Uzi Yemin, the CEO, Chairman and President of Delek US, reported that they completed the Alon USA deal on July 1 and had robust performance on a combined basis in Q3 2017. Their team advanced with the integration and handled the hurricane situation in the month of August and September well, as their refineries continued to function near capacity during that period, as they focused on supplying their consumers.
The details
Delek captured annualized synergies of around$53 million from the Alon deal and are moving toward their annualized objective of $95 million next year. With a refining system crude account that is around 70% Permian Basin crude as well as light offerings priced dependent on a Gulf Coast basis, they gained from a wider discount between Brent crude oil and Midland WTI during Q3 that enhanced margins in their refining division.
Yemin concluded that they are recording progress to get sustainable value from the combined firm. The Krotz Springs enhancement measures are moving forward, as they work to reduce the crude oil transportation expense and establish the alkylation unit assignment that should add around $35 million to 40 million of yearly EBITDA.
The CEO of Delek reported that they recorded a robust performance for logistics in Q3 2017, and there is logistics EBITDA of around $78 million for future prospective dropdowns. They are putting initiatives toward dropping the asphalt terminals in Q4 2017. Their corporate simplification is ongoing, with the deal to buy the remaining Alon Partners units. The team is working to record value from the California resources. The company closed the quarter with cash of around $832 million and continue to assess prospects to establish long-term shareholder value.
In the last trading session, the stock price of Delek gained 0.15% to close the day at $32.90. The gains came at a share volume of 1.38 million compared to average share volume of 1.44 million.
