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HF Sinclair's profit beats expectations in the second quarter on higher refining rates

Refiner HF Sinclair surpassed Wall Street expectations for the second-quarter profits on Thursday, as higher refining rates helped offset lower volumes. Its shares rose about 1% to $43.80 before market opening.

Top U.S. refiners were expected to post higher second-quarter profits, rebounding from first-quarter losses as stronger-than-expected diesel margins lifted earnings. The higher margins allowed competitors such as Valero Energy, Phillips 66 and others to surpass Wall Street expectations.

Fuel manufacturers have experienced an unexpected increase in profits in recent months. This is a relief to those who saw their earnings fall from the 2022 highs, due to a rebound in demand following the pandemic and disruptions in supply after Russia's invasion in Ukraine.

The adjusted refinery margin per barrel of the company was $16.50, an increase of about 46% over a year ago. The company's adjusted margin for the mid-continent region increased by about 85% to $15.52 a barrel.

The higher margins in the quarter helped offset the lower throughput volume, which was down 2.4% to 660,640 barges per day compared to a year ago, and refinery utilization fell from 93.6% to 90.8%.

In a press release, the company explained that the lower volumes were due in part to turnaround activities in its Tulsa refinery and Parco refinery during the quarter reported.

LSEG data shows that HF Sinclair's adjusted profit for the three-month period ended June 30 was $1.70 per common share. This compares to analysts' average estimates of $1.02 per common share. Tanay Dhumal, Bengaluru. Pooja Dasai, editing.

(source: Reuters)