HollyFrontier Corporation Reports Quarterly Results
05/05/2021 - 06:30 AM
HollyFrontier Corporation (NYSE:HFC) (“HollyFrontier” or the “Company”) today reported first quarter net income attributable to HollyFrontier stockholders of $148.2 million , or $0.90 per diluted share, for the quarter ended March 31, 2021, compared to a net loss of $(304.6) million , or $(1.88) per diluted share, for the quarter ended March 31, 2020.
The first quarter results reflect special items that collectively increased net income by a total of $233.5 million . On a pre-tax basis, these items include a lower of cost or market inventory valuation adjustment of $200.0 million and a $51.5 million gain on a tariff settlement, partially offset by severance costs of $7.8 million related to restructuring in our Lubricants and Specialty Products segment and charges related to the Cheyenne Refinery conversion to renewable diesel production, including decommissioning charges of $8.3 million , last-in, first-out (“LIFO”) inventory liquidation costs of $0.9 million and severance charges totaling $0.5 million . Excluding these items, net loss for the current quarter was $(85.3) million ($(0.53) per diluted share) compared to net income of $86.5 million ($0.53 per diluted share) for the first quarter of 2020, which excludes certain items that collectively decreased net income by $391.1 million .
HollyFrontier’s President & CEO, Michael Jennings, commented, “A record earnings quarter in our Lubricants and Specialties business, as well as steady performance from HEP, helped offset the impacts of heavy planned maintenance and winter storm Uri on our refining segment during the quarter. As we enter the summer, our focus remains on safely completing the build-out of our Renewables business on schedule.”
The Refining segment reported Adjusted EBITDA of $(65.8) million for the first quarter of 2021 compared to $175.9 million for the first quarter of 2020. This decrease was driven by the impacts of planned maintenance and winter storm Uri on our operations and lower realized margins along with higher laid-in crude costs, which resulted in a consolidated refinery gross margin of $8.00 per produced barrel, a 28% decrease compared to $11.06 for the first quarter of 2020. Crude oil charge averaged 348,170 barrels per day (“BPD”) for the current quarter compared to 392,630 BPD for the first quarter of 2020.
The Lubricants and Specialty Products segment reported EBITDA of $87.1 million for the first quarter of 2021 compared to $32.3 million in the first quarter of 2020. Excluding the $7.8 million related to restructuring in our Lubricants and Specialty Products segment, Adjusted EBITDA was $94.9 million . This increase was driven by strong base oil margins in the first quarter of 2021.
Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $96.2 million for the first quarter of 2021 compared to $64.4 million in the first quarter of 2020.
For the first quarter of 2021, net cash provided by operations totaled $62.3 million . During the period, HollyFrontier declared and paid a dividend of $0.35 per share to shareholders totaling $57.7 million . At March 31, 2021, the Company's cash and cash equivalents totaled $1,193.4 million , a $174.9 million decrease over cash and cash equivalents of $1,368.3 million at December 31, 2020. Additionally, the Company's consolidated debt was $3,126.1 million . The Company’s debt, exclusive of HEP debt, which is nonrecourse to HollyFrontier, was $1,737.8 million at March 31, 2021.
The Company has scheduled a webcast conference call for today, May 5, 2021, at 8:30 AM Eastern Time to discuss first quarter financial results. This webcast may be accessed at: https://event.on24.com/wcc/r/3081846/EF98CFA2BFD7FDCC6F3E486A1640262F . An audio archive of this webcast will be available using the above noted link through May 19, 2021.
HollyFrontier Corporation, headquartered in Dallas, Texas, is an independent petroleum refiner and marketer that produces high value light products such as gasoline, diesel fuel, jet fuel and other specialty products. HollyFrontier owns and operates refineries located in Kansas, Oklahoma, New Mexico and Utah and markets its refined products principally in the Southwest U.S., the Rocky Mountains extending into the Pacific Northwest and in other neighboring Plains states. In addition, HollyFrontier produces base oils and other specialized lubricants in the U.S., Canada and the Netherlands, and exports products to more than 80 countries. HollyFrontier also owns a 57% limited partner interest and a non-economic general partner interest in Holly Energy Partners, L.P., a master limited partnership that provides petroleum product and crude oil transportation, terminalling, storage and throughput services to the petroleum industry, including HollyFrontier Corporation subsidiaries.
