HF Sinclair: $500,000 Cheyenne refinery shutdown cost reduced second quarter net income

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“HF Sinclair delivered strong financial results in the second quarter, driven by robust performance in our Refining, Marketing, Lubricants and Midstream segments,” said CEO Michael Jennings. “Healthy free cash flow generation during the quarter enabled us to return cash to shareholders through dividends and share repurchases, further demonstrating our commitment to our capital return strategy. During the quarter, we also began commissioning the renewable diesel facility in Artesia, New Mexico. With all of our previously announced renewable energy projects completed, we will continue to ramp up production from these assets as we expect to reach full production levels by the end of the third quarter. Looking ahead, we remain focused on integrating our newly acquired Sinclair assets while maintaining safe and reliable operations.”

Refining segment income before interest and income taxes was $1.56 billion for the second quarter of 2022, compared to $250.1 million at this time in 2021.

Earnings before interest, taxes, depreciation and amortization were $1.66 billion compared to $330 million in the same quarter of 2021.

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The company said higher refining indicator margins in both the West and Mid-Continent regions and following higher refining segment earnings in the quarter boosted those gains.

The refinery’s consolidated gross margin was $36.36 per barrel produced, more than double the $11.71 for the second quarter of 2021. Crude oil costs averaged 627,310 barrels per day in the second quarter of 2022 versus 416,350 BPD im second quarter of last year.

Renewable Energy segment loss before interest and income taxes was $73.2 million for the second quarter of 2022, compared to $11.5 million for the second quarter of 2021, while second quarter 2022 EBITDA was $62.8 million. dollars, compared to $11.2 million in the second quarter of 2021.

Excluding the lower of cost or market inventory valuation of $34.5 million, Adjusted EBITDA for the second quarter of 2022 was $28.3 million. The Company’s sales volume for the second quarter of 2022 was 26 million gallons.

The Cheyenne renewable diesel plant was mechanically completed in the fourth quarter of 2021 and fully commissioned in the first quarter of 2022, the pretreatment plant at the Company’s facility in Artesia, New Mexico was completed and fully commissioned in the first quarter of 2022 at The Artesia RDU was completed and fully operational in Q2 2022. Since the completion of the Sinclair acquisition on March 14, the Renewable Energy segment includes the Sinclair RDU.

Branded fuel sales for the second quarter of 2022 were 335 million gallons.

Strong demand for finished products at the Company’s Rack Forward businesses helped Lubricants and Specialty Products segment earnings before interest and income taxes more than double, to 135, from $60.1 million in the second quarter of 2021, $1 million in Q2 2022.

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Holly Energy Partners LP reported second quarter 2022 EBITDA of $79.8 million compared to $88.1 million for the second quarter of 2021. However, adjusted EBITDA was $104.2 million for the second quarter Q2 2022 compared to $88.3 million in Q2 2021.

Net cash from operations totaled $1.53 billion for the second quarter of 2022.

At the end of the second quarter, the Company’s cash and cash equivalents totaled $1.7 billion, an increase of $1.11 billion from cash and cash equivalents of $592.3 million at the end of the year previous quarter.

During the second quarter of 2022, the company announced and paid a regular dividend of 40 cents per share to shareholders, totaling $90.2 million. It spent $110.4 million on share buybacks. Consolidated debt was $3.4 billion. Excluding HEP debt that does not rely on HF Sinclair, it was $1.74 billion at the end of the second quarter of this year.

HF Sinclair’s board of directors said the regular quarterly dividend of 40 cents per share is payable to shareholders Sept. 1 through Aug. 18.

Subsequent to Q2 2022, HF Sinclair realized over $90 million in annualized run rate synergies related to the Sinclair acquisition. Working capital synergies exceed $100 million.

“The Company is currently on track to achieve its goal of approximately $100 million in annual run-rate synergies within two years of the acquisition’s close through a combination of commercial improvements, operating cost reductions and sales, general and marketing optimization to beat administration costs.”

A webcast of the August 8 conference call is available here through August 22.

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