Valero reports strong income

By Holly Jessen | October 14, 2010
Posted Oct. 28, 2010

For Valero Energy Corp., 2010 is shaping up to be a much better year than 2009. On Oct. 28 the company reported that its income from continuing operations the first nine months of the year was $721 million, compared to a loss of $170 million for the first nine months of 2009. For the third quarter the numbers are even more dramatic. Valero's income from continuing operations was $292 million, compared to a loss from continuing operations of $343 million for the third quarter of 2009.

"It's great to report back-to-back profitable quarters, which is a reflection of the improvement we have seen in our business over last year," said Valero Chairman and CEO Bill Klesse.

The company's ethanol business segment was down slightly from last year, but performing impressively, the company said. Valero earned $47 million in operating income for its ethanol business in the third quarter, compared to $49 million in the same time period last year. The company reported 34 cents in operating expenses for every gallon of ethanol production for the third quarter of this year. Operating expenses were 31 cents each gallon for the same time period of 2009.

In 2009, Valero purchased seven ethanol plants from VeraSun Energy Corp.'s bankruptcy auction. In December the company added three more plants in Linden, Ind., Bloomingburg, Ohio, and Jefferson, Wis. The Linden and Bloomingburg plants are also former VeraSun plants, but were purchased by Valero from ASA Ethanol Holdings LLC. In all, nine of the company's 10 ethanol plants are former VeraSun facilities.

The company's fast entry into the ethanol business has meant dramatic increases in its production numbers. Valero reported it produced 3,100 gallons of ethanol per day in the third quarter. That's a 46 percent increase when compared to the third quarter of 2009, when it produced 2,116 gallons per day. For the first nine months of the year production averaged 2,943 gallons per day.

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