Operations at Hawaii’s largest oil refinery contributed to a $124 million loss for Tesoro Corp. in the fourth quarter of 2011, though the company still produced a full-year profit of $546 million.
FOURTH-QUARTER LOSS
$124 million
YEAR-EARLIER PROFIT
$3 million |
San Antonio-based Tesoro, which said last month it intends to sell its refinery and chain of 32 gas stations in Hawaii, reported 2011 fourth-quarter and full-year financial results on Wednesday. The company added no new information about the sale effort.
Tesoro’s fourth-quarter loss compared with a $3 million profit in the same quarter the year before. Its profit last year represented the company’s best performance since 2007, and compared with a loss of $29 million in 2010.
Greg Goff, Tesoro president and CEO, said the banner year was largely due to increased refinery utilization, reduced manufacturing costs and a favorable spread between the cost of crude oil and the price of refined products.
That spread, however, wasn’t great in the fourth quarter, especially at the Hawaii refinery.
The spread, also known as the refining margin, was a negative $4.33 per barrel in the fourth quarter compared with a positive $4.79 a barrel in the year-earlier quarter for the Hawaii refinery.
The refinery at Campbell Industrial Park was the only one of Tesoro’s seven refineries with a negative refining margin, according to the financial report.
For all of last year, the spread at the Hawaii refinery was a positive $4.08, up from $3.77 in 2010.
Tesoro’s Hawaii plant produces about half of the state’s gasoline and feedstock for utility generators.
It also is the primary supplier of jet fuel and diesel used in cars and trucks.
Its total yield, or the amount of refined products of gas, jet fuel, diesel fuel and heavy oils, was 72,000 barrels a day last year, up from 65,000 barrels a day in 2010. The plant has a capacity of 94,000 barrels a day.
The refinery has been considered underperforming by Tesoro in recent years.
Two years ago, Tesoro, citing losses from the Hawaii plant, contemplated shutting the refinery down or converting it into a terminal from which to distribute fuel. Then last month the company announced it would seek a buyer, saying the refinery and gas stations aren’t aligned with a strategic focus on the mainland.
"While the Hawaii business is no longer in line with our vision for Tesoro’s future, there is no question that it offers value for the right investor," Goff said in a statement last month that was repeated in Wednesday’s earnings report.
Tesoro anticipates completing the sale no sooner than the second half of this year, subject to regulatory and other approvals.
Shares of Tesoro stock on the New York Stock Exchange closed on Wednesday, before the earnings announcement, at $24.84, down 19 cents from $25.03 on Tuesday.
