Calumet(CLMT -3.62%) reported second quarter 2025 earnings on August 8, 2025, delivering $76.5 million of adjusted EBITDA with tax attributes, including $8.3 million of adjusted EBITDA with tax attributes from Montana Renewables amid cyclical margin lows. Management accelerated its deleveraging plan through asset optimizations and robust specialty performance. The following key insights examine competitive positioning, regulatory catalysts, and strategic balance sheet progress with direct implications for long-term investors.
Operational discipline drives Calumet cost leadership
Company-wide operating costs decreased by $42 million in the first half of 2025 compared to the prior-year period, despite a $7 million rise in energy expenses. Specialty sales volumes within the Specialty Products and Solutions (SPS) segment sustained three straight quarters above 20,000 barrels per day, underscoring reliability amid a full facility turnaround.
"Company-wide, our operating costs have been reduced by $42 million through the first half of the year, versus the first half of last year, despite a $7 million increase in the cost of natural gas and electricity, our largest variable expenses. Further, through the halfway point, company-wide production has slightly increased year over year, despite the full month turnaround at our largest plant."
— Todd Borgmann, CEO
Calumet’s ability to expand production and maintain specialty segment volumes while aggressively lowering operating costs reflects superior execution, enhancing sustainable margin resilience and positioning the company favorably for future volatility in input costs or end markets.
Montana Renewables establishes durable competitive advantages
Montana Renewables generated $8.3 million of adjusted EBITDA with tax attributes during a period the CEO described as the lowest quarterly industry margin on record for renewable diesel, supported by top-quartile costs ($0.43 per gallon operating, $0.51 per gallon inclusive of SG&A) and record throughput. Management initiated marketing for the MaxSaf 150 expansion, targeting 120 million to 150 million gallons of sustainable aviation fuel (SAF) production annually beginning in 2026 for $20 million to $30 million in new capital expenditure for the MaxSaf 150 project.
"Our ability to remain positive in this brutal market is a function of our advantaged fee flexibility, leading staff position, ultra-competitive costs, and the highest throughput volumes we've achieved yet. More simply, Montana Renewables has firmly established itself as one of the most competitively advantaged producers in the space."
— Todd Borgmann, CEO
The demonstrated cost and operating discipline, together with feedstock and end-market flexibility, affirms Montana Renewables’ structural advantage, increasing its value as a monetization prospect and supporting Calumet's strategic shift toward higher value, lower-carbon fuels.
Asset optimization accelerates Calumet deleveraging
During Q2, the company refreshed its Shreveport terminal asset financing, unlocking $80 million of incremental cash and calling $80 million of 2026 notes, bringing the year-to-date total debt called to $230 million. Expected restricted group cash flow for the remainder of 2025 is $50 million to $60 million, augmented by a $30 million working capital release as the Shreveport turnaround unwinds.
"We had previously sold these assets to Stonebriar for $70 million back in 2021. And given the improvements in Shreveport production, the truck and related assets value increased to $120 million. Instead of repurchasing the asset in the year and a half, we were able to add $80 million of new cash to the existing $40 million of principal and call another $80 million of our 2026 notes reducing the outstanding balance to a manageable $124 million. Add this to the accretive Royal Purple industrial asset monetization and deleveraging that occurred earlier this year, and we now will have called $230 million of the 2026 notes in the last few months."
— David Lunin, EVP and CFO
Continued progress on balance sheet repair enables Calumet to reduce refinancing risk, expand future strategic options, and advance toward its $800 million restricted group debt target, thus enhancing balance sheet optionality.
Looking Ahead
Management reaffirmed that Montana Renewables’ MaxSaf 150 expansion remains on course for a 2026 startup, with expected SAF volumes of 120 million to 150 million gallons per year upon project startup and capital investment of $20 million to $30 million for the MaxSaf 150 project. The company expects to monetize all accumulated production tax credits shortly, with over $50 million of production tax credits built up on the balance sheet, and to generate $50 million to $60 million in restricted group cash flow in the second half of 2025. No further plant turnarounds are scheduled for the year, and leadership reiterated deleveraging and ultimate Montana Renewables monetization as core strategic priorities; no explicit timeline was provided for finalizing the sale, but 2026 remains a potential window contingent on margin recovery.
