HF Sinclair posts surprise quarterly profit on higher refining margins

By Pooja Menon and Nicole Jao

May ‌1 (Reuters) - HF Sinclair ​posted a ​surprise first-quarter adjusted profit on Friday, helped by higher refining margins, refined product sales and throughput volumes.

Shares of the company rose nearly 2% in ‌morning trade.

Refiners in the U.S. are reaping their strongest margins in ⁠years, as disruptions to Middle Eastern oil flows due to the Iran war have driven up demand for ‌U.S. fuel exports.

U.S. refiners, less ‌dependent on Middle Eastern crude, stand to benefit from global fuel shortfalls by expanding international sales from the U.S. Gulf Coast hub.

"Looking forward, we remain focused on ​the execution of our strategic priorities and believe each of our business segments is well positioned to take advantage of the current favorable macroeconomic backdrop," CEO Franklin ⁠Myers said in a statement.

U.S. refinery margins, measured by the 3-2-1 crack spread, rose about 73% on average in the ​first quarter from a year earlier.

HF Sinclair said it expects to run between 600,000 to 630,000 barrels per day of crude oil ​in its refining segment in the second quarter.

The ‌refining segment reported a quarterly adjusted core profit of $55 million, compared with a loss of $8 million from a year earlier.

Adjusted refinery gross margin ⁠per barrel rose 9% to $9.95 in the quarter, while refinery utilization increased 90.4%.

Its refinery throughput for the quarter was up 1.6% at 656,920 bpd, while sales of refined products rose nearly 4% ⁠to 646,140 bpd.

The renewables segment swung to an adjusted core profit of $133 million, while lubricants and specialties ​income rose 21.2% to $103 million.

"While the result were better than expected ... there was no update on management, as the company continues to work with interim CEO and CFO," UBS analyst Manav Gupta ‌said.

"A timely conclusion to the management search should provide greater stability."

Franklin Myers, serving as the interim CEO, and Vivek Garg, the interim ‌CFO, both began their tenures in February.

The Dallas, Texas-based company reported an adjusted profit of 69 ⁠cents per share for the three ‌months ended March 31, compared ​with analysts' average estimate of a loss of 6 cents, according to data compiled by LSEG.

(Reporting by Pooja Menon in Bengaluru; Editing by ‌Maju Samuel)

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