Valero releases Q1 financial results

By Erin Voegele | May 03, 2013

Valero Energy Corp. has released its financial results for the first quarter of 2013, reporting an operating income of $14 million for its ethanol segment, a $5 million increase over the $9 million operating income reported during the same period of last year. In a call to discuss the results, Ashley Smith, vice president of investor relations, attributed the increase to higher gross margins per gallon. However, the higher margins were somewhat offset by lower production levels.

According to Smith, ethanol production averaged approximately 2.7 million gallons per day during the first three months of 2013. That is a decline of about 770,000 gallons per day compared to the production level reported for the first quarter of 2012. He noted that ethanol margins have remained healthy so far in the second quarter.

Regarding ethanol operations in the second quarter, Smith said Valero expected throughput volumes of 3.4 million gallons per day, with operating expenses averaging 37 cents per gallon.

When asked about issues surrounding high prices for ethanol renewable identification numbers (RINs), Bill Klesse, chairman and CEO of Valero, said noted he, along with other refiners, recently met with federal lawmakers. “They all realized the RFS is broken and needs to be fixed,” he said, noting he can’t say anything will be solved in the short run. Klesse also mentioned the blend wall, saying it won’t be hit next year, but moving forward, E15 is not a solution.