Valero Energy Corporation (NYSE: VLO) reported net income attributable to its stockholders of $364 million, or $1.14 per share, for the third quarter of 2024. This marks a significant decline compared to the $2.6 billion, or $7.49 per share, reported for the same period in 2023.
Refining Performance
The Refining segment generated operating income of $565 million in Q3 2024, down from $3.4 billion in Q3 2023. Average refining throughput volumes during this quarter were 2.9 million barrels per day, impacted by extensive maintenance activities.
Renewable Diesel Update
The Renewable Diesel segment, which includes the DGD joint venture, reported operating income of $35 million in the third quarter of 2024, a decrease from $123 million in the previous year. Sales volumes for this segment averaged 3.5 million gallons per day, up by 552 thousand gallons compared to Q3 2023.
Ethanol Segment
Valero’s Ethanol segment reported operating income of $153 million for Q3 2024, down from $197 million a year earlier. Ethanol production volumes averaged 4.6 million gallons per day, reflecting an increase of 255 thousand gallons per day from Q3 2023.
Corporate Expenses
General and administrative expenses totaled $234 million in Q3 2024, down from $250 million in the same quarter last year. The effective tax rate for the period was 20%.
Cash Flow and Investments
Net cash provided by operating activities amounted to $1.3 billion in Q3 2024, including a $166 million positive change in working capital and $47 million in adjusted net cash from the other joint venture member’s share of DGD. Adjusted net cash provided by operating activities, excluding these factors, was $1.1 billion.
Capital investments for the quarter reached $429 million, with $338 million allocated for sustaining operations, covering costs such as turnarounds, catalysts, and regulatory compliance. Excluding investments related to the other joint venture member’s share of DGD, Valero’s capital investments were $394 million.
Valero returned $907 million to its stockholders in Q3 2024, including $342 million in dividends and $565 million for the repurchase of approximately 3.8 million shares. This resulted in a payout ratio of 84% of adjusted net cash provided by operating activities. The company maintains a commitment to a through-cycle minimum annual payout ratio of 40 to 50 percent, defined as the sum of dividends and stock buyback costs divided by adjusted net cash from operating activities.
“Our focus on operational excellence, capital discipline, and commitment to shareholder returns has served us well through multiple commodity cycles and will continue to guide our strategy moving forward,” stated Lane Riggs, Valero’s CEO and President.
Financial Position and Liquidity
As of September 30, 2024, Valero reported total debt of $8.4 billion, finance lease obligations of $2.5 billion, and cash and cash equivalents totaling $5.2 billion. The debt-to-capitalization ratio, net of cash and equivalents, stood at 17%.
Strategic Developments
Valero successfully completed the SAF project at its DGD Port Arthur plant in October, which is expected to be fully operational this year. This project will enable the plant to upgrade approximately 50% of its current 470 million gallon annual renewable diesel production capacity to SAF.
“The DGD SAF project was completed on schedule and under budget, showcasing the strength of our project and operations teams,” added Riggs.
