Delaware City refinery owner PBF Energy posted a nearly $1.4 billion loss from operations but saw its stock rise 20 percent as results were better than expected.
The refiner saw crude oil prices and demand for fuel plummet during the coronavirus crisis.
PBF shares were trading at nearly $11 a share on Tuesday after falling below $6 in early April.
The company reported a first-quarter 2020 loss from operations of nearly $1.4billioncompared to income from operations of $364.6 million for the first quarter of 2019.
However, minus special items, the loss was only $134 million, compared to a $141 million loss during the same quarter last year. The special items including adjusting the value of its inventory as crude oil prices plunged and costs associated with its recent purchase of a refinery in northern California.
Tom Nimbley, PBF Energy’s CEO, said, “2020 has presented unexpected and unprecedented challenges and PBF has responded by taking several significant actions to ensure we navigate the current market successfully. Our employees have readily adjusted to new working conditions and continue to provide essential services.” Nimbley continued, “We implemented aggressive cost reduction measures and scaled back operations in response to the near-term, generational decline in demand. We took additional steps to increase our capital resources through the sale of hydrogen plants and a successful debt offering, thereby ensuring we have the resources to manage our business through the current and potential future downturns.”
Nimbley concluded, “As more regions across the country are beginning the process of returning to work, we are already seeing an increase in product demand. We are at a delicate intersection on this path and PBF will continue to run our operations in a safe, reliable and environmentally responsible manner and we look forward to a sustainable return to work.”
The company had a successful $1 billion notes offering this month and has $2 billion in liquidity.
PBF is also cutting expenses while running refineries at about 30 percent of capacity. The company has not closed any of its sites, due to a coronavirus outbreak. It also imposed salary reductions while suspending its once hefty dividend.
PBF also sold its five hydrogen plants to Air Products for $530 million.
PBF got its start during the previous recession a decade ago by acquiring the Delaware City refinery, which was slated for demolition by former owner Valero.
Thanks to private equity funding and a financial package from the State of Delaware, the refinery reopened. PBF went on to acquire a refinery up the river in Paulsboro, NJ; as well as sites in Ohio, Louisiana, and California.