Q4 2024 Delek US Holdings Inc Earnings Call
Jael: Thank you for standing by. My name is Jael and I will be your conference operator today. At this time, I would like to welcome everyone to the DK fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.
Speaker Change: Politically fall was transformation.
Jael: Boy.
Jael: We have vastly improved our financial performance made significant progress on our some of the past efforts and implemented key plan to increase the overall profitability of our company.
Jael: I would like to highlight the progress we have made will now keep layoffs.
Jael: With safe and reliable operations, we have made gates bogus and improving the operations towards our company we.
Jael: <unk> successfully completed a major S case that in the fourth quarter.
Jael: Coming out of the downturn on the refinery is showing improved operational performance.
Jael: The asset is adding well and we look forward to a strong contribution from <unk> in 2025.
Jael: Moving to Big Spring in 2020, full we have significantly improved reliability.
Jael: We have consistently been running over 70000 barrels per day.
Jael: Looking forward in 2025, we have no major update announced plan in our system and we expect to continue our improvement journey.
Jael: Now I would like to discuss our some of the bulk strategy.
Jael: In 'twenty thankful, we made great progress in unlocking the sum of the parts value inherit in all assets.
Jael: In September we sold our ethyl acid for $390 million and we are extremely happy with the timing and the value we received.
Jael: The timely sale has allow us to continue to progress our initiatives in a tough refining environment.
Jael: We have also made great progress in making Delek logistics.
Jael: Independent Midstream company Levered to the growth in the Permian Basin.
Jael: In slide 24, we successfully executed economic swap of assets between Dk and <unk> the swap will improve the profitability of our refineries going forward at the same time, the swap bring more certainty to decay.
Jael: Cash flow through the contract extension by up to seven years.
Jael: Our economic separation from <unk> is increasing and at the same time the distribution Dk received from <unk> continue to grow.
Jael: <unk> also announced two accretive acquisitions with $100 million in third party EBITDA.
Jael: After a detailed acquisition of gravity midstream decay ownership in PKU.
Jael: Come down to 63, 6%.
Jael: <unk> is progressing its capacity expansion in delivered gas processing complex and expect to complete the expansion in the first half of 2025.
Jael: Obviously communicated.
Speaker Change: Additionally, we can announced NFIB an acid gas injection and deliver complex in December.
Jael: <unk>.
Jael: Highlights detail August and becoming an attractive high growth mid sized Midland company benefiting from the natural gas growth in the Permian Basin.
Jael: This is reflected in the strong guidance that Delek logistics.
Jael: Provided today.
Jael: Despite these great move <unk> continue to trade at discount versus its peers and very limited if any of this value is reflected in dk shales.
Jael: We are in the process of taking additional steps such that the value of greater than $350 million in third party EBITDA in detail is fully reflected in dk shale place and Dks unit price.
Jael: We are confident that we'll complete the DKNY deconsolidation and methodical manner and create value for both shareholder and unitholder.
Jael: In 2024, we have made progress in improving overall profitability of the company.
Jael: We completed our zero based budget initiatives, which allowed us to save around $100 million in cost through our system.
Jael: We completed this program in the second quarter of 2020 full ahead of our original target of completion by the end of placing full.
Jael: Our <unk> effort laid the foundation for enterprise optimization point all ERP.
Jael: <unk> aims to improve decay cash flow by $80 million to $120 million per year, starting in the second half of 2025 I am pleased to announce that we have made great August with GOP and now we expect to be closer to the top end of our cash flow improvement Guy.
Jael: <unk>.
Jael: Despite our initial success, we are not standing still.
Jael: And look forward for further improve our cash generation power as we progress through deal.
Jael: Final piece of our strategy is being a shareholder friendly and having strong balance sheet.
Jael: During the quarter, we paid $16 million in dividends and bought back $22 million.
Jael: Our shifts.
Jael: We remain committed to a disciplined and balanced approach to capital allocation now I would like to make the comment about small refinery exemption.
