HollyFrontier posts wider-than-expected loss on weather setback
HollyFrontier Corp posted a wider-than-expected quarterly loss on Wednesday, as the U.S. refiner faced heavy refining maintenance and weather-related downtime, sending its shares down as much as 8%.
Flooding in British Columbia, Canada, cut crude oil supplies to Puget Sound refinery and severe weather conditions and operating problems restricted output at processing plants in New Mexico and Oklahoma, HollyFrontier said last month.
Its refinery utilization in the reported quarter fell to 83.6%, from 93.8% in the previous year and total operating costs and expenses also rose nearly 88% to $5.64 B.
On an adjusted basis, the company posted a quarterly loss of 11 cents per share, slightly bigger than average analysts' expectation of 9 cents per share, according to Refinitiv IBES.
For the current quarter, HollyFrontier expects to run between 490,000 and 510,000 bpd of crude.
The outlook reflects impact of weather-related downtime at Puget Sound refinery, a scheduled turnaround at the Woods Cross refinery, Utah, as well as maintenance activities at the Navajo refinery, New Mexico, throughout the first quarter.
However, a sustained recovery in demand for fuel and refined products from the pandemic-driven lows helped narrow HollyFrontier's losses from the year-ago numbers.
Refinery gross margin for the 4Q of 2021 was $8.70 per produced barrel, a 116% increase from the year-ago period. Throughput, or the amount of crude processed, rose 12% in the quarter to 462,740 bpd.
"We believe that demand for transportation fuels will continue to strengthen as the global economy recovers from the pandemic," Chief Executive Officer Michael Jennings said on a conference call.
The Dallas, Texas-based refiner said 4Q net loss attributable to stockholders narrowed to 24 cents per share, compared with a loss of 73 cents per share, a year earlier.
"Within refiners, we believe HFC is best positioned to grow earnings in the next year by adding Puget Sound, Sinclair assets and its renewable diesel projects," said Manav Gupta, analyst at Credit Suisse.
Shares of HollyFrontier were trading 6.5% lower at $32.20 in morning trade on the NYSE.
(Reporting by Arunima Kumar in Bengaluru; Editing by Sherry Jacob-Phillips and Shailesh Kuber)
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