

Thank joining by shareholder remain as you, the Drew. us today. execution We're focused for improving the backdrop and value key year. on encouraged this Thanks market driving to

Operator

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

disconnect. You may now

Par Pacific (PARR) 26 Feb 252024 Q4 Earnings call transcript