Jael: As you know that this is circuit court all of them. The EPA denial of our small refinery exemption petition under datasets in July 2024.
Our petitions were sent back to the EPA for reconsideration.
Jael: We are optimistic that the EPA will revise its approach following the court ruling and grant US a studies.
Jael: We hope the recent willing on F series, along with Supreme Court ruling on Chevron deference case will reduce unneeded bureaucracy and allow for predictable approach to the SLE petition review.
Jael: In closing I would like to thank our entire team for the hard work and dedication.
Jael: We are excited about the prospects of decay in 2025 and beyond.
Joseph: Now I will turn the call over to Joseph who will provide additional color on our operations.
Joseph: Thank you all for you.
Joseph: First I would like to congratulate our team on another safe reliable and environmentally compliant tier.
Joseph: Our progress in hiring the right people developing good processes and proactively managing equipment is when reflected in the field and it's giving US a strong foundation to perform optimize and grow our business in.
Joseph: And Tyler.
Joseph: Throughput in the fourth quarter was approximately 66000 barrels per day.
Joseph: Production margin in the quarter was <unk> 66 cents per barrel and operating expenses were $5 51 per barrel.
Joseph: During the first quarter, we are executing our planned maintenance in the alky unit.
Joseph: Including an upgrade scoop, which will allow us to increase production of higher value products by approximately 500 barrels per day.
Joseph: For the first quarter estimated total throughput in Tyler is in the 65 to 69000 barrels per day range.
Joseph: In El Dorado total throughput in the fourth quarter was approximately 77000 barrels per day.
Joseph: Our production margin was 56 cents per barrel and operating expenses were $4 78 per barrel.
Joseph: Estimated throughput for the first quarter is in the 73 to 76000 barrels per day range.
Joseph: On the strategic front, we are.
Joseph: Making good progress with our ERP initiatives.
Joseph: Which are expected to add <unk> meet the year $50 million of annual EBITDA run rate in the El Dorado integrated system.
Joseph: The incremental approximately $2 per barrel of net margin will support El Dorado cash flow generation through the cycles.
Joseph: In Big Spring total throughput for the quarter was approximately 73000 barrels per day.
Joseph: Our production margin was $5 four per barrel and operating expenses were $6 29 per barrel.
Joseph: Including approximately 52 barrel of winter organization and maintenance special activities.
Joseph: Focusing big spring is when reflected in the numbers total throughput in 2024 increased over 10% compared to 2023 due to improved reliability.
Joseph: Cost structure is approaching our target and as important it is mostly driven now by routine and proactive agenda rather than reactive.
Joseph: In the first quarter, we are replacing catalyst in our reformer and diesel hydro treater per plan.
Joseph: As a result estimated throughput for the first quarter using the 57 to 61.
Joseph: <unk> barrels per day range.
Joseph: In Krotz Springs.
Joseph: <unk> successfully completed the planned major turnaround.
Joseph: Startup.
<unk> demonstrated improved crude capacity.
Joseph: Product mix and liquid yield recovery capabilities consistent with our plans.
Joseph: Total throughput in the fourth quarter was approximately 50000 barrels per day.
Joseph: Our production margin was $2 71 per barrel and operating expenses in the quarter was <unk> 27 cents per barrel.
Joseph: Our planned throughput for the first quarter is in the 83 to 86000 barrels per day range.
Joseph: Our implied system throughput target for the first quarter.
Joseph: The 278 to 292000 barrels per day range.
Brian: Moving on to the commercial front in the fourth quarter, So Brian marketing contributed.
Brian: Also $34 6 million.
Brian: Of that approximately $12 million loss was generated by wholesale marketing driven by seasonal low demand trends around double system racks.
Brian: $2 million loss was attributed to supply and a negative.
Brian: $5 million contribution was generated by asphalt.
Brian: In summary, we.
Brian: We continued to execute well on the fundamentals.
Brian: In terms of our business after.
Brian: After successfully addressing.
