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    DINO
    Earnings call· Mar 2026(Q1 FY26)

    HF Sinclair Q1 FY26 earnings call DINO

    May 1, 2026 Source

    Executive summary

    HF Sinclair Q1 FY26 — Strong Operational Performance and Shareholder Returns

    HF Sinclair delivered strong Q1 FY26 results, driven by robust operational performance across its refining and renewables segments, despite challenging weather and market volatility. The company continues to execute on its integrated value chain strategy, focusing on reliability, cost efficiencies, and strategic growth in marketing and lubricants, while maintaining a strong commitment to shareholder returns amidst ongoing leadership transitions.

    Highlights

    5

    • Adjusted EBITDA for Q1 FY26 was $426 million, up from $201 million in Q1 FY25.

    • Adjusted net income for Q1 FY26 was $127 million, or $0.69 per diluted share, compared to an adjusted net loss of $50 million, or negative $0.27 per diluted share in Q1 FY25.

    • Refining crude charge averaged 613,000 barrels per day, at the upper end of guidance, despite heavy turnaround and harsh winter weather.

    • Returned $167 million in cash to shareholders in Q1 FY26, consisting of $91 million in dividends and $76 million in share repurchases.

    • Since March 2022, the company has returned over $4.9 billion in cash to shareholders and reduced share count by over 66 million shares.

    Concerns

    3

    • Lubricants segment experienced unprecedented cost inflation across its product portfolio, requiring multiple pricing actions.

    • Midstream segment adjusted EBITDA decreased to $111 million from $119 million in Q1 FY25, primarily due to a fuel contamination incident.

    • Middle East conflict created substantial and material disruption, leading to market volatility.

    Guidance & targets

    3
    CategoryTargetConfidence
    Full-year 2026 Capital Spending
    No change
    high materiality
    High
    Q2 2026 Crude Oil Runs
    600,000 to 630,000 barrels per day
    high materiality
    High
    Annual Branded Sites Growth
    approximately 10% annually
    medium materiality
    High

    Segment performance

    5
    SegmentRevenueYoYQoQMargin
    Refining
    Increased adjusted EBITDA driven by higher adjusted refinery gross margins in the West region and increased refined product sales volume, partially offset by lower margins in the Mid-Con. Small refinery RINs waiver increased adjusted gross margin by $21 million.
    Crude charge: 613,000 barrels per day (Q1 FY26)Crude charge: 606,000 barrels per day (Q1 FY25)Adjusted EBITDA (excluding LCM): $55 million (Q1 FY26)Adjusted EBITDA (excluding LCM): -$8 million (Q1 FY25)Adjusted refinery gross margins: higher in West regionAdjusted refinery gross margins: lower in Mid-ConRefined product sales volume: increased
    		———$55 million adjusted EBITDA
    Renewables
    Significant increase in adjusted EBITDA driven by increased sales volume, higher adjusted renewable gross margins due to narrowing Boho spread, higher RINs prices, and recognition of prior year producers tax credit benefits.
    Adjusted EBITDA (excluding LCM): $133 million (Q1 FY26)Adjusted EBITDA (excluding LCM): -$17 million (Q1 FY25)Total sales volumes: 52 million gallons (Q1 FY26)Total sales volumes: 44 million gallons (Q1 FY25)Producers tax credit benefits: $49 million (prior year production, recognized Q1 FY26)
    		———$133 million adjusted EBITDA
    Marketing
    Slight increase in EBITDA driven by higher branded fuel sales volume and progress in integrating the Green Trail Fuels JV, adding new branded sites.
    EBITDA: $28 million (Q1 FY26)EBITDA: $27 million (Q1 FY25)Total branded fuel sales volume: 325 million gallons (Q1 FY26)Total branded fuel sales volume: 294 million gallons (Q1 FY25)Branded sites added: 25 (Q1 FY26)Contracted sites: >100 (expected online 6-12 months)
    		———$28 million EBITDA
    Lubricants and Specialties
    Increase in adjusted EBITDA primarily due to a large FIFO benefit, partially offset by dislocation between rising feedstock costs and product sales price increases.
    Adjusted EBITDA: $103 million (Q1 FY26)Adjusted EBITDA: $85 million (Q1 FY25)FIFO benefit: $53 million (Q1 FY26)FIFO benefit: $8 million (Q1 FY25)
    		———$103 million adjusted EBITDA
    Midstream
    Decrease in adjusted EBITDA primarily driven by marginally higher operating costs resulting from a fuel contamination incident at a Colorado product terminal.
    Adjusted EBITDA: $111 million (Q1 FY26)Adjusted EBITDA: $119 million (Q1 FY25)
    		———$111 million adjusted EBITDA

    Operational metrics

    33
    Adjusted net income
    $127 millionvs. -$50 million Q1 FY25
    Q1 FY26

    Excluding special items that collectively increased net income by $521 million.

    Adjusted diluted EPS
    $0.69vs. -$0.27 Q1 FY25
    Q1 FY26

    Excluding special items that collectively increased net income by $521 million.

