Delek US Holdings Inc. is sticking to a strategy to grow its retail fuel and
convenience store business that offers an attractive rate of return and free
cash flow, while the refinery operator is also open to putting its retail
business up for sale in the future, CEO Uzi Yemin said Monday.

At the Shareholder Equity Conference held virtually Monday afternoon, Yemin
also said he is confident about the prospect of U.S. transportation fuel
consumption due to COVID-19 vaccinations, suggesting 2022 to be the strongest
year ever in product demand on expectations that most American workers will
once again commute to offices.

In a joint presentation with Delek's senior vice president of investor
relations and market intelligence, Blake Fernandez, Yemin said that building
new retail fuel and convenience stores that offer bigger footprints with unique
food offerings can offer a rate of return of 20%-25%.

In addition, spending $4 million-$5 million to build out a new retail store is
a relatively small investment with a short time frame compared with long-lead
and capital-intensive refinery and pipeline projects, the Delek executives said.

"You can progressively ramp up the growth in retail and match it with the free
cash generation of the company and provide a really nice rate of return," said
Fernandez. "At some point, if the market is such that we can divest in a really
attractive valuation multiple, I think we can always consider that -- we don't
have any sacred cows. For the time being ... we really see some strong
opportunity to build out the retail."

Delek operates about 253 convenience stores in central and west Texas and New
Mexico. In addition, Delek US fuel brands -- DK and ALON -- are supporting over
700 independent distributor and jobber sites across the Southwest. In 2018,
Delek bought out all of Alon USA Partners' shares.

In 2016, Delek sold its 348-store Mapco Express Inc. and affiliates to
Chile-based Compania de Petroleos de Chile (COPEC) for about $535 million.

"Delek started as a retail company, so we have our roots in retail. We're not
shy of selling retail if we see the value is there," said Yemin, adding that
Delek is "on track to more than double" the valuation of its convenience stores
business within three years. Yemin has served as Delek's CEO since 2004.

CVR Energy Inc., which is controlled by billionaire financier Carl Icahn and is
a major investor in Delek, in May suggested a list of changes it wanted to see
at Delek, including selling its retail business and ending refining operations
at the company's Krotz Springs, Louisiana, and El Dorado, Arkansas, plants.

CVR had at one point acquired a 15% stake in Delek with the intent of acquiring
the company. However, the company dropped that plan in January and instead
launched a proxy fight to seat its candidates on Delek's board.

Delek maintains that CVR is its competitor and the proposed changes would harm
Delek while benefiting CVR.

At 1:04 p.m. ET, shares of Delek US were down about 94cts, at $18.08 per share
on the New York Stock Exchange. The stock of Delek, which operates four U.S.
refineries and other logistics assets, traded between $8.92 and $27.38 per
share in the past 52 weeks.

--Reporting by Frank Tang, ftang@opisnet.com; Editing by Barbara Chuck,
bchuck@opisnet.com


Copyright, Oil Price Information Service