Brian: Ability gaps our teams continue to focus on operational excellence and commercial optimization initiatives.
Brian: And we position ourselves for the coming gasoline season, and the future cycles.
Brian: I will now turn the corner over to hold out for the financial variants.
Brian: Yeah.
Brian: Thank you Joseph I will start by referring to slide 14 for the fourth quarter Delek had a net loss of $414 million or a negative $6 35 per share.
Brian: Included within this is a partial impairment of our goodwill balance of $212 million.
Brian: Adjusted net loss was $161 million or negative $2 54 per share and adjusted EBITDA was a loss of $23 million.
Brian: On slide 15, the waterfall of adjusted EBITDA from the third quarter of 2024 to the fourth quarter of 2024 shows that the decline is primarily because of lower refining contribution.
Brian: The $80 million decrease in refining is primarily attributable to a lower margin environment in the fourth quarter relative to the third quarter.
Brian: As a logistics segment, we continue to have another strong quarter, delivering $107 million and adjusted EBITDA.
Brian: Moving to slide 16 to discuss cash flow cash flow from operations was a use of $164 million.
Brian: With the net amount as our net loss for the period. In addition to an outflow of approximately $71 million of timing related working capital movements, which include the impacts of the inventory intermediation agreement.
Brian: Investing activities of $216 million.
Brian: <unk> capital asset purchases of $191 million.
Brian: A $23 million deposit paid for the gravity acquisition, which closed on January 2025.
Brian: Financing activities of $77 million reflects the decal equity offering and timing of accruals.
Brian: Also includes $22 million in share repurchases $16 million in dividend payments and $19 million in distribution payments.
Brian: On slide 17, we have the actual results of the 2024 capital program.
Brian: Fourth quarter capital expenditures for $198 million.
Brian: $140 million of the spend was in the refining segment, a large portion of which was related to the successful completion of the ksr turnaround.
The remaining amount is largely spend associated with the construction of the <unk> gas plant, which remains on track from a timing and cost perspective.
Brian: As we have previously announced our Standalone Dk capital outlook for 2025 is approximately 150 to a $178 million.
Our net cash position is broken out between Delek and Delek logistics on slide 18.
Brian: During the quarter, we drew approximately $300 million of cash primarily due to anticipated capital expenditures on growth projects and the turnaround of ksr additional.
Brian: Unfavorable impacts included working capital timing differences and the overall market conditions impacting our recognize EBITDA results for the period.
Brian: Excluding delek logistics, we finished the year with an increase of $82 million and net debt we.
Brian: We are pleased with a relatively modest increase in net debt for the year, especially considering the broader market conditions and the impact on our peers, many of whom have experienced substantial increases.
Brian: Moving now to slide 19, where we cover outlook item.
Brian: In addition to the guidance Josef provided for the first quarter of 2025, we expect operating expenses to be between 220 $235 million.
Brian: G&A to be between $55 and $60 million.
Brian: DNA is expected to be between 101 hundred $5 million.
Brian: And net interest expense to be between 78 and $88 million.
Brian: We will now open the call for questions.
Speaker Change: Thank you the floor is now open for questions.
Speaker Change: <unk> would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.
Speaker Change: If you would like to withdraw your question simply press Star one again.
Speaker Change: If you are called upon asking questions and listening via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: We do request for today's session that you. Please limit yourself to one question and one follow up.
Speaker Change: Your first question comes from the line of Manav Gupta of UBS. Your line is open.
Manav Gupta: Good morning, guys I wanted to focus on a little bit on slide 10, obviously, you are making a lot of improvements in El Dorado help us to understand what more can be done to make this a truly competitive assets something which can be performing in line with property Tyler here at least.
Speaker Change: Yeah Manav. Good morning. Thank you for your question and Dorado is a big focus for us Joseph leading that with a lot of talent and I will allow air Joseph to China.
Joseph: Yes, the <unk> is the most significant beneficiary of our <unk>.
Speaker Change: We focus.
