CITGO Announces 2004 Third Quarter and Nine Months Results
Nov 2, 2004
HOUSTON, Nov. 2, 2004 -- Luis Marín, CITGO Petroleum Corporation's President and CEO, today announced third quarter net income of $205 million, almost double the 2003 third quarter net income of $103 million. For the nine months ended Sept. 30, net income was $430 million, up 22 percent from the same time period in 2003.
According to Marín, several factors contributed to CITGO’s outstanding results for this quarter:
· Demonstrated by continuing excellence in our safety performance and environmental stewardship, CITGO employees remain committed to safe and environmentally friendly operations in all areas of the business.
· With CITGO’s refineries configured to process heavy crudes, the company took full advantage of the opportunity presented by the record low market price of heavy crude relative to light crude during the third quarter. The average utilization rate of CITGO’s three fuels refineries averaged 97 percent for the quarter.
· As the price of heating oil relative to WTI crude exceeded the price of gasoline relative to WTI crude, distillate production in the third quarter increased by 18 percent over the same quarter last year.
· Asphalt sales volumes remained strong, up 27 percent from third quarter 2003 levels. For the first nine months of this year, asphalt sales volume increased 43 percent over the same time frame in 2003.
· Sales volumes for petrochemicals and industrial products increased 19 percent for the third quarter and 16 percent for the first nine months of 2004 relative to the same time periods in 2003.
· Lubricants and waxes sales volumes increased for both the third quarter and the first nine months of the year when compared with the same time periods in 2003.
In addition to these factors, other significant events include:
· On Oct. 22, 2004, CITGO issued $250 million of 6 percent unsecured senior notes due Oct. 15, 2011. With these proceeds and available cash on hand, CITGO redeemed approximately $540 million principal amount of its 11 3/8 percent senior notes due 2011.
· Both Moody’s Investors Service and Fitch Ratings upgraded CITGO’s senior unsecured debt ratings to Ba2 and BB, respectively.
· During one of the most active hurricane seasons in history, CITGO, a major supplier of transportation fuel to the state of Florida, was recognized by Gov. Jeb Bush for the company’s outstanding efforts in maintaining supply.
· The crude vacuum expansion project at the Lake Charles, La. refinery is proceeding ahead of schedule with anticipated start-up in the first quarter of 2005.
· CITGO completed negotiations with the U.S. Environmental Protection Agency (EPA) with regard to the New Source Review regulations under the Clean Air Act and has agreed to implement environmental improvement projects over the next four years with a capital cost of approximately $320 million.
“CITGO’s operational performance in the third quarter as well as the first nine months of the year has been excellent,” stated Marín. “As a result, our profitability and available cash has improved significantly, allowing us to repay debt and improve our credit ratings. With these results we expect that investor confidence in CITGO will continue to grow.”
EARNINGS CONFERENCE CALL
CITGO’s executive team will conduct a conference call on Wednesday, Nov. 3, 2004, at 1 p.m. (CST) to discuss third quarter 2004 earnings. Interested parties inside the U.S. may access the call by dialing 800-288-8967. Interested parties outside the U.S. may access the call by dialing 800-553-0273. A recorded playback of the conference call will be available beginning on Nov. 3 at 4:30 p.m. (CST) and ending on Nov. 17 at 11:59 p.m. (CST). To access the recording inside the U.S. dial 800-475-6701, access code: 753718. To access the recording outside the U.S. dial 320-365-3844, access code: 753718.
CITGO Petroleum Corporation is a leading refining and marketing company based in Houston, with approximately 4,000 employees and annual revenues of approximately $25 billion. CITGO’s ultimate parent is Petróleos de Venezuela, S.A. (PDVSA), the national oil company of the Bolivarian Republic of Venezuela and its largest supplier of crude oil. CITGO operates fuels refineries in Lake Charles, La.; Corpus Christi, Texas; and Lemont, Ill.; and asphalt refineries in Paulsboro, N.J. and Savannah, Ga. The company has long-term crude oil supply agreements with PDVSA for a portion of the crude oil requirements at these facilities. CITGO is also a 41 percent participant in LYONDELL-CITGO Refining LP, a joint venture fuels refinery located in Houston. CITGO’s interests in these refineries result in a total crude oil capacity of approximately 865,000 barrels per day.
Serving nearly 14,000 branded, independently owned and operated retail locations, CITGO is also one of the five largest branded gasoline suppliers within the United States.
FORWARD LOOKING STATEMENTS
Except for the historical information contained in this release, certain of the matters discussed in this release may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such as “anticipate,” “estimate,” “expect,” “project,” “believe” and similar expressions generally identify a forward-looking statement. The factors that could cause actual results to differ materially from the forward-looking statements include general economic activity, developments in international and domestic petroleum markets, refinery turnarounds and operations as well as the other factors identified in our filings with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this release. We disclaim any duty to update any forward-looking statements.