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HollyFrontier Corp HFC

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HollyFrontier Q3 Earnings Soar, but Lack of Dividend and Acquisition Spree Could Weigh on Shares

Allen Good, CFA Sector Strategist

Analyst Note

| Allen Good, CFA |

HollyFrontier reported third-quarter adjusted earnings of $209.9 million compared with an adjusted loss of $66.9 million a year ago. Adjusted earnings for the quarter exclude noncash benefits from the sale of a real property offset by restructuring, preclose acquisition and other charges. Refining segment-adjusted EBITDA improved to $295.3 million from a loss of $39.3 million a year ago due to higher volumes from stronger product demand and an increase in the realized refining margin to $14.87 per barrel from $6.20 per barrel last year. Crude throughput increased during the quarter to 416,430 b/d from 375,880 b/d last year. Lubricants performed well with adjusted EBITDA increasing to $81.7 million from $60.6 million on stronger base oil margins. HEP-adjusted EBITDA, which excludes a goodwill impairment charge, fell to $83.3 million from $86.4 million. Management revised 2021 capital spending lower as some renewables spending will slip into 2022, but total renewables project spending of $800 million-900 million remains unchanged, with all projects within budget.

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Company Profile

Business Description

HollyFrontier is an independent petroleum refiner that owns and operates four refineries serving the Rockies, midcontinent, and Southwest, with a total crude oil throughput capacity of 405,000 barrels per day. It is converting its Cheyenne petroleum refinery to renewable diesel. It also has a 57% ownership stake in Holly Energy Partners, which owns and operates petroleum product pipelines and terminals principally in the Southwestern United States.

2828 North Harwood, Suite 1300
Dallas, TX, 75201
T +1 214 871-3555
Sector Energy
Industry Oil & Gas Refining & Marketing
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 3,891