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HS

HF Sinclair Corp (DINO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 was loss-making on weak refining; consolidated sales were $6,500M, adjusted EPS was $(1.02) as adjusted EBITDA fell to $28M while midstream, lubes and marketing partially offset the refining downturn .
  • Refining adjusted EBITDA was $(169)M as adjusted refinery gross margin fell 51% YoY to $6.68/bbl on high global supply and lower volumes; crude charge declined on the El Dorado turnaround and softer markets .
  • Non-refining businesses showed resilience: Marketing EBITDA rose to $21M, L&S adjusted EBITDA to $70M, and Midstream adjusted EBITDA to $114M; the Board declared a $0.50 dividend .
  • Management guided to ~$775M sustaining capex and ~$100M growth capex for 2025 and Q1’25 crude runs of 580–620 kbpd; they highlighted improving indicator cracks into driving season as a potential tailwind .
  • S&P Global consensus estimates were unavailable at time of analysis; estimate comparisons could not be shown and may need updating when available (S&P Global data unavailable).

What Went Well and What Went Wrong

  • What Went Well

    • Record or strong non-refining performance: “record EBITDA in both our marketing and midstream businesses,” and “another strong year” in Lubricants & Specialties in 2024, demonstrating portfolio resilience .
    • Marketing margins improved with EBITDA up to $21M in Q4; lubes adjusted EBITDA rose to $70M helped by lower FIFO charges; midstream adjusted EBITDA increased to $114M on higher tariffs .
    • Strategy execution and capital return: “returned over $1 billion to shareholders in 2024” and continued commitment to returns; management expects to capture a rebound in cracks during driving season .

  • What Went Wrong

    • Refining weakness drove losses: adjusted refinery gross margin per produced bbl fell 51% YoY to $6.68; refining adjusted EBITDA was $(169)M (vs $276M in Q4’23) on high global fuel supply and lower sales volumes .
    • Turnaround and volumes: crude charge averaged 562,020 bpd (vs 614,160 bpd in Q4’23), pressured by the El Dorado turnaround and market conditions .
    • Renewables headwinds: a $20M cost-of-sales impact from drawing down higher-priced inventory led to Renewables adjusted EBITDA of $(9)M; adjusted renewables margin less op-ex remained negative .

Financial Results

Sequential performance (consolidated)

Metric (USD)Q2 2024Q3 2024Q4 2024
Sales and other revenues ($ Millions)$7,845.8 $7,207.1 $6,500.0
Net income (loss) attributable to stockholders ($ Millions)$151.8 $(75.9) $(214.0)
Diluted EPS ($)$0.79 $(0.40) $(1.14)
EBITDA ($ Millions)$408.0 $98.6 $9.0
Adjusted EBITDA ($ Millions)$405.8 $316.0 $28.0

YoY performance (Q4 only)

Metric (USD)Q4 2023Q4 2024
Sales and other revenues ($ Millions)$7,660.0 $6,500.0
Net income (loss) attributable to stockholders ($ Millions)$(62.0) $(214.0)
Diluted EPS ($)$(0.34) $(1.14)
EBITDA ($ Millions)$129.0 $9.0
Adjusted EBITDA ($ Millions)$428.0 $28.0

Segment results (Q4)

SegmentQ4 2023 IBIT ($M)Q4 2024 IBIT ($M)Q4 2023 EBITDA ($M)Q4 2024 EBITDA ($M)
Refining$(75) $(332) $55 $(200)
Renewables$(76) $(13) $(57) $4
Marketing$2 $13 $9 $21
Lubricants & Specialties$34 $46 $57 $69
Midstream$87 $97 $105 $114

Refining KPIs (Q4)

KPIQ4 2023Q4 2024
Crude charge (BPD)614,160 562,020
Sales of produced refined products (BPD)658,900 596,800
Adjusted refinery gross margin ($/produced bbl)$13.58 $6.68
Adjusted refinery operating expenses ($/throughput bbl)$7.98 $8.49

Other segment KPIs (Q4)

KPIQ4 2023Q4 2024
Renewables sales volumes (thousand gallons)62,614 62,155
Adjusted renewables gross margin ($/gallon)$0.35 $0.25
Adjusted renewables gross margin less op-ex ($/gallon)$(0.02) $(0.13)
Marketing branded sites (period-end)1,540 1,627
Marketing sales volumes (thousand gallons)350,391 333,108
Adjusted marketing gross margin ($/gallon)$0.06 $0.09
L&S sales of produced refined products (BPD)29,530 29,492
Midstream total volumes (Pipelines + Terminals BPD)2,046,141 2,016,204

