CITGO Reports Second Quarter 2024 Results

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Aug 08, 2024, 08:00 ET

Net loss of $25 million, EBITDA¹ of $162 million and Adjusted EBITDA¹of $149 million
Total liquidity at quarter-end of $3.8 billion, including full availability under CITGO's $500 million accounts receivable securitization facility
Major turnaround and maintenance activities successfully completed
Total throughput of 720,000 barrels-per-day (bpd) and crude utilization of 84%

HOUSTON, Aug. 8, 2024 /PRNewswire/ -- CITGO Petroleum Corporation ("CITGO" or "CITGO Petroleum") today reported its 2024 second quarter financial and operational results. A less favorable market environment contributed to a second quarter net loss of $25 million, EBITDA of $162 million, and Adjusted EBITDA of $149 million compared with net income of $410 million, EBITDA of $709 million and Adjusted EBITDA of $677 million for the first quarter of 2024.

"Our second quarter earnings reflect a lower margin environment and the impact of extensive turnaround and maintenance activities at our refineries," said CITGO President and CEO Carlos Jordá. "That said, these activities have improved optimization across our refinery system, as we work to ensure a steady supply of crude and feedstocks while effectively managing product placement. As we look forward, we have improved our reliability and crude utilization rates, gasoline sales volumes are strong, and we are proceeding with our capital spending plans."

Operational Highlights

Operational Excellence – Completed the quarter with a continued focus on strong operations while maintaining safety and operational standards for employees and contractors. Other highlights include:

Total throughput for the second quarter declined to 720,000 bpd due to the turnaround and maintenance activities, of which crude runs were 678,000 bpd with an overall average crude utilization rate of 84%. In comparison, total refinery throughput for the first quarter of 2024 was 830,000 bpd, of which crude runs were 769,000 bpd with an average crude utilization rate of 95%.
The Lake Charles Refinery commissioned a Vacuum Tower Bottom (VTB) import line, with the goal of creating new synergies across CITGO's refinery system by enabling the Lemont and Corpus Christi Refineries to optimize their heavy crude processing and the Lake Charles Refinery to improve utilization of certain units. Additionally, the Lake Charles Refinery successfully restored most of its heavy crude processing capability and achieved a post turnaround crude unit rate above 485,000 bpd.
The Corpus Christi Refinery underwent a major turnaround at its West Plant, keeping the crude unit online throughout, and continued to operate the East Plant as a result of the VTB import line project.
The Lemont Refinery hosted an FBI joint public safety exercise in June, with nearly 100 attendees from 30 local, state and federal agencies and was also recognized with two safety awards during the quarter: the CSX Railroad Chemical Safety Excellence Award and the Union Pacific Railroad Pinnacle Award.
Strong occupational safety and environmental performance continued for the Lubricants and Terminals and Pipeline (TPL) business units and TPL received the International Liquid Terminal Association's (ILTA) Safety Excellence Award for 2023 safety performance

Commercial Excellence – Both Marketing and TPL delivered solid results for the second quarter. Total second quarter Marketing sales volume was 424,000 bpd, up from 394,000 bpd in the first quarter of 2024, with 76 new CITGO-branded sites during the quarter, the largest quarterly increase in branded sites in the last 20 years. TPL expanded its loading rack at the East Chicago terminal during the quarter, contributing to a new unbranded gasoline sales record in June. In addition, the Product Supply organization expanded into new international export markets and secured new jet fuel sales contracts.

Financial Highlights

Funded $228 million in turnaround and catalyst expenditures and an additional $128 million in direct capital expenditures. Projected turnaround, catalyst and capital expenditures for full year 2024 total approximately $1.0 billion.
Achieved quarter-end liquidity of $3.8 billion, including full availability under CITGO's $500 million accounts receivable securitization facility, which was recently extended to April 2026.

About CITGO
CITGO owns and operates three large-scale, highly complex petroleum refineries with a total rated crude oil refining capacity of approximately 807,000 bpd, located in Lake Charles, La., Corpus Christi, Texas and Lemont, Ill. Our refining operations are supported by an extensive distribution network, which provides reliable access to our refined product end-markets. We own 34 active refined product terminals with a total storage capacity of 18.1 million barrels and have equity ownership of an additional 3.5 million barrels of refined product storage capacity through our joint ownership of an additional 8 terminals, spread across 22 states. In addition, we own or have an equity interest in four additional terminals, consisting of approximately 1 million barrels of refined storage capacity, which are currently inactive or only utilized to store feedstocks used in refining operations. We also have access to approximately150 active third-party and related-party terminals through exchange, terminalling and similar arrangements. Our retail network consists of more than 4,000 independently owned and operated CITGO-branded retail outlets located east of the Rocky Mountains. We and our predecessors have had a recognized brand presence in the U.S. for more than 100 years.

