Delek US Holdings Inc. (NYSE:DK) reported a near quadrupling of profit for the first quarter of 2012. The company reported net profit from continuing operations of $46.2 million ($0.79 per share) compared with net profit of $16.9 million ($0.31 per share) in the corresponding quarter 2011.
Delek US Holdings president and CEO Uzi Yemin said "Today, we reported the best first quarter financial results in the history of the company, supported by significant contributions from the company's refining segment. The location of our refineries, in particular the Tyler refinery, allows us to access substantial volumes of WTI-linked crude oil, including discounted crude sourced from the Midland crude hub. In addition, we sell most of our light products based upon US Gulf Coast prices which have remained elevated in recent months. Together, the Tyler and El Dorado refineries sold more than 141,000 barrels per day, exceeding our overall crude nameplate capacity, taking advantage of improved refining margins and increased asphalt prices in our markets."
The company reported that crude oil differentials widened during the first quarter of 2012, as illustrated by a marked disparity between the price of West Texas Intermediate (WTI) and other crude oils. This positively impacted the benchmark Gulf Coast 5-3-2 crack spread, which averaged $23.87 per barrel during the first quarter 2012, compared with $17.54 per barrel in the first quarter of 2012.
In the first quarter, Delek US completed the acquisition of the Nettleton crude oil pipeline for $12.3 million, which is connected directly to its Tyler refinery and had previously been leased. This line carries half of the crude oil processed in Tyler. Delek US also acquired a light products terminal in Big Sandy, Texas, and an associated pipeline for $11 million. The Big Sandy terminal will provide additional flexibility in marketing the Tyler refinery's finished products once it is re-commissioned.
As of March 31, 2012, Delek US had $235.1 million in cash and $441.2 million in debt, resulting in a net debt position of $206.1 million.
Yemin said, "We have made significant investments to expand our midstream businesses and improve our refining assets over the last year to better position the company for long-term success. At the same time, we have also demonstrated our commitment to shareholders by recently announcing our second special dividend in the last two quarters. As we continue to generate significant cash flow, we remain excited about our opportunities to deliver additional value to shareholders in the future."
Published by Globes, Israel business news - www.globes-online.com - on May 3, 2012
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