Stacey Hudson, Investor Relations Manager
Alon USA Energy, Inc.
FOR IMMEDIATE RELEASE
Investors: Jack Lascar/ Sheila Stuewe
Dennard § Lascar Associates, LLC 713-529-6600
Media: Blake Lewis
Lewis Public Relations
SMG Public Relations
Alon USA Reports Third Quarter Results
Declares Quarterly Cash Dividend
Company schedules conference call for November 8, 2013 at 11:30 a.m. Eastern
DALLAS, TEXAS, November 7, 2013 - Alon USA Energy, Inc. (NYSE: ALJ) (“Alon”) today announced results for the third quarter of 2013. Net loss available to stockholders for the third quarter of 2013 was $(28.7) million, or $(0.47) per share, compared to net income available to stockholders of $43.2 million, or $0.76 per share, for the same period last year. Excluding special items, Alon recorded net loss available to stockholders of $(28.9) million, or $(0.47) per share, for the third quarter of 2013, compared to net income available to stockholders of $47.6 million, or $0.84 per share, for the same period last year.
Net income available to stockholders for the first nine months of 2013 was $37.0 million, or $0.56 per share, compared to net income available to stockholders of $56.9 million, or $1.01 per share, for the same period last year. Excluding special items, Alon recorded net income available to stockholders of $42.5 million, or $0.64 per share, for the first nine months of 2013, compared to net income available to stockholders of $91.3 million, or $1.62 per share, for the same period last year.
Paul Eisman, CEO and President, commented, “Our third quarter results were impacted by a volatile and deteriorating margin environment resulting primarily from decreasing discounts for West Texas crude oil. In addition, our results were affected by backwardation in the crude market and by unplanned downtime at our Big Spring Refinery during the second half of September. Versus the second quarter, higher West Texas crude oil prices negatively impacted our results by approximately $72 million with an additional $10 million negative impact resulting from crude oil backwardation. The Big Spring FCC outage during the quarter resulted in additional expenses and lost opportunity costs of approximately $12 million, or $0.10 per share. Without the FCC outage effect, the third quarter results would have been a net loss of $(0.37) per share.
“Given the dramatically increased production levels of domestic light crude oil, we remain optimistic about the prospects for domestic refining in general and for Alon USA in particular. Not only is this increased production benefiting mid-continent refineries, but it is just now beginning to impact crude oil differentials, and therefore refining margins, on the Gulf Coast. We believe the margin environment we saw during much of the third quarter was unsustainable, and we already see significant improvements in crude oil differentials and margins. However, we are not simply waiting for markets to improve as we continue to focus on executing our strategic plans and adjusting to our operating environment.
“At Big Spring, we are encouraged by the continued growth in Permian Basin crude production, and we believe the Big Spring refinery’s location in the Permian Basin will provide a sustainable long term crude sourcing advantage for the refinery as Midland priced West Texas crudes will trade at a wider spread to Brent priced crudes. Though WTI Cushing and WTS traded near parity during the third quarter, we believe this dynamic is temporary given the transportation cost to Cushing and the difference in product value between sweet and sour crudes. In the fourth quarter to date, the WTI Cushing to WTS spread has widened $4.35 per barrel to our benefit.
“At Krotz Springs, we continue to adjust our crude slate in light of changing crude price dynamics and the flexibility provided by our rail facility. The discount in LLS pricing relative to Brent reflects the growing supply of light crude oil on the Gulf Coast, which we believe will enhance the profitability of Krotz Springs going forward. The average Gulf Coast 2/1/1 high
The following information was filed by Alon Refining Krotz Springs, Inc. (ARKS) on Thursday, November 7, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.