• Net Loss: $214 million or negative $1.14 per share for Q4 2024.
• Adjusted Net Loss: $191 million or negative $1.02 per diluted share for Q4 2024.
• Adjusted EBITDA: $28 million for Q4 2024, down from $428 million in Q4 2023.
• Refining Segment EBITDA: Negative $169 million for Q4 2024, down from $276 million in Q4 2023.
• Renewables Segment EBITDA: Negative $9 million for Q4 2024, compared to negative $3 million in Q4 2023.
• Marketing Segment EBITDA: $21 million for Q4 2024, up from $9 million in Q4 2023.
• Lubricants and Specialties Segment EBITDA: $70 million for Q4 2024, up from $57 million in Q4 2023.
• Midstream Segment EBITDA: $114 million for Q4 2024, up from $110 million in Q4 2023.
• Net Cash Used by Operations: $141 million in Q4 2024.
• Capital Expenditures: $173 million for Q4 2024.
• Total Liquidity: Approximately $3.3 billion as of December 31, 2024.
• Debt Outstanding: $2.7 billion as of December 31, 2024.
• Shareholder Returns: Over $1 billion returned in 2024 through dividends and share repurchases.
• Dividend Declaration: $0.50 per share payable on March 20, 2025.

• Warning! GuruFocus has detected 4 Warning Sign with DINO.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• HF Sinclair Corp (NYSE:DINO) achieved record EBITDA in both marketing and midstream businesses, demonstrating strong operational performance.
• The company returned over $1 billion to shareholders in 2024 through dividends and share repurchases, maintaining a strong balance sheet.
• Significant improvements in reliability and operational efficiency were achieved, with a reduction in annual adjusted operating expenses per throughput barrel.
• The Lubricants and Specialties segment delivered strong earnings with $330 million of adjusted EBITDA, despite FIFO headwinds.
• HF Sinclair Corp (NYSE:DINO) expanded its branded marketing footprint by a net of 87 sites, indicating growth in its marketing segment.

Negative Points

• HF Sinclair Corp (NYSE:DINO) reported a fourth-quarter net loss attributable to shareholders of $214 million, reflecting challenging market conditions.
• The refining segment experienced a significant decrease in adjusted EBITDA, driven by lower refinery gross margins and reduced sales volumes.
• The Renewables segment reported a negative adjusted EBITDA due to high-priced inventory drawdown, impacting overall profitability.
• The company faced a challenging margin environment in 2024, affecting overall financial performance.
• There is uncertainty in the R&D environment and potential impacts from tariffs, which could affect future operations and profitability.

Q & A Highlights

Q: Can you explain your leverage to the West Coast market given the current tightness due to unplanned downtime? A: Steve Ledbetter, EVP of Commercial, stated that HF Sinclair is well-positioned to benefit from the current market conditions on the West Coast. The company can supply the market through its Puget Sound refinery and has the capability to move barrels from the Salt Lake Valley to Vegas and from the Navajo, Artesia refinery to Phoenix. CEO Tim Go added that their strategy to move barrels west is proving beneficial in the current environment.

Q: What are your plans for growing the marketing business post-Sinclair acquisition? A: Steve Ledbetter explained that the company is focusing on organic growth, having added 87 net stores in 2024, with plans for an additional 152 in the first half of 2025. While there are no current plans for inorganic growth, the company is open to opportunities but believes organic growth will primarily drive expansion.

Q: How do you view the macro backdrop for the Lubricants business, and can it return to a $350 million run rate in 2025? A: Matt Joyce, SVP of Lubricants and Specialties, noted that while the base oil market has been challenging, the company is seeing signs of improvement. The business is expected to perform well, with underlying performance above mid-cycle levels. CEO Tim Go added that despite challenges, the business achieved a $375 million underlying business rate in 2024, indicating strength.

Q: How do you balance driving value recognition for your diversified business model, particularly for Lubricants, versus potential external monetization? A: CEO Tim Go emphasized that the goal is to maximize shareholder value, whether the Lubricants business remains within HF Sinclair's portfolio or is sold. The company is focused on optimizing and integrating the business while evaluating strategic options for maximizing value.

Q: Can you provide an update on your refining cost targets and initiatives to achieve them? A: Valerie Pompa, EVP of Operations, stated that the company is targeting a $7.25 per barrel cost, focusing on reliability improvements and digital performance strategies. CEO Tim Go added that the company achieved a record $7.98 per barrel in 2024 and has a clear path to reach the target through cost reductions and improved reliability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.