Valero Energy Corporation has recently announced a 5% increase in its quarterly cash dividends on common stock. Shareholders as of February 1, 2024, will receive dividends on March 4, 2024, elevating Valero’s annual dividend rate to $4.28 per share. Valero VLO latest quarterly earnings report sheds light on its dividend adjustments, refining segment performance, and capital investments.
Segment Performance Analysis
In the refining segment, Valero reported adjusted operating income of $1.577 billion, down from $4.355 billion in the previous year’s quarter. Reduced processing volumes and lower per-barrel refining margins impacted this segment’s performance.
Ethanol and Renewable Diesel Segments
Valero’s ethanol segment reported adjusted operating income of $205 million, a significant increase from $69 million in the previous year’s quarter. However, the renewable diesel segment’s operating income decreased to $84 million from $261 million sequentially, despite increased sales volumes.
Refining Operations Overview
Valero’s refining throughput in Q4 averaged 2.995 million barrels per day, slightly lower than 3.042 million barrels per day reported in Q4 2022. The breakdown of crude oil processed included sweet, light-sour, and heavy-sour varieties, accounting for 50.7%, 9%, and 16.2% of the total volume, respectively.
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Refining Margin and Operating Expenses
The per-barrel refining margin decreased to $12.89 from $22.58 year-over-year, while operating expenses per barrel were $4.99 compared to $5 in the previous year’s quarter. Adjusted operating income from refining amounted to $5.72 per barrel, down from $15.56 in the prior year’s quarter.
Capital Investments and Financial Position
Valero’s capital expenditures in Q4 totaled $540 million, with $460 million allocated for business maintenance. As of the end of the quarter, the company had cash and equivalents of $5.424 billion, with total debt and finance lease obligations of $11.524 billion as of December 31, 2023.
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