PBF Energy Inc. Q3 FY2024 earnings call

• Refineries ran well in Q3 with no planned maintenance or material unplanned downtime. Market conditions were challenging due to weaker margins and crude differentials, but long-term view is global refining supply and product demand remain tightly balanced.
• Developed a business improvement initiative aiming for $200 million in run rate cash savings by year-end 2025, focusing on operating costs and capital expenditures.
• Nearing completion of the last major turnaround of the year at Chalmette, prework began late September and expected to be completed in first half of November.
• Returned $104 million to shareholders in Q3, including ~$75 million in share repurchases, and Board approved 10% increase to quarterly dividend to $0.275 per share.

For the third quarter, PBF reported an adjusted net loss of $1.50 per share and an adjusted EBITDA loss of $60.1 million. A $29 million loss was related to its equity investment in St. Bernard Renewables (SBR). SBR produced an average of 13,000 barrels per day of renewable diesel in Q3, with Q4 expected to be 16,000 to 17,000 bpd. Cash flow used in operations for the quarter was approximately $68 million, including a working capital headwind of ~$25 million. Consolidated CapEx for Q3 was ~$153 million, with full-year 2024 CapEx likely near the top end of guidance at ~$850 million.

• Aim to achieve $200 million in run rate cash savings by year-end 2025 through operating cost and CapEx improvements.
• 2025 CapEx guidance is in the range of $750 to $800 million, including discretionary growth projects.
• Dividend increase reflects confidence in medium to long-term business outlook.

• Regulatory challenges in California, including attacks from regulators/politicians and industry swallowing significant losses. Also, a major refinery closure in California which may impact supply/demand dynamics.
• Market cyclicality affecting refinery margins. Geopolitical risks impacting crude markets. Inflationary pressures potentially affecting cost savings initiatives.

Q: Thoughts on changes in California, including competitor exiting the market?

A: California regulators/politicians are attacking the industry, but the state will need refined products and PBF intends to provide them if refineries are competitive.

Q: Dividend increase thought process?

A: Dividend is designed to be conservative, reliable, and stable through cycles. Based on medium to long-term constructive outlook, comfortable with $0.275 dividend.

Q: $200 million cost savings target, primary buckets?

A: ~30%-40% from energy reduction, plus maintenance, third-party spend, catalyst/chemicals, operating supplies.

Q: West Coast feedstock update, TMX barrels?

A: Running 20,000 bpd in Q3, expect less in Q4 due to factors like sulfur content and barrel pricing, but have capability to run up to 50,000 bpd of TMX barrels long-term if cost competitive.

Q: 2025 CapEx outlook?

A: Still finalizing, but range 750-800 million including growth projects; will release guidance early Jan with turnaround schedule.

Q: SBR performance relative to expectations?

A: Market below expectations, but PBF positioned competitively in renewable diesel, partnership with Eni, and expecting improvement as market shakes out.