Balance sheet and cash flow notes

  • Cash and cash equivalents declined to $800M at 12/31/24 (from $1,354M at 12/31/23); net cash used in operations was $141M in Q4; consolidated debt was $2,638M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Sustaining capital (incl. turnarounds, catalysts)FY 2025N/A~$775M New
Growth capitalFY 2025N/A~$100M New
Refining crude runsQ1 2025N/A580–620 kbpd New
Quarterly dividendOngoing$0.50/share (prior) $0.50/share declared for Mar 20, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Marketing expansion and marginsQ2: Marketing EBITDA $15.5M; volumes -2% YoY; margin $0.06–$0.09/gal framework . Q3: EBITDA $22.1M; branded sites 1,586; margin up .Q4: EBITDA $21M; branded sites 1,627; adjusted margin $0.09/gal; pipeline of +152 sites signed; growth 5–10% YoY targeted .Positive on margin uplift; footprint accelerating.
Refining cost and reliabilityQ2: Lower OpEx/bbl and higher utilization; adjusted gross margin $11.33/bbl . Q3: cost per barrel 8.06 and adjusted margin $10.79; reliability improved .Targeting $7.25/bbl OpEx; heavy 2024 TAs completed on time/budget; best-ever safety; line of sight to target .Ongoing cost-down drive; reliability improving.
West Coast optionalityNot highlighted in Q2 press release; Q3: throughput and regional mix noted .Leveraging Puget/UNEV/Artesia-Phoenix to capture tighter PADD 5; small growth project at Puget to increase CARB gasoline flexibility in coming 1–2 months .Improving structural positioning into PADD 5.
Capital returnsQ2/Q3: Dividends maintained; Q3 cash returns $222M -.Commitment to 50% payout; non-refining EBITDA (~$450M midstream, $330M lubes, $75M marketing) provides “dry powder” for returns .Maintained/credible funding capacity for returns.
Renewables policy/marginsQ2/Q3: Renewables swung with indicator margins and LCM; volumes increased .Q1 volatility in 45Z/LCFS; strategy on low-CI feedstocks, op-ex control; $20M Q4 inventory draw hit .Policy uncertainty; operationally focused.
Tariffs/Macro (Canadian crude)Not covered in Q2 PR; Q3 macro noted -.Prepared for potential tariffs; flexibility to lighten slate; expect producers share burden; aim to maintain utilization -.Managed risk; flexible crude slate.

Management Commentary

  • Strategy and portfolio resilience: “Our full year 2024 financial and operational results highlight the strength and resiliency of our diversified portfolio… record EBITDA in both our marketing and midstream businesses… another strong year of earnings in our Lubricants & Specialties business” .
  • Capital returns: “We returned over $1 billion to shareholders in 2024… declared a regular quarterly dividend of $0.50 per share” .
  • Refining outlook: “We are… encouraged by the recent uptick in our refining indicator margins and believe we are well positioned to capture the anticipated rebound in cracks during this driving season” .
  • Cost and reliability: “Our heavy turnaround workload in 2024 was completed on schedule and on budget… best-ever results for Personal Safety 2024” .
  • Marketing growth pipeline: “We put on 87 net stores… another 152 signed… grow branded by 5%–10% YoY” .
  • Lube strategy: Progress integrating base oils into finished products to reduce exposure to base oil cycles; underlying lubes earnings power trending above mid-cycle ex-FIFO .

Q&A Highlights

  • West Coast exposure: Management outlined multiple vectors (Puget components/CARB gas, UNEV to Las Vegas, Artesia-to-Phoenix) to benefit from tighter PADD 5 balances; a small Puget project will expand CARB gasoline flexibility near term .
  • Marketing metrics: Same-store sales are at/above parity after ~6-month ramp; portfolio “high grading” explains lower volumes but higher EBITDA per site -.
  • Cost target: Team reiterated line of sight to $7.25/bbl OpEx through reliability, turnaround capital, and digital/predictive maintenance initiatives .
  • Capital returns framework: Commitment to 50% payout; midstream EBITDA alone can fund dividends; buybacks flex with margin outlook .
  • Policy and macro: Renewables credits (45Z/LCFS) remain uncertain in Q1; flexible crude slate to manage potential Canadian tariffs; SREs back on the table but outcomes uncertain - -.

Estimates Context

  • S&P Global Wall Street consensus for Q4 2024 EPS, revenue, and EBITDA was unavailable at time of analysis due to data access limits; therefore vs-consensus comparisons are not shown. We will update when S&P Global data is accessible (S&P Global data unavailable).

Key Takeaways for Investors

  • Non-refining ballast matters: Midstream, Marketing, and L&S collectively cushioned a weak refining quarter and support ongoing dividends and selective buybacks as cracks improve .
  • Refining reset sets the bar low: With adjusted refinery margin down to $6.68/bbl and turnaround drag in Q4, sequential recovery into driving season could create positive estimate revisions if management’s improving indicator cracks materialize .
  • West Coast optionality is a 2025 lever: Puget flexibility and pipeline connectivity (UNEV, Artesia–Phoenix) provide capture to PADD 5 tightness without major capex; watch project start-up and California pricing spreads -.
  • Cost-down execution is a medium-term thesis: Track OpEx per throughput barrel versus the $7.25 target and reliability metrics post-2024 heavy turnaround season .
  • Renewables volatility persists near term: Policy outcomes (45Z, LCFS) and inventory/pricing dynamics keep Q1 fluid; focus on low-CI feedstock mix and utilization to narrow losses .
  • Capital allocation: 2025 sustaining capex (~$775M) plus $100M growth is manageable against liquidity and diversified EBITDA; throughput guide (580–620 kbpd) implies Q1 run-rate recovery despite planned Tulsa turnaround .
  • Dividend maintained: $0.50/share declared; midstream cash flow coverage provides comfort on base return even in down-cycle refining quarters .