Speaker Change: On the product mix, we started to make and sell is just fuel through the rack.
Speaker Change: We are looking to convert heavy bottoms to light products.
Speaker Change: The sufficiency, we are focused on liquid yield recovery, mainly in the reformer FCC in asphalt periods on the logistics front, we put together a new logistics.
Speaker Change: Were already shipping more products away from the local market to optimize their net backs.
Speaker Change: Bottomline named Manav.
Speaker Change: It doesn't go stronger refinery theme out there.
Speaker Change: Alex its flexibility and the $50 million of low hanging fruits were confident about our ability to translate disposal as to numbers sooner than later.
Speaker Change: Perfect guys.
Speaker Change: Follow up here it looks like you're growing D cattle EBITA, although here.
Speaker Change: Divesting it down slowly is the strategy here to look for smaller bolt on deals whether it's water cooled gap and basically continue to grow the company at the <unk> level.
Speaker Change: And at the same time try and bring down the ownership below 50%.
Manav Gupta: Yes, so manav I will take that question and I would like to give you a bigger answer than depth about some of the part that's what we are doing and some of the parts together with <unk> the most strategic.
Manav Gupta: Initiatives, we have for Dci and deconsolidation I want to make it crystal clear is happening and will happen as we speak so it's very very clear and I want to take a moment to reflect on 2020 full action that we did around it.
Manav Gupta: So in 2024, we sold retail.
Manav Gupta: As we wanted we continue to make progress in the deconsolidation right. We took the ownership with platform 79 to six to below 64% today.
Manav Gupta: We grew the EBITDA, while we're doing all of that form 10, 85, not very long ago.
Manav Gupta: <unk> hundred this year the placement of four to 500 guidance.
Manav Gupta: For 2025, which is another step and we increased our third party EBITDA from 40% to 70%.
Manav Gupta: While we were doing all of that.
Manav Gupta: We also increased the distribution the dk against on Dks. So it's many many many boxes that we are checking the box on.
Manav Gupta: Today I don't know if you noticed we announced another efficient tool in our toolbox to allow basically efficient tax.
Manav Gupta: Wei for Dk.
Manav Gupta: K to sell back the units to Teekay. So we know that today for $150 million up to $150 million.
Manav Gupta: So the <unk> benefit for Dk for the efficient way and it's also a benefit for <unk> because of free cash flow ICL Boeing seven Boeing seven annual avoiding the cost of the Nols.
Manav Gupta: That's very beneficial for both companies and the last point I want to make that.
Manav Gupta: The deconsolidation is.
Manav Gupta: Is the goal of both companies.
Manav Gupta: Because it will allow <unk> to grow over time, and then it all dk to fulfill.
Manav Gupta: Get the old value in the asset with that said the market was very busy this year with all the deals we had in the plan is that he was going to be very busy in 2025 as well.
Manav Gupta: So I'll let.
Manav Gupta: Market timing, yes, thanks, Avago and <unk>, we're very happy with our some of the parts efforts in 2024, and we were very active in in the year in advancing our deconsolidation efforts, both HBO and gravity checked all the boxes and what we look at for acquisitions of highly strategic and highly synergistic.
Manav Gupta: With our Midland Basin operations, and what we're trying to do out there is a full service midstream provider immediately accretive to free cash flow improved our leverage and increased our coverage ratio. We also initiated organic growth projects in the Delaware to add to our gas processing capacity and also add critical salary gas capabilities and finally draw.
Manav Gupta: Down Wink to Webster, our 15% interest in Wink to Webster and when you take all of those combined we're adding significant third party EBITDA to detail, which is driving this economic separation between dk and detail that we're talking about.
Manav Gupta: If you layer on top of that we also continue to see premium valuations paid in the private markets by midstream companies for midstream assets over the past few months and in particular, those tied to the Permian Basin, which as you know is the core of our detail operations.
