Valero Energy Corporation
CEO : Mr. Joseph W. Gorder
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | 16.3% YoY | 222.9% | 199.6% | 2023-01-26 |
Jason Fraser says,
Deleveraging and Payout Ratio
- The company aggressively worked on paying off $4 billion of incremental debt taken in 2020, and in Q4 2022, they were able to repurchase $442 million of debt, meeting their deleveraging goal.
- The payout ratio for the year ended at 45%, bringing them back to the midpoint of their target range of 40% to 50%, considering the construction margin environment moving forward, payout targets may be mid-level or higher.
Dividend Strategy
- The company aims to provide a competitive and sustainable dividend compared to their peers.
- After working through the pandemic, rebuilding cash, and reducing debt, the company intends to return to a pattern of growth in dividends.
Homer Bhullar says,
Valero’s Financial Performance
- Revenue for the fourth quarter of 2022 is expected to be between $25.7 billion and $27.3 billion.
- Adjusted EPS (earnings per share) is expected to range between $1.65 and $1.95.
- The company anticipates capital expenditures for 2022 of approximately $1.8 billion to $2.2 billion.
Impact of COVID-19
- The COVID-19 pandemic is expected to continue to impact Valero’s operations in the short term.
- The company expects demand for refined products to continue to recover as COVID-19 vaccines become more widely available.
Valero’s Operations
- Valero’s renewable diesel plant in Louisiana is expected to start operations in the second half of 2022.
- The company is evaluating strategic options for its renewable diesel business.
Environmental Regulations and Initiatives
- Valero will continue to invest in renewable energy and technology to reduce greenhouse gas emissions.
- The company supports federal and state carbon pricing policies.
Capital Deployment and Shareholder Returns
- Valero expects to return a significant portion of its cash flow to shareholders through dividends and share repurchases.
- The company also plans to invest in growth projects and reduce debt.
Q & A sessions,
Financial Performance
- Net income attributable to Valero stockholders was $3.1 billion or $8.15 per share for Q4 2022, compared to $1 billion or $2.46 per share for Q4 2021.
- Refining segment reported $4.3 billion of operating income for the Q4 2022 compared to $1.3 billion for Q4 2021.
- Raised $2.2 billion for the stockholders in Q4 2022, resulting in a 2022 payout ratio of 45% of adjusted net cash provided by operating activities through dividends and stock buybacks.
Renewable Diesel Segment
- Operating income was $261 million for Q4 2022, compared to $150 million for Q4 2021.
- Raised Renewable Diesel sales volumes averaged 2.4 million gallons per day in Q4 2022, which was 851,000 gallons per day higher than the Q4 2021.
- Expect sales volumes to be approximately 1.2 billion gallons in 2023.
Ethanol Segment
- Reported $7 million of operating income for Q4 2022 compared to $474 million for Q4 2021.
- Ethanol production volumes averaged 4.1 million gallons per day in the Q4 2022.
Operating Expenses
- Refining cash operating expenses of $5 per barrel in Q4 2022 were $0.14 per barrel higher than Q4 2021.
- Operating expenses in 2023 should be $0.49 per gallon for Renewable Diesel segment and $0.51 per gallon for Ethanol segment.
Guidance
- Expect capital investments attributable to Valero for 2023 to be approximately $2 billion.
- Refining throughput volumes for Q1 2023 are expected to fall within the following ranges: Gulf Coast at 1.59 million to 1.64 million barrels per day; Mid-Continent at 415,000 to 435,000 barrels per day; West Coast at 245,000 to 265,000 barrels per day; and North Atlantic at 415,000 to 435,000 barrels per day.
- Expect refining cash operating expenses in Q1 2023 to be approximately $4.95 per barrel.
No bad stock 