Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Par Pacific Holdings Inc (PARR, Financial) achieved a record quarterly refining throughput of over 198,000 barrels per day, demonstrating strong operational performance.
- The company reported record logistics adjusted EBITDA, indicating robust performance in its logistics segment.
- Par Pacific Holdings Inc (PARR) is targeting a reduction in 2025 fixed operating expenses by $30 million to $40 million, which will enhance its ability to thrive in various market cycles.
- The Hawaii SAF project is on track for startup in the second half of 2025, which is expected to contribute to future growth.
- The company maintains a strong liquidity position with $633 million, providing flexibility for strategic growth and investments.
Negative Points
- Par Pacific Holdings Inc (PARR) reported an adjusted net loss of $0.10 per share for the third quarter, indicating financial challenges.
- The refining segment's adjusted EBITDA decreased to $20 million from $60 million in the previous quarter, reflecting a challenging market environment.
- Same-store fuel volumes in the retail segment declined by 1.4%, indicating potential challenges in maintaining retail sales momentum.
- The Washington refinery faced a tough quarter with low capture rates, highlighting difficulties in the West Coast market.
- The company's operating expenses in Billings were higher than the $10 per barrel target, suggesting room for cost optimization.
Q & A Highlights
Q: How does Par Pacific plan to approach share buybacks given the current crack environment and attractive share prices?
A: Shawn Flores, CFO, stated that Par Pacific will maintain an opportunistic approach to share buybacks, balancing the opportunity to buy back stock at attractive prices with the need to maintain a strong balance sheet to support strategic growth and capital investments.
Q: Can Par Pacific sustain $30 million-plus of logistics EBITDA in a low 90s utilization environment?
A: Shawn Flores, CFO, indicated that while logistics mid-cycle guidance is $115 million annually, implying about $29 million per quarter, higher than mid-cycle margins are typically seen in the summer due to full rates and maximized sales volume.
Q: What are the plans to reduce operating expenses by $30 million to $40 million in 2025?
A: CEO William Monteleone explained that reductions will come from corporate expenses, particularly by consolidating IT systems post-Billings acquisition, and a mix of refining and logistics costs, primarily impacting refining OpEx.
Q: What is the long-term outlook for the Washington refinery given the tough market conditions?
A: CEO William Monteleone emphasized that despite a challenging market, the Tacoma refinery benefits from low operating costs and feedstock advantages, allowing it to minimize cash consumption and participate in market upsides.
Q: How is Par Pacific managing the turnaround schedule and what does this mean for capital requirements?
A: Richard Creamer, EVP of Refining and Logistics, noted improvements in mechanical integrity have allowed for extended turnaround schedules, reducing costs. Shawn Flores, CFO, mentioned they continue to guide towards $40 million of amortized expenditures over the cycle.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
