HollyFrontier (HFC) has reported 62.05 percent plunge in profit for the quarter ended Sep. 30, 2016. The company has earned $74.50 million, or $0.42 a share in the quarter, compared with $196.32 million, or $1.04 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $66.67 million, or $0.38 a share compared with $342.64 million or $1.82 a share, a year ago. 

Revenue during the quarter dropped 20.60 percent to $2,847.27 million from $3,585.82 million in the previous year period. Gross margin for the quarter contracted 196 basis points over the previous year period to 17.74 percent. Total expenses were 95.62 percent of quarterly revenues, up from 91 percent for the same period last year. That has resulted in a contraction of 461 basis points in operating margin to 4.38 percent.

Operating income for the quarter was $124.76 million, compared with $322.60 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $206.91 million compared with $630.03 million in the prior year period. At the same time, adjusted EBITDA margin contracted 1030 basis points in the quarter to 7.27 percent from 17.57 percent in the last year period.  

HollyFrontier’s president & chief executive officer, George Damiris, commented, "Excellent operational reliability and continued progress on controlling operating and capital spending were overshadowed by weak industry margins, a diminishing crude advantage and escalating costs associated with the RFS mandate during the quarter. Given our balance sheet strength and excellent liquidity position, HollyFrontier remains well positioned to withstand the challenging operating environment and exploit potential opportunities. Last week, we announced the acquisition of Suncor Energy’s Petro-Canada Lubricants business "PCLI". PCLI will diversify HollyFrontier’s earnings stream through the addition of a differentiated high-margin business that generates more stable cash flows. We anticipate that lubricants will represent more than 20% of normalized refining EBITDA and a higher percentage in a low fuels margin year like 2016. We believe increased scale in high-margin, lower volatility lubricants, alongside our high-quality refining and midstream business will drive continued value creation for our shareholders."