Day: October 24, 2024

INDIANAPOLIS, Oct. 23, 2024 /PRNewswire/ — Calumet, Inc. CLMT (the “Company,” “Calumet,” “we,” “our” or “us”) announced today preliminary selected financial results for the third quarter ended September 30, 2024.

Based on preliminary data, the Company currently expects to report a net loss between $110 million and $90 million and Adjusted EBITDA between $45 million and $55 million for the third quarter 2024.  For a reconciliation of the preliminary estimate of Adjusted EBITDA to preliminary estimated net loss, the most directly comparable GAAP measure, see “Non-GAAP Financial Measures” below.  Further, as of September 30, 2024, the Company estimates total liquidity of approximately $290 million comprised of approximately $35 million of unrestricted cash and cash equivalents and approximately $255 million of availability under our credit facilities.

Calumet continued to demonstrate strong operations at Montana Renewables throughout the third quarter, processing approximately 12,000 barrels per day of renewable feedstock and producing over 2,500 barrels per day of sustainable aviation fuel (“SAF”). Further, a new SAF production record was achieved each month during the third quarter, culminating with approximately 3,200 barrels per day of SAF produced in September.  Montana Renewables is expected to generate over $5 million of Adjusted EBITDA for the third quarter, despite experiencing a roughly $6 million impact to margins from feedstock price lag when the industry saw these prices abruptly drop approximately $0.40 per gallon in late July. Last, the Great Falls facility expects to conduct a planned turnaround in November to change catalyst.  This timing is expected to allow completion prior to the winter season and to coincide with a period of margin uncertainty as the blender tax credit is expected to change to the production tax credit.

Our Specialties business operated well during the third quarter, with total production volume increasing versus the prior quarter despite experiencing unplanned downtime in July from Hurricane Beryl.  As previously disclosed, this downtime resulted in a loss of approximately 500,000 barrels of production, resulting in a lost opportunity of roughly $8 million.  Specialty margins continue to remain resilient, largely in line with the second quarter, and fuel margins tightened along with the broader industry.

Finally, the Company announced on October 16 that the U.S. Department of Energy (“DOE”) Loan Programs Office (“LPO”) has awarded a conditional commitment for a loan guarantee of up to $1.44 billion to fund the construction and expansion of a renewable fuels facility owned by Montana Renewables, LLC (“Montana Renewables” or “MRL”), an unrestricted subsidiary of Calumet.  Further details on this announcement can be found in the Current Report on Form 8-K filed by the Company on October 22, 2024.

The Company has prepared the estimated preliminary financial data presented above based on the most current information available to management. The Company’s normal financial reporting processes with respect to the preliminary financial data have not been fully completed and the Company’s independent registered public accounting firm has not audited, reviewed, compiled or performed any procedures with respect to the accompanying preliminary financial data.  As a result, the Company’s actual financial results could vary materially from this preliminary financial data.  Investors should not place undue reliance on these preliminary financial data. These estimates should not be viewed as a substitute for full interim financial statements prepared in accordance with U.S. GAAP.

