Q3 2022 Parkland Corp Earnings Call
Payments are based on current views and assumptions and are subject to uncertainties, which are difficult to predict. These uncertainties include but are not limited to expected operating results and industry conditions among other factors risks.
The risk factors applicable to our business are set out in our revised annual information form and management's discussion and analysis.
We will also be discussing non-GAAP and other financial measures, which do not have any standardized meaning prescribed by <unk>.
These measures are identified and defined in parkland continuous disclosure documents, which are available on our website or on SEDAR. Please refer to these documents as they identify factors, which may cause actual results to differ materially from any forward looking statements.
Dollar amounts discussed today are expressed in Canadian dollars, unless otherwise noted I will now turn the call over to Bob.
Great. Thank you Bill and good morning, we appreciate you joining us today I am pleased to lead off by highlighting that we completed our consolidation of salt in October .
We also closed our acquisitions with husky in GB groups Jamaican business during the quarter.
With all previously announced deals behind US, we remain focused on integration and capturing synergies to grow cash flow.
While lowering our leverage ratio and increasing distributions to shareholders or.
Our recently closed transactions include our acquisition of 163 Husky retail sites.
These sites are located in the following markets Vancouver Island, Vancouver, Calgary and Toronto.
Where we are already have a supply advantage. These sites helped to fill in some of the white space in our Canadian retail network and creates.
Create more opportunities for us to engage with customers and better serve their needs.
Our teams are excited to welcome this network to parkland and integrating these husky sites, we will leverage our industry, leading control fuel brands of Chevron pioneer and ultramar as well as our on the run convenience brand. We will also enhance our food offerings and introduce journey rewards similar to the Calgary Chevron loci.
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Yeah.
Location you see on the cover slide once these three brands are complete we expect a significant uplift in performance and customer traffic with that let's dive into the quarter.
As followers of parkland.
Over many years, we have demonstrated our resilience building a durable busy.
Business, delivering consistent operating performance and exceeding the ambitious targets, we set for ourselves through the quarter commodity prices experienced unprecedented volatility. The net result was a 27% fall in wty, 33% fall in U S gasoline and a 17% fall in U S diesel.
In some local markets. This volatility was amplified creating significant local imbalances heartland is not alone in experiencing these market dynamics.
This impacted our USA segment, where volatility led to losses. Excluding these parkland USA performed in line with expectations.
We have taken definitive steps to ensure this is not repeated we have curtailed our USA business and have contained the impact to the third quarter. We expect our USA segment will return to normal run rate in Q4 it.
It is important to note that in the first nine months 2020 to Heartland has generated approximately $1 2 billion of adjusted EBITDA.
This is a record for our company, which highlights the underlying strength and resilience of our business. It also provides us with confidence to deliver a 2022 guidance range of one six to $1 7 billion.
Let me touch briefly on our balance sheet shareholder distributions and growth until now we've been primarily focused on growth. However, with the completion of our acquisitions, we will now focus on deleveraging enhancing and enhancing shareholder distributions I remain confident we can achieve our mid decade.
<unk> target I'll now turn the call over to Marcel to speak in more detail about the financial results on slide four.
Thank you, Rob and good morning, everyone I'll start with our Canadian segment, which delivered adjusted EBITDA of $140 million.
$140 million, which is up 4% year over year. This.
This was driven by higher.
Fewer unit margins, the Eminem flowback, husky, and <unk> acquisitions and growth in our <unk> businesses.
And as prices at the pump retreated during the quarter. We saw average fill rates increase and we continue to see good backcourt conversions supported by our merchandising strategy.
Same store food and company C store sales, excluding cigarettes grew over 5% compared to Q3 2021.
Central store continues to perform well, reflecting the higher volumes and our pricing strategy.
Over quarter, 70, rolls up 9% salty snacks were up 14% and packaged beverages were up 11% with <unk>.
To grow our journey loyalty program, adding 300000, new members in the quarter.
Increased aviation traffic to provide a meaningful tailwind heading into Q4.
And Ah USA segments, we recorded and adjusted EBITDA loss of $18 million, excluding the wholesale baucis, which we previous previously spoke about our underlying operations delivered an adjusted EBITDA of $47 million. This is up 9% year over year and is in line with our expectations.
In the USA or retail and commercial volumes grew 40% year over year driven by our acquisitions.
Continue to see strength in fuel margins, particularly on the retail side of the business.
And also during the quarter several new major account grins helped triple the size of a marine business.
Moving through the refinery.
