PBF Energy (PBF) Tops Q1 EPS by 2c, Revenues Beat

PBF Energy (NYSE: PBF) reported Q1 EPS of ($2.61), $0.02 better than the analyst estimate of ($2.63). Revenue for the quarter came in at $4.9 billion versus the consensus estimate of $4.7 billion.

Tom Nimbley, PBF Energy's Chairman and CEO, said, "PBF's first quarter results reflect the continuing challenges of lower demand brought on by the pandemic. Our refineries operated well and at rates which mirrored demand." Mr. Nimbley continued, "We did see sequential improvement during the quarter. We ran higher in March than we did in January which reflects more favorable market conditions as the progressive vaccine rollout lead to improving demand. However, even with rising demand, the independent refining sector is facing unsustainable headwinds as a result of escalating compliance costs under the RFS program. If the program is not fixed, it will likely result in a reshaping of the U.S. refining industry and a greater reliance on foreign energy."

Mr. Nimbley concluded, "We exited the first quarter with approximately $1.5 billion in cash and with ample other sources of liquidity that we believe will support our business. We expect demand to continue its gradual improvement as the vaccine rollout and approaching herd-immunity should allow everyone to return to their normal routines."

Strategic Update and OutlookEmployee and operational safety continue to be an ongoing priority in our pandemic response. We implemented a number of necessary safety protocols and social distancing requirements, issued personal protective equipment to all employees and enhanced facility cleaning, with these efforts focused on protecting our dedicated front line employees who have remained on the job throughout the current crisis. As a result of our efforts, our operating facilities have remained fully-staffed by our essential workforce throughout the pandemic, and we continue supplying our critical products to our valued customers.

In response to the effects of the global pandemic, we undertook a number of measures to ensure the safety and reliability of our operations. We successfully reconfigured our East Coast refining system to maintain the most profitable elements of two refineries while reducing costs and improving our competitive position. In all of our locations, we focused on creating sustainable cost reductions that we expect will make each of our assets more regionally competitive, and continue to review our operations in order to drive profitability.

In addition to focusing on our core refining operations, we are exploring opportunities to participate in the burgeoning renewable fuels market. We previously announced a potential project to be co-located at the Chalmette refinery. This project is expected to use certain idled assets, including an idle hydrocracker, along with a newly-constructed pre-treatment unit to establish an 18,000 to 20,000 barrel per day renewable diesel production facility. We believe that with the utilization of currently idled assets, and its strategic location on the Mississippi River, our project will have a shorter time to market and reduced construction costs compared to similar greenfield projects. We are currently in advanced discussions with potential partners and expect to provide further updates in the coming months.

Consistent with our previous guidance, our refining capital spending program for the first half of 2021 is expected to be approximately $150 million. Our overall market outlook for the second half of 2021 remains constructive, with continued gradual improvement in demand, and our full-year capital expenditures are expected to be approximately $400 to $450 million. Should market conditions change from our current expectations, we expect that we will review our capital requirements and adjust as needed.

We operated our refineries at reduced rates during the first quarter and, based on current market conditions, we expect to continue to operate our refineries in response to demand for our products. In the second quarter we expect to run at higher rates in every region with total expected throughput regionally as follows: East Coast to average 225,000 to 245,000 barrels per day (bpd); Mid-Continent to average 135,000 to 145,000 bpd; Gulf Coast to average 175,000 to 185,000 bpd; and West Coast to average 290,000 to 310,000 bpd.

For earnings history and earnings-related data on PBF Energy (PBF) click here.

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