Par Pacific Holdings ((PARR)) has held its Q4 earnings call. Read on for the main highlights of the call.
Par Pacific Holdings recently held its earnings call, revealing a mixed sentiment. The company showcased strong operational performance in its logistics and retail segments, alongside a successful share repurchase strategy. However, challenges such as a significant incident at the Wyoming facility, fourth-quarter financial losses, and high production costs in Wyoming were also highlighted.
Record Logistics and Retail Adjusted EBITDA
Par Pacific Holdings achieved a record in logistics and retail adjusted EBITDA, underscoring robust operational performance. This achievement comes despite facing a challenging refining market, marking a significant milestone for the company.
Retail Segment Growth
The retail segment showed impressive growth, with in-store gross margins increasing by 11% compared to 2023. Additionally, fuel volumes expanded, driven by strong same-store sales results in the legacy portfolio, indicating a healthy retail environment.
Successful Share Repurchase
The company successfully repurchased nearly five million shares, equating to 9% of outstanding shares, at attractive prices. This move demonstrates Par Pacific’s strong capital allocation strategy and confidence in its financial position.
Low-Cost, High-Return Projects
Par Pacific is executing several key projects aimed at enhancing earnings power. These include the Montana FCC and Alky turnaround and the Hawaii SAF unit startup, which are expected to drive future growth.
Improvement in Washington and Montana Margins
The company reported improvements in regional margins, with the Washington index improving by approximately $7 per barrel and the Montana index by over $10 per barrel compared to January. These improvements signal positive market conditions in these regions.
Wyoming Facility Incident
An operational incident at the Wyoming facility led to damage to the crude heater furnace, resulting in a temporary shutdown. The company plans a ramp-up to full operations by Memorial Day, aiming to mitigate the impact of this setback.
Fourth-Quarter Financial Loss
Par Pacific reported a fourth-quarter adjusted EBITDA of $11 million, with an adjusted earnings loss of $43 million or $0.79 per share. This financial loss highlights the challenges faced during the quarter.
Refining Segment EBITDA Loss
The refining segment experienced an adjusted EBITDA loss of $22 million in the fourth quarter, reflecting the difficulties in this area of operations.
High Production Costs in Wyoming
Wyoming’s throughput was 14,000 barrels per day, with high production costs of $11.49 per barrel due to scheduled routine maintenance, adding to the financial strain on the segment.
Forward-Looking Guidance
Looking ahead, Par Pacific provided guidance for 2024, reporting an adjusted EBITDA of $239 million and a strong operational performance with record refining throughput. The company plans to execute several key projects in 2025, including the Montana FCC and Alky units turnaround, the restart of Wyoming units, and the Hawaii SAF unit startup. These initiatives are expected to bolster future growth and operational efficiency.
In summary, Par Pacific Holdings’ earnings call reflected a mixed sentiment, with strong performances in logistics and retail segments but challenges in the refining segment and Wyoming facility. The company’s strategic initiatives and forward-looking projects aim to overcome these hurdles and drive future growth.