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Delek US Lifts Outlook After EPA SRE Approvals Drive Q3 Beat and Cash Windfall

Management expects to monetize about $400 million of granted RINs within six to nine months.

Overview

  • The EPA approved multiple small-refinery exemption petitions covering 2019–2024, and Delek plans to monetize the associated RINs for roughly $400 million on a near-term timeline.
  • Excluding SRE effects, Q3 results included adjusted EPS of $1.52 and adjusted EBITDA of about $319 million, while reported EPS of $2.92 surpassed consensus.
  • Delek raised its Enterprise Optimization Plan target to at least a $180 million annual run rate after estimating a roughly $60 million contribution in the quarter.
  • Delek Logistics delivered a record quarter with approximately $136 million of adjusted EBITDA and increased full-year guidance to $500 million–$520 million.
  • The Libby 2 gas plant was commissioned as acid gas injection and sour-gas handling advance to support added processing capacity, and DKL’s board increased the quarterly distribution to $1.12 per unit.