Alon USA Energy Inc. reports 3Q15 results

Alon USA Energy Inc. has announced results for the 3Q15. Net income available to stockholders for the third quarter of 2015 was US$41.9 million, or US$0.60 per share, compared to net income available to stockholders of US$38.5 million, or US$0.56 per share, for the same period last year. Excluding special items, Alon recorded net income available to stockholders ofUS $42.0 million, or US$0.60 per share, for the third quarter of 2015, compared to net income available to stockholders of US$40.6 million, or US$0.59 per share, for the same period last year.

Net income available to stockholders for the first nine months of 2015 was US$105.3 million, or US$1.51 per share, compared to net income available to stockholders of US$31.8 million, or US$0.46 per share, for the same period last year. Excluding special items, Alon recorded net income available to stockholders of US$110.1 million, or US$1.58 per share, for the first nine months of 2015, compared to net income available to stockholders of US$41.4 million, or US$0.60 per share, for the same period last year.

Paul Eisman, President and CEO, commented: "We are pleased with the strong third quarter results across most of our businesses. Our refining segment capitalised on a robust crack spread environment during the third quarter to generate solid margins. Our retail business continued to perform well, and we are encouraged by the strong results from our asphalt segment and the return to profitability in this business.

"While strong financial results are an important driver of shareholder value, we are also focused on unlocking the value embedded in our assets and pursuing growth opportunities to increase shareholder value. We have identified US$71 million in annual existing logistics EBITDA across our businesses as discussed in the detail below. We are committed to realising value from these assets, which we believe are undervalued in our current structure. We also see the potential to implement growth projects in logistics and refining as discussed below.

"The Big Spring refinery ran well during the third quarter of 2015, achieving total throughput of almost 76 000 bpd. Despite unfavorable Midland crude differentials, Big Spring generated a refinery operating margin of US$16.71/bbl. The refinery also achieved low direct operating expense of US$3.46/bbl. Our results benefited from a strong wholesale marketing environment driven by a robust gasoline market. During the quarter, our wholesale marketing business sold on average approximately 3800 bpd of gasoline into the Phoenix market.

"The Krotz Springs refinery achieved refinery operating margin of US$6.66/bbl in the third quarter of 2015 and direct operating expense of US$3.82/bbl. The planned major turnaround at Krotz Springs began in late September, and the refinery is currently in the process of restarting. This is a significant effort which takes years of planning, and we are pleased with how the turnaround work has progressed.

"We are pleased to announce that our board has approved moving forward with detailed engineering and procurement of long lead equipment for the sulfuric acid alkylation unit at Krotz Springs. We expect the project to cost US$85 million and to generate annual EBITDA of US$45 million once completed. The alkylation unit capitalises on low LPG prices and high values for octane. We believe this project will enhance gasoline margins for Krotz Springs and increase our flexibility in gasoline blending. We expect this project to be completed in 2017.

"Our asphalt segment generated operating income of US$18.5 million in the third quarter of 2015. This is the third best quarter in the history of this business. It comes as a result of improved market conditions, especially in West Texas, along with our successful cost reduction initiative. We are encouraged with our results and believe that the improvements in profitability we experienced are sustainable.

"Our retail business continues to perform well. In August, we closed on the acquisition of 14 retail gas stations in the Albuquerque area, and in October, we opened a new, large-format store in El Paso.

"We expect total throughput at the Big Spring refinery to average approximately 75 000 barrels per day for the fourth quarter of 2015. We expect total throughput at the Krotz Springs refinery to average approximately 40 00 bpd for the fourth quarter of 2015 due to the planned major turnaround."

Edited from press release by Angharad Lock

Read the article online at: https://www.hydrocarbonengineering.com/refining/05112015/alon-usa-energy-inc-announces-3q15-results-1553/