PBF Energy Inc. (PBF) Bundle
Understanding PBF Energy Inc. (PBF) Revenue Streams
Understanding PBF Energy Inc.’s Revenue Streams
As of 2024, PBF Energy Inc. has diversified revenue streams primarily from its refining and logistics operations. The company reported total revenues of $25,764.0 million for the nine months ended September 30, 2024, compared to $29,186.1 million for the same period in 2023, reflecting a decrease of 11.0%.
| Period | Total Revenues (in millions) | Year-over-Year Change (%) |
|---|---|---|
| Q3 2024 | $25,764.0 | -11.0% |
| Q3 2023 | $29,186.1 | N/A |
Breakdown of Primary Revenue Sources
The revenue generation for PBF Energy can be segmented into refining and logistics. In 2024, the refining segment contributed $25,735.8 million to total revenues, while logistics added $289.2 million, with intersegment eliminations accounting for $(261.0) million.
| Segment | Revenue (in millions) |
|---|---|
| Refining | $25,735.8 |
| Logistics | $289.2 |
| Eliminations | $(261.0) |
Year-over-Year Revenue Growth Rate
Analyzing the year-over-year growth rate, PBF Energy experienced a significant decline in revenue. The total revenue for the nine months ended September 30, 2024, was $25,764.0 million, down from $29,186.1 million in the same period of 2023, marking a decrease of 11.0%.
Contribution of Different Business Segments to Overall Revenue
The refining segment remains the dominant contributor to revenue. For the nine months ended September 30, 2024, refining represented approximately 99.9% of total revenues, while logistics contributed less than 1.2%.
| Segment | Revenue Contribution (%) |
|---|---|
| Refining | 99.9% |
| Logistics | 1.2% |
Analysis of Significant Changes in Revenue Streams
The significant change in revenue streams can be attributed to several factors, including fluctuating refining margