Valero Energy Reports First Quarter 2021 Results

Rhea-AI Summary

Valero Energy Corporation (NYSE: VLO) reported a net loss of $704 million, or $1.73 per share, for Q1 2021, an improvement from a net loss of $1.9 billion in Q1 2020. This includes excess energy costs of $579 million due to Winter Storm Uri. The refining segment suffered a $592 million operating loss but showed recovery signs with increased product demand, achieving operational income in March. Renewable diesel reported a $203 million operating income, and ethanol losses decreased to $56 million. Valero returned $400 million to shareholders through dividends.

Positive

• Reduced net loss from $1.9 billion in Q1 2020 to $704 million in Q1 2021.
• Renewable diesel segment reported a $203 million operating income, up from $198 million in Q1 2020.
• Refinery operations showed improved cash flow and positive operating income in March.

Negative

• Operating loss of $592 million in the refining segment, impacted by $525 million in excess energy costs.
• Refinery throughput volumes decreased by 414,000 barrels per day compared to Q1 2020.
• Ethanol segment reported a $56 million operating loss, despite improvement from $197 million in Q1 2020.

Valero Energy Corporation (NYSE: VLO, “Valero”) today reported a net loss attributable to Valero stockholders of $704 million, or $1.73 per share, for the first quarter of 2021, compared to a net loss of $1.9 billion, or $4.54 per share, for the first quarter of 2020. The operating loss in the first quarter of 2021 includes estimated excess energy costs of $579 million, or $1.15 per share, related to impacts from Winter Storm Uri. Excluding the adjustments shown in the accompanying earnings release tables, adjusted net income attributable to Valero stockholders for the first quarter of 2020 was $140 million, or $0.34 per share. First quarter 2020 adjusted results exclude an after-tax lower of cost or market, or LCM, inventory valuation adjustment of approximately $2.0 billion.

“Winter Storm Uri impacted operations and operating costs of many facilities in the U.S. Gulf Coast and U.S. Mid-Continent regions, including our facilities,” said Joe Gorder, Valero Chairman and Chief Executive Officer. “I am very proud of our team for safely managing the utilities curtailments and the freeze by idling or shutting down the affected facilities and resuming operations without incident.”

Refining

The refining segment reported a $592 million operating loss for the first quarter of 2021, compared to an operating loss of $2.1 billion for the first quarter of 2020. The first quarter 2021 adjusted operating loss was $554 million, compared to adjusted operating income of $329 million in the first quarter of 2020, which excludes the LCM inventory valuation adjustment. The operating loss for the first quarter of 2021 includes estimated excess energy costs of $525 million related to impacts from Winter Storm Uri. Refinery throughput volumes averaged 2.4 million barrels per day in the first quarter of 2021, which was 414 thousand barrels per day lower than the first quarter of 2020.

“We are encouraged by the substantial increase in products demand and refining margins in the last three months,” said Gorder. “In fact, we achieved positive operating income and operating cash flow in March.”

Renewable Diesel

The renewable diesel segment, which consists of the Diamond Green Diesel (DGD) joint venture, reported $203 million of operating income for the first quarter of 2021, compared to $198 million for the first quarter of 2020. Renewable diesel sales volumes averaged 867 thousand gallons per day in the first quarter of 2021.

“We are leveraging our global liquid fuels platform to continue expanding our long-term competitive advantage in renewables,” said Gorder. “Valero’s operational expertise and commercial strength are demonstrated by the record operating income and renewable diesel margin by this segment in the first quarter of 2021.”

Ethanol

The ethanol segment reported a $56 million operating loss for the first quarter of 2021, compared to an operating loss of $197 million for the first quarter of 2020. The operating loss for the first quarter of 2021 includes estimated excess energy costs of $54 million related to impacts from Winter Storm Uri. First quarter 2020 adjusted operating loss was $69 million, which excludes the LCM inventory valuation adjustment. Ethanol production volumes averaged 3.6 million gallons per day in the first quarter of 2021, which was 541 thousand gallons per day lower than the first quarter of 2020.

Corporate and Other

General and administrative expenses were $208 million in the first quarter of 2021, compared to $177 million in the first quarter of 2020. The effective tax rate for the first quarter of 2021 was 19 percent.

Investing and Financing Activities

Capital investments totaled $582 million in the first quarter of 2021, of which $333 million was for sustaining the business, including costs for turnarounds, catalysts and regulatory compliance. Excluding capital investments attributable to our partner’s 50 percent share of DGD and those related to other variable interest entities, capital investments attributable to Valero were $479 million.

Net cash used in operating activities was $52 million in the first quarter of 2021. Included in this amount was a $184 million favorable impact from working capital and $108 million associated with our joint venture partner’s share of DGD’s net cash provided by operating activities, excluding changes in DGD’s working capital. Excluding these items, adjusted net cash used in operating activities was $344 million.

Valero returned $400 million to stockholders through dividends in the first quarter of 2021.

Valero continues to target a long-term total payout ratio between 40 and 50 percent of adjusted net cash provided by operating activities. Valero defines total payout ratio as the sum

FAQ

What was Valero Energy's net loss for Q1 2021?

Valero Energy reported a net loss of $704 million, or $1.73 per share, for Q1 2021.

How did Winter Storm Uri affect Valero Energy's financial performance?

Winter Storm Uri resulted in estimated excess energy costs of $579 million for Valero in Q1 2021.

What is the operating income for Valero's renewable diesel segment?

The renewable diesel segment reported an operating income of $203 million for Q1 2021.

How much did Valero Energy return to shareholders in Q1 2021?

Valero Energy returned $400 million to shareholders through dividends in Q1 2021.

What were Valero's refining throughput volumes for Q1 2021?

Valero's refinery throughput volumes averaged 2.4 million barrels per day in Q1 2021, down 414,000 barrels per day from Q1 2020.