CITGO Oil Company Announces First Quarter 2003 Profits Way Up!
TULSA, Okla., May 2 -- CITGO Petroleum Corporation today reported net income of $140 million for the first quarter of 2003 compared with a net loss of ($16) million for the first quarter of 2002. Operating income (income before interest and income taxes) for the first quarter of 2003 was $243 million, compared with an operating loss of ($7) million for the same period last year.
Strong first quarter refining earnings resulted from strengthening margins and steady operations. Additional factors include:
-- Gulf coast crack spreads doubled to $5.58 and Chicago crack spreads
were 75-percent higher at $6.45 relative to the crack spreads in the
same quarter of 2002.
-- Crude oil differentials for sour, heavy sour and Canadian crudes
showed significant improvement in the first quarter relative to the
first quarter of 2002.
While gasoline sales volumes held steady at three billion gallons when compared to the first quarter of 2002, total refined product sales increased ten percent to six billion gallons in the first quarter of 2003. In addition;
-- Gasoline sales to branded marketers and major convenience store chains
represented about 65-percent of total gasoline sales, an increase of
three percent in the first quarter of 2003 relative to the first
quarter of 2002.
-- Wholesale margins on light oil products increased to 2.2 cents-per-
gallon (cpg) in the first quarter of 2003 compared with 0.3 cpg in the
first quarter of 2002.
-- Finished lubricant prices increased toward the end of the quarter.
-- Finished lubricant volume was up nine percent in a relatively flat
demand market, reflecting the strength of the CITGO/Mystik brands and
successful execution of the marketing plan.
-- Our asphalt refineries completed scheduled turnarounds and are on
target to produce and sell asphalt for the 2003 paving season.
Several first quarter market conditions positively contributed to CITGO's overall financial results, including:
-- historically high refining margins driven primarily by a reduction in
worldwide refining capacity and a heavy refinery maintenance schedule
in the United States;
-- historically low crude and products inventories; and
-- colder than normal winter weather, producing a strong demand for
distillate and improved distillate margins.
"With our refineries running at peak capacity throughout the quarter," stated CITGO President and CEO Oswaldo Contreras, "we were able to take full advantage of robust refining margins and favorable market conditions that existed during the last month and a half. Furthermore, our employees continue to focus on 'keeping it safe, clean and running,' which directly contributes to operational efficiency and the bottom line. On the marketing side, sales to CITGO-branded marketers were up and wholesale margins improved significantly.
"In addition to the above, we also worked to improve cash flow during the quarter by implementing stringent cost control measures throughout the corporation and securing additional financing to meet our operating needs When taken all together, these factors added up to a good first quarter for CITGO," Contreras concluded.
CITGO Petroleum Corporation is a leading energy company based in Tulsa, Okla., with approximately 4,300 employees and annual revenues of nearly $20 billion. CITGO is a direct, wholly-owned subsidiary of PDV America, Inc., a wholly-owned subsidiary of PDV Holding, Inc. CITGO's ultimate parent is Petroleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela and its largest supplier of crude oil.
CITGO operates fuels refineries in Lake Charles, La., Corpus Christi, Texas, and Lemont, Ill., and asphalt refineries in Paulsboro, NJ and Savannah, Ga. The company has long-term crude oil supply agreements with PDVSA for a portion of the crude oil requirements at these facilities. CITGO is also a 41-percent participant in LYONDELL-CITGO Refining LP, a joint venture fuels refinery located in Houston, Texas. CITGO's interests in these refineries result in a total crude oil capacity of approximately 865,000 barrels per day.
With more than 13,000 branded, independently owned and operated retail locations, CITGO is also one of the five largest branded gasoline suppliers within the United States.
