US refiner HollyFrontier reports 91% drop in profit
5/4/2016 12:00:00 AM
May 4 (Reuters) -- US refiner HollyFrontier Corp. reported a 91% fall in quarterly profit, hurt by a steep fall in refining margins and lower refinery utilization rates amid a rise in diesel and gasoline inventories.
US refiners voluntarily reduced output in the first quarter after ramping up production last year to benefit from weak prices of their main feedstock -- crude oil.
Crack spreads, the difference between the prices of crude oil and refined products, have narrowed sharply due to a spike in distillate and gasoline inventories in the US.
Average sales price per produced barrel fell to $46.44 from $69.61 a year earlier, pressuring refinery gross margin, which fell to $7.59 per produced barrel from $16.69.
However, CEO George Damiris said he expects gasoline margins to continue to strengthen in the current quarter.
HollyFrontier's refinery utilization rate fell to 88.3% in the first quarter ended March 31 from 94% a year earlier.
The net profit attributable to the company's shareholders fell to $21.3 million, or 12 cents/share, in the quarter, from $226.9 million, or $1.16/share, a year earlier.
Sales and other revenue fell 33% to $2.02 billion.
(Reporting by Amrutha Gayathri in Bengaluru; Editing by Shounak Dasgupta)
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