Delaware City refinery owner reports lower earnings and strengthened balance sheet

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Delaware City refinery owner PBF Energy saw sharply lower revenue in the second quarter but reported a smaller decline in earnings, thanks to the company’s renewable diesel fuel venture at its refinery near New Orleans.

PBF’s revenue drop came as fuel prices declined between 2022 and 2023.

Second-quarter revenues slid to $9.2 billion from $14.1 billion in 2022, with first-half revenues down to $18.5 billion, from $23.2 billion a year earlier

The company reported second-quarter 2023 net income of $1 billion. This compares to net income of nearly $1.3 billion during the same period in 2022.

Non-cash special items included in the second quarter 2023 results increased net income by an after-tax benefit of $729.4 million, due to a gain from the partner’s contribution to the bio-diesel site at its Louisiana refinery. Demand for diesel fuel from renewable oils and other sources is growing, with the challenge coming in making the business profitable.

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Matt Lucey, PBF Energy’s CEO, said, “After the second quarter of 2023, PBF is now more than halfway through the second-best financial year for the company. We are on pace to invest approximately $750 million in our refining assets this year to ensure we can continue to safely and responsibly provide our essential products. PBF’s financial condition has undergone a radical transformation, and our efforts in that area are being recognized. The earnings of our refining business continue to support the strengthening of our balance sheet and the opportunity to generate long-term value for our shareholders.” Lucey continued, “In June, we completed the formation of the SBR equity investment and began our partnership with Eni (the partner in the Louisiana bio-diesel venture).

“Looking ahead, the balance between global refining capacity and refined product demand remains tight. We remain focused on ensuring that our refineries are safe, reliable and available to respond to market demands. PBF’s path forward is bright, and we are committed to generating long-term value for our investors through prudent capital allocation,” Lucey said.

Regarding the Louisiana venture, Italian refiner Eni Sustainable Mobilty’s affiliate committed to making capital reimbursements and contributions totaling $835 million to PBF. In July, the venture commenced operations of the pre-treatment unit. As a result, $414.6 million was paid to PBF.

PBF has strengthened its balance sheet and now has $1.5 billion in cash on hand, with virtually zero debt. The company’s debt came as it built out a nationwide system of smaller refineries, the first Being Delaware City.

PBF also increased the nation’s refining capacity earlier this year by reopening a closed unit at its Paulsboro, NJ refinery, upriver from Delaware City.

The company had successful maintenance turnarounds this year, with its southern California refinery the last to see an overhaul.

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