PBF Energy Inc. reported lower second-quarter earnings, but noted that its Delaware City and Paulsboro, NJ refineries returned to profitability during the quarter.
The Delaware City refinery earlier suffered from a power outage from a snowstorm that led the company to reduce production and move up scheduled maintenance in the first quarter.
Delaware City, which was shuttered and slated for demolition when purchased by PBF in 2010, was the first refinery company managed by veteran executives who had knowledge of the site when working for a previous owner.
PBF reported second quarter 2016 net income of $120.6 million, and net income attributable to PBF Energy Inc. of $103.5 million. This compares to net income of $158.5 million, and net income attributable to PBF Energy Inc. of $135.8 million. Results include a logistics and pipeline entity controlled by PBF.
Revenues for the quarter rose to $3.9 billion, from $3.5 billion in 2015, due in part to the addition of a refinery near New Orleans. PBF now has five refineries, two on the East Coast, one in Toledo, Ohio; and Torrance, CA.
Shares of PBF Energy were up 2 percent on Friday, with stock trading above $22 a share. That is well below the 52-week high of nearly $41.50 a share in November. The company has been hit by volatility in crude oil prices that at one point dropped to nearly $35 a barrel and are now in the mid-40s.
PBF is also affected when the price differential between harder-to-refine heavier grades of crude oil and lighter grades is reduced.
PBF operates refineries in Delaware and elsewhere that process a variety of grades of crude oil and often profits from lower prices for heavier crude.
Tom Nimbley, PBF Energy’s CEO, said, “Our refineries ran better than last quarter, generating positive results as the East Coast returned to profitability. Our margins were negatively impacted by several factors, including narrower light/heavy crude differentials and a 35 percent increase in the flat price of crude versus the first quarter. These factors contributed to lower realized margins due to increased input costs and higher relative losses on our low-value products across our system.”
Nimbley continued, “Despite the recent market volatility, we are excited about the increased diversification of our system with the addition of Torrance. We have grown our business significantly over the past 12 months and increased the earnings potential of our company.”
PBF completed the acquisition of the Southern California refinery on July 1.
