Sign in
PP

PAR PACIFIC HOLDINGS, INC. (PARR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was weak on refining margins and inventory timing, resulting in a net loss of $(55.7) million ($-1.01 EPS) and Adjusted EBITDA of $10.9 million; Retail and Logistics remained resilient with record annual Adjusted EBITDA contributions .
  • Segment drivers: Hawaii remained positive but saw a sharp YoY margin compression (Adj GM $7.36/bbl vs $16.73), Washington’s index turned negative (−$0.62/bbl), and Wyoming was pressured by higher unit costs and a FIFO headwind; Montana margins fell seasonally (asphalt mix/discounting) .
  • 2025 setup: Management guided to improved market indices in February (Washington +~$7/bbl m/m) and expects Wyoming to restart mid‑April at ~50% and reach full rates by end‑May; Montana FCC/alky turnaround begins in early April; SAF project on schedule for 2H25 start‑up .
  • Capital allocation and liquidity: Board reauthorized up to $250M buyback; total liquidity at 12/31/24 was $613.7M and gross term debt $644.2M (below mid‑target leverage) .
  • Potential stock reaction catalysts: execution on the Wyoming restart timeline, Billings’ turnaround, and sustained improvement in West Coast/Northern Rockies cracks vs recent lows .

What Went Well and What Went Wrong

What Went Well

  • Record annual Retail and Logistics performance with Q4 Retail Adj EBITDA of $22.2M (+29% YoY) and Logistics Adj EBITDA of $33.0M (+38% YoY); Logistics hit a quarterly record on system utilization and cost control .
  • Hawaii execution and capture: Q4 Hawaii throughput 83 Mbpd with production costs of $4.42/bbl; management cited strong utilization, favorable yield, and capture above benchmark ex-hedge/lag effects, and expects Q1 crude differential of $4.75–$5.25/bbl .
  • Management reaffirmed 2025 project execution priorities (Billings turnaround, Wyoming restart, Hawaii SAF 2H25 start‑up) and highlighted a more constructive refining backdrop into early 2025 (tighter balances, China curtailment, rising EU gas costs) .

What Went Wrong

  • Refining margins and timing effects drove losses: Q4 Refining Adj EBITDA was $(22.3)M vs $106.5M YoY; Hawaii price lag (−$5.4M), Washington’s negative index (−$0.62/bbl), Montana seasonal asphalt discounting, Wyoming FIFO headwind (−$2.2M) .
  • Washington weakness: Adj GM fell to $1.05/bbl from $7.87 YoY on a negative local index and soft secondary products/asphalt dynamics .
  • Wyoming incident (Feb 12, 2025) led to idling through winter; while restart plans are in place, the outage reduces Q1 throughput and near‑term production; unit costs in Q4 rose to $11.49/bbl vs $8.03 YoY .

Financial Results

Sequential performance (Q2→Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$2,017.5 $2,143.9 $1,832.2
Net Income ($USD Millions)$18.6 $7.5 $(55.7)
Diluted EPS ($)$0.32 $0.13 $(1.01)
Adjusted EBITDA ($USD Millions)$81.6 $51.4 $10.9
Adjusted Net Income ($USD Millions)$28.5 $(5.5) $(43.4)
Adjusted Diluted EPS ($)$0.49 $(0.10) $(0.79)

YoY comparison (Q4 2024 vs Q4 2023)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$2,183.5 $1,832.2
Net Income ($USD Millions)$289.3 $(55.7)
Diluted EPS ($)$4.77 $(1.01)
Adjusted EBITDA ($USD Millions)$122.0 $10.9
Adjusted Net Income ($USD Millions)$65.2 $(43.4)
Adjusted Diluted EPS ($)$1.08 $(0.79)

Segment results – Adjusted EBITDA trend

Segment ($USD Millions)Q3 2024Q4 2024
Refining$20.1 $(22.3)
Logistics$33.0 $33.0
Retail$21.0 $22.2
Corporate & Other$(22.6) $(21.9)

KPIs by refinery (Q4 2024 vs Q4 2023)

KPIQ4 2023Q4 2024
Hawaii Throughput (Mbpd)80.6 83.3
Hawaii Adj GM ($/bbl)$16.73 $7.36
Hawaii Production Cost ($/bbl)$4.80 $4.42
Montana Throughput (Mbpd)49.8 51.9
Montana Adj GM ($/bbl)$11.55 $3.70
Montana Production Cost ($/bbl)$12.03 $10.48
Washington Throughput (Mbpd)38.4 39.0
Washington Adj GM ($/bbl)$7.87 $1.05
Washington Production Cost ($/bbl)$4.53 $4.34
Wyoming Throughput (Mbpd)17.2 13.6
Wyoming Adj GM ($/bbl)$13.90 $11.11
Wyoming Production Cost ($/bbl)$8.03 $11.49

Notable non‑GAAP/timing effects: Hawaii price lag ~$(5.4)M (−$0.71/bbl) in Q4; Wyoming FIFO impact ~$(2.2)M (−$1.75/bbl) in Q4 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Hawaii landed crude differential ($/bbl)Q1 2025Q4 2024: $5.75–$6.25 $4.75–$5.25 Lower
Throughput – Hawaii (Mbpd)Q1 2025Q4 2024: 80–83 79–82 (reformer maintenance) Slightly lower (seasonal/Mx)
Throughput – Washington (Mbpd)Q1 2025Q4 2024: 38–41 37–39 Slightly lower
Throughput – Montana (Mbpd)Q1 2025Q4 2024: 48–52 48–52; FCC/alky turnaround starts early April Maintained, turnaround slated
Throughput – WyomingQ1–Q2 2025Q4 2024: 15–17 Mbpd Idled remainder of Q1; restart mid‑Apr ~50% and full by end‑May Lower in Q1; staged Q2 ramp
Capture guidance – Washington2025 benchmarkn/a85%–95% (new index) New disclosure
Capture guidance – Wyoming2025 benchmarkn/a90%–100% New disclosure
Cost reductions2025 annualized$30–$40M target (introduced) On track $30–$40M Maintained
CapExFY 2025Prior framework referenced$210–$240M; Wyoming repairs within this range Maintained
Share repurchase authorizationOpen‑endedPrior $250M nearly consumed New $250M authorization Replenished

