Vertex Energy A prominent specialty refiner and marketer of high-quality refined products and renewable fuels, today announced its financial and operational results for the second quarter of 2024. The Company also provided an update on the optimization of its hydrocracking capacity, focusing on conventional and renewable production. A conference call to discuss these results is scheduled for today at 9:00 A.M. Eastern Time. Further details are available at the end of this release.
Key Highlights for Q2 2024:
- Secured new loans of $15 million and $20 million, enhancing liquidity.
- Modified terms of the current term loan agreement and appointed Seth Bullock as Chief Restructuring Officer.
- Maintained safe operations at the Mobile, Alabama refinery with a second-quarter throughput of 67,758 barrels per day (bpd).
- Reported a net loss of $53.8 million, or $0.58 per fully-diluted share.
- Recorded an Adjusted EBITDA loss of $22.4 million, impacted by a 28% decrease in crack spreads compared to Q1 2024.
- Reduced selling, general, and administrative expenses by 6% from Q1 2024 and 12% from Q2 2023.
- Completed processing all renewable feedstock and began transitioning the Mobile Refinery’s hydrocracker from renewable diesel to conventional fuels, with expected results in Q4 2024.
CEO Statement:
Benjamin P. Cowart, CEO, commented, “We have continued to demonstrate operational reliability in conventional refining and strong safety performance. However, the challenging crack spread environment, caused by weakening gasoline and diesel demand, negatively impacted our Adjusted EBITDA. We successfully processed our remaining renewable feedstock and decommissioned the hydrotreater from renewable service. We have also managed expenses effectively, achieving reductions in capital and fixed costs.”
Cowart added, “In light of ongoing EBITDA and liquidity challenges, we are pursuing strategic options and financing opportunities to maximize value. This includes securing additional loans and appointing Seth Bullock as Chief Restructuring Officer. Seth’s extensive industry experience will be invaluable as we navigate the current economic conditions and focus on liquidity management and performance improvement. Support from our lenders is crucial for executing our strategic priorities, which include managing liquidity, reducing operating costs, and improving margins.”
In Q2 2024, the Mobile Refinery processed 67,758 bpd of conventional throughput. Production of high-value light products, including gasoline, diesel, and jet fuel, was approximately 64% of total production, consistent with Q1 2024 and in line with expectations.
The conventional operations generated a gross profit of $6.4 million, with a fuel gross margin of $35.0 million, or $5.67 per barrel, compared to $37.5 million and $73.6 million, or $12.63 per barrel in Q1 2024. The decrease was attributed to a 28% drop in crack spreads.
The Mobile Renewable Diesel facility produced 3,082 bpd of renewable diesel, reflecting a yield of 99.7%. However, it incurred a gross loss of $11.8 million, with a fuel gross margin of $4.5 million, or $16.08 per barrel.
Renewable Business Transition:
As previously announced, Vertex is pausing renewable fuel production and shifting the hydrocracking unit to conventional fuels. The Company is utilizing a scheduled catalyst and maintenance turnaround to facilitate this transition. The associated cost of approximately $10 million was part of the planned maintenance budget and does not significantly alter the forecasted capital expenditure.
Vertex has ceased renewable production and is on track for converting its Hydrocracker to conventional service, with an anticipated operational target of Q4 2024.
