30 October 2012 12:50 [Source: ICIS news]
LONDON (ICIS)--US-based Valero’s third-quarter net income fell steeply to $674m (€526m) from $1.20bn reported in the same period last year, following impairment losses and severance expenses primarily related to its Aruba refinery, the US-based refiner said on Tuesday.
In September, Valero announced that it plans to convert its Aruba refinery into a refined products terminal, following the company’s suspension of operations at the facility in March this year. The company said at the time the move will further reduce Valero’s operations in Aruba, and will lead to “considerable” reductions in workforce at the site.
Excluding these items, Valero reported a net income of $1.1bn. Operating revenues during the quarter rose by 3% year on year to $34.7bn.
Third-quarter 2012 operating income was $1.31bn, compared with $1.98bn in the same period of 2011. Excluding the items noted above, third-quarter 2012 operating income was $1.7bn, the group added.
Valero said the decrease in operating income was primarily because of lower refining throughput margins in the US Gulf Coast, mid-continent and west coast, which were partially offset by significantly higher refining throughput margins in the North Atlantic region.
In addition, the company said throughput volumes at its St Charles, Meraux and Memphis refineries were negatively impacted by the effects of Hurricane Isaac and unplanned maintenance on the Meraux crude unit.
A decline in retail and ethanol margins also contributed to the decrease in operating income, Valero said.
Valero chairman and CEO Bill Klesse, said: "During the third quarter we elected to reorganise the Aruba refinery into a crude oil and refined products terminal, did major-reliability work at the Meraux refinery and continued to pursue the separation of our retail business.
“The new Port Arthur hydrocracker is expected to be operational in December, and the new St. Charles hydrocracker remains on schedule to be operational in the second quarter of 2013.”
Looking at the fourth quarter, Klesse said gasoline margins have narrowed significantly, but distillate margins and sour crude discounts remain wide.
“US demand for refined products continues to be weak, reflecting high unemployment and high prices, but exports remain strong. As we approach winter, US inventories of refined products look favourable," he added.
($1 = €0.78)
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections