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Refining Losses Deepen for Phillips 66

Phillips 66 has reported $8 million in net profit for the fourth quarter of 2024, a dramatic fall from $1.26 billion for the same three-month period in 2023 as refining margins softened. The Houston, Texas-based company saw refining losses deepen from $108 million for the third quarter of 2024 to $775 million for the fourth […]

Phillips 66 has reported $8 million in net profit for the fourth quarter of 2024, a dramatic fall from $1.26 billion for the same three-month period in 2023 as refining margins softened.

The Houston, Texas-based company saw refining losses deepen from $108 million for the third quarter of 2024 to $775 million for the fourth quarter, according to results it published online. For the fourth quarter of the prior year, Phillips 66’s refining business logged $814 million in net income.

Realized refining margins averaged $6.08 a barrel in the October-December 2024 period, down from $8.31 for the prior quarter and $14.41 for the corresponding quarter in 2023.

Phillips 66 kept its crude capacity utilization stable at 94 percent between the third and fourth quarters of 2024.

Refining turnaround expenses dropped sequentially from $137 million to $123 million.

When adjusted for extraordinary of nonrecurring items, the refining segment lands at a $759 million net loss for the fourth quarter of 2024, compared to a $67 million net loss for the third quarter of 2024.

Before interest, tax, amortization and depreciation deductions, the refining segment had an adjusted net loss of $298 million, compared to an adjusted net profit of $188 million for the preceding quarter.

“Refining adjusted pre-tax loss increased [quarter-on-quarter] primarily due to a decline in realized margins largely driven by lower market crack spreads and accelerated depreciation associated with the planned ceasing of operations at the Los Angeles Refinery, partially offset by a higher clean product yield”, Phillips 66 said.

Phillips 66 announced October 16, 2024, it would cease production at the Los Angeles refinery by the end of 2025, with chief executive Mark Lashier citing uncertainty from “market dynamics”.

Pipeline throughput in the fourth quarter of 2024 averaged 759,000 barrels per day (bpd), down from 762,000 bpd in the prior quarter.

Midstream contributed $673 million in adjusted net profit for the fourth quarter of 2024. Chemicals posted $107 million, while $28 million came from renewable fuels.

Midstream adjusted EBITDA was $708 million. That of chemicals was $72 million. Renewable fuels adjusted EBITDA was $28 million.

“Midstream fourth-quarter 2024 adjusted pre-tax income increased compared with the third quarter mainly due to higher NGL [natural gas liquids] margins and volumes”, Phillips 66 said.

“Chemicals adjusted pre-tax income decreased mainly due to lower margins, as well as higher turnaround and maintenance costs”.

It added, “Renewable fuels pre-tax results increased primarily due to higher margins at the Rodeo Complex and stronger international results”.

Overall Phillips 66 registered an adjusted net loss of $61 million, or negative $0.15 per share – compared to $1.36 billion in adjusted net profit for the same period in 2023.

Still the company beat Zacks’ loss estimate of 20 cents, derived from projections by brokerage analysts.

Phillips 66 distributed $1.1 billion to shareholders in the fourth quarter of 2024 via dividends and buybacks.

It ended 2024 with $1.7 billion in cash and cash equivalents and $4.6 billion in committed capacity from credit facilities. Total debt was $20.06 billion.

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OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

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