    Adjusted EBITDA
    $426 millionvs. $201 million Q1 FY25
    Q1 FY26

    Company-wide adjusted EBITDA.

    Net cash provided by operations
    $457 million
    Q1 FY26

    Net cash provided by operations, including turnaround spend.

    Capital expenditures
    $102 million
    Q1 FY26

    Total capital expenditures for the quarter.

    Total liquidity
    $3.15 billion
    as of March 31, 2026

    Includes cash balance and undrawn credit facility.

    Cash balance
    $1.15 billion
    as of March 31, 2026

    Part of total liquidity.

    Undrawn unsecured credit facility
    $2 billion
    as of March 31, 2026

    Part of total liquidity.

    Debt outstanding
    $2.8 billion
    as of March 31, 2026

    Total debt outstanding.

    Debt-to-capital ratio
    22%
    as of March 31, 2026

    Company's debt-to-capital ratio.

    Net debt to capital ratio
    13%
    as of March 31, 2026

    Company's net debt to capital ratio.

    Regular dividends
    $91 million
    Q1 FY26

    Part of cash returned to shareholders.

    Share repurchases
    $76 million
    Q1 FY26

    Part of cash returned to shareholders.

    Total cash returned to shareholders (since Sinclair acquisition)
    $4.9 billion
    since March 2022

    Cumulative cash returned to shareholders since the Sinclair acquisition.

    Share count reduction (since Sinclair acquisition)
    over 66 million shares
    since March 2022

    Cumulative share count reduction since the Sinclair acquisition.

    Quarterly dividend per share
    $0.50
    Q2 FY26

    Declared by Board of Directors.

    Small refinery RINs waiver impact
    $21 million
    Q1 FY26

    Increased adjusted refinery gross margin.

    Producers tax credit benefits (prior year production)
    $49 million
    Q1 FY26

    Recognized following February 2026 proposed ruling by US Department of Treasury and IRS.

    FIFO benefit
    $53 millionvs. $8 million Q1 FY25
    Q1 FY26

    FIFO benefit in the Lubricants and Specialty segment.

    Crude charge
    613,000vs. 606,000 barrels per day Q1 FY25
    Q1 FY26

    Crude charge for the refining segment, at the upper end of guidance.

    Renewable diesel sales volume
    52 millionvs. 44 million gallons Q1 FY25
    Q1 FY26

    Total sales volumes for the renewables segment.

    Branded fuel sales volume
    325 millionvs. 294 million gallons Q1 FY25
    Q1 FY26

    Total branded fuel sales volume.

    Branded sites added
    25
    Q1 FY26

    New branded sites added in the quarter.

    Contracted branded sites
    more than 100
    Q1 FY26

    Sites with contracts signed and expected to come online.

    Puget Sound diesel/jet swing flexibility
    7,000
    Q1 FY26

    Project enabling flexibility to swing between diesel and jet, depending on market environment.

    El Dorado heavy crude incremental capacity
    10,000
    Fall turnaround

    Expected incremental heavy crude capacity from the vacuum furnace project.

    Refinery utilization (Q2 target)
    north of 70%
    Q2 FY26

    Target utilization for co-located kits in the renewables business, net of planned events.

    US gasoline demand
    down 2%YoY
    Q1 FY26

    Overall US gasoline demand trend.

    US distillate demand
    up 4%YoY
    Q1 FY26

    Overall US distillate demand trend.

    DINO service center same-store sales
    down 2%YoY
    Q1 FY26

    Compared to OPUS down about 4.5%, indicating outperformance.

    Refinery product swing flexibility
    10%
    current

    Ability to swing between gasoline and distillate across the entire fleet.

    RVO projected annual cost
    $50 billion
    annual

    Projected annual cost of the RVO program.

    RVO projected cost per gallon equivalent
    $0.30
    annual

    Projected annual cost of the RVO program as an equivalent per gallon.

    Industry KPIs

    3
    MetricValueDetails
    Realized price differential—
    FCF shareholder distributions$457 million FCF; $167 million total distributionsUSD
    Weather event volume earnings impact—

    Orderbook & backlog

    1
    Share repurchase authorizationunder 2024 share repurchase programQ1 FY26

    Company will opportunistically repurchase shares.

    Deals & partnerships

    2
    Green Trail Fuels JVIntegration of previously announced JV to accelerate growth of Sinclair brand and expand footprint.

    Added 25 branded sites in Q1, with over 100 sites contracted for the next 6-12 months.

    Industrial Oils UnlimitedAcquisition to high-grade molecules and move into more specialized finished lubricants and specialties applications.

    Part of the strategy to tuck in opportunities for acquisition in the lubricants segment.

    Capital programs

    2
    Puget Sound diesel/jet swing flexibility projectcompleted

    Benefit: 7,000 barrels per day swing capacity between diesel and jet

    Successfully brought on another project enabling flexibility to swing approximately 7,000 barrels per day between diesel and jet, depending on the market environment. This is paying off given the current market conditions.

