Valero reports improved Q1 earnings for ethanol segment

By Erin Voegele | May 01, 2018

Valero Energy Corp. released first quarter 2018 financial results on April 26. The company reported $45 million of operating income for its ethanol segment, up from $22 million during the same three-month period of 2017. The increase is primarily attributed to higher distillers grains prices.

According to Valero, its ethanol plants produced approximately 4.1 million gallons per day. Production was in line with volumes produced during the same quarter of last year.

During an investor call, John Locke, vice president of investor relations at Valero, said the company’s ethanol segment is expected to produce approximately 4 million gallons per day during the second quarter of this year, with operating expenses averaging 37 cents per gallon.

Valero also reported that its biofuel blending costs reached $206 million during the first quarter of this year, up $60 million when compared to the first quarter of 2017. The company attributed the increase to higher renewable identification number (RIN) prices.

For the full year, Locke said RIN expenses are expected to be between $500 million and $600 million, down approximately $200 million when compared to previous guidance released by Valero. The expected decrease is primarily attributed to lower RIN prices.

Overall, Valero reported net income attributable to stockholders of $469 million, or $1.09 per share, up from $305 million, or 68 cents per share, during the first quarter of last year. Adjusted net income attributable to Valero stockholders reached $431 million, or $1 per share, an increase of 47 percent in adjusted per share results when compared to the same period of 2017.