Valero Energy Corporation Reports Q4 and Full-Year 2024 Financial Results
Valero Energy Corporation (NYSE: VLO), a global leader in refining and renewable energy, has announced its financial results for the fourth quarter and full year of 2024. The company reported a significant decline in both quarterly and annual net income compared to the previous year, reflecting the challenges and market conditions faced during the period.
Financial Highlights
For the fourth quarter of 2024, Valero reported net income attributable to its stockholders of $281 million, or $0.88 per share, a sharp drop from $1.2 billion, or $3.55 per share, in the same period of 2023. Excluding certain adjustments outlined in the earnings release, the adjusted net income for Q4 2024 stood at $207 million, or $0.64 per share, compared to $1.2 billion, or $3.57 per share, in Q4 2023.
Looking at the full year, Valero’s net income attributable to stockholders totaled $2.8 billion, or $8.58 per share, compared to $8.8 billion, or $24.92 per share, in 2023. The adjusted net income for 2024, excluding specific items, amounted to $2.7 billion, or $8.48 per share, down from $8.9 billion, or $24.96 per share, in 2023. These results reflect the volatile market conditions and challenges in the refining and ethanol sectors, impacting the company’s profitability.
Segment Performance
Refining
Valero’s refining segment, which is its core business, faced significant declines in operating income for Q4 2024. The segment reported operating income of $437 million, a decrease from $1.6 billion in Q4 2023. Refining throughput volumes averaged 3.0 million barrels per day during the fourth quarter, reflecting the company’s continued focus on safe and efficient operations despite market headwinds.
Lane Riggs, Valero’s Chairman, CEO, and President, commented, “2024 was our best year for personnel and process safety and one of our best years for environmental performance. This is a testament to our long-standing commitment to safe, reliable, and environmentally responsible operations.”
Renewable Diesel
The Renewable Diesel segment, driven by the Diamond Green Diesel (DGD) joint venture, showed strong performance despite the overall decline in other areas. The segment generated $170 million in operating income for Q4 2024, a notable increase from $84 million in Q4 2023. DGD’s sales volumes averaged 3.4 million gallons per day in the fourth quarter, reflecting continued demand for renewable diesel and the growth of the company’s sustainable fuel offerings.
Ethanol
Valero’s Ethanol segment experienced a significant decline in operating income, which fell to $20 million in the fourth quarter of 2024, compared to $190 million in Q4 2023. Ethanol production volumes averaged 4.6 million gallons per day during the fourth quarter. This decline was primarily due to lower ethanol prices and a reduction in demand, further challenging Valero’s performance in the segment.
Corporate and Other
General and administrative expenses for Q4 2024 were reported at $266 million, with a total of $961 million for the year. Valero’s effective tax rate for 2024 was 19 percent. These costs were primarily associated with administrative functions, regulatory compliance, and ongoing investments in operational efficiency.
Investing and Financing Activities
Valero generated $1.1 billion in net cash from operating activities during the fourth quarter of 2024, including $119 million related to the other joint venture member’s share of DGD. Excluding this adjustment, adjusted net cash provided by operating activities stood at $951 million for the quarter. For the full year, net cash provided by operating activities totaled $6.7 billion, boosted by a favorable impact from working capital and contributions from the DGD joint venture.
Capital investments amounted to $547 million in the fourth quarter, with $452 million earmarked for sustaining the business through turnarounds, catalyst replacements, and regulatory compliance. For the year, total capital investments reached $1.9 billion, of which $515 million was attributed to Valero’s direct investments in sustaining its refining and renewable diesel operations.
Shareholder Returns
Valero continued to prioritize shareholder returns, distributing $601 million in Q4 2024. This included $339 million in dividends and $262 million used for share repurchases, representing approximately 63% of adjusted net cash provided by operating activities. For the full year, Valero returned $4.3 billion to stockholders, which included $2.9 billion in stock buybacks and $1.4 billion in dividends.
Valero’s commitment to its stockholders was further demonstrated on January 16, 2025, when the company announced an increase in its quarterly cash dividend to $1.13 per share, up from $1.07 per share. Riggs emphasized, “Our team continues to successfully execute a strategy underpinned by operational excellence, deploying capital with an uncompromising focus on returns, and honoring our commitment to stockholders.”
Liquidity and Financial Position
As of December 31, 2024, Valero maintained a strong liquidity position, with total debt of $8.1 billion, finance lease obligations of $2.4 billion, and cash and cash equivalents totaling $4.7 billion. The company’s debt-to-capitalization ratio, net of cash and cash equivalents, stood at 17%, reflecting its prudent approach to managing debt while maintaining a solid cash position.
Strategic Initiatives
Valero made significant strides in its strategic growth initiatives in 2024, particularly in the renewable energy sector. The company successfully completed its Sustainable Aviation Fuel (SAF) project at the DGD Port Arthur plant in the fourth quarter. This milestone allows the plant to upgrade approximately 50% of its current 470 million gallon renewable diesel annual production capacity to SAF, aligning with Valero’s commitment to sustainability and reducing its carbon footprint.
In addition to the SAF project, Valero is progressing with an FCC Unit optimization project at its St. Charles Refinery. This project, estimated to cost $230 million, aims to increase the refinery’s yield of high-value products and is expected to be completed by 2026.
Despite the challenges faced in 2024, Valero remains optimistic about its future prospects. The company’s strong balance sheet, disciplined capital investments, and focus on operational excellence position it well to navigate evolving market conditions and capitalize on growth opportunities in the renewable energy sector.
As the energy industry continues to transform, Valero’s commitment to innovation, safety, and sustainability will remain central to its long-term strategy. With a focus on renewable fuels, strategic refinery upgrades, and a solid financial foundation, Valero is poised to continue delivering value to its stockholders and making meaningful contributions to the global energy transition.
Valero’s executives are confident that the company will continue to thrive in the years ahead, adapting to market dynamics while upholding its values of operational excellence and environmental responsibility.