    El Dorado vacuum furnace projectunderway

    Benefit: improved reliability and yield, incremental 10,000 barrels per day of heavy crude into the mix

    Expected to come online as part of the fall turnaround.

    Risks & headwinds

    6
    Middle East military conflictongoing

    substantial and material disruption to the crude oil and other necessary prior the advancement of markets around the world

    Mitigation: Company remains focused on addressing any challenges to serve customers and remains nimble to address market volatility.

    Lubricants cost inflationQ1 FY26, protracted into Q2 and Q3

    unprecedented cost inflation across our product portfolio both in magnitude and the rate at which it occurred

    Mitigation: Implemented multiple pricing actions aimed at recovering higher costs; supply chain remains secure.

    Midstream fuel contamination incidentQ1 FY26

    marginally higher operating costs

    RVO burdenongoing

    projected to be $50 billion a year or an equivalent of $0.30 per gallon

    Mitigation: Company has petitions out for 5 refineries for SREs, believes in the program, and is actively involved in discussions for solutions.

    Demand destruction from high product pricesnear-term, summer driving season

    some slight consider softness as we head in the driving season

    Mitigation: Watching very closely; prompt resolution of global conflicts would be more beneficial.

    Geopolitical events impacting crude spreadsQ1 FY26, likely to continue

    Brent-TI spread widening given the geopolitical elements

    Mitigation: Managing carefully to get into the right markets and ensure margin coverage for increased cost.

    What to watch in Q2 FY26

    5

    El Dorado vacuum furnace project completion

    Fall turnaround
    Currentunderway
    Targetonline

    Why it matters

    This project is expected to improve reliability and yield, allowing for an incremental 10,000 barrels per day of heavy crude into the mix, impacting refining profitability.

    We continue to advance the El Dorado vacuum furnace project to provide improved reliability and yield while allowing up to an incremental 10,000 barrels per day of heavy crude into the mix. This project is expected to come online as part of the fall turnaround.

    Q&A highlights

    8

    What drove strong Q1 renewables results, what's the Q2 utilization target, and are stronger margins expected?

    Steve Ledbetter attributed strong renewables performance to feedstock strategy, market placement (Pacific Northwest, Canada), OpEx discipline, catalyst optimization, and favorable market conditions. He indicated Q2 utilization would be north of 70% net of planned events.

    “We're not going to guide specifics, but we do believe that we will optimize particular co-located kits to the best value, and we see that being north of 70% utilization, net of all of the planned events that we have.”

    asked by Matthew Blair · answered by Steven Ledbetter

    2 min read7 chapters

    Detailed Narrative

    01

    Management Transition and Strategy Continuity

    Franklin Myers is serving as interim CEO and President following leaves of absence by the CEO and CFO. The Board is diligently addressing future leadership. The current executive team is committed to continuing the successful performance and strategy established in 2021-2022, focusing on operational excellence and integrated value chain.

    02

    Middle East Conflict Impact

    The ongoing military conflict in the Middle East has created substantial disruption to crude oil markets, leading to increased volatility. The company acknowledges the stress this creates and remains focused on addressing challenges to serve customers, emphasizing nimbleness in response to market events.

    03

    Refining Operations and Turnarounds

    The refining segment completed two turnarounds at Puget Sound and Woods Cross refineries in Q1 FY26, running crude charge at 613,000 barrels per day despite harsh winter weather. No planned turnarounds are scheduled until the El Dorado turnaround in late Q3. The company is encouraged by refining margin strength and is well-positioned for the summer driving season.

    04

    Renewables Segment Optimization

    The Renewables segment delivered strong financial performance through commercial and operational optimization. This included a successful feedstock strategy, molecule high-grading, and operational excellence. Management remains optimistic about LCFS, D4 RINs, and producers tax credits supporting renewable diesel margins.

    05

    Lubricants Segment Cost Pressures

    The Lubricants and Specialties segment faced unprecedented🌐 cost inflation across its product portfolio in Q1 FY26. The team implemented multiple pricing actions to recover these higher costs and expects to continue pursuing additional price recovery in Q2 as elevated cost pressures persist, while maintaining a secure supply chain.

    06

    Marketing Segment Growth

    The Marketing segment is making progress with the integration of the Green Trail Fuels JV, aiming to accelerate growth of the Sinclair brand and expand its footprint. The company added 25 branded sites in Q1, with over 100 sites contracted for the next 6-12 months, and expects to grow branded sites by approximately 10% annually.

    07

    Strategic Projects and Flexibility

    HF Sinclair continues to advance strategic projects, including a multiphase project to leverage Rockies logistics for Western markets. A project at Puget Sound enables flexibility to swing approximately 7,000 barrels per day between diesel and jet, proving beneficial in current market conditions. The El Dorado vacuum furnace project, expected online in fall, will improve reliability and yield, allowing for an incremental 10,000 barrels per day of heavy crude.

    AI-generated summary of the company’s earnings call. Not investment advice.