Three Months
Ended March 31,
2003 2002
Net Sales 6,375.7 3,671.4
Cost of sales and operating expenses 6,205.8 3,708.9
Gross margin 169.9 (37.5)
Equity in earnings of LCR 9.1 14.4
Equity in earnings of affiliates 4.5 4.5
Insurance recoveries 117.7 94.7
Other income (expense) net 14.9 (6.5)
Subtotal 316.1 69.6
Selling, general and administrative 73.3 76.4
Operating income 242.8 (6.8)
Interest expense 24.4 17.6
Income taxes 78.6 (8.8)
Net Income 139.8 (15.6)
Summarized Marketing Data Three Months
Ended March 31,
2003 2002
Wholesale fuel sales (millions of gallons) 3,449.0 3,419.0
Wholesale margin (cents per gallon) 2.2 0.3
Marketing expenses (millions of dollars) 22.3 25.1
(Dollars in Millions)
March 31, December 31,
2003 2002
Current assets $2,537.4 $2,187.5
Total Assets $7,340.7 $6,986.9
Current liabilities $1,706.7 $1,999.1
Total Debt $1,592.9 $1,300.5
Total Liabilities $4,641.8 $4,427.7
Shareholder's equity $2,698.9 $2,559.2
Total capitalization $7,340.7 $6,986.9
Three Months Ended March 31, 2003
Lake Corpus
Charles Christi Lemont Total
Total Feedstock
throughput (Mbbls p/day) 366 220 172 758
Per barrel of throughput
Gross Margin (A) 6.77 6.70 5.54 6.47
Operating Expenses (B) 2.70 2.67 1.49 2.42
Three Months Ended March 31, 2002
Lake Corpus
Charles Christi Lemont Total
Total Feedstock
throughput (Mbbls p/day) 330 225 66 621
Per barrel of throughput
Gross Margin (A) 3.80 3.94 (2.09) 3.23
Operating Expenses (B) 2.86 2.10 5.00 2.81
(A) Gross margin consists of the estimated product yield value less
refinery input costs divided by total refinery input volumes.
(B) Operating expense consists of total refinery operating expense less
depreciation and amortization divided by total refinery input
volumes.
Market Indicators (dollars per barrel)
Three Months
Ended March 31,
2003 2002
West Texas Intermediate, "WTI" (sweet) $ 34.00 $ 21.55
Crack Spreads:
Gulf Coast 3/2/1 $ 5.58 $ 2.79
Chicago 3/2/1 $ 6.45 $ 3.70
Crude Oil Differentials
WTI less WTS (sour) $ 3.66 $ 1.32
WTI less Maya (heavy sour) $ 7.57 $ 5.44
WTI less Bow River (Canadian) $ 7.77 $ 5.33
Natural Gas (per mmbtu) $ 5.92 $ 2.49
Selected Volumetric Data
Three Months Ended March 31, 2003
Lake Corpus
(in thousands of barrels per day) Charles Christi Lemont Total
Feedstocks:
Crude oil throughput
Sweet 85.0 7.0 7.0 99.0
Light/Medium sour 99.0 35.0 151.0 285.0
Heavy sour 5.0 6.0 --- 11.0
Contract (heavy sour) 122.0 110.0 --- 232.0
Total crude oil 311.0 158.0 158.0 627.0
Unfinished feedstocks 55.0 62.0 14.0 131.0
Total feedstocks 366.0 220.0 172.0 758.0
Rated crude capacity at period end 320.0 157.0 167.0 644.0
Utilization of rated crude capacity 97% 101% 95% 97%
Production:
Light products
Gasoline 183.0 95.0 92.0 370.0
Jet fuel 67.0 --- 1.0 68.0
Diesel fuel 54.0 62.0 41.0 157.0
Total light products 304.0 157.0 134.0 595.0
Petrochemicals and industrial
products 76.0 63.0 39.0 178.0
Total production 380.0 220.0 173.0 773.0
Selected Volumetric Data
Three Months Ended March 31, 2002
Lake Corpus
(in thousands of barrels per day) Charles Christi Lemont Total
Feedstocks:
Crude oil throughput
Sweet 85.0 3.0 --- 88.0
Light/Medium sour 124.0 21.0 25.0 170.0
Heavy sour --- 2.0 --- 2.0
Contract (heavy sour) 112.0 130.0 --- 242.0
Total crude oil 321.0 156.0 25.0 502.0
Unfinished feedstocks 9.0 69.0 41.0 119.0
Total feedstocks 330.0 225.0 66.0 621.0
Rated crude capacity at period end 320.0 157.0 167.0 644.0
Utilization of rated crude capacity 100% 99% 15% 78%
Production:
Light products
Gasoline 166.0 100.0 47.0 313.0
Jet fuel 76.0 --- --- 76.0
Diesel fuel 49.0 60.0 --- 109.0
Total light products 291.0 160.0 47.0 498.0
Petrochemicals and industrial
products 51.0 65.0 17.0 133.0
Total production 342.0 225.0 64.0 631.0