MOSCOW (MRC) -- PBF Energy Inc posted a higher fourth-quarter profit on Thursday and said it sealed a joint venture with a unit of Italian energy group Eni for a renewable diesel project in the United States, said the company.
Shares of PBF jumped 10% to USD45.90. As part of the 50-50 venture, Eni will contribute USD835 million, excluding working capital, plus up to an additional USD50 million that is subject to the achievement of project milestones, PBF said.
The joint venture, St. Bernard Renewables LLC (SBR), will own the renewable diesel project currently under construction and co-located with PBF’s Chalmette refinery in Louisiana. “A little short on earnings, but strong buyback figure and sold half of the RD (renewable diesel) project for more than the total cost to build,” said Matthew Blair, analyst at Tudor, Pickering, Holt & Co.
PBF in December had announced a USD500 million share repurchase program, of which the company said on Thursday it returned about USD188.9 million, including USD32.5 million in 2023. U.S. refiners last year benefited from increased exports after their cost-wary European counterparts reduced capacity due to a surge in European natural gas prices.
PBF’s gross refining margin, excluding special items, rose to USD1.71 billion in the reported quarter, from USD998.7 million a year ago. Total crude oil and feedstocks throughput climbed 8% in the October-December quarter to 86.4 million barrels.
The company expects full-year 2023 throughput between 935,000 barrels per day (bpd) and 995,000 bpd, and in the current quarter between 845,000 bpd and 905,000 bpd. PBF said net income attributable to stockholders rose to USD637.8 million, or USD4.86 per share, in the three-month period ended Dec. 31, from USD165.3 million, or USD1.36 per share, in the year-ago quarter.
However, on an adjusted basis, it posted a profit USD4.41 per share, missing average analysts’ estimate of USD4.98 per share, according to Refinitiv data.
We remind, PDVSA has allocated an oil cargo to a unit of Eni for a February loading, the first to the Italian firm following a contract suspension this year by new management at the state-run company, people familiar with the matter said. Eni and Spanish oil firm Repsol in May last year received authorizations from the U.S. State Department to take the crude to Europe for outstanding Venezuela debt and dividends, an exception to U.S. oil sanctions on Venezuela.