Reliable operations resulted in a composite utilization of 94% during the quarter.
Generated an adjusted EBITDA of $135 million.
This is a top five quarter for the refinery.
And these results reflect higher operating in compliance costs as well as higher trailing crude prices in a declining market.
Some of these items are transit transitory in nature.
As a rule of thumb, we expect to capture appropriate to capture approximately 70% of crack margins overtime, but volatility impacts this number quarter over quarter.
As a reminder, we have a six to eight week planned turnaround in the first quarter of 2023.
In total park delivered $328 million of adjusted EBITDA in the third quarter or.
Or parts of our business performed well during the quarter some fell below our expectations.
We do see the benefits of our strategically diversified business, which provide brazilians truthful at all times.
With that last slide five.
During the quarter, our leverage ratio increased three turns 235.
Lower adjusted EBITDA in the third quarter compared to Q3 2020 Ronald increased our leveraged by two times payment.
Payments for the Jamaican Husky acquisitions increased our level of ratio by one time in the quarter. These were the loss of our previously announced deals.
You start to see some working capital released with declining commodity prices and this is reversing part of the increase experienced in the first half of the year and lowered ratio by phone times.
And higher foreign exchange rates immediately increase the Canadian dollar value of our U S dollar denominated debt and while we do expect foreign exchange benefits in our internationally U S business results. The trading 12 months impact will take time to work through our leverage ratio calculation.
We continued to targeted level leverage ratio of less than three turns by 2023.
Leverage ratio may continued to be impacted by commodity price and foreign exchange volatility.
But we are focused on the things that we can control, including operational execution to generate strong cash flow and maintaining liquidity.
Moving to slide six.
And you have a track record of discipline capital allocation and over the past two years, we have prioritized growth and completed about $2.9 billion of acquisitions double the originally planned right.
Approximately 25% of these were funded by equity.
We have now pulse acquisitions, and a focus of integrating and capturing synergies from the business we acquired.
Economic environment has also changed with higher interest rates driving a higher cost of capital and therefore, we have reviewed our capital allocation framework.
Continues to be focused on lowering our leverage ratio to maintain a strong balance sheets and financial flexibility.
Last year, we locked in lower interest rates and extended maturities with the earliest bombed you in 2000 2006 and.
In addition, we have bumper $3 billion of liquidity at the end of the quarter and parking is well positioned to navigate and inserted macroeconomic environment.
Going forward as part of our rebalance of rebalancing our capital allocation framework, we expect to allocate more of a cash flow toward shareholder distributions.
For the last decade delivered consistent annual dividend growth and earlier this year, we increase their annual dividend by 5% to $1.30 per share. We believe our chefs are currently undervalued and as a result, we have decided to spend our dividend reinvestment program immediately.
Using our existing and CIP, we expect to allocate some of our cash flow to buy back shares. This is the most attractive way to allocate capital at the moment.
We also focus on hydrating, our portfolio, which is to be expected. After the acquisitions we have done.
This will include divesting assets and businesses that no longer fit our strategy or do not generate sufficient returns proceeds from this activity will be deployed within our capital allocation framework.
In addition, we have a large pool of high return organic growth opportunities that will generate new cash flow and advance our strategy, we will invest capital in an appropriate pace.
We remain disciplined in our new capital investment in our new capital investment opportunities such as to renewable diesel facility at the Burnaby refinery.
We continue to advance of design and engineering of the project, but note that the environment has changed with higher inflation and change government policy in Canada, and the U S, particularly the recently announced inflation reduction Act.
We do believe that the project provides great economic and environmental benefits to Canada. However, we will review the economics of this project carefully before proceeding to a final investment decision next year and.
And with that alternates back to Bob for his final phones great.
Great.
Thank you Marcel for great overview of the quarter.
Before we open the lines for questions I will update you on some of the strategic initiatives, which will contribute to our future success or.
Our business is resilient and we have one of the most talented teams in the industry. The combination of our capabilities and strategic position allow us to see see opportunities that lie ahead.
You are familiar with this slide on the screen, we shared it in our 2021 Investor day, and it has been a constant and each of our disclosures since.
In our develop Taylor.
We have now completed all our previously announced acquisitions as well as the consolidation of our international segment.
These have added scale to our business and a platform for growth and we see evidence of cinergy capture, particularly with our recent <unk> acquisition, which is tracking ahead of plan. Our teams continued to drive organic growth.
Factive merchandising and new concepts and R. C stores, such as our food program Ah driving central store performance in advancing our convenience destination model.
