Delaware City Refinery owner PBF Energy reported higher net income in the first quarter, despite challenges that included the bulk of its refining system undergoing maintenance.
PBF Energy’s financial results reflect the consolidation of PBF Logistics LP (PBFX), a master limited partnership of which PBF indirectly owns the general partner and approximately 54.1 percent of the limited partner interests as of quarter-end.
The company reported first-quarter 2019 net income of $241.4 million and net income attributable to PBF Energy Inc. of $229.2 million. This compares to net income of $41.8 million, and net income attributable to PBF Energy Inc. of $30.4 million for the first quarter of 2018.
Zacks and other sites, using other figures, reported a loss for the quarter on weak refining margins. Zacks also reported the company did not meet earnings forecasts.
PBF shares are trading at under $34 share, well below the 52 week high of nearly $54.
Tom Nimbley, PBF Energy’s Chairman and CEO, said, “PBF made the strategic decision to advance the majority of our 2019 maintenance program into the first quarter of 2019. Consequently, first quarter results reflect both the challenging market conditions, in terms of narrow crude differentials and weak product margins, as well as the intentional shift of maintenance into this period of low refining margins. Four out of five of our refineries conducted turnarounds or significant maintenance during the quarter which reduced our overall throughput and increased expenditures.” Nimbley continued, “As a result of this shift in maintenance activity to the first quarter, our refineries are in the favorable position of being able to operate unimpeded for the remainder of the year in an improving market with an even stronger outlook.”
Press reports indicated the turnaround of the Delaware City refinery was moved up after a fire earlier in the year. Construction is underway on a new hydrogen plant at Delaware City.
At the end of April, PBF Logistics LP (PBFX) (the “Partnership” or “PBF Logistics”) announced the execution of definitive agreements to acquire the fifty percent interest in Torrance Valley Pipeline Company from an affiliate of PBF for approximately $200 million in cash. PBF currently anticipates closing of the transaction to occur in the second quarter, subject to customary closing conditions.
TVPC owns the 189-mile San Joaquin Valley Pipeline system with a throughput capacity of approximately 110,000 barrels per day. The assets also include 11 pipeline stations with approximately one million barrels of combined storage capacity and truck unloading capability at two of the stations.
The refinery and assets, such as the pipeline, give the company access to a lucrative California market. A shortage of supply and other factors have led to $4-plus gas prices in California.
