Phillips 66 Reports 1Q 2024 Financial Results, Highlights Strategic Priorities Progress

HOUSTON - Phillips 66 (NYSE: PSX), a leading diversified and integrated downstream energy company, announced first-quarter earnings of $748 million, compared with earnings of $1.3 billion in the fourth quarter.

Excluding special items of $74 million, the company had adjusted earnings of $822 million in the first quarter, compared with fourth-quarter adjusted earnings of $1.4 billion.

'In the first quarter, we progressed our strategic priorities and returned $1.6 billion to shareholders,' said Mark Lashier, president and CEO of Phillips 66. 'While our crude utilization rates were strong, our results were affected by maintenance that limited our ability to make higher-value products. We were also impacted by the renewable fuels conversion at Rodeo, as well as the effect of rising commodity prices on our inventory hedge positions. The maintenance is behind us, our assets are currently running near historical highs and we are ready to meet peak summer demand.

'We recently launched a process to sell our retail marketing business in Germany and Austria, consistent with our plan to divest non-core assets. A major milestone was achieved with the startup of our Rodeo Renewable Energy Complex, positioning Phillips 66 as a world leader in renewable fuels.

'We remain committed to delivering increased value to our shareholders. We have returned $9.9 billion to shareholders through share repurchases and dividends since July 2022, on pace to meet our target of $13 billion to $15 billion by year-end 2024. Our strategic priorities put us on a clear path to achieve our $14 billion mid-cycle adjusted EBITDA target by 2025 and return over 50% of operating cash flows to shareholders.'

irst-Quarter Results

First-quarter earnings of $748 million or $1.73 per share; adjusted earnings of $822 million or $1.90 per share $1.6 billion returned to shareholders through dividends and share repurchases

Refining operated at 92% crude utilization

Recently announced 10% increase to the quarterly dividend to $1.15 per common share

Earned industry recognition for 2023 exemplary safety performance in Midstream, Refining and Chemicals

Strategic Priorities Highlights

Returned $9.9 billion to shareholders through dividends and share repurchases since July 2022

On track to achieve $1.4 billion of business transformation cost and sustaining capital savings by year-end 2024

Launched process to divest retail marketing assets in Germany and Austria

Commenced operations at Rodeo Renewable Energy Complex

Midstream first-quarter 2024 pre-tax income was $554 million, compared with $756 million in the fourth quarter of 2023. Results in the first quarter included a $59 million asset impairment. Fourth-quarter results included a $2 million tax benefit.

Transportation first-quarter adjusted pre-tax income was $302 million, compared with adjusted pre-tax income of $334 million in the fourth quarter. The decline mainly reflects a decrease in throughput and deficiency revenues, partially offset by seasonally lower maintenance costs.

NGL and Other adjusted pre-tax income was $306 million in the first quarter, compared with adjusted pre-tax income of $423 million in the fourth quarter. The decrease was mainly due to a decline in margins, as well as lower volumes reflecting impacts from winter storms.

In the first quarter, the fair value of the company's investment in NOVONIX, Ltd. increased by $5 million, compared with a $3 million decrease in the fourth quarter.

Financial Position, Liquidity and Return of Capital

Cash used in operations was $236 million in the first quarter. Operating cash flow was $1.2 billion, excluding $1.4 billion of working capital impacts mainly due to inventory builds. The company had net debt issuances of $802 million.

During the first quarter, Phillips 66 funded $1.2 billion of share repurchases, $448 million in dividends and $628 million of capital expenditures and investments.

As of March 31, 2024, the company had $1.6 billion of cash and cash equivalents and $3.5 billion of committed capacity available under its credit facility. The company's consolidated debt-to-capital ratio was 40% and its net debt-to-capital ratio was 38%. The company ended the quarter with 424 million shares outstanding.

Strategic Priorities and Business Update

Phillips 66 is executing its strategic priorities to increase mid-cycle adjusted EBITDA to $14 billion by 2025 and return over 50% of operating cash flow to shareholders. Since July 2022, the company has distributed $9.9 billion through share repurchases and dividends and is on pace to achieve its $13 billion to $15 billion target by year-end 2024.

Phillips 66 plans to monetize assets that no longer fit its long-term strategy. The company is progressing the potential divestiture of its retail marketing business in Germany and Austria. Completion of dispositions is subject to market and other conditions, including customary approvals.

The company achieved $1.24 billion in run-rate cost and sustaining capital savings through business transformation as of March 31, 2024. The company is targeting $1.4 billion in run-rate savings by the end of 2024.

Phillips 66 is capturing value from its Midstream NGL wellhead-to-market strategy. The company's increased ownership of DCP Midstream has provided an incremental $1.25 billion toward its 2025 mid-cycle adjusted EBITDA target, including approximately $250 million of synergies. The company remains focused on capturing over $400 million of run-rate commercial and operating synergies by the end of 2024.

In Chemicals, CPChem is building world-scale petrochemical facilities with a joint-venture partner on the U.S. Gulf Coast and in Ras Laffan, Qatar. Both projects are expected to start up in 2026.

In Refining, the company continues to invest in high-return, low-capital projects to improve asset reliability and market capture. Since 2022, completed projects have added over 3% to market capture based on mid-cycle pricing.

During the first quarter, Phillips 66 achieved a significant milestone with the startup of the Rodeo Renewed project. The Rodeo Renewable Energy Complex is now producing 30,000 barrels per day of renewable fuels. The facility is on track to produce approximately 50,000 barrels per day (800 million gallons per year) of renewable fuels by the end of the second quarter, positioning Phillips 66 as a leader in renewable fuels.

The American Fuel and Petrochemical Manufacturers (AFPM) recognized four Phillips 66 refineries and two CPChem facilities for exemplary safety performance in 2023. The Rodeo and Sweeny facilities both received the Distinguished Safety Award, the highest annual safety award in the industry. This was Sweeny Refinery's third consecutive year to receive the honor. The Ponca City Refinery earned the Elite Platinum Award, and the Lake Charles Refinery secured the Elite Gold Award. In Midstream, the company received the first-place Division I 2023 GPA Midstream Safety Award for its gathering and processing operations.

About Phillips 66

Phillips 66 (NYSE: PSX) is a leading diversified and integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company's portfolio includes Midstream, Chemicals, Refining, and Marketing and Specialties businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future.

Contact:

Jeff Dietert

Tel: [phone]

Email: [e-mail]

Owen Simpson

Tel: [phone]

Email: [e-mail]

Thaddeus Herrick

Tel: [phone]

Email: [e-mail]

(C) 2024 Electronic News Publishing, source ENP Newswire