In our commercial business, we are leveraging our capabilities in scale to enlarge accounts. We saw this during the third quarter in our U S Marine Division, which grew threefold.
In our diversify pillar Eminem plays a central role in our food and convenience destination strategies by the end of the year. We will have doubled eminems presence with are on the run network from 150 locations to around 300 <unk>.
These stores within stores or Eminem express locations expand our proposition for providing customers with quality take home meal options.
Looking toward 2023, we are progressing in new store pipeline, including stand alone and combined on the run.
Stores across Canada, we also expect to launch a fresh fruit concept in the second half of 2023, which will expand our Eminem brand into the take out and dine in segments in our Decarbonized color, we have upgraded the electric vehicle charging experience for our customers through the latest upgrade to our.
Journey App.
I encourage you to downloaded and take a look.
R E B customers can now start stop and monitor they're charging sessions directly from the journey App. This eliminates the need for multiple applications and is at first in North America. It will provide us with insights on customer behaviors and enable us to deliver relevant cross promotional offers.
Let me wrap up by saying how proud I am of the parkland team with the best in the industry I would like to thank them for safely meeting our customers needs. The senior team and I have tremendous confidence in the trajectory of each of our operating segments in the USA or retail and commercial businesses are strong and we will continue to grow.
In Canada, or retail businesses resilient and growling and the commercial businesses entering that traditionally strong winter season.
Or international business has delivered steady growth in his position to benefit from a strong natural resource sector, and Ah resurging tourism industry and the refinery consistently deliver safe and reliable operation and continues to deliver strong financial performance.
These are just some of the reasons, we are confident in delivering our 2022 guidance and meeting or $2 billion run right ambition by 2025 with that amount bite the moderator to open the line for questions.
Thank you, ladies and gentlemen will now begin the question and answer session should you have a question. Please press star followed by one on your touch tone.
You will hear a three tone acknowledging your request.
Draw your request please press star followed by chance.
If you're using a speaker phone please mister handset before pressing any key.
So our first question comes from Michael <unk> Securities. Please go ahead.
Hi, guys.
Out of the question is just on it too.
2025 target.
$2 billion <unk> need more acquisitions to get to the best of luck.
Get to this level or do you expect to see the organic growth pickup.
Yeah look we do have some good tailwinds in the business right now in terms of cinergy capture we're continuing to invest in our organic activities and that those.
Push us a long way to hitting that 2 billion target by mid decade.
Okay. So do you require any new acquisitions to get there.
But.
Look it's something we will update the street on next quarter.
Okay, and then I guess when you look at that you Tucker.
I guess I was.
And the second part of the question was going to do it you're free cash flow obligations a year.
I was wondering how you're going to balance that you are deleveraging targets to get below three times and trying to find a tree while also.
Returning capital to shareholders and Civ shots, how active are you going to be online civ.
What is your confidence level of getting leverage below three over that time next 12 months.
Yeah look again and I'll I'll pass it over to Marcel held but the business cash flows incredibly strong.
We now have completed all of our acquisitions that were in our pipeline, which we stated that we would do previously and as a result that cash flow is now available to both day labor and increased distributions to shareholders, but allowed I'll, let ourselves get some more color.
Michael.
For us this is a balanced allocation of.
Capital and free cash as we go in and so our first commitment continues to be owned deleveraging. We believe now that that will be.
Somewhere during 2023 to three <unk>.
At three level that we talked about before and but also we think that we see sufficient room to start buying back shares.
We will do that in moderation and with balance. It also having available liquidity and continue to have available liquidity just to manage the uncertain macroeconomic times, particularly in working capital calls.
Oil prices run up and we continue to be focus alleged so it will be measured and it will be balanced trying to add all of those.
Alright, thank you.
Your next question comes from the line of Ben.
Please go ahead.
Good morning, everyone, maybe just to follow up on the last question or maybe I'll just try to put friendly so you've got 1.6 billion today.
Which only includes a little piece of the 25 per cent of salt. So perhaps you run rate EBITDA, maybe closer to 1.7 right now and of course, you are going to $2 billion. By 25 26 can you just bridge that gap of $300 million for us in terms of what kind of pockets should we expect that 200 moment that come from.
And then just as a follow up to that question when we get to about 2 billion of EBITDA.
What kind of free cash flow per share does that translate to in does that include growth cutbacks or not thank you.
Hey, Thanks for the question what's in there.
Look.
So if you are run right. So next year, you're you're Directionally correct on the EBITDA.
And that is with a turnaround so our run rate is indicative Lee about $100 million higher than that.