Manav Gupta: And as Alberto said, our focus is that we're going to continue our measured approach to deconsolidation and the focus is going to continue on enhancing and maximizing value for both teekay shareholders in detail unitholders.
Manav Gupta: Okay. Thank you guys.
Speaker Change: Your next question comes from the line of Matthew Blair of Tpa, which your line is open.
Manav Gupta: Okay.
Matthew Blair: Thank you and good morning, I was hoping you could go into the supply and marketing dynamics, a little bit more in the fourth quarter.
Matthew Blair: I understand there is some seasonality with wholesale but could you help us understand why why is that just an outright negative EBITDA contribution and does there need to be any structural changes there and then how are the supply and marketing dynamics trending so far in the first quarter.
Speaker Change: Hey, guys. Good morning. Thank you for the question first of all.
Speaker Change: I am very happy in there on the progress of decay CSR doing if youre comparing that to the fourth quarter of last year, the moderate market conditions <unk>.
Speaker Change: It was better vessels this quarter, but do you get the <unk> achieved $10 million better this quarter versus last quarter. So that's a very good step on the right direction and I will let Pat Reilly, our chief commercial officer to chime in into that answer and give you some.
Speaker Change: Some color. Thank you very much golf fourth quarter <unk> performance was impacted primarily by seasonal inland demand weakness led by the group.
Speaker Change: And a onetime major turnaround across with that said <unk> made significant progress on our 2024 initiatives.
Speaker Change: As <unk>, just mentioned supply and trading market conditions in Q4 with significantly weaker relative to the same time period in 2023. So as an example group diesel weakened by <unk> 14 per gallon.
Speaker Change: Almost $6 a barrel year on year.
Speaker Change: Despite these headwinds because he has outperformed fourth quarter 2023 by nearly $10 million.
Speaker Change: <unk> will play a crucial role in delivery of 2025, and our strategy is actually simple.
Speaker Change: It's intelligently streamline operations, thereby reducing costs further increase our margins on the back of optimization of supply and trading leading to our partnership with our assets to flex our broader product offering.
Speaker Change: Further mature the Etfs as new found an expanded market reach.
Speaker Change: Excited for the commitment and the challenge.
Speaker Change: Sounds good and then on the on the R&D side have you made a decision on whether to invest in the Bakersfield.
Speaker Change: Renewable diesel plant.
Speaker Change: Yes, that's not on our table distant second if something changes, we'll definitely let you know, but it is not.
Speaker Change: Maybe more if you want to chime in on that Matt that option is still available to us as you and I have discussed in the past.
Speaker Change: Okay.
Speaker Change: <unk> there has to show that they have had.
Speaker Change: We had healthy operations for around three months and then we have around 90 days to exercise our option.
Speaker Change: We are obviously going to be looking at it. Once we are asked to look at that option, but as of right now that option is still.
Speaker Change: Available to us and we are just hoping for the team to <unk>.
Speaker Change: Have those operations in order before we start making our decisions.
Speaker Change: Sounds good thank you.
Speaker Change: Your next question comes from the line of John Royall of Jpmorgan. Your line is open.
John Royall: Hi, good morning, Thanks for taking my question.
John Royall: Maybe my first question is on the my first question is on the Opex guide for <unk>, we noticed the step up.
John Royall: From where you had guided to <unk>, but it's also in the context of things going well with <unk>. So.
John Royall: I was hoping you could help us bridge the difference.
John Royall: Maybe how should we think about that Opex number.
John Royall: We progress further into 2025 beyond that <unk> got.
Speaker Change: Absolutely Joe. Thank you for the question Mohit was putting the guidance together, so I will let <unk> chime in please.
Speaker Change: Yes, John Thanks for the question so as far as our Companys total Opex and cost reduction we are taking a lot of pride in it and you are seeing the results through ERP you have seen the results with CBB as far as your specific question around Q1 guidance is concerned. So therefore factors, which are influencing the guidance.
Speaker Change: First one is as you know that we closed the gravity water midstream and.
