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PE

PBF Energy Inc. (PBF)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 was loss-making on weak refining margins and narrow crude diffs: revenue $7.35B and GAAP diluted EPS $(2.54); Adjusted fully-converted EPS $(2.82); Adjusted EBITDA $(249.7)M, all deteriorating vs Q3 and YoY as capture was pressured and a $124.5M LIFO decrement hit results .
  • Management highlighted structurally tight global refining long term, but acknowledged 2H24 headwinds; forward cracks “look constructive” and 2025 net capacity adds (~700–800 kbpd) should balance with demand (~750 kbpd) .
  • Post-quarter Martinez refinery fire (Feb 1, 2025): Q1 guidance excludes Martinez beyond Jan 31; company later set a two-stage restart (stage 1 early Q2 2025 at 85–105 kbpd; stage 2 by Q4 2025) with insurance expected to largely cover repair costs and business interruption (deductible/retentions total $30M; BI coverage from Apr 3, 2025) .
  • Liquidity and capital returns: Cash $536M, net debt ~$921M at YE; $60M returned in Q4 and ~$450M for 2024; quarterly dividend maintained at $0.275; deleveraging prioritized as markets improve (ABL availability $2.4B) .
  • Cost actions: PBF launched an RBI (refining business improvement) program targeting >$200M run-rate cash savings by YE 2025, with 30–50% from energy use and turnarounds; detailed plan by end of Q1 2025 .

What Went Well and What Went Wrong

What Went Well

  • Clear cost-reduction roadmap: RBI program targeting >$200M run-rate savings by YE 2025; “By the end of the first quarter, we expect to have an overall implementation plan with clear line of sight to our goal” .
  • Balance sheet flexibility and capital returns: Ended 2024 with $536M cash; returned ~$60M to shareholders in Q4 and >$1B cumulative buybacks since launch; quarterly dividend maintained at $0.275 .
  • Renewable diesel operations stabilized: SBR averaged ~17 kbpd in Q4; Q1 RD expected at 10–12 kbpd during catalyst change; management expects to accrue 45Z credits based on current guidance .

What Went Wrong

  • Margin pressure and inventory effects: Q4 consolidated gross refining margin per barrel ex-specials fell to $4.89 (vs $9.88 YoY; $6.79 in Q3) amid narrow heavy-light diffs; a $124.5M LIFO decrement further reduced operating income .
  • West Coast weakness: Q4 West Coast gross margin per barrel was deeply negative (GAAP), and even ex-specials was below prior-year levels, reflecting tougher regional cracks and mix; refinery opex per barrel remained elevated at $11.26 .
  • Working capital/tax headwinds and SBR equity loss: Q4 operating cash flow used ~$330M with ~$83M WC headwind; SBR contributed a $4.8M equity loss (despite 17 kbpd production) .

Financial Results

Headline P&L and Margin Metrics

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Billions)$9.14 $8.74 $8.38 $7.35
GAAP Diluted EPS ($)$(0.40) $(0.56) $(2.49) $(2.54)
Adj. Fully-Converted EPS ($)$(0.41) $(0.54) $(1.50) $(2.82)
Adjusted EBITDA ($USD Millions)$117.2 $94.8 $(60.1) $(249.7)
Gross refining margin/throughput, ex-specials ($/bbl)$9.88 $8.12 $6.79 $4.89
Refinery opex ($/bbl)$7.98 $6.94 $7.22 $7.94

Notes: Special items included a positive $154.5M LCM inventory adjustment and $14.7M SBR LCM, offset by a $124.5M LIFO decrement; net after-tax special item benefit reduced Q4 loss by ~$33M .

Segment Breakdown (Q4)

SegmentQ4 2023 Revenue ($MM)Q4 2023 Op Inc ($MM)Q4 2024 Revenue ($MM)Q4 2024 Op Inc ($MM)
Refining$9,129.3 $26.6 $7,342.1 $(362.0)
Logistics$96.8 $54.9 $97.6 $51.7
Corporate/Other—$(128.7) —$(72.9)
Consolidated$9,138.7 $(47.2) $7,351.3 $(383.2)

Key Operating KPIs

KPIQ4 2023Q2 2024Q3 2024Q4 2024
Production (kbpd)884.9 926.7 945.4 871.1
Crude + feedstock throughput (kbpd)878.2 921.3 935.6 862.0
Throughput (MMbbl)80.8 83.8 86.1 79.3
Consolidated gross margin ($/bbl)$1.04 $0.08 $(3.35) $(3.89)
Effective RIN basket ($/RIN)$4.78 $3.38 $3.89 $4.05
Natural gas ($/MMBtu)$2.92 $2.32 $2.23 $2.98