About Calumet

Calumet, Inc. CLMT manufactures, formulates, and markets a diversified slate of specialty branded products and renewable fuels to customers across a broad range of consumer-facing and industrial markets. Calumet is headquartered in Indianapolis, Indiana and operates twelve facilities throughout North America.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements and information in this press release may constitute “forward-looking statements.” The words “will,” “may,” “intend,” “believe,” “expect,” “outlook,” “forecast,” “anticipate,” “estimate,” “continue,” “plan,” “should,” “could,” “would,” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. The statements discussed in this press release that are not purely historical data are forward-looking statements, including, but not limited to, the statements regarding (i) preliminary estimates of selected financial results for the most recent quarterly period, (ii) our expectations regarding the loan facility (the “DOE Facility”) that MRL expects to receive from the DOE LPO, including the timing, size and intended use of borrowings under such facility, (iii) our expectation that the DOE Facility will enable MRL to complete the MaxSAF™ construction and that such project will be completed on time and on budget, (iv) demand for finished products in markets we serve, (v) our expectation regarding our business outlook and cash flows, including with respect to the Montana Renewables business and our plans to de-leverage our balance sheet, (vi) our expectation regarding anticipated capital expenditures and strategic initiatives, and (vii) our ability to meet our financial commitments, debt service obligations, debt instrument covenants, contingencies and anticipated capital expenditures. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. All comments concerning our current expectations for future sales and operating results are based on our forecasts for our existing operations and do not include the potential impact of any future acquisition or disposition transactions. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause our actual results to differ materially from our historical experience and our present expectations or projections. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include: the overall demand for specialty products, fuels, renewable fuels and other refined products; the level of foreign and domestic production of crude oil and refined products; our ability to produce specialty products, fuel products, and renewable fuel products that meet our customers’ unique and precise specifications; the marketing of alternative and competing products; the impact of fluctuations and rapid increases or decreases in crude oil and crack spread prices, including the resulting impact on our liquidity; the results of our hedging and other risk management activities; our ability to comply with financial covenants contained in our debt instruments; the availability of, and our ability to consummate, acquisition or combination opportunities and the impact of any completed acquisitions; labor relations; our access to capital to fund expansions, acquisitions and our working capital needs and our ability to obtain debt or equity financing on satisfactory terms; successful integration and future performance of acquired assets, businesses or third-party product supply and processing relationships; our ability to timely and effectively integrate the operations of acquired businesses or assets, particularly those in new geographic areas or in new lines of business; environmental liabilities or events that are not covered by an indemnity, insurance or existing reserves; maintenance of our credit ratings and ability to receive open credit lines from our suppliers; demand for various grades of crude oil and resulting changes in pricing conditions; fluctuations in refinery capacity; our ability to access sufficient crude oil supply through long-term or month-to-month evergreen contracts and on the spot market; the effects of competition; continued creditworthiness of, and performance by, counterparties; the impact of current and future laws, rulings and governmental regulations, including guidance related to the Dodd-Frank Wall Street Reform and Consumer Protection Act; the costs of complying with the Renewable Fuel Standard, including the prices paid for renewable identification numbers (“RINs”); shortages or cost increases of power supplies, natural gas, materials or labor; hurricane or other weather interference with business operations; our ability to access the debt and equity markets; accidents or other unscheduled shutdowns; and general economic, market, business or political conditions, including inflationary pressures, instability in financial institutions, general economic slowdown or a recession, political tensions, conflicts and war (such as the ongoing conflicts in Ukraine and the Middle East and their regional and global ramifications).

For additional information regarding factors that could cause our actual results to differ from our projected results, please see our filings with the Securities and Exchange Commission (“SEC”), including the risk factors and other cautionary statements in Calumet Specialty Products Partners, L.P.’s (the “Partnership”) latest Annual Report on Form 10-K and other filings made by the Partnership and the Company with the SEC.

We caution that these statements are not guarantees of future performance and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required by applicable law. Certain public statements made by us and our representatives on the date hereof may also contain forward-looking statements, which are qualified in their entirety by the cautionary statements contained above.

Non-GAAP Financial Measures

Our management uses certain non-GAAP performance measures to analyze operating segment performance and non-GAAP financial measures to evaluate past performance and prospects for the future to supplement our financial information presented in accordance with generally accepted accounting principles (“GAAP”). These financial and operational non-GAAP measures are important factors in assessing our operating results and profitability and include performance measures along with certain key operating metrics.

We use the following financial performance measures:

EBITDA: We define EBITDA for any period as net income (loss) plus interest expense (including amortization of debt issuance costs), income taxes and depreciation and amortization. We believe net income (loss) is the most directly comparable GAAP measure to EBITDA.

Adjusted EBITDA: We define Adjusted EBITDA for any period as: EBITDA adjusted for (a) impairment; (b) unrealized gains and losses from mark to market accounting for hedging activities; (c) realized gains and losses under derivative instruments excluded from the determination of net income (loss); (d) non-cash equity-based compensation expense and other non-cash items (excluding items such as accruals of cash expenses in a future period or amortization of a prepaid cash expense) that were deducted in computing net income (loss); (e) debt refinancing fees, extinguishment costs, premiums and penalties; (f) any net gain or loss realized in connection with an asset sale that was deducted in computing net income (loss); (g) amortization of turnaround costs; (h) lower of cost or market (“LCM”) inventory adjustments; (i) the impact of liquidation of inventory layers calculated using the last in, first-out (“LIFO”) method; (j) RINs mark-to-market adjustments; and (k) all extraordinary, unusual or non-recurring items of gain or loss, or revenue or expense.