And so that's and then to close the gap the bulk of that can be done with organic growth.
And that continued the team continues to work those opportunities and push them. So.
As with.
With respect to the.
A couple of things around free cash flow.
The growth is primarily in our marketing businesses, which are high cash conversion businesses. So it is very strong cash flow with low maintenance capex to maintain it so.
Now however to get to that 2 billion target.
We will be deploying organic cash flow organic.
Capital to achieve that.
And maybe also addressed then we don't have a target out there for free cash flow for sure, but it's something that as we continue to look forward to 2025 will update the the street on Israel and given numbers specifically in the future.
Okay, and if I could just sneak in one more you did talk about getting leverage down to three or below in 23 can you just give us if you can have a little bit narrower goalposts.
Early late and what is the risk to that I mean, obviously, we didn't expect to.
To see the Sun.
Movement 10-Q, three is there a risk that we could see that deteriorate little bit further just because things are going the wrong direction.
Oh look look let's say, let's just we're not going in the wrong direction. We did have this.
Incident, I mean look I think if you step back and look at the.
Strength of the balance sheet and the cash flow of the business.
You can charter pretty clear path here to deleveraging I mean, the other thing that Marcel did allude to.
Our discussion here was.
Some divestitures, which we're looking at in some parts of the business, which will help us get there.
Confident with English camera.
Next year.
Yeah, that's a fair point. Thank you very much appreciate it.
Mmm.
Your next question comes from the line of Neil.
Goldman Sachs.
Please go ahead.
Hey, Good morning. This is Carly on for now thanks for taking my questions you.
He made some references to divestments in the prepared remarks can you just flush that out a little bit how are you thinking about what's core versus non core in the portfolio and are there any processor setups kind of started that we should be keeping in mind and then I guess as you think about proceeds from any type of of transaction. How would you think about allocating those put that paydown versus buybacks.
Yeah, <unk> kick off with what's for sale and.
Marcel will talk about.
How we use that cash.
First part of it is focused on our Canadian business in our network planning.
Which is something we always do.
But with the recent growth we've had particularly in adding some of the more recent acquisitions.
We will continue to push our network planning and there are some sites that will potentially be divesting here now that will be primarily used to fund.
Continued organic growth in that business and then we do have some pieces of the business.
And.
As we grow on that we've accumulated.
That we can sell particularly in art.
And some of our <unk>.
Commercial product lines.
Yeah, and then in terms of some.
Some of the larger chunks of divestments as we look at it of course, we run carefully through a process and we currently don't have anything get underway, but in preparation that make sure that we understand the market as well.
And is that an as those come to fruition.
Just look at our capital allocation framework with the priorities into balancing laid out before and how we do that.
But for the larger pieces at the majority of that will go through those first two priorities which is being.
Bring the leveraged down and number two to kind of additional shareholder distributions.
Great. Thanks, that's helpful. And then just monitor follow up on on the refining side, how far can you started off quite a chunk from a larger perspective on on the West Coast can you just talk about how you're thinking about them the thing pieces impacting capture rates for <unk>.
And then are there any hedges in place at that business that we should be keeping in mind.
Yeah, Let me, let me comment on that so similar to some of the headwinds that we saw in the third quarter in terms of prices coming down <unk> absolute prices come up a bit in the fourth quarter, so that will be helpful.
And while while will be.
<unk> Hi, I was just pulling out again when diesel cracks a high typically compliance cost is higher as well because that's driven by the by the diesel prices themselves. So that's the piece that will kind of impact that particular number.
We're still we've already into quarter, we only got the first the first among them. So kind of November December we need to see we just kind of continued continue.
Continued volatility overall discretion, that's not driven by our business, but just local by the broader geopolitical.
Situation as well as just refinery performance and other products opportunity in North America, particularly on the West Coast. So we will continue to.
To see dose impacting thats refineries running well and so we've kind of laid out in terms of our expectation two hits.
Hit the guidance rule to stay within the guidance that we've given before we anticipated our refinery continues to run well during the fourth quarter.
Great. Thank you.
Your next question comes from the line, Steve Hansen from Raymond James. Please go ahead.
Yeah. Thanks.
Two small ones actually one was just would like some additional clarity on your reference tripling with the rain business or some reference to that effect with adding a bunch of new customers I'm curious about the magnitude of something like that relative to the U S position and then secondarily on the international side I think your references from Tailwinds into Q4.
Or around the tourism season, which on encouraging just curious to hear anymore.
What that could mean ultimately for the balance of the year.
