Phillips 66 has announced first quarter earning of US$ 1.6 billion and adjusted earnings of US$ 866 million, excluding US$ 706 million primarily related to the realised gain on Phillips Specialty Products Inc. (PSPI) exchange.
In comparison, fourth quarter 2013 (Q4 2013) earnings were US$ 826 million. Adjusted earning for this period were US$ 808 million.
Greg Garland, chairman and CEO of Phillips 66, commented: “We delivered a strong quarter, with solid performance and improved margins in our Midstream and Chemicals businesses. Our Refining results were impacted by planned downtime at several of our Gulf Coast and Central Corridor refineries and tightening crude spreads."
Refining earnings were equal to US$ 306 million for the first quarter of 2014, compared to US$ 418 million during for previous quarter.
According to Phillips 66, the decrease is primarily due to lower volumes due to planned turnaround and maintenance activities, as well as weaker realised refining margins. Realised margins decreased mostly due to tightening crude spreads, lower clean product realizations and negative inventory impacts.
91% of Phillips 66’s crude slate was advantaged during the quarter, compared to 94% for Q4 2013.
Worldwide, Phillips 66’s refinining utilisation was 90% and clean product yield was 84%.
Phillips 66 Midstream recorded a profit of US$ 188 million for the quarter, US$ 67 million higher than earnings for the previous quarter.
Transportation business earnings were US$ 62 million, compared with US$ 50 million for the final quarter of 2013. The increase was due primarily to improved margins from higher throughput fees and railcar rates, as well as lower operating costs.
First quarter earnings related to the company’s equity investment in DCP Midstream, LLC were US$ 83 million, compared with US$ 37 million in the previous quarter.
Earnings from the NGL business were US$ 43 million, compared with US$ 34 million during the fourth quarter of 2013. The increase was largely due to improved margins driven by stronger propane prices.
Garland said: “During the first quarter, we made significant progress executing our Midstream growth plans. Phillips 66 Partners completed its first acquisition, final investment decisions were reached on our Sweeney NGL Fractionator I and Freeport LPG Export Terminal projects, and we signed a key LPG sales agreement.”
Chemicals earnings for the first quarter of 2014 were US$ 316 million, an increase of US$ 55 million on earnings for the final quarter of 2013.
CPChem’s Olefins and Polyolefins (O&P) business contributed US$ 283 million to the total, compared with US$ 262 million for Q4 2013. Global utilisation for O&P was 93%.
CPChem’s Specialties, Aromatics and Styrenics (SA&S) business contributed US$ 38 million of earnings, US$ 29 million higher than the prior period.
Adapted from a press release by Emma McAleavey.
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