Citgo Reports 1Q:22 Net Income of $245mn

(Citgo, 17.May.2022) — Citgo Petroleum Corporation reported net income of $245mn for the first quarter 2022, compared to net income of $21mn for the fourth quarter of 2021 and a loss of $(180)mn for the first quarter of 2021.

Reliable operations and favorable market conditions enabled Citgo to generate EBITDA 1 of $518mn for the first quarter of 2022, compared to EBITDA of $236mn and Adjusted EBITDA of $139mn for the fourth quarter of 2021. There were no special items for the first quarter of 2022.

“We have worked hard to position Citgo operationally and commercially to benefit from improved refining margins, and the first quarter provided this opportunity,” said Carlos Jordá, Citgo President and CEO. “I’m equally pleased that we successfully completed a major Cat Cracker (FCC) and Alkylation plant turnaround at our Corpus Christi refinery, and both of the affected units are back in operation.”

“While significant energy-market uncertainties remain in the near term, we are confident that through reliable and safe operations we can continue providing a consistent supply of fuel products to our customers in the North American and Latin American markets,” Jordá concluded.

Q1 2022 Highlights:

  • Throughput – Crude throughput in the first quarter of 2022 was 731,000 barrels-per-day (bpd), resulting in overall crude utilization of 95%. This compares to fourth quarter of 2021 throughput of 723,000 bpd, and overall crude utilization of 94%. Feedstock processing for the first quarter 2022 was 20,000 bpd compared to 73,000 bpd for the previous quarter, due primarily to the Corpus Christi turnaround.
  • Turnarounds and Capital Investments – Invested $205mn during the first quarter, consisting of $133mn in turnaround and catalyst changes and $72mn in capital expenditures. This compares with a total spend of $49mn during the previous quarter with no turnaround activity. The turnaround expenses were concentrated in Corpus Christi, where the FCC and Alkylation turnarounds required extensive refractory and metal repairs in the reactor, extending the duration and cost. Manpower during the turnaround for both units peaked at 2,460 contractors, with an outstanding safety performance with no recordable incidents. At Lake Charles, catalyst changes were done for A Reformer, and turnarounds for C Reformer and the Unicracker were advanced after the reformer experienced catalyst losses.
  • Operational Excellence – Health, Safety and Environmental (HSE) performance was excellent, and the company is on pace for record-setting occupational safety and environmental performance for 2022.
  • Commercial Excellence – Citgo expanded its customer base in Latin America, and export/domestic marine sales increased 61% over first quarter 2021 to 214,000 bpd. The Company’s Lubricants and Light Oils business units also contributed favorably to the first quarter results.
1 EBITDA/Adjusted EBITDA are non-GAAP financial measures. See page 3 of this release for additional information regarding EBITDA and Adjusted EBITDA and the reconciliations to the most directly comparable GAAP financial measure included with this release.
Reconciliation of net income (loss) to Adjusted EBITDA
(Unaudited, in millions of U.S. dollars)
 
 Three Months Ended
 March 31, December March 31,
 2022 2021 2021
Net income (loss)245 21 (180)
Plus (less)     
     Interest expense, including finance lease57 64 59
     Income tax expense (benefit)71 6 (53)
     Depreciation and amortization145 145 153
EBITDA518 236 (21)
Plus (less)     
    Hurricane Laura expenses, net of insurance recoveriesnm*  4
    Winter Storm Uri costs, net of insurance recoveries  21
    Loss on early extinguishment of debt  6
    LIFO inventory permanent dip impact (100) 
    Charitable contributions 3 
Adjusted EBITDA518 139 10
nm* not meaningful

Select items affecting Adjusted EBITDA during the periods shown above were:

–      Hurricane Laura expenses (all periods presented): To date, we incurred approximately $94mn in repair costs, of which approximately $50mn were recovered through insurance.

–      During 1Q 2022, Citgo did not incur any significant costs associated with the repairs from the damages caused by Winter Storm Uri (to date: $24mn). Out of $24mn approximately $14mn were recovered through insurance.

–      LIFO permanent dip (4Q 2021): We incurred approximately $100mn benefit in 2021 because of selling prior years’ inventory layers at prices above cost.

Reconciliation of Refinery EBITDA Estimates to Consolidated EBITDA 1
(Unaudited, in millions of U.S. dollars)
 
 Three Months Ended
 March 31, December 31, March 31,
 2022 2021 2021
Refinery EBITDA:     
     Lake Charles339 164 13
     Corpus Christi99 77 (99)
     Lemont128 47 52
Total Refinery EBITDA Estimates566 288 (34)
     Supply(39) (14) 18
     Marketing26 24 32
     Lubricants13 9 7
     Corporate and other(48) (71) (44)
Consolidated EBITDA518 236 (21)
1 See “Additional Information – Refinery EBITDA Estimates” beginning on page 3 of this release for additional information regarding how we calculate and estimate Refinery EBITDA.

Notable Personnel Changes

Citgo also continued to strengthen its leadership team in the first quarter with the appointment of Bob Kent to the Citgo Petroleum Board of Directors. Jerry Dunn was also named Vice President of Refining, replacing Art Klein who retired after more than 40 years of service to Citgo, and Sterling Neblett was named Vice President and General Manager of the Lake Charles refinery, succeeding Mr. Dunn in that role. In addition, Joe Carroll was named the company’s first-ever Chief Information Officer.

Stephen McNabb also was named Citgo Treasurer in May 2022.

RELATED STORY: Stephen McNabb Appointed Citgo Treasurer

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