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PBF Energy (PBF) Posts Huge Q4 Loss on Weak Refining Margin
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PBF Energy Inc. (PBF - Free Report) reported fourth-quarter 2020 loss of $4.53 per share, wider than the Zacks Consensus Estimate of a loss of $3.41. The company reported earnings of 60 cents per share in the year-ago quarter.
The weak quarterly earnings can be attributed to lower crude oil and feedstock throughput volumes, significantly reduced gross refining margin, as well as increased refinery operating expense.
Total revenues decreased to $3,655.1 million from $6,301.5 million in the prior-year quarter. However, the top line beat the Zacks Consensus Estimate of $3,522 million.
Energy demand destruction caused by coronavirus-induced lockdowns and travel bans massively affected refining and marketing companies’ 2020 bottom line. Hit by lower refining margins, PBF Energy joined others like Phillips 66 (PSX - Free Report) , Valero Energy Corporation (VLO - Free Report) , Marathon Petroleum Corporation (MPC - Free Report) in reporting losses.
The pandemic forced PBF Energy to reduce refinery rates in second-half 2020. Importantly, its refineries are expected to run at reduced utilization rates until demand is adequate. Near-term throughput volumes will likely be in the range of 675-725 thousand barrels per day (bpd).
Looking forward, the company’s East Coast refining reconfiguration and other favorable moves are expected to lead to $200-$225 million of cost savings per annum. Its refining capital expenditure for the first half of 2021 is now expected to be $150 million.
It generated a profit of $41.9 million from the Logistics segment, which reflects a decrease from the prior-year quarter’s $42.9 million.
Throughput Analysis
Volumes:
For the quarter under review, crude oil and feedstocks throughput volumes were 677.3 thousand bpd, lower than the year-ago figure of 843 thousand bpd.
East Coast, Mid-Continent, Gulf Coast and West Coast regions accounted for 33.8%, 16.5%, 17.5%, and 32.2%, respectively, of total oil and feedstock throughput volume.
Margins:
Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at 98 cents, significantly lower than the year-earlier quarter’s $9.31.
Refining margin per barrel of throughput was 9 cents in the East Coast, down from $8.16 in the year-earlier quarter. Realized refining loss was $1.64 per barrel in the Gulf Coast against a profit of $6.05 in the prior-year period. Moreover, the metric was $2.72 and $2.17 per barrel in the West Coast and Mid-Continent, down from $14.85 and $9.42, respectively, a year ago.
Refinery operating expense per barrel of throughput was $7.25, higher than $5.28 in the year-ago quarter.
Costs & Expenses
Total costs and expenses for the reported quarter were $3,983.2 million, significantly lower than $6,178.5 million in the year-ago period. Cost of sales — which includes operating expenses, cost of products and others — amounted to $3,835.6 million, lower than the year-ago level of $6,066.3 million. General and administrative expenses fell to $61.5 million from $108.1 million in the year-ago period.
Capital Expenditure & Balance Sheet
Through the fourth quarter, the company spent $45.7 million capital on refining operations and $2.7 million on logistics businesses.
At quarter-end, it had cash and cash equivalents of $1,609.5 million, up from the third-quarter level of $1,282.6 million. As of Dec 31, PBF Energy had a total debt of $4,661 million, up from the third-quarter level of $4,411.1 million. This resulted in total debt to capitalization of 68%.
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PBF Energy (PBF) Posts Huge Q4 Loss on Weak Refining Margin
PBF Energy Inc. (PBF - Free Report) reported fourth-quarter 2020 loss of $4.53 per share, wider than the Zacks Consensus Estimate of a loss of $3.41. The company reported earnings of 60 cents per share in the year-ago quarter.
The weak quarterly earnings can be attributed to lower crude oil and feedstock throughput volumes, significantly reduced gross refining margin, as well as increased refinery operating expense.
Total revenues decreased to $3,655.1 million from $6,301.5 million in the prior-year quarter. However, the top line beat the Zacks Consensus Estimate of $3,522 million.
Energy demand destruction caused by coronavirus-induced lockdowns and travel bans massively affected refining and marketing companies’ 2020 bottom line. Hit by lower refining margins, PBF Energy joined others like Phillips 66 (PSX - Free Report) , Valero Energy Corporation (VLO - Free Report) , Marathon Petroleum Corporation (MPC - Free Report) in reporting losses.
The pandemic forced PBF Energy to reduce refinery rates in second-half 2020. Importantly, its refineries are expected to run at reduced utilization rates until demand is adequate. Near-term throughput volumes will likely be in the range of 675-725 thousand barrels per day (bpd).
Looking forward, the company’s East Coast refining reconfiguration and other favorable moves are expected to lead to $200-$225 million of cost savings per annum. Its refining capital expenditure for the first half of 2021 is now expected to be $150 million.
PBF Energy Inc. Price, Consensus and EPS Surprise
PBF Energy Inc. price-consensus-eps-surprise-chart | PBF Energy Inc. Quote
Segmental Performance
The Zacks Rank #4 (Sell) company’s operating loss at the Refining segment was $311.6 million against profit of $184.9 million a year ago.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It generated a profit of $41.9 million from the Logistics segment, which reflects a decrease from the prior-year quarter’s $42.9 million.
Throughput Analysis
Volumes:
For the quarter under review, crude oil and feedstocks throughput volumes were 677.3 thousand bpd, lower than the year-ago figure of 843 thousand bpd.
East Coast, Mid-Continent, Gulf Coast and West Coast regions accounted for 33.8%, 16.5%, 17.5%, and 32.2%, respectively, of total oil and feedstock throughput volume.
Margins:
Company-wide gross refining margin per barrel of throughput — excluding special items — was recorded at 98 cents, significantly lower than the year-earlier quarter’s $9.31.
Refining margin per barrel of throughput was 9 cents in the East Coast, down from $8.16 in the year-earlier quarter. Realized refining loss was $1.64 per barrel in the Gulf Coast against a profit of $6.05 in the prior-year period. Moreover, the metric was $2.72 and $2.17 per barrel in the West Coast and Mid-Continent, down from $14.85 and $9.42, respectively, a year ago.
Refinery operating expense per barrel of throughput was $7.25, higher than $5.28 in the year-ago quarter.
Costs & Expenses
Total costs and expenses for the reported quarter were $3,983.2 million, significantly lower than $6,178.5 million in the year-ago period. Cost of sales — which includes operating expenses, cost of products and others — amounted to $3,835.6 million, lower than the year-ago level of $6,066.3 million. General and administrative expenses fell to $61.5 million from $108.1 million in the year-ago period.
Capital Expenditure & Balance Sheet
Through the fourth quarter, the company spent $45.7 million capital on refining operations and $2.7 million on logistics businesses.
At quarter-end, it had cash and cash equivalents of $1,609.5 million, up from the third-quarter level of $1,282.6 million. As of Dec 31, PBF Energy had a total debt of $4,661 million, up from the third-quarter level of $4,411.1 million. This resulted in total debt to capitalization of 68%.
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In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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