Yeah look the.
Our marine team has done a great job growing market share.
It on in on itself is not.
Massively material to parkland, but it is a good indication.
Of organic growth and just to see the ability of our team too.
Go into.
Ah sector and grow.
Based on our ability to provide fuel in different jurisdictions in the service that we provide so.
It is also to your point.
Leading indicator in the activity that we expect in in the Caribbean.
With the cruise related traffic, which drives more than yes marine.
Demand that drives demand throats.
Wrote.
Lot of different sectors and these.
Tourists sensitive market so.
Look we're quite bullish on that business on the prospects for going into the final quarter and into 2023.
And maybe you also just as a reminder, the tourism season in the Caribbean really Sparks at the end of November into the first quarter and if you'll recall last year fourth quarter to Brazil, all sorts of Covid restrictions going on which we don't foresee ditch fourthquarter. So we will see a full tourism season.
Of this year.
That will provide some good tailwind relative to relative to last year.
That's very helpful. Thanks, and just follow up on the free cash flow question I don't know if it's too early is just yet but any comments on capex for next year and how that might relate to the recent pattern will be helpful. Thanks.
Yeah node for next year will updates will fit to market as usual with our fourth quarter in terms of Capex was still in the middle of growing to our own budget exercise and making sure that we scrutinize within next.
Rebalancing capital location framework laid out so will come with bits of recurrent Rick R. Q for results.
Okay.
Your next question comes from the line of Matthew week from I, a capital markets. Please go ahead.
Hi, Good morning, Thanks for taking my question, you talked about sort of putting the renewable diesel project on Cosby for a little bit sort of evaluating the economics.
In light of changing market conditions is that mostly to do it kind of rising rates sort of looking at the capital allocation framework or or.
Or other factors and I'm just wondering if you could touch on that a little bit more thanks.
Yeah, Let me take that question Matthew I didn't say that we were put into practical pulse right. We are in the engineering phase of the project because a lot of work actually going on.
<unk> large projects usually require.
We <unk>. We also look just set the environment, which is to do remote legislation in Canada as well as in the U S.
Which while supporter things have changed so that's the first bits that we look at and then the second biggest mostly general inflation, which we have seen let's say from the first announcement that we made and we need to affected all of that in <unk>.
Before we kind of decide to proceed at that doesn't mean that we don't proceeding now to the work, but before we conversate <unk>, which we expect to be.
<unk> 2023 will have to take a quick look and whether it's an economic project.
Yes, I know look and just to add to that I mean, specifically, we've seen the legislative environment in the U S change and get more preferential with the producer tax credit and.
We just have to make sure that the competitive landscape is is the same in Canada and that's the economics for a project like this makes sense in Canada.
Okay. Thanks, I appreciate that and then I was wondering if you.
You had an update now on sort of the amount of stand alone.
Convenient on the run stories, you have right now and if you're sort of on tracks for.
Your expectations from for the number of those you want it sent.
Deployed by this time thanks.
Look quite excited about the progress of the teams making in this area.
We are we do have locations identified and next year will be in market with about half a dozen or so.
These initially our concept stores that will test. The concept. We're also quite excited and we alluded to it in the call on.
Taking eminem and migrate.
Migrating that into a fresh offer which we would also combine in these sites. So.
Stay tuned and look as soon as we're up and running we'd love to welcome you to come and test our new offer.
[laughter] that'd be great. Thanks, and I've had some of the products before at I wanted the I'm around location and then they are quite good.
I appreciate the commentary I'm not allowed.
I'll I'll turn it back.
Ladies and gentlemen, as a reminder, should you have a question. Please press star followed by one.
Your next question comes from the line of Peter Scanner from female your line is open.
Thank you so this.
This emphasis you keep talking about on disciplined capital allocation, which is something you've been talking about it for a few months now.
What is the underlying objective of this.
Is that you are trying to achieve investment grade rating or do you think it will be positive for the stock price, but what are you trying to achieve here.
Yes, just to clarify that I mean look.
We've.
Completed our M&A, which we've always said we would do so that's consistent with what we said we closed our last two deals in the quarter. This cat this business cash flows tremendously well and as we look forward here. We can we can continue to deleverage and also.
Start to increase.
<unk>.
Disbursements to our shareholders rates, so I dunno, maybe you want to.
Peter I think it's actually quite it's consistent for us. So our goal is to grow shareholder value overtime and that's been always our goal.
