HF Sinclair posts bigger-than-expected loss as refining margins shrink
U.S. refiner HF Sinclair on Thursday posted a bigger-than-expected loss for the fourth quarter, becoming the latest energy company to take a hit from weak refining margins and rising global capacity.
Bigger rivals Valero Energy and Marathon Petroleum, as well as energy heavyweights such as ExxonMobil, have seen refining profits normalize from 2022 peaks, when a post-pandemic demand recovery and sanctions over producer Russia's invasion of Ukraine had boosted fuel prices.
U.S. refinery margins, measured by the 3-2-1 crack spread, averaged $16.66 in the October–December quarter, down nearly 25% from a year earlier.
HF Sinclair's refinery adjusted margin shrank to $6.86 per produced barrel in the fourth quarter, from $13.58 a year earlier, due to weakness in the West and Mid-Continent regions caused by excess global fuel supplies hurting prices.
Overall sales of products that the company refines crude into, such as gasoline and diesel, fell 9.4% from the previous quarter to 596,800 bpd.
That pulled down revenues by 15% to $6.5 B in the quarter.
However, the company's lubricants and midstream segments performed better than last year.
Adjusted profit in the lubricants segment grew thanks to a decrease in feedstock inventory charges, while the midstream segment benefited from higher tariffs charged to transport crude.
On an adjusted basis, the Dallas, Texas (U.S.)-based company reported a loss of $1.02 per share for the quarter ended December, compared with analysts' estimates for a loss of $0.90, according to data compiled by LSEG.
Comments