Q2 2026 Calumet Inc Earnings Call Transcript
Key Points
- Calumet Inc (CLMT) delivered strong Q2 2026 results with $175 million of adjusted EBITDA, driven by robust performance in both Specialties and Montana Renewables segments.
- The company's restricted group leverage ratio fell below 4x, and it expects to surpass 3x next quarter, supported by strong cash flows and accelerated debt reduction efforts.
- Specialties business is benefiting from a structurally imbalanced global base oil market, with over 10% of global capacity offline, positioning Calumet's integrated production model advantageously.
- Montana Renewables is ramping up successfully after completing the first phase of MaxSAF 150 expansion, with July indicating a pace well ahead of Q2 and strong index margins around $2.60 per gallon.
- The company identified a novel, capital-efficient expansion for Montana Renewables using a second reactor from the fossil refinery, which is cheaper, faster, and carries a higher IRR, enabling up to 200 million gallons of SAF production by 2028.
- Calumet Inc (CLMT) faced a $20 million offset from fuel hedges in Q2, which traded upside for certainty to support debt paydown commitments, potentially limiting gains from favorable market conditions.
- The company experienced a $70 million working capital build during the quarter, including higher crude inventory levels and increased accounts receivable, which, while expected to unwind, temporarily ties up cash.
- Performance Brands segment saw adjusted EBITDA decline by $6.2 million year-over-year due to timing issues, as input costs spiked before pricing actions caught up, with a $7 million LIFO accounting headwind.
- Montana Renewables' Q2 results were impacted by over $40 million of foregone margin due to downtime from the MaxSAF expansion and turnaround, limiting its contribution to $17 million of adjusted EBITDA.
- The company is deferring the full ramp-up of SAF production to capture an extra $50 million of EBITDA at the conventional refinery (CMR) before reconfiguring assets, which delays the realization of higher SAF yields and volumes.
Good day, and welcome to the Calumet Inc Second Quarter 2026 Conference Call. (Operator Instructions)
Please note this event is being recorded. I would now like to turn the conference over to John Kompa, Investor Relations. Please go ahead.
Thanks, David. Good morning.
Thank you for joining our second quarter 2026 earnings call. With me on today's call are Todd Borgmann, CEO, David Lunin, EVP and Chief Financial Officer, Bruce Fleming, EVP, Montana Renewables and Corporate Development, and Scott Obermeier, President, Specialties. You may now download the slides that accompany the remarks made on today's conference call, which can be accessed in the investor relations section of our website at calumet.com. Also, a webcast replay of this call will be available on our site within a few hours. Turning to the presentation, on slide two, you can find our cautionary statements. I'd like to remind everyone that during this call, we may provide various forward-looking statements.
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