Valero announces record ethanol income in quarterly results

By Erin Voegele | January 30, 2014

Valero Energy Corp. has announced its financial results for the fourth quarter of 2013, reporting net income attributable to stockholders of $1.3 billion, or $2.38 per share, up from $1 billion or $1.82 per share for the same quarter of 2012. For the full 2013 fiscal year, the company reported net income attributable to Valero stockholders of $2.7 billion, or $4.97 per share.

“We had a great fourth quarter and ended the year on a strong note,” said Valero Chairman and CEO Bill Klesse. “Our refineries and ethanol plants ran well and at a high utilization rate in the fourth quarter.  In refining, we took advantage of favorable crude oil discounts at most locations, while our ethanol business enjoyed high margins and set a record-high for quarterly and annual operating income.”

Valero’s ethanol segment earned record operating income of $269 million during the fourth quarter, up from $12 million during the same period of 2012. The increase in operating income was attributed to significantly higher gross margins per gallon caused by a decrease in corn prices and low industry ethanol inventories, combined with production volumes at a record high quarterly average of 3.6 million gallons per day.

For the full 2013 period, Valero reported that its ethanol segment earned $491 million in operating income, compared to an operating loss of $47 million in 2012.

Moving into the first quarter of this year, Valero expects ethanol production to be maintained. During a call to discuss the quarterly results, Ashley Smith, vice president of investor relations at Valero, said production volumes are expected to continue at an average of 3.6 million gallons per day during the first three months of 2014. Operating expenses are expected to average 37 cents per gallon, including 4 cents per gallon for noncash costs, such as depreciation and amortization, Smith continued.