VALERO ENERGY CORP/TX Q1 FY2025 earnings call

Lane Riggs noted positive results despite maintenance and tough margins in renewable diesel. Refining margins improved with U.S. light product demand higher and inventories lower. Strong shareholder returns with 73% payout ratio in Q1 and 6% dividend increase. Progressing SEC unit optimization project at St. Charles (estimated $230M, start-up in 2026) and pursuing other optimization projects. Homer Bhullar provided financial details including net loss of $595M or $1.90 per share, adjusted net income, capital investments, dividends, and balance sheet details.

Refining: Reported an operating loss of $530 million in Q1 2025 compared to operating income of $1.7 billion in Q1 2024. Throughput volumes averaged 2.8 million barrels per day (89% capacity utilization) and cash operating expenses were $5.07 per barrel. Renewable Diesel: Reported an operating loss of $141 million in Q1 2025 compared to operating income of $190 million in Q1 2024. Sales volumes averaged 2.4 million gallons per day. Ethanol: Reported $20 million of operating income in Q1 2025 compared to $10 million in Q1 2024. Production volumes averaged 4.5 million gallons per day.

2025 capital investments attributable to Valero expected ~$2 billion. Second quarter refining throughput: Gulf Coast 1.75-1.8M bbl/day, Mid Continent 385,000-405,000 bbl/day, West Coast 240,000-260,000 bbl/day, North Atlantic 320,000-340,000 bbl/day. Renewable diesel sales volumes expected 1.1 billion gallons in 2025. Ethanol production expected 4.6 million gallons/day in Q2. D&A expenses include incremental for Benicia refinery closure ($0.25 per share impact). G&A expenses expected ~$985 million in 2025.

Factors causing actual results to differ from expectations, including those in earnings release and SEC filings. Maintenance activities and margin environment impacts. Regulatory and policy challenges in regions like California affecting refinery operations and profitability.

Q: Chatter around tariffs and recessions, market dynamics for refined products and crude differentials?

A: Gary Simmons discussed market dynamics, inventory draws, strong diesel fundamentals, and crude differentials influenced by factors like OPEC production, Canadian production, and potential sanctions Q: Guidance for second quarter being light relative to year ago?

A: Greg Bram explained it's maintenance-driven in certain regions like North Atlantic and Mid Con Q: Decision to close Benicia refinery and Wilmington's future?

A: Rich Walsh and others discussed intent to close Benicia, discussions with state, and performance comparison of West Coast refineries