US Valero Q2 net income falls 44% on lower refining margins

23 July 2013 13:57  [Source: ICIS news]

HOUSTON (ICIS)--US refining major Valero on Tuesday reported a 44% decline in second-quarter net income to $466m (€354m), as lower refining throughput margins hurt operating income.

The decline in margins was caused by significantly lower discounts for heavy sour and light crude oil, as well as higher natural gas costs, the company said.

In addition, Valero incurred higher costs in complying with the US federal Renewable Fuel Standard, it said.

Valero’s operating income for the three months ended 30 June was down to $808m, from $1.36bn in the 2012 second quarter. Operating revenues were almost unchanged at $34.0bn, compared with $34.7bn in the 2012 second quarter.

Second-quarter 2013 refining throughput volumes averaged 2.6m bbl/day, a decrease of 52,000 bbl/day from the second quarter of 2012. 

Valero had “significant turnaround and planned maintenance activity” at its refineries in Quebec City, in Canada, and McKee, Meraux, and Port Arthur in the US in the second quarter of 2013, it said.

Valero's ethanol segment reported operating income of $95m in the second quarter of 2013 versus $5m in the second quarter of 2012. The increase in ethanol operating income was due to a higher gross margin per gallon and higher production volumes, the company said.

"Valero performed well financially given the margin environment and maintenance activities," said CEO Bill Klesse.

"We also returned $364m in cash to our stockholders through dividends and stock buybacks in the second quarter,” Klesse added.

($1 = €0.76)

By: Stefan Baumgarten
+1 713 525 2653

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