Delek US Holdings, Inc. reports strong Q2 2023 results and announces fourth consecutive dividend increase
Dividends
August 7, 2023
Delek US Holdings, Inc. (DK), a prominent energy company, recently disclosed its financial results for the second quarter of 2023. The company's President and CEO, Avigal Soreq, expressed satisfaction with the quarter's performance, highlighting robust contributions from its refining, logistics, and retail segments. Furthermore, the company reiterated its commitment to value creation for shareholders and announced an increase in its quarterly dividend for the fourth consecutive quarter.
In the second quarter of 2023, Delek US reported a net loss attributable to the company of $8.3 million compared to a net income of $361.8 million in the same period the previous year. Despite the loss, the company's adjusted net income was $65.2 million, showcasing improvements in cost efficiency and savings across its business operations. Diluted earnings per share (EPS) reflected a loss of $0.13 compared to positive EPS of $5.05 in Q2 2022.
Despite the challenging financial results, Delek US remained committed to rewarding its shareholders. The company's board of directors approved a quarterly dividend increase to $0.235 per share. This marks the fourth consecutive quarter of dividend hikes, underscoring the company's dedication to delivering shareholder value. Since its commitment to returning value to shareholders, Delek US has returned $95 million through dividends and share buybacks.
In Q2 2023, the refining segment's adjusted EBITDA was $201.1 million, significantly lower than the $463.1 million reported in the same quarter last year. The decrease can be attributed to other inventory impacts and lower refining crack spreads, which averaged 49.2% lower than the prior year. Despite the challenges, Delek US remains optimistic about the growth potential in this segment.
The logistics segment recorded an adjusted EBITDA of $90.9 million in Q2 2023, representing a notable increase from $69.0 million in the previous year's quarter. The surge in earnings was driven by strong contributions from the Midland Gathering system and the acquisition of 3 Bear Delaware Holding - NM, LLC ("3 Bear") in June 2022 (Delaware Gathering).
The retail segment also witnessed positive growth, with adjusted EBITDA of $15.0 million in Q2 2023, compared to $12.5 million in the same period last year. The growth can be attributed to higher fuel volumes, increased average fuel margins, and improved inside store sales.
The corporate and other activity segment reported a reduced adjusted EBITDA loss of $(47.6) million in Q2 2023, compared to $(82.4) million in the prior-year period. The decrease in losses was primarily due to cost-saving efforts, particularly in general and administrative expenses related to employee benefits.
As of June 30, 2023, Delek US had a cash balance of $821.6 million and total consolidated long-term debt of $2,810.9 million, resulting in a net debt position of $1,989.3 million. Excluding Delek Logistics, the company had $813.9 million in cash and $1,066.6 million of long-term debt, leading to a $252.7 million net debt position.
Delek US Holdings, Inc. remains committed to driving value for its shareholders, as evidenced by its consecutive dividend increases. Despite facing challenges in its refining segment, the company's logistics and retail segments performed well in Q2 2023. Investors can learn more about the company's performance and outlook by participating in the conference call scheduled for August 7, 2023.
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