HF Sinclair Corp Q1 FY2025 earnings call

Tim Go highlighted strong results in refining, midstream, marketing, and lubricants/specialties, noting sequential improvement in refining and focus on commercial/excellent, turnaround execution, capital discipline. Atanas Atanasov covered financial highlights including net loss, adjusted EBITDA, capital spending guidance (full year 2025 sustaining capital ~$775M, down 25M from 2024; growth capital ~$100M), debt refinancing, and new credit facility details.

Refining: First quarter delivered sequential quarter improvements in capture and operating expenses despite tough economic environment. Began Tulsa refinery turnaround, completed on schedule and budget. Adjusted EBITDA was negative $48 million in Q1 2025 vs $209 million in Q1 2024. Renewables: Focused on lowering total operating expenses and optimizing low CI feed stocks, estimated close to breakeven after Q1 if PTC included. Marketing: Record quarter with $27 million in EBITDA, highest quarterly adjusted gross margin 12 cents per gallon. Grew branded supplied stores by 37 sites, backlog of over 170 additional supplied branded sites. Lubricants and Specialties: $85 million in EBITDA, strong quarter, completing turnaround at Mississauga facility. Midstream: Record quarter, generating $119 million in adjusted EBITDA, benefited from higher pipeline revenues.

Full year 2025 sustaining capital spend expected at approximately $775 million, down 25 million from 2024. Expect to spend $100 million in growth capital investments across business segments. Q2 2025 refining segment expected to run between 606,000 - 630,000 barrels per day.

Volatility in market conditions, uncertainty around producers tax credit, tariffs, regulatory changes affecting renewables and lubricants businesses.

Q: Good morning, guys. Very strong result considering the macro. I actually just wanted to start on the midstream side. I think you moved some assets from the midstream hep into refining, and yet what we are seeing is like probably one of the strongest midstream quarters that you have delivered close to almost one 20 million in EBITDA. So help us understand what's driving the growth in the midstream business, and your outlook for continue to grow this business as we move ahead.

A: Hey, Manav, this is Steve. We're very excited about the midstream business, and we think that it's really not fully optimized yet. What drove the performance in q1 was predominantly increased and focused on our products and crude pipelines and the revenue generation from our tariff situation there. We believe that this is both an opportunity to grow the integrated value as well as a third party situation. So it's a focus area, and helps us, what we like to say, unlock the integrated value chain between refining midstream and marketing moving forward.

Q: Maybe on the refining side, can you talk about what you're seeing in terms of demand across your markets? Product sales were down across your network, I think year on year. I'm just curious, is that a selection of demand or something else, and maybe more broadly, what are you seeing across your markets?

A: Yeah. Ryan Steve, just across our markets, we're seeing demand relatively flat, we like to say for gas and distillate, what we saw in the first quarter was positive. The impact on our sales was mainly driven by turnaround aspects, but distillate demand being up, we think is generated predominantly by a colder winter and pad one, as well as reduced RD and BD product associated with the new 40 5z regulation that drove about 100,000 barrels a day off the market, which was supplemented by petroleum demand. So we're pretty, pretty excited about the demand patterns and what we're seeing and how it's showing up in the cracks moving into the driving season, particularly across our regions.