Earnings Call Themes & Trends

TopicQ2 2024 (prev)Q3 2024 (prev)Q4 2024 (current)Trend
SAF project (Hawaii)On budget; 2H25 start‑up targeted Construction phase; on track 2H25 Construction on plan; strong customer interest; $92M capex; inside‑fence cost/logistics advantages Steady execution; rising commercial interest
Cost reductionn/aTarget $30–$40M 2025; IT consolidation and site OpEx focus Initiatives launched in Q4; tracking to $30–$40M savings Execution underway
Washington economicsQ2 capture 21% on heavy diffs/secondary weakness Weak capture; low‑cost operator positioning emphasized Index turned negative in Q4; Feb index +~$7/bbl m/m; expect volatility tailwind Near‑term improvement
Rockies/BillingsTurnaround executed on time/budget Reliability improving; 2025 FCC/alky turnaround planned FCC/alky turnaround starts early April; run other units at reduced rates Planned heavy 1H25 work
WyomingStrong Q2 ops; record throughput Normal opsFeb 12 incident; restart mid‑Apr ~50%, full by end‑May; adequate property/BI insurance Temporary outage; staged recovery
Capital returns$66M buybacks in Q2; opportunistic Continued buybacks; liquidity strong New $250M authorization; dynamic approach vs liquidity/margins Replenished capacity

Management Commentary

  • “2024 adjusted EBITDA was $239 million and adjusted net income was $0.37 per share… record Logistics and Retail adjusted EBITDA. The durability of our results in a challenging refining market reflects the benefits of our diversified business model” – CEO Will Monteleone .
  • “Following nearly 9 months of declining Refining margins, several factors are now contributing to a more optimistic Refining outlook… tighter balances, higher EU gas prices, reduced China exports, and reemerging operational challenges” – CEO Will Monteleone .
  • “Based on our preliminary assessment [of Wyoming], we believe that the refinery can restore partial operations, targeting 50% utilization by mid‑April and full rates before Memorial Day” – EVP Richard Creamer .
  • “We launched our cost reduction initiatives in earnest during the fourth quarter and remain on track to achieve $30 million to $40 million in annual savings” – CFO Shawn Flores .

Q&A Highlights

  • Capital returns vs deleveraging: Management will remain opportunistic with the new $250M authorization, balancing repurchases against forward margin outlook and desired liquidity cushion; comfortable with current term‑debt leverage .
  • SAF project economics and contracting: Competitive due to inside‑fence operating costs and existing logistics; $92M capex (<$1.50/gal), with flexibility to sell into West Coast incentives and Asia Pacific; mix of merchant and airline contracts under negotiation .
  • Wyoming outage: Adequate property/business interruption coverage above thresholds; incremental repair costs managed within FY25 capex guidance ($210–$240M). Q1 lost production math based on Wyoming being down after Feb 12; capture guidance 90%–100% .
  • Washington/PADD 5 backdrop: February index up ~+$7/bbl m/m amid outages and tight inventories; low‑cost Tacoma system poised to capitalize on volatility .
  • Laramie monetization: Asset remains non‑core; macro more favorable; management working with partners to maximize value; seeing increased regional interest/capital opportunities .

Estimates Context

  • S&P Global consensus for Q4 2024 EPS and revenue was unavailable via the SPGI feed at the time of query; therefore, estimate comparisons could not be provided. Values retrieved from S&P Global were not available due to rate limits.
  • Given the absence of consensus data, we do not label beats/misses for Q4; however, the primary drivers of underperformance vs prior periods were weaker regional indices (Washington negative), price lag and FIFO effects, and seasonal/asphalt mix at Montana .

Key Takeaways for Investors

  • Near‑term inflection watch: February index improvements in Washington (+~$7/bbl m/m) and seasonally tightening PNW/Northern Rockies cracks could support Q1/Q2 margin recovery if sustained .
  • Execution catalysts: Billings FCC/alky turnaround (early April), Wyoming restart (mid‑Apr to end‑May), and Hawaii SAF 2H25 start‑up are the primary operational events that can reset earnings power through 2025 .
  • Defensive ballast: Retail and Logistics continue to offset low‑cycle refining; Q4 Logistics set a quarterly record; Retail grew volumes and inside sales, supporting cash generation diversity .
  • Cost program traction: $30–$40M annual run‑rate savings targeted and “in earnest” as of Q4 lowers breakevens into mid‑cycle margins .
  • Capital allocation: Renewed $250M buyback authorization adds flexibility; management will pace repurchases vs margin outlook and liquidity; term‑debt leverage remains within target .
  • Risk lens: Washington index sensitivity (asphalt/secondary products), Wyoming outage execution risk, and asphalt seasonality in Montana remain key variables near term .
  • Medium‑term thesis: If margin normalization persists and projects/guidance execute, consolidated EBITDA should recover off Q4 lows, with higher‑quality Retail/Logistics mix and SAF optionality enhancing through‑cycle returns .

Notes on non‑GAAP: Company highlights Adjusted Gross Margin, Adjusted EBITDA, and Adjusted Net Income, excluding inventory valuation timing, environmental obligation MTM, unrealized derivatives, and other specified items; reconciliations provided in the release .