Delek US Holdings (NYSE:DK) posted a smaller-than-expected adjusted loss for the second quarter, as improved refining margins helped the company navigate persistent headwinds in the energy sector.
The company reported an adjusted loss of $0.56 per share, ahead of Wall Street’s projected loss of $0.86. Revenue came in at $2.76 billion, surpassing the consensus forecast of $2.67 billion.
Refining was a bright spot in the quarter, with adjusted EBITDA climbing to $113.6 million, compared to $42.1 million in the same period a year earlier. The jump was largely driven by an 11.4% rise in benchmark crack spreads, reflecting a more favorable pricing environment.
“We continue to make progress in achieving our Sum of the Parts goals and improving the overall profitability of the company by achieving our original $120 million EOP target one quarter in advance,” said Avigal Soreq, President and Chief Executive Officer of Delek US. “Our EOP efforts are exceeding expectations and today we have increased our run-rate cash flow improvement target to $130 to 170 million.”
The logistics division also posted strong results, with adjusted EBITDA increasing to $120.2 million, up from $100.6 million in Q2 last year. The gains were attributed to contributions from the W2W dropdown and recent acquisitions, such as H2O Midstream and Gravity.
Delek highlighted approximately $30 million in benefits from its Enterprise Optimization Plan (EOP) during the quarter. Additionally, its midstream arm, Delek Logistics Partners (NYSE:DKL), completed the Libby 2 gas processing facility, which expands gas processing capacity for customers in New Mexico.
During the quarter, Delek spent about $13 million repurchasing common stock, followed by another $7.5 million in buybacks after the quarter closed. The board also declared a quarterly dividend of $0.255 per share.
As of June 30, the company reported a cash balance of $615.5 million and long-term debt totaling $3.1 billion, resulting in net debt of $2.49 billion.
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