Valero Energy Corporation (NYSE: VLO) reported third-quarter 2024 net income of $364 million, or $1.14 per share, down from $2.6 billion, or $7.49 per share, in Q3 2023.
Segment Performance
Refining:
The Refining segment posted an operating income of $565 million, compared to $3.4 billion in Q3 2023, with an average refining throughput of 2.9 million barrels per day during a maintenance-heavy quarter.
Renewable Diesel:
Valero’s Renewable Diesel segment, driven by its DGD joint venture, reported an operating income of $35 million, down from $123 million in Q3 2023. Segment sales volumes increased to 3.5 million gallons per day, up 552,000 gallons from Q3 2023.
Ethanol:
The Ethanol segment reported $153 million in operating income, compared to $197 million in Q3 2023, with production volumes averaging 4.6 million gallons per day, up 255,000 gallons from Q3 2023.
Financial Highlights
General and administrative expenses for Q3 2024 were $234 million, down from $250 million a year ago. Valero’s effective tax rate was 20% for the quarter.
Net cash from operating activities was $1.3 billion, including a $166 million improvement in working capital. Adjusted for joint venture contributions, net cash from operating activities was $1.1 billion. Capital investments were $429 million, primarily for sustaining business operations, with $338 million allocated to turnarounds, catalysts, and regulatory compliance.
The company returned $907 million to shareholders in Q3 2024, with $342 million in dividends and $565 million for repurchasing 3.8 million shares, achieving an 84% payout ratio on adjusted net cash from operating activities. Valero remains committed to a minimum annual payout ratio of 40-50%.
CEO Lane Riggs stated, “Our disciplined focus on operational excellence, capital discipline, and consistent shareholder returns has positioned us well through various commodity cycles and will continue guiding our strategy.”
Liquidity and Strategic Updates
At quarter-end, Valero reported $8.4 billion in total debt, $2.5 billion in finance lease obligations, and $5.2 billion in cash. The net debt-to-capitalization ratio stood at 17% as of September 30, 2024.
Valero also completed its SAF project at the DGD Port Arthur plant in October, enabling an upgrade of 50% of its 470-million-gallon renewable diesel production to sustainable aviation fuel (SAF). Riggs noted, “The DGD SAF project was delivered on time and under budget, showcasing our teams’ expertise.”
