Valero Energy (VLO) Q2 2024 earnings summary

Executive summary

• Net income attributable to stockholders was $880 million ($2.71/share) for Q2 2024, down from $1.9 billion ($5.40/share) in Q2 2023, with declines across all segments due to lower margins and volumes.

• Achieved strong operational performance with 94% refinery throughput utilization and U.S. wholesale sales exceeding 1 million barrels per day.

• Growth projects, including the Diamond Green Diesel SAF project, are progressing on schedule for Q4 2024, expected to make DGD one of the largest SAF producers globally.

• Cash from operations was $4.3 billion in the first half of 2024, funding $1.1 billion in capital investments and $2.8 billion returned to shareholders via buybacks and dividends.

• Continued focus on operational excellence, disciplined growth, and high shareholder returns, with an 80% year-to-date payout ratio.

Financial highlights

• Q2 2024 revenues were $34.5 billion, nearly flat year-over-year; net income was $880 million ($2.71/share), down from $1.9 billion ($5.40/share) in Q2 2023.

• Refining segment operating income was $1.2 billion (down from $2.4 billion); renewable diesel $112 million (vs. $440 million); ethanol $105 million (vs. $127 million).

• Net cash from operating activities was $2.5 billion in Q2; adjusted net cash was $1.6 billion after working capital and JV adjustments.

• Capital investments totaled $420 million in Q2 2024, with $360 million attributable to Valero.

• For the first six months, revenues were $66.2 billion (down from $70.9 billion), operating income was $2.9 billion (down from $6.8 billion), and net income was $2.1 billion (down from $5.0 billion).

Outlook and guidance

• 2024 capital investments expected at $2 billion, with $1.6 billion for sustaining and the remainder for growth, split between low-carbon fuels and refining.

• Q3 refining throughput guidance: Gulf Coast 1.77–1.82 million bpd, Mid-Continent 405–425k bpd, West Coast 235–255k bpd, North Atlantic 390–410k bpd.

• Renewable diesel sales expected at 1.2 billion gallons for 2024; ethanol production at 4.6 million gallons/day in Q3.

• Gasoline and diesel demand has returned to pre-pandemic levels and is expected to follow seasonal patterns; jet fuel demand is improving.

• Management reaffirmed a through-cycle minimum annual payout ratio of 40–50%.