Speaker Change: Thank you presented good guidance on a consolidated basis, so youre seeing some opex coming from gravity water midstream.
Speaker Change: We are running higher throughput quarter over quarter. So thats also influencing our.
Speaker Change: Opex number third pieces natural gas as <unk> seen in natural gas prices have gone a little bit higher. So thats also influencing our opex numbers and finally, we have some planned maintenance at big spring in <unk>, which is reflected in our throughput guidance. So that is also impacting our overall opex and as I start.
Speaker Change: And my answer Opex and cost reduction is an extremely positive story for delek.
Speaker Change: Really excited about how opex addiction side contributing to iOS and our free cash flow generation and we look forward to updating you guys more on that.
Speaker Change: Great very helpful. Thanks, Mohit and then.
Speaker Change: My follow up's another one on guidance, maybe just on the <unk> EBITDA guidance, just trying to bridge from the run rate of about I think it's about $430 million.
Speaker Change: And for Q.
Speaker Change: So this guy that's about $50 million to $90 million above that if you could just walk us through some of those moving pieces I know, obviously theres gravity, there's the gas plant coming on mid year maybe.
Speaker Change: Maybe some other things on the organic side, just a little bit of detail on how you got from the $4 30 to 480 to $5 20.
Speaker Change: Yeah, absolutely. So first of all John we need to take a step back and talk about the <unk> in a broader context I detailed the growing story.
Speaker Change: And obviously, we as we speak we are encasing the economical separation between the companies and we are doing that very much.
Speaker Change: Methodically into benefit both unit holder and shareholder as Youll see by all the actions that we have done in the last 18 months or so that that's very very important.
Speaker Change: <unk>.
Speaker Change: <unk> decided to allow you guys to give guidance for <unk>, because we want they want to model that company right and to be able to understand the value creation that was done here. So we're taking a lot of pipe.
Speaker Change: What we are doing here and we think the guidance. We gave you is a solid and good and Mohit do you want to chime into this one if there is more modeling question, we can take it offline.
Mohit: Yes, I think you covered most of it but John I can definitely help you walk through the moving pieces.
Mohit: If we can do about that one call. After this so maybe we should take that offline.
Mohit: Yes.
Mohit: Great. Thank you.
Mohit: Thank you.
Mohit: Yes.
Speaker Change: Your next question comes from the line of Doug Leggate of Wolfe Research. Your line is open.
Speaker Change: Hi, This is <unk> Kim we offered <unk> travel with the mobile first.
Carlos: First question Carlos Piggyback on some of the commentary that you had.
Speaker Change: Addition to the.
Speaker Change: The ERP guys.
A few options in terms of being able to release value from detail where are you in the process for example, with year sour gas permitting and.
Speaker Change: They are kind of line of sight for potentially other available assets going forward.
Speaker Change: Yeah. So.
Speaker Change: As part of your question with ERP. So I will start my answer with IOP.
Speaker Change: And I will give you some broader context around it but so.
Speaker Change: Especially on the refinery environment that we are at.
Speaker Change: LP is all about free cash flow period end of story, that's what we're after right.
Speaker Change: We obviously today's a happy day around it because we felt comfortable enough to take our guidance towards the end of the range. We gave in the past.
Speaker Change: So that's a happy moment for US we have seen a significant progress on the cost side already been signed and we will see them executed and coming to fruition over the next few months and as Pat mentioned, we see a good progress also on the margin improvement that we see only op.
Speaker Change: But I want to ensure you that we are not stopping here, we're not standing still.
Speaker Change: Always have more options and more things that we are working on and adding to that to that very important initiative and we are very optimistic about this the last one is I want to make this.
Speaker Change: Leasing neutral to market condition and all the actions that we are doing here, our new action that was not done in the past. So we are very optimistic and woven.
Speaker Change: Is very close to that and help us and help managing that very nicely and I'll, let him chime in on that thank you all of the Gulf. So the ERP plan includes a bank of projects from all areas of the company and I will address specific to your question about <unk> at the end each project has to be validated two ways, one that is sustainable and to.