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Throughput ranges (kbpd): EC 250–270; Mid-Con 135–145; Gulf 155–165; West 200–210 (excludes Martinez beyond Jan 31)Q1 2025N/AAs listed New; Martinez excluded
SBR RD productionQ1 2025N/A10–12 kbpd (catalyst change) New
Quarterly dividendOngoing$0.275 declared in Q3 $0.275 payable Mar 14, 2025 Maintained
RBI cost savings targetRun-rate by Jan 1, 2026Announced $200M run-rate (Q3) Five workstreams, plan by end Q1 2025 Reiterated with detail
Post-quarter Martinez restart plan2025N/AStage 1 early Q2 (85–105 kbpd); Stage 2 by Q4; repairs largely insured; BI coverage from Apr 3; $30M deductible/retentions New post-quarter update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q4 2024)Trend
Macro margins/captureQ2: seasonal cracks weakened; extended maintenance hurt capture . Q3: crude strength, narrow diffs, lower capture; forward cracks could improve .Weak margins persisted; heavy/sour diffs narrow; forward cracks “look constructive”; 2025 adds vs demand roughly balanced .Stabilizing to Improving
Turnarounds/operationsQ2: extended turnarounds (Delaware City, Toledo); Martinez hydrocracker turnaround in Q2 . Q3: Chalmette turnaround underway, expected Nov completion .Major Chalmette cat turnaround completed Q4; 1H25 planned: EC hydrocracker; Gulf FCC HDT; Martinez fire led to exclusion from guidance .Mixed (Ops steady; Martinez event)
Cost savings (RBI)Not disclosed in Q2. Q3: $200M run-rate savings by YE25 .5 teams; 30–50% savings from energy and turnarounds; plan by end Q1 2025 .Improving execution clarity
Regulatory/tariffsQ3: strong critique of CA regulatory pressures and supply constraints .Detailed tariff discussion (Canada/Mexico/China); PBF not disadvantaged vs peers .Mixed macro risk
Renewable diesel/45ZQ2: RD 16.5 kbpd; market soft; strategy benefits RINs . Q3: RD 13 kbpd; Q4 guide 16–17 kbpd .RD 17 kbpd in Q4; plan to accrue 45Z under current guidelines .Stabilizing
Balance sheet/capital returnsQ2: Cash $1.4B; $0.25 dividend; buybacks ongoing . Q3: Cash $977M; dividend ↑ to $0.275; continued buybacks .YE cash $536M; net debt $921M; deleveraging prioritized; ABL $2.4B; $60M returned in Q4 .Leaning to de-lever near term

Management Commentary

  • “Results reflect the challenging markets… weak margin environment and poor crude differentials… we successfully executed a major [cat turnaround] on budget at Chalmette” – CEO .
  • “Forward cracks look constructive… 2025 net capacity additions are expected in the 700,000 to 800,000 range, with… demand growth in the 750,000 bpd range” – CEO .
  • On Martinez fire: “We are committed to safe, responsible and reliable operations… Our forward-looking guidance excludes Martinez operations beyond January 31, 2025” – CEO and press release .
  • “We’ve launched 5 separate efforts… targeting over $200 million in run rate cost savings to be implemented by the end of 2025… energy usage and turnarounds… 30% to 50%” – SVP Refining .
  • “For the fourth quarter, we reported an adjusted net loss of $2.82 per share and adjusted EBITDA loss of $249.7 million… ended the quarter with approximately $536 million in cash and approximately $921 million of net debt” – CFO .
  • “As the market normalizes… we expect to use periods of strength to focus on delevering… ABL availability $2.4 billion” – CFO .

Q&A Highlights

  • Martinez timeline and insurance: Access to incident area expected “very soon”; PBF has “proper coverages” and will work with insurers; too early for specifics at the time of call .
  • Liquidity/deleveraging: Balance sheet entered 2024 very strong; priority to delever before buybacks as markets strengthen; net debt-to-cap ~16%; ABL availability $2.4B .
  • Cost savings phasing: $200M target is run-rate by Jan 1, 2026; some 2025 benefit expected; energy and turnaround efficiency are main levers .
  • Tariffs and market impact: Discussion of potential Canada/Mexico/China tariffs; PBF does not see itself disadvantaged vs U.S. peers under scenarios discussed .
  • East Coast throughput: Lower Q1 guidance tied to market throttling rather than structural constraints; system will ramp to capture market as it improves .
  • RD/45Z: Expect to accrue producer tax credits based on current guidelines; continue to view SBR as strategically positioned .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS, revenue, and EBITDA was unavailable due to data-access limits during this analysis window; as a result, beat/miss versus consensus cannot be assessed at this time (noted per instruction).

Key Takeaways for Investors

  • Near-term: Earnings were pressured by weak cracks, narrow heavy/sour diffs, and a $124.5M LIFO decrement; West Coast margins were notably weak; expect Q1 to reflect Martinez exclusion and planned maintenance, but forward cracks and crude balances are improving into 2025 .
  • Martinez restart is a critical 2025 catalyst: staged ramp (85–105 kbpd in stage 1 early Q2; full restoration by Q4), with insurance expected to largely offset repairs and BI losses (post-quarter update) .
  • Cost-down execution matters: RBI program (>$200M run-rate savings) can structurally lower cash costs by 2026; watch for Q1 2025 implementation plan and early 2025 savings traction (energy and turnaround efficiency) .
  • Balance sheet discipline: With YE cash $536M and net debt ~$921M, management signals deleveraging priority ahead of buybacks in stronger markets; dividend maintained at $0.275 .
  • RD optionality and policy watch: SBR volumes stable through catalyst work; accounting to accrue 45Z under current guidance; RD market/policy evolution remains a swing factor for 2025 profitability .
  • Macro watchlist: Heavy-light diffs, tariffs/geopolitics, and regional import dynamics (especially West Coast) will drive capture; management sees 2025 supply/demand balance as constructive .

Appendix: Additional Detail

  • Balance sheet snapshot: Cash $536.1M; total debt $1,457.3M; total equity $5,678.6M at Dec 31, 2024 .
  • Cash flow 2024: CFO provided operations cash flow $43.4M for FY; investing $(1,041.5)M; financing $(249.3)M (YE tables) .
  • Special items in Q4: +$154.5M LCM (PBF), +$14.7M SBR LCM, −$124.5M LIFO decrement; net after-tax special items decreased loss by ~$33M .
  • Regional throughput ex-Martinez: Q1 2025 guide EC 250–270 kbpd; Mid-Con 135–145; Gulf 155–165; West 200–210 .