You are here
HOUSTON — Par Pacific Holdings Inc.’s Par Hawaii retail division will complete its conversion of 37 of its 97 Hawaiian convenience stores to the Hele brand name by the end of this current quarter, which ends Sept. 30, president and CEO William Pate stated during Tuesday’s 2016 fiscal second-quarter earnings call.
Hele is a Hawaiian word that means “to go” in English. The remaining 60 c-stores will retain the 76 brand name.
“We believe [Hele] will allow us to grow our retail operations,” said Pate.
When questioned by a Wall Street analyst in the call why Par Pacific is only converting less than half of its c-stores to the new brand, Joseph Israel, president and CEO of the company’s Par Petroleum LLC division, responded its priority was to remove the Tesoro brand name off its 37 stores. Par Pacific previously purchased these Hawaiian c-stores from Tesoro Corp.
“We like our 76 brand,” said Israel.
Regarding earnings at its retail division, the Par Hawaii division reported net operating income of $3.4 million in its 2016 second quarter ended June 30, compared to a $5.3-million profit in its 2015 second quarter.
Adjusted retail gross margins came in at $15.4 million vs. $16.6 million in the year-ago period, and EBITDA was $4.9 million in its latest quarter, a decline of $2 million year over year. Retail fuel sales volume ticked slightly higher to 23 million gallons in the company’s most recent quarter.
Pate explained these Par Hawaii earnings declines were due to “compression of retail margins due to a higher cost of crude oil."
“Retail was off a bit. … [But] we expect retail will pick up,” noted Pate. “Margins will normalize over time.”
Companywide, Par Pacific reported a net loss of $13.1 million, compared to a net profit of $11.7 million in its 2015 second quarter. Pate explained earnings results were “overwhelmingly impacted by poor global refining cracks.”
Houston-based Par Pacific Holdings Inc. manages and maintains interests in energy and infrastructure businesses. Its business is organized into three primary segments of refining, retail and logistics.