The definition of Adjusted EBITDA that is presented in this press release is similar to the calculation of (i) “Consolidated Cash Flow” contained in the indentures governing our 11.00% Senior Notes due 2025 (the “2025 Notes”), our 8.125% Senior Notes due 2027 (the “2027 Notes”), our 9.75% Senior Notes due 2028 (the “2028 Notes”), and our 9.25% Senior Secured First Lien Notes due 2029 (the “2029 Secured Notes”) and (ii) “Consolidated EBITDA” contained in the credit agreement governing our revolving credit facility. We are required to report Consolidated Cash Flow to the holders of our 2025 Notes, 2027 Notes, 2028 Notes, and 2029 Secured Notes and Consolidated EBITDA to the lenders under our revolving credit facility, and these measures are used by them to determine our compliance with certain covenants governing those debt instruments. Please see our filings with the SEC, including the Partnership’s most recent Annual Report on Form 10-K and other filings made by the Partnership and the Company with the SEC, for additional details regarding the covenants governing our debt instruments.

These non-GAAP measures are used as supplemental financial measures by our management and by external users of our financial statements such as investors, commercial banks, research analysts and others, to assess:

• the financial performance of our assets without regard to financing methods, capital structure or historical cost basis;
• the ability of our assets to generate cash sufficient to pay interest costs and support our indebtedness;
• our operating performance and return on capital as compared to those of other companies in our industry, without regard to financing or capital structure;
• the viability of acquisitions and capital expenditure projects and the overall rates of return on alternative investment opportunities; and
• our operating performance excluding the non-cash impact of LCM and LIFO inventory adjustments, RINs mark-to-market adjustments, and depreciation and amortization.

We believe that these non-GAAP measures are useful to analysts and investors, as they exclude transactions not related to our core cash operating activities and provide metrics to analyze our ability to fund our capital requirements and to pay interest on our debt obligations. We believe that excluding these transactions allows investors to meaningfully analyze trends and performance of our core cash operations.

EBITDA and Adjusted EBITDA should not be considered alternatives to Net income (loss) or any other measure of financial performance presented in accordance with GAAP. In evaluating our performance as measured by EBITDA or Adjusted EBITDA management recognizes and considers the limitations of these measurements. EBITDA and Adjusted EBITDA do not reflect our liabilities for the payment of income taxes, interest expense or other obligations such as capital expenditures. Accordingly, EBITDA and Adjusted EBITDA are only two of several measurements that management utilizes. Moreover, our EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of another company because all companies may not calculate EBITDA and Adjusted EBITDA in the same manner. Please see the section of this release entitled “Non-GAAP Reconciliations” for tables that present reconciliations of EBITDA and Adjusted EBITDA to Net income (loss), our most directly comparable GAAP financial performance measure.

Subject to the qualifications set forth above, our estimated range of Net loss and Adjusted EBITDA for the Company for the three months ended September 30, 2024 is (in millions):

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SOURCE Calumet, Inc.

Hydro’s adjusted EBITDA for the third quarter of 2024 was NOK 7,367 million, up from NOK 3,899 million in the same quarter last year, positively impacted by higher aluminium and alumina prices, lower raw material costs and positive currency effects. This was partly offset by lower recycling margins, Extrusions volumes and Energy prices resulting in an adjusted RoaCE of 8.5 percent over the last twelve months and free cash flow of NOK 1.7 billion.

• Solid upstream results from increasing alumina and aluminium prices
• 2024 improvement programs on track, Extrusions building robustness in weaker core markets
• Energy executing on renewable ambitions with Illvatn pumped storage project
• Reducing ownership from 30 to 19.9 percent and impairing NOK 956 million investments in Vianode
• Hydro and Mercedes-Benz extend partnership to foster socioeconomic development in Brazilian Amazon

“The positive development in our upstream revenue drivers continued in the third quarter, supporting strong results in our upstream business, countering the overall effects of the challenging downstream market,” says Eivind Kallevik, President & CEO of Hydro.

Positive upstream revenue drivers continued into the third quarter, supporting record results in Bauxite & Alumina. The Platts Alumina Index (PAX) gradually increased to USD 562 per tonne by quarter’s end as global alumina supply tightened. Chinese alumina prices also rose due to bauxite sourcing constraints, keeping the market balanced. Alunorte continued the fuel switch project, producing alumina with natural gas during the third quarter, and is expected to be fully implemented by the end of this year. The three-month aluminium price rose from USD 2,515 to USD 2,612 per tonne during the third quarter, supporting solid results in Aluminium Metal.

“The fuel switch at Alunorte exemplifies sustainability and profitability going hand in hand, yielding significant savings in carbon intensity as well as costs. Combined with the higher alumina price driven by the tight alumina market, the investment impacts Bauxite & Alumina‘s result positively this quarter,” says Kallevik.