Speaker Change: That is for the most part the market agnostic.
Speaker Change: Once they're there they seem to execution and added to the projections.
Speaker Change: You can see on the.
Speaker Change: Deck that we provided it's reflected in slide nine and the green boxes.
Speaker Change: Each project has a different timeframe for fruition that is why we are measuring third and fourth quarter run rates as for detail.
Speaker Change: We have the sour gas plant.
Speaker Change: Which our team is executing on time on budget and is expected to flow in the second quarter and that gives us a whole new dimension and flexibility around guests in and around gasoline.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Jason <unk> of TD Cowen Your line is open.
Jason: Hey, good morning. Thanks for taking my question you gave some good morning, thanks for joining us today.
Speaker Change: I wanted to ask about the Dk al repurchase program of decay units.
Speaker Change: Im wondering one what the what the timeline is to deploy that.
Speaker Change: Hi back cash in Q1's, once dk gets that cash, but its going to use that cash for.
Speaker Change: Yes. Thank you for the question.
Speaker Change: The timeline that we put the program in these other west in 2026, obviously, it's a detail option, but we are very close to that so we'll do that when time is right.
Speaker Change: You probably can appreciate that thats another tool in our toolbox that benefit the deconsolidation for both company and hence free cash flow both companies. So thats six many many boxes and it's very tax efficient I think you can be proud of a very creative way to create deconsolidation with no tax impact basically, but I want to take the other.
Speaker Change: And then to talk about the capital allocation program, we have in the <unk>.
Speaker Change: Wanted to give a broader discussion around that so we said many times and we are saying that today that we are maintaining dividend toward the cycle. We are doing that we have done that and we will do it in the future and then we have a balanced approach between taking care of the balance sheet and buybacks, we did buyback in Q3.
Speaker Change: We did buyback in Q4, and we are doing buybacks at Q1 of 2025.
At the current valuation of our share price, we see a huge value in our share price and we are acting on that just to make it very clear. So that's kind of that's where we are.
Speaker Change: Great No I appreciate it.
Speaker Change: The color on the capital allocation.
Speaker Change: The other question is just back to group III dynamics and it sounds like.
Speaker Change: Weaker.
Speaker Change: <unk> margin environment, you you see some weakness in that supply in line item and I wonder.
Speaker Change: Post Covid, we have seen inland market become more seasonal weather weaker in the winter. So should we expect that that supply line is weaker in <unk> and <unk> kind of in line, where it where it was this past quarter or maybe I guess a little better.
Speaker Change: Based on what's going on in the ERP program or I guess, how should we think about the seasonality of that supply line. Thanks.
Speaker Change: Listen it to different question here market observation there is some thought that there is.
Speaker Change: The weakness in the winter.
Speaker Change: Thanks in the summer, but I'm not going to provide we're not going to provide the guidance for <unk>. We didn't do that in the Boston I don't think I'd say its best practice in the markets. We are not going to deviate from that today, but I am going to tell you and Jason you need to know that very well.
Speaker Change: We are moving very well with the things thats controlling <unk>.
Speaker Change: <unk>.
Speaker Change: Different products that we will start moving in different market that we are moving towards and I can be only very pleased with the progress. We are doing about what we can control. So I will leave it to that.
Speaker Change: Okay understood. Thanks for the answers.
Speaker Change: But.
Speaker Change: That concludes our Q&A session I will now turn the conference back over to Ed <unk> for closing remarks.
Speaker Change: Yes, so I would like to thank my colleagues around the table.
Speaker Change: So a great safe and reliable year.
Speaker Change: Want to thank the entire delek employees for a great execution and a great commitment for the company and I'm very pleased with that too. Thanks to our board of directors and to thank you investors for believing in our story and our journey with that I will conclude the call and we assume next in the next quarter. Thank you.
Speaker Change: This concludes today's conference call you may now disconnect.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yes.