With refineries in Tulsa and Kansas, New Mexico, Wyoming and Utah, HollyFrontier Corporation reported Wednesday net income of $1.1 billion or $6.19 per diluted share for 2018. But its Fourth Quarter 2017 earnings were much lower than a year earlier.
The Dallas company said its adjusted net income was $1.14 billion or $6.44 per diluted share. Earnings before adjusts totaled $2 billion.
The fourth quarter 2018 net income was $141.9 million or 81-cents a share, down from the $521.1 million and $2.92 per share reported for the fourth quarter of 2017.
The fourth quarter results include a lower of cost or market inventory valuation adjustment that decreased pre-tax earnings by $329.2 million. Excluding this item, net income for the fourth quarter was $393.9 million ($2.25 per diluted share) compared to $124.6 million ($0.70 per diluted share) for the fourth quarter of 2017, which excludes certain items that collectively decreased earnings by $396.5 million for the three months ended December 31, 2017.
HollyFrontier’s President & CEO, George Damiris, commented, “HollyFrontier achieved strong financial results in 2018 as we were able to capture the favorable crude discounts and healthy product cracks across our refining system. We returned approximately $597 million in cash to shareholders in the form of regular dividends and share repurchases, while continuing to invest in our assets.”
He is also predicting a growing strength in the diesel markets and a seasonal rebound in the gasoline markets.
“On February 1, 2019, we closed on our previously announced acquisition of Sonneborn. With the addition of Sonneborn, we continue to focus on advancing our downward integration strategy into the high-margin finished lubricants and specialty products market.”
The Refining and Marketing segment reported adjusted EBITDA of $583.4 million compared to $233.1 million for the fourth quarter of 2017.
The firm’s Lubricants and Specialty Products segment reported EBITDA of $(3.9) million, driven by negative Rack Back EBITDA. Rack Forward EBITDA was $48.5 million for the quarter and $213.4 million for the year ended December 31, 2018.
Holly Energy Partners, L.P. (“HEP”) reported EBITDA of $89.9 million for the fourth quarter 2018 compared to $124.6 million in the fourth quarter of 2017, which included a remeasurement gain related to the acquisition of the remaining interest in the SLC and Frontier Pipelines.
For the fourth quarter of 2018, net cash provided by operations totaled $424.5 million.
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