Earnings Drop at HollyFrontier, Safety-Kleen


For the fourth quarter and full year 2020, HollyFrontier Corp.’s lubricants and specialty products segment posted weaker income and lower revenue from operations, while Clean HarborsSafety-Kleen segment reported lower revenue.


HollyFrontier Corp.‘s lubricants and specialty products segment reported a $53.6 million loss in operations for the quarter ending Dec. 31, falling from $11.7 million in income from operations in the year-earlier period. For 2020, the segment posted a $209.2 million loss in operations, declining further from a $129.1 million loss in 2019.

The segment’s revenues from external customers declined 10% to $464.3 million for the fourth quarter, down from $516.1 million. For the full year, revenues from external customers decreased to $1.8 billion, down 14%.

The Dallas, Texas-based company noted that the full year 2019 results only include 11 months of performance from Sonneborn because HollyFrontier acquired the white oils business on Feb. 1 of that year.

HollyFrontier’s lubricants and specialty products segment includes Petro-Canada Lubricants and its Mississauga, Ontario, refinery, which makes products such as base oils, white oils, specialty products and finished lubricants, along with specialty lubricants from HollyFrontier’s Tulsa refineries. Acquisitions Red Giant Oil Co. and Sonneborn are also part of the company’s lubricants and specialty products segment.

Clean Harbors

Norwell, Massachusetts-based Clean Harbors’ Safety-Kleen segment – which includes oil rerefining – reported third party revenues of $282.7 million for the fourth quarter ending Dec. 31, down 14% from $328.5 million in 2019.

For 2020, revenues decreased 15% to $1.1 billion. These third-party revenues include sales of base oil, blended products and reclaimed fuel oil and a small amount of byproducts.

“Within Safety-Kleen, market conditions were comparable with the third quarter, with revenue essentially flat on a sequential basis,” Clean Harbors Chairman, President and CEO Alan McKim said in the company’s earnings news release. “While certain geographies improved, new shelter-in-place restrictions in areas, such as California and across Canada, limited the ability of our branch business to continue its recovery to pre-pandemic levels.

“Within [Safety-Kleen] Oil, while lower vehicle miles driven continued to dampen market demand for lubricants, available base oil and lubricant supply from traditional refiners remained severely constrained, leading to price increases across the industry toward year-end. With fewer waste oil outlets available, market rates charged for used motor oil remained high, and collection volumes were relatively strong at 49 million gallons.”

In the company’s business outlook and financial guidance, McKim said, growing demand for sustainable solutions has increased the opportunities for its base oil and blended lubricant products.

“For our Safety-Kleen branch business, we anticipate a steady recovery as vehicle miles driven increase with the rollout of vaccines across North America,” he observed. “For [Safety-Kleen] Oil, our rerefineries are running well, and pricing conditions in the marketplace are favorable. We anticipate continuing to carefully manage our rerefining spread going forward, while more aggressively seeking to grow our collection volumes given the market dislocations created by IMO 2020 and other factors,” McKim concluded. IMO 2020 regulations, which took effect at the start of 2020, lowered the cap on sulfur content in marine fuels from 3.5% to 0.5% by weight.

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