The downstream aluminium market continued to be challenged by weak demand and recycling margins in Europe and North America. Automotive extrusion demand remains weak due to low electrical vehicle sales in Europe, especially in Germany. Building and construction, and industrial demand continues to be moderate with potential 2025 support from lower interest rates. Low activity in these markets limits aluminium scrap supply, squeezing recycling margins and reducing remelt production in both Hydro Extrusions and Metal Markets.

“Hydro is responding with short and long-term actions to strengthen robustness in Extrusions. While responding to the challenging market with firm mitigating actions, we are continuing to invest in the long-term robustness of our operations,” says Kallevik.

Hydro Extrusions is actively navigating challenging markets to address weak demand. By leveraging production flexibility and implementing cost-cutting programs, Extrusions aims to maintain margins. The recent investment in an automated press in Cressona in the U.S., replacing two old presses, exemplifies the commitment in Extrusions to enhance efficiency and productivity. However, achieving the NOK 8 billion EBITDA target for 2025 will require an extrusion market recovery of more than 20 percent volume growth and a recovery of remelt margins in line with historical averages, both in total representing NOK 2-3 billion improved EBITDA.

Weak markets are pressuring recycling margins, and active measures are taken to boost profitability and secure competitive scrap sourcing. Critical to this effort are enhanced capabilities in advanced scrap sorting. In the third quarter, the Alusort joint venture launched commercial operations of HySort in the U.S., enabling plants to process more post-consumer scrap. This expands Hydro’s HySort portfolio, to soon five machines in operation, including four across Europe, reinforcing the company’s leadership in recycling more post-consumer scrap.

By leveraging a fully integrated, traceable value chain from mine to component, Hydro is attracting strategic partnerships with industry frontrunners like Mercedes-Benz. The collaboration advanced significantly during the third quarter, as both companies committed to a long-term initiative aimed at driving positive change in the Brazilian Amazon. The Corridor program focuses on protecting human rights, generating income for local communities, restoring nature and building low-carbon value chains, underscoring that sustainability in aluminium solutions goes beyond just reducing carbon footprint.

“The agreement with Mercedes-Benz extends our partnership beyond low-carbon product development to create positive social and environmental impact in the state of Pará. Together, we aim to lift sustainability throughout our shared value chain, from mine to end-consumer product,” says Kallevik.

Securing renewable power is key to growth in low-carbon aluminium. Hydro made an investment decision for the Illvatn pumped storage plant in Luster, Norway, aiming to generate 84 GWh of renewable energy annually and improving flexibility in its production system. This will strengthen Hydro Energy’s portfolio, powering industrial production in Norway.

On October 22, Hydro decided to reduce its ownership in the synthetic graphite producer Vianode, based in Norway, from 30 to 19.9 percent. Hydro will step down from the board and no longer provide capital to Vianode to focus on projects supporting Hydro’s strategic priorities towards 2030. Impairments of NOK 956 million of investments in Vianode are taken in the third quarter, with NOK 581 million impacting reported EBITDA and shareholder loan in Vianode of NOK 375 million is impacting Finance expense.

Results and market development per business area

Adjusted EBITDA for Bauxite & Alumina increased compared to the third quarter of last year, from NOK 93 million to NOK 3,410 million, mainly driven by higher alumina sales prices, lower cost of raw materials and positive currency effects, partly offset by increased alumina sourcing costs and decreased sales volume. PAX started the quarter at USD 505 per mt, traded down to USD 478 per mt in July, before increasing gradually to USD 562 per mt at the end of the quarter as the World ex-China alumina market continued tightening.

Adjusted EBITDA for Energy in the third quarter decreased compared to the same period last year, from NOK 762 million to NOK 626 million. Lower prices and lower gain on price area differences were partly offset by the expiry of a 12-month internal fixed price purchase contract from Aluminium Metal at a loss in the same period last year. Average Nordic power prices in the third quarter 2024 decreased, both compared to the same quarter last year and the previous quarter. The decrease compared to the second quarter in 2024 was primarily a result of strengthened hydrological balance and seasonally reduced consumption. Price area differences between the south and the north of the Nordic market region decreased compared to the same quarter last year and increased compared to the previous quarter.

Adjusted EBITDA for Aluminium Metal increased in the third quarter of 2024, from NOK 1,379 million to NOK 3,234 million compared to the third quarter of 2023, mainly due to higher all-in metal prices, reduced carbon cost, higher level in CO2 compensation and positive currency effects, partly offset by increased alumina cost and higher fixed cost. Global primary aluminium consumption was up 1.6 percent compared to the third quarter of 2023, driven by a 2.3 percent increase in China. The three-month aluminium price increased throughout the third quarter of 2024, starting the quarter at USD 2,515 per mt and ending at USD 2,612 per mt.