You know different circumstances, perhaps but that goes through growth in acquisitions, and we have demonstrated that we can do that to improve to the acquisitions and firstly, we have a lot of those acquisitions that reaction need to integrate and swallow so that in itself drives us, but if you look at our current share price and let's be honest it's undervalued.
And if.
<unk> that would be an M&A target for ourselves. So we buy back our own shares is the best way to counter generates that sustainable shareholder value growth and so it's been the same kind of capital allocation of capital discipline that demonstrates before that we now think our own shares are the best way to generate that value and we will do that as well.
Kind of bring our leverage down as well and of course to continue integrating the businesses that we already bolt.
Okay. Thank you I have two other questions if I may.
So I believe during the third quarter.
The margins in your Canadian business, and your <unk> and your distribution business.
Refined product.
Would have been suppressed.
Suppressed because of inventory losses that abrupt decline in energy prices, you've talked about but do you expect like our margins going too.
<unk> back to the levels. They were in Q1 Q2, I think you would like to talk about margin in terms of.
Fuel gross profit per liter I think that's that's kind of a benchmark you use.
Yeah look at the look at our core marketing businesses.
Margins tend to be relatively stable and tend to trend upwards to compensate for price increase cost increases so that's consistent and consistent with what we're seeing.
We do get some volatility at times because of inventory and others see that as well.
Our various competitors that would be in similar segments.
On the.
On the wholesale side again other than in the U S. We've seen that business.
Hanging quite nicely and in fact.
Certainly in Canada, and U S, where is a key contributor in the quarter.
Excellent and helped.
The margins on both side one of the things that you do see in our business is that makes at times changes.
As we grow wholesale at a quicker rate than some of our other marketing channels, you will see margins come down, but ultimately it's still very good business and that doesn't mean that there is any margin headwind in the business and again I would say.
While we do see at times volatility.
<unk> be driven by reevaluation of inventory of the actual underlying margins are fairly consistent quarter to quarter.
Mmk tanks and just my last question on the refinery.
Can you explain how the.
Hi diesel prices negatively impacted the capture right I thought that.
You're producing your own renewable diesel and so maybe you're buying your incorporating your own diesel and you're buying from outside as well can it go through the mechanics of that.
Yeah like.
When we look at the economics of the facility I mean, there's many factors in place and ultimately.
Diesel crack is very good for the facility.
We're always looking at though is that diesel price compared to the import of alternative renewables.
And.
Differential has has come in so now may be more self can provide more color on that but it's it's net a benefit for us. It's just shifting some of the economics around.
And maybe.
This will open the way to look at it so of course renewable diesel prices will typically go up with diesel prices, So dear well correlated and I think we had previously said that's around three times the price of diesel so.
We haven't looked at Webb, that's actually for the third quarter of his executive case, but that will help but also to feedstocks for renewables. There also correlated with that as well so even when diesel prices go up even our own co processed.
Kind of renewable diesel that comes out that will also grow up ripping that so it compresses.
Referring to that is to capture so well the overall.
Gross crack spreads go up the net <unk> don't go up with the same to the same extent that then results in that lower capture when you'd just simply take a percentage of that crack spreads to kind of predict where the where the refinery margin is it doesn't mean that recapturing.
Don't kept you're welcome you're entitled to is just the rule of thumb that we have laid out where we were slightly different where we see dose volatile periods, where in certain cracks move move wider than others I hope that helps about Marcel I thought you're producing your own renewable diesel.
We do but we need to buy the feedstock for depth and those feedstocks are also correlated with the prices for all right. So prices would have gone off into periods.
Okay got it thank you.
Your next question comes from the line of Michael a analyst Securities. Please go ahead.
I just wanted to follow up on.
Regarding the turnaround coming up in Q1 can you comment on the timing when it started how long it's going to how long you expect it to go and then.
Awesome I know these are planned well in advance and they can't be delayed but.
Crack spreads are really high right now and I'm wondering if there are other ways that you might be able to replace some of that are firing profits.
Wallet down so the trading RMR imports or whatnot.
Yeah.
Typically those turnarounds are in the area of eight weeks plus or minus.
And this would be consistent with that.
The exact start date and I'm not aware of but.
It will be in Q1.
The.
Yes in terms of timing.
<unk> Yeah, Yeah look.
These can't be postponed but on the flip side is we've demonstrated in the past that we can import product, which we will do to offset part part of the shortfall. So.
Thank you.
There are no further questions at this time. Please proceed.
Great well, thanks, very much for joining in look forward to touching base.
And the new year.
Thank you.
Ladies and gentlemen, does conclude your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.
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