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HollyFrontier reports on first quarter performance

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Hydrocarbon Engineering,

HollyFrontier Corporation has reported first quarter net income attributable to HollyFrontier stockholders of US$21.3 million or US$0.12 per diluted share for the quarter ended 31 March 2016, compared to US$226.9 million or US$1.16 per diluted share for the quarter ended 31 March 2015. Included in the current quarter results was a non-cash inventory valuation adjustment that increased after-tax earnings by US$37.0 million, or US$0.21 per share.

For the first quarter, net income attributable to stockholders, excluding the lower of cost or market inventory valuation adjustment, decreased by US$238.0 million compared to the same period of 2015, principally reflecting lower refining margins. Production levels averaged approximately 416 000 bpd and crude oil charges averaged 391 000 bpd for the current quarter. On a per barrel basis, consolidated refinery gross margin was US$7.59 per produced barrel, a 55% decrease compared to US$16.69 for the first quarter of 2015. Total operating expenses for the quarter were US$252.6 million compared to US$263.6 million for the first quarter of last year, and refining operating expenses averaged US$5.77 per produced barrel sold compared to US$5.87 per barrel for the same period of 2015.

HollyFrontier's President & CEO, George Damiris, commented, "First quarter earnings reflect seasonally weak industry refining margins, which were 40% below the levels for the comparable period last year. Gasoline margins continue to strengthen, up between 40% and 70% versus first quarter levels. I expect gasoline margins to strengthen further and remain encouraged by the strong vehicle miles traveled data. We remain competitively positioned within the refining landscape given our gasoline weighting, crude slate flexibility and continued progress on the execution of our business improvement plan."

For the first quarter of 2016, net cash provided by operations totalled US$6.6 million. During the period, the company declared a dividend of US$0.33 per share to shareholders totalling US$58.6 million and spent US$133.4 million in stock repurchases. At 31 March 2016, the combined balance of cash and short term investments totalled US$111.0 million and consolidated debt was US$1308.2 million. The company’s debt, exclusive of Holly Energy Partners' debt, which is nonrecourse to HollyFrontier, was US$246.2 million at 31 March 2016.

Adapted from press release by Rosalie Starling

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