DK Q2 Earnings Call Highlights Cash Flow and Refining Flexibility

DK Builds on Refining Reliability

CEO Avigal Soreq said all four refineries operated well. Big Spring has met expectations after its turnaround, with better reliability, crude-slate flexibility, product yields, octane and blending capabilities.

CEO Avigal Soreq said crude access, high distillate output and quick responses to market shifts remain central advantages. With no planned turnarounds for the rest of 2026, the system is positioned to capture market strength.

EVP Robert Wright guided third-quarter system throughput to 296,000-316,000 barrels per day. Operating expenses are expected at $220-$230 million, G&A at $50-$55 million and depreciation and amortization at $110-$120 million.

Delek Expands Its Cash Flow Playbook

CEO Avigal Soreq said the enterprise optimization plan contributed about $60 million to second-quarter results. The program targets at least $220 million of annual run-rate cash-flow improvement.

EVP of Strategy, Business Development and Investor Relations Mohit Bhardwaj said confidence is increasing in mid-cycle free cash flow of $650-$700 million, including Delek Logistics distributions.

A Goldman Sachs analyst pressed for the next upside sources. CEO Avigal Soreq described optimization as an organization-wide discipline and cited further opportunities in gross margin, product mix, sales locations and other operating areas.

DK Looks to Logistics for Separation

Delek Logistics generated second-quarter adjusted EBITDA of $143.5 million and reaffirmed 2026 guidance of $520-$560 million. Gathering and processing adjusted EBITDA rose to $104.1 million from $78 million a year earlier.

CEO Avigal Soreq said third-party EBITDA should exceed 80% on a pro forma basis in 2026. He called that economic separation a cornerstone of the sum-of-the-parts and deconsolidation work.

CFO Mark Hobbs said both Libby plants are running well, the acid-gas injection well is complete and sour-gas gathering and compression are nearing completion. He expects a step change in gas volumes through year-end.

Delek Keeps SRE Upside in View

A Wolfe Research analyst asked about exemption timing and the reversed Krotz Springs denial. EVP Mohit Bhardwaj said the decision reinforced confidence in Delek’s 2025 petitions.

Answering a TPH Research analyst, EVP Mohit Bhardwaj said Delek’s total 2025 renewable volume obligation was $468.4 million, based on a RIN price of $1 per gallon. EVP Robert Wright emphasized tax minimization as a key strategy.

EVP Mohit Bhardwaj framed awarded RINs as a return of credits already purchased for compliance, not a new cash grant. CEO Avigal Soreq said proceeds would follow the existing capital-allocation framework.

DK Maintains a Balanced Capital Plan

CEO Avigal Soreq said Delek paid about $16 million in dividends and repurchased $20 million of shares during the quarter. He added that the company has bought back about 10% of its shares since the beginning of 2025.

Answering Goldman Sachs, CEO Avigal Soreq reaffirmed a through-cycle dividend and a balance between debt reduction and repurchases. He said Delek does not plan to retain excess cash without a defined purpose.

EVP Robert Wright said stand-alone net debt declined by $72 million after the term loan was refinanced and reduced from $920 million to $850 million. CEO Avigal Soreq said acquisitions must be strategic and accretive to leverage and coverage.

Delek Ends With an Execution-First Stance

CEO Avigal Soreq’s tone was confident on refinery reliability, enterprise optimization and logistics growth, while measured on market volatility and the timing and value of regulatory relief.

The priorities leaving the call were consistent: safe operations, higher free cash flow, economic separation of Delek Logistics and disciplined capital returns.

Zacks Signals Favor Value and Growth

DK carries a Zacks Rank #1 (Strong Buy), indicating a favorable earnings-estimate revision profile under the Zacks framework. Its Value Score of A, Growth Score of A and VGM Score of A reinforce broad style strength, while the Momentum Score of C is less favorable.You can see the complete list of today’s Zacks #1 Rank stocks here.

The combination points to constructive near-term potential rather than a certain outcome. The Zacks Rank can change as analysts revise estimates following the just-reported results.

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