The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995: The statements in this press release relating to matters that are not historical facts are “forward-looking statements” based on management’s beliefs and assumptions using currently available information and expectations as of the date hereof, are not guarantees of future performance and involve certain risks and uncertainties, including those contained in our filings with the Securities and Exchange Commission. Forward-looking statements use words such as “anticipate,” “project,” “expect,” “plan,” “goal,” “forecast,” “intend,” “should,” “would,” “could,” “believe,” “may,” and similar expressions and statements regarding our plans and objectives for future operations. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that our expectations will prove correct. Therefore, actual outcomes and results could materially differ from what is expressed, implied or forecast in such statements. Any differences could be caused by a number of factors, including, but not limited to, the Company’s ability to successfully close the pending Puget Sound refinery transaction, or, once closed, integrate the operation of the Puget Sound refinery with our existing operations; the extraordinary market environment and effects of the COVID-19 pandemic, including a significant decline in demand for refined petroleum products in markets that the Company serves; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products or lubricant and specialty products in the Company’s markets; the spread between market prices for refined products and market prices for crude oil; the possibility of constraints on the transportation of refined products or lubricant and specialty products; the possibility of inefficiencies, curtailments or shutdowns in refinery operations or pipelines, whether due to infection in the workforce or in response to reductions in demand; the effects of current and/or future governmental and environmental regulations and policies, including the effects of current and/or future restrictions on various commercial and economic activities in response to the COVID-19 pandemic; the availability and cost of financing to the Company; the effectiveness of the Company’s capital investments and marketing strategies; the Company’s efficiency in carrying out and consummating construction projects, including the Company's ability to complete announced capital projects, such as the conversion of the Cheyenne Refinery to a renewable diesel facility and the construction of the Artesia renewable diesel unit and pretreatment unit, on time and within budget; the Company's ability to timely obtain or maintain permits, including those necessary for operations or capital projects; the ability of the Company to acquire refined or lubricant product operations or pipeline and terminal operations on acceptable terms and to integrate any existing or future acquired operations; the possibility of terrorist or cyberattacks and the consequences of any such attacks; general economic conditions, including uncertainty regarding the timing, pace and extent of an economic recovery in the United States; continued deterioration in gross margins or a prolonged economic slowdown due to the COVID-19 pandemic could result in an impairment of goodwill and/or additional long-lived asset impairments; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s Securities and Exchange Commission filings. The forward-looking statements speak only as of the date made and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
RESULTS OF OPERATIONS
Financial Data (all information in this release is unaudited)
Three Months Ended
March 31,
Change from 2020
2021
2020
Change
Percent
(In thousands, except per share data)
Sales and other revenues
$
3,504,293
$
3,400,545
$
103,748
3
%
Operating costs and expenses:
Cost of products sold:
Cost of products sold (exclusive of lower of cost or market inventory valuation adjustment)
2,960,305
2,693,726
266,579
10
Lower of cost or market inventory valuation adjustment
(200,037
)
560,464
(760,501
)
(136
)
2,760,268
3,254,190
(493,922
)
(15
)
Operating expenses
399,909
328,345
71,564
22
Selling, general and administrative expenses
81,975
87,737
(5,762
)
(7
)
Depreciation and amortization
124,079
140,575
(16,496
)
(12
)
Total operating costs and expenses
3,366,231
3,810,847
(444,616
)
(12
)
Income (loss) from operations
138,062
(410,302
)
548,364
(134
)
Other income (expense):
Earnings of equity method investments
HFC Rankings
N/A Ranked by Stock Gains
