01—Abstract
Summary
Summary of the 10-Q filed October 31, 2024. Cited figures are marked; the original filing is the authoritative source.
HF Sinclair Corporation reported a net loss attributable to HF Sinclair stockholders of $(75.9) million, or $(0.40) per basic and diluted share, for the three months ended September 30, 2024, compared with net income of $790.9 milliona, or $4.23 per share, in the same period of 2023.
For the nine months ended September 30, 2024, net income attributable to HF Sinclair stockholders was $390.5 millionb, or $2.01 per share, versus $1,651.8 million, or $8.57 per share, a year earlier. The company attributed the decline principally to lower adjusted refinery gross margins in both the West and Mid-Continent regions, which fell to $10.79 per produced barrel sold in the quarter from $26.27 a year earlier. Sales and other revenues fell 19.1% in the quarter to $7.21 billion, and a $202.3 million lower-of-cost-or-market inventory charge further weighed on results.
Cash and cash equivalents were $1.23 billionc at September 30, 2024, and liquidity was approximately $3.7 billion, including an undrawn $1.65 billion HF Sinclair credit facility and $850.0 million of availability under the HEP Credit Agreement. Total debt was $2.64 billion, including $350.0 million of HEP Credit Agreement borrowings classified as current debt maturing July 2025. Operating cash flow for the nine months was $1.25 billion, down from $2.07 billion, while the company repurchased $667.3 million of common stock and paid $290.5 million in dividends.
Management expects fourth-quarter 2024 crude throughput of 565,000 to 600,000 barrels per day, reflecting the planned El Dorado refinery turnaround, and expects continued weakness in RINs and LCFS prices to affect renewable diesel margins. The filing also reports a July 26, 2024 D.C. Circuit decision vacating the EPA's denial of the company's small refinery exemption petitions, the impact of which the company says is too early to determine.
Separately, HFS Navajo received a proposed penalty demand from New Mexico and federal agencies in September 2024 related to alleged Clean Air Act noncompliance at the Artesia refinery, and the company says it is unable to estimate the costs it may incur. The board declared a regular quarterly dividend of $0.50d per share on October 31, 2024.
02—Key points
Key Highlights
- Q3 2024 net loss attributable to HF Sinclair stockholders of $(75.9) million, or $(0.40) per share, versus net income of $790.9 million, or $4.23 per share, in Q3 2023.
- Adjusted refinery gross margin per produced barrel sold fell to $10.79 in Q3 2024 from $26.27 in Q3 2023; the company cites lower average sales prices per barrel.
- Sales and other revenues decreased 19.1% to $7.21 billion in Q3 2024, principally due to lower refined product sales prices.
- Lower-of-cost-or-market inventory valuation adjustments reduced pre-tax earnings by $202.3 million in Q3 2024.
- Liquidity of approximately $3.7 billion at September 30, 2024, including $1.2 billion of cash and an undrawn $1.65 billion HF Sinclair credit facility.
- Returned capital through $667.3 million of treasury stock purchases and $290.5 million of dividends in the first nine months of 2024; $798.5 million remains under the May 2024 repurchase program.
- D.C. Circuit vacated the EPA's denial of the company's small refinery exemption petitions on July 26, 2024; the final financial impact is not yet determinable.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed October 31, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $7.21B$8.91B | −19.1% |
| SG&A Expenses | $118.00M$124.21M | −5.0% |
| Operating Income | -$121.00M$1.07B | −111.3% |
| Net Income | -$76.00M$790.92M | −109.6% |
| EPS (Basic) | $-0.40$4.23 | −109.5% |
| EPS (Diluted) | $-0.40$4.23 | −109.5% |
| Shares Outstanding (Basic) | 189.84M185.46M | +2.4% |
| Shares Outstanding (Diluted) | 189.84M185.46M | +2.4% |
05—Questions
Frequently Asked Questions
Why did HF Sinclair swing to a net loss in the third quarter of 2024?
The company attributes the decline principally to lower adjusted refinery gross margins in both its West and Mid-Continent regions, which fell to $10.79 per produced barrel sold from $26.27 a year earlier. A $202.3 million lower-of-cost-or-market inventory charge also reduced pre-tax earnings, and the company recorded a $(57.3) million income tax benefit in the quarter.
How much liquidity does HF Sinclair have and how is its debt structured?
Liquidity was approximately $3.7 billion at September 30, 2024, consisting of $1.2 billion of cash, an undrawn $1.65 billion HF Sinclair credit facility maturing in April 2026, and $850.0 million of remaining availability under the HEP Credit Agreement. Total debt was $2.64 billion, including $350.0 million of HEP Credit Agreement borrowings that mature in July 2025 and are classified as current debt.
What is the company's outlook for the fourth quarter of 2024?
HF Sinclair expects to run between 565,000 and 600,000 barrels per day of crude oil in the fourth quarter of 2024, reflecting the planned turnaround at its El Dorado refinery. It also expects continued weakness in RINs and Low Carbon Fuel Standard prices to affect renewable diesel margins, and expects to grow its branded sites by approximately 10% over the next six to twelve months.
What regulatory and environmental matters could affect the company?
The D.C. Circuit's July 26, 2024 decision vacated the EPA's denial of the company's small refinery exemption petitions, but the company says it is too early to determine the final impact. HFS Navajo received a proposed penalty demand in September 2024 for alleged Clean Air Act noncompliance at the Artesia refinery, and the company says it is unable to estimate the costs it may incur.
What shareholder returns were announced with this filing?
On October 31, 2024, the Board declared a regular quarterly dividend of $0.50 per share, payable December 4, 2024 to holders of record on November 21, 2024. During the first nine months of 2024, the company repurchased $667.3 million of common stock and paid $290.5 million in dividends, and $798.5 million remained authorized under the May 2024 Share Repurchase Program as of September 30, 2024.
06—Continue