ADDITIONAL INFORMATION
General:

CITGO publishes financial and other information on its website, including reports of quarterly and annual results of operations. While CITGO's historical financial information is presented in accordance with U.S. generally accepted accounting principles ("GAAP"), CITGO is not an SEC reporting company and does not report all information required of SEC reporting companies. In addition, CITGO publishes certain non-GAAP financial information, including EBITDA and Adjusted EBITDA, as discussed below.

Forward-Looking Statements:
This press release contains "forward-looking statements" regarding financial and operational matters relating to the CITGO business. These forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties many of which are beyond CITGO's control, that could result in expectations not being realized or could otherwise materially and adversely affect CITGO's business, financial condition, results of operations and cash flows. This press release may also contain estimates and projections regarding market and industry data that were obtained from internal company estimates, as well as third-party sources believed to be generally reliable. However, market data is subject to change and cannot always be verified with certainty due to limits on the availability and reliability of raw data and other limitations and uncertainties inherent in any statistical survey, interpretation or presentation of market data and management's estimates and projections. The forward-looking statements contained in this press release are made only as of the date of this press release. For additional information, please see CITGO's most recent annual report and other reports to CITGO noteholders, including the information set forth under the caption "Risk Factors." CITGO disclaims any duty to update any such forward-looking statements.

Operational Metrics and Non-GAAP Financial Measures:
This press release also contains operational metrics and non-GAAP financial information, including EBITDA and Adjusted EBITDA, that have not been audited and are based on management's estimates, which may be difficult to verify. These non-GAAP financial measures are presented in addition to and should not be viewed as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. In addition, CITGO's non-GAAP financial measures may differ from non-GAAP measures used by other companies in our industry. We believe these non-GAAP financial measures, when presented in conjunction with comparable GAAP measures, provide useful supplemental information regarding underlying trends in the Company's operating performance by excluding items that may not be indicative of the Company's core operating performance. These non-GAAP financial measures should not be considered a substitute for financial information presented in accordance with GAAP. Please see the reconciliation of EBITDA and Adjusted EBITDA to the most directly comparable GAAP measure set forth on page [4] of this press release, as well as the reconciliation of Refinery EBITDA Estimates to CITGO's consolidated EBITDA set forth on page [5] of this press release.

Reconciliation of Net Income to EBITDA
(unaudited, in millions of U.S. dollars)

	Three Months Ended				Six Months Ended
	June 30, 2024		March 31, 2024		June 30, 2024		June 30, 2023
	($ in millions)

Net income (loss)	$	(25)	$	410	$	385	$	1,317
Excluding the impacts of:
Interest expenses, net		10		11		21		2
Income tax expense		1		115		116		378
Depreciation and amortization		176		173		349		305
EBITDA ⁽³⁾	$	162	$	709	$	871	$	2,002
Legal Settlement		-		(32)		(32)		-
Hurricane Laura Insurance Recoveries		(13)		-		(13)		-
Adjusted EBITDA	$	149	$	677	$	826	$	2,002

Reconciliation of Refinery EBITDA Estimates to Total Consolidated EBITDA
(unaudited, in millions of U.S. dollars)

	Three Months Ended				Six Months Ended
	June 30, 2024		March 31, 2024		June 30, 2024		June 30, 2023
	($MM)

Lake Charles		138		383		521		1,091
Corpus Christi		(67)		128		61		283
Lemont		48		227		275		587
Total Refinery EBITDA Estimates⁽¹⁾	$	119	$	738	$	857	$	1,961

Marketing		34		36		70		67
Lubricants		6		4		10		26
Terminals & Pipelines		40		49		89		64
Product Supply ⁽²⁾		11		(60)		(49)		85
Total EBITDA Estimate for Non-Refining Businesses	$	91	$	29	$	120	$	242
Corporate EBITDA Estimate ⁽³⁾		(48)		(58)		(106)		(201)
Total CITGO Consolidated EBITDA	$	162	$	709	$	871	$	2,002


(1)	Refinery EBITDA Estimates and EBITDA Estimates for the Non-Refining Businesses are non-GAAP financial measures. The table above includes further detail on a by refinery basis, as well as for CITGO's Non-Refining Businesses. CITGO's Total Consolidated EBITDA also reflects hedging activities associated with procuring crude and feedstocks for the refineries and other derivatives activities.
(2)	Includes activities related to selling refinery production both externally and to CITGO's Marketing function.
(3)	Includes corporate staff and overhead costs, and other corporate-related items.

¹ EBITDA and Adjusted EBITDA are non-GAAP financial measures. For additional information, please see the information under "General Information – Non-GAAP Financial Measures" on page 3 of this press release and the reconciliation on page 4 of this press release.

SOURCE CITGO Petroleum Corporation