HollyFrontier Corporation (NYSE: HFC) (“HollyFrontier” or the
“Company”) today announced a business update in response to
COVID-19. Due to the economic uncertainty in today’s environment,
HFC is providing an update on its operations and balance sheet and
announcing a revised 2020 capital budget.
“The health and safety of our employees, communities, and
contractors remains our top priority as we navigate this
challenging environment,” commented Mike Jennings, President and
Chief Executive Officer. “HollyFrontier is implementing
precautionary measures to protect our workforce so that we may
continue to safely operate our facilities. We maintain a strong
balance sheet and liquidity position precisely as a buffer against
economic downturns such as we are experiencing today. While the
COVID-19 pandemic is unprecedented, we believe our disciplined
approach to capital allocation and leverage will help us to
withstand current market conditions.”
Operational Update:
HollyFrontier is committed to producing the essential products
necessary for our communities as long as it is safe to do so and
has taken the following steps:
- HollyFrontier is limiting onsite staff at all of our facilities
to essential operational personnel only. As a result, the Company
is carefully evaluating projects at the refinery and limiting or
postponing non-essential projects and contractor work.
- Based on market conditions, the Refining segment is currently
running at approximately 70% of capacity.
- In Lubricants and Specialty Products, the Company is
withdrawing 2020 guidance for Rack Forward due to lack of
visibility around global end market demand.
Capital Expenditures Update:
HollyFrontier is making the following initial revisions to its
previously announced 2020 consolidated annual capex guidance:
- The Company is reducing total consolidated capital expenditures
by approximately 15% to a range of $525 – 625 million from its
previously announced guidance of $623 – 729 million.
- HollyFrontier remains committed to the strategic goal of
producing renewable fuels and will continue with construction of
the Renewable Diesel Unit at our Artesia refinery.
- HollyFrontier will continue to evaluate market conditions and
make further changes as circumstances dictate.
Current Liquidity:
HollyFrontier remains committed to a conservative capital
structure and strives to be a preferred counterparty to its
suppliers and customers. As of March 31, 2020:
- HollyFrontier’s standalone (excluding HEP) liquidity stood at
over $2.2 billion consisting of a cash balance of approximately
$900 million and undrawn $1.35 billion credit facility maturing in
2022.
- HollyFrontier’s earliest standalone (excluding HEP) debt
maturity is $1 billion of Senior Notes due 2026, rated investment
grade by S&P, Moody’s and Fitch.
- HollyFrontier’s standalone (excluding HEP) debt to capital
ratio was 14% and net-debt to capital ratio was 1%.
“We understand the critical role HollyFrontier plays in
supporting our local workforce, communities and customers, and our
principal goal is to maintain safe and reliable operations during
this time,” said Jennings. “We also recognize the importance of
being flexible and will continue to monitor COVID-19 developments
and the dynamic market environment to properly address our business
plan going forward.”
About HollyFrontier Corporation:
HollyFrontier Corporation, headquartered in Dallas, Texas, is an
independent petroleum refiner and marketer that produces high value
light products such as gasoline, diesel fuel, jet fuel and other
specialty products. HollyFrontier owns and operates refineries
located in Kansas, Oklahoma, New Mexico, Wyoming and Utah and
markets its refined products principally in the Southwest U.S., the
Rocky Mountains extending into the Pacific Northwest and in other
neighboring Plains states. In addition, HollyFrontier produces base
oils and other specialized lubricants in the U.S., Canada and the
Netherlands, and exports products to more than 80 countries.
HollyFrontier also owns a 57% limited partner interest and a
non-economic general partner interest in Holly Energy Partners,
L.P., a master limited partnership that provides petroleum product
and crude oil transportation, terminalling, storage and throughput
services to the petroleum industry, including HollyFrontier.
HFC Forward Looking Statement:
The statements contained herein relating to matters that are not
historical facts are "forward-looking statements" within the
meaning of the federal securities laws, including statements with
respect to our strategic goals and capital expenditures. These
statements are based on our beliefs and assumptions using currently
available information and expectations as of the date hereof, are
not guarantees of future performance and involve certain risks and
uncertainties. Although we believe that such expectations reflected
in such forward-looking statements are reasonable, we cannot give
assurance that our expectations will prove to be correct.
Therefore, actual outcomes and results could materially differ from
what is expressed, implied or forecast in these statements. These
risks and uncertainties include, among other things, various risks
and uncertainties associated with the extraordinary market
environment and impacts resulting from the COVID-19 pandemic. Such
risk and uncertainties include, but not limited to:
• uncertainty regarding the length of time it
will take for the United States, Canada, and the rest of the world
to slow the spread of the COVID-19 virus to the point where
applicable authorities are comfortable easing current restrictions
on various commercial and economic activities; such restrictions
are designed to protect public health but also have the effect of
significantly reducing demand for refined products;
• risks and uncertainties with respect to the
actions of actual or potential competitive suppliers and
transporters of refined petroleum or lubricant products in
HollyFrontier's markets;
• the demand for and supply of crude oil,
refined products and lubricant products;
• uncertainty regarding actions by foreign
and domestic suppliers of crude oil;
• the spread between market prices for
refined products and market prices for crude oil;
• the possibility of constraints on the
transportation of refined products or lubricants;
• the possibility of inefficiencies,
curtailments or shutdowns in refinery or lubricants operations or
pipelines;
• effects of governmental and environmental
regulations and policies;
• the availability and cost of financing to
HollyFrontier;
• the effectiveness of HollyFrontier's
capital investments and marketing strategies;
• HollyFrontier's efficiency in carrying out
and consummating construction projects;
• the ability of HollyFrontier to acquire
refined product or lubricant product operations or pipeline and
terminal operations on acceptable terms and to integrate any future
acquired operations;
• the possibility of terrorist attacks and
the consequences of any such attacks;
• general economic conditions; and
• other financial, operational and legal
risks and uncertainties detailed from time to time in
HollyFrontier's Securities and Exchange Commission filings.
The forward-looking statements speak only as of the date made
and, other than as required by law, HollyFrontier undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200408005079/en/
HollyFrontier Corporation Craig Biery, 214-954-6510 Director,
Investor Relations or Trey Schonter, 214-954-6510 Investor
Relations
HollyFrontier (NYSE:HFC)
Historical Stock Chart
From Jun 2024 to Jul 2024
HollyFrontier (NYSE:HFC)
Historical Stock Chart
From Jul 2023 to Jul 2024