Adjusted EBITDA for Metal Markets decreased in the third quarter compared to the same period last year, from NOK 568 million to NOK 277 million, due to lower results from recyclers and negative currency effects, partly offset by strong results from sourcing and trading activities. Lower results from recyclers are due to reduced sales prices in a weakening market and additional margin pressure in a tightening scrap market.

Extrusions adjusted EBITDA for the third quarter of 2024 decreased compared to the same quarter last year, from NOK 1,322 million to NOK 879 million driven by lower sales volumes and decreased margins from recycling. General inflation pressured fixed and variable costs, partly offset by cost measures. European extrusion demand is estimated to have decreased 7 percent in the third quarter of 2024 compared to the same quarter last year, and 21 percent compared to the second quarter partly driven by seasonality. Automotive extrusion demand continues to be challenged by weak sales of electric vehicles across Europe, particularly in Germany. Demand for building and construction, and industrial segments has remained moderate after summer with no clear signs of improvement over the coming months, although lower interest rates may support demand into 2025. North American extrusion demand is estimated to have decreased 4 percent during the third quarter of 2024 compared to the same quarter last year and 7 percent compared to the second quarter. The transport segment has been particularly weak, driven by lower trailer build rates. Automotive demand is facing headwinds due to weaker sales of electric vehicles. Demand continues to be soft in the building and construction, and industrial segments, however, underlying demand is expected to gradually improve into 2025 driven by lower interest rates.

Other key financials

Compared to the second quarter 2024, Hydro’s adjusted EBITDA increased from NOK 5,839 million to NOK 7,367 million in the third quarter 2024. Higher realized aluminium and alumina prices combined with lower fixed costs were partly offset by lower Extrusions and recycling volume.

Net income (loss) amounted to NOK 1,409 million in the third quarter of 2024. Net income (loss) included a NOK 907 million unrealized derivative loss on LME related contracts and a net foreign exchange gain of NOK 139 million. The result also includes the impairment of the equity accounted battery investment Vianode of NOK 581 million and NOK 129 million in rationalization charges and closure costs. Further, foreign exchange losses of NOK 1,092 and losses on a loan to Vianode of NOK 375 million are adjusted for. The tax effect on these adjustments reflects a standardized tax rate for taxable gains and tax deductible losses.

Hydro’s net debt decreased from NOK 16.2 billion to NOK 14.8 billion during the third quarter of 2024. The net debt decrease was mainly driven by EBITDA contributions, partly offset by investments and other operating cash flows.

Adjusted net debt decreased from NOK 26.1 billion to NOK 25.0 billion, largely due to the decrease in net debt of NOK 1.5 billion, partly offset by increased net pension liabilities of NOK 0.3 billion and increased collateral of NOK 0.2 billion.

Reported earnings before financial items and tax (EBIT), and net income include effects that are disclosed in the quarterly report. Adjustments to EBITDA, EBIT and net income (loss) are defined and described as part of the alternative performance measures (APM) section in the quarterly report.

Investor contact:
Martine Rambøl Hagen
+47 91708918
Martine.Rambol.Hagen@hydro.com

Media contact:
Halvor Molland
+47 92979797
Halvor.Molland@hydro.com

The information was submitted for publication from Hydro Investor Relations and the contact persons set out above. Certain statements included in this announcement contain forward-looking information, including, without limitation, information relating to (a) forecasts, projections and estimates, (b) statements of Hydro management concerning plans, objectives and strategies, such as planned expansions, investments, divestments, curtailments or other projects, (c) targeted production volumes and costs, capacities or rates, start-up costs, cost reductions and profit objectives, (d) various expectations about future developments in Hydro’s markets, particularly prices, supply and demand and competition, (e) results of operations, (f) margins, (g) growth rates, (h) risk management, and (i) qualified statements such as “expected”, “scheduled”, “targeted”, “planned”, “proposed”, “intended” or similar. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. 

Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include, but are not limited to: our continued ability to reposition and restructure our upstream and downstream businesses; changes in availability and cost of energy and raw materials; global supply and demand for aluminium and aluminium products; world economic growth, including rates of inflation and industrial production; changes in the relative value of currencies and the value of commodity contracts; trends in Hydro’s key markets and competition; and legislative, regulatory and political factors. No assurance can be given that such expectations will prove to have been correct. Except where required by law, Hydro disclaims any obligation to update or revise any

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