Valero Operating Income Falls on Lower Fuel Margins
SAN ANTONIO -- Lower margins took their tool on major energy company Valero Energy Corp., as its second quarter 2009 operating loss totaled $317 million, vs. operating income of $1.2 billion in the second quarter 2008.
The decline was primarily due to lower diesel and jet fuel margins, along with lower sour crude oil differentials compared to the same quarter last year, the company stated.
Valero Energy also saw a net loss of $254 million in the second quarter, compared to a net income of $734 million in the year-ago quarter.
"This is a very challenging environment for sour crude oil refiners," Bill Klesse, Valero chairman and CEO, said in a statement. "The downturn in the global economy has sharply reduced demand for refined products at a time when new refining capacity is coming online around the world."
Despite lower performance in its refining section, Valero's retail operations saw operating income increase 33 percent, from $49 million in the second quarter 2008 to $65 million in the just-ended quarter.
Fuel volumes on a per-store basis also increased, going from 5,104 gallons in the second quarter of 2008 to 5,119 gallons in the second quarter 2009. Fuel margins per gallon decreased slightly, from 12.9 cents per gallon in the year-ago period to 12.5 cents per gallon. Merchandise sales jumped to $307 million in the second quarter 2009 from last year's $282 million, while merchandise margin fell 1.2 percentage points to 28.6 percent.
In other earnings news, BP's second-quarter profits fell 53 percent to $4.39 billion, due to lower world oil prices, The New York Times reported.
Chief Executive Tony Hayward offered a subdued outlook in an earnings statement cited by the Times, saying he expected energy demand to be sluggish in the near term.
''The overall picture is of energy demand now stabilizing following significant falls in the first half of the year,'' Hayward said. ''We see little evidence of any growth in demand and expect the recovery to be long and drawn out.''
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The decline was primarily due to lower diesel and jet fuel margins, along with lower sour crude oil differentials compared to the same quarter last year, the company stated.
Valero Energy also saw a net loss of $254 million in the second quarter, compared to a net income of $734 million in the year-ago quarter.
"This is a very challenging environment for sour crude oil refiners," Bill Klesse, Valero chairman and CEO, said in a statement. "The downturn in the global economy has sharply reduced demand for refined products at a time when new refining capacity is coming online around the world."
Despite lower performance in its refining section, Valero's retail operations saw operating income increase 33 percent, from $49 million in the second quarter 2008 to $65 million in the just-ended quarter.
Fuel volumes on a per-store basis also increased, going from 5,104 gallons in the second quarter of 2008 to 5,119 gallons in the second quarter 2009. Fuel margins per gallon decreased slightly, from 12.9 cents per gallon in the year-ago period to 12.5 cents per gallon. Merchandise sales jumped to $307 million in the second quarter 2009 from last year's $282 million, while merchandise margin fell 1.2 percentage points to 28.6 percent.
In other earnings news, BP's second-quarter profits fell 53 percent to $4.39 billion, due to lower world oil prices, The New York Times reported.
Chief Executive Tony Hayward offered a subdued outlook in an earnings statement cited by the Times, saying he expected energy demand to be sluggish in the near term.
''The overall picture is of energy demand now stabilizing following significant falls in the first half of the year,'' Hayward said. ''We see little evidence of any growth in demand and expect the recovery to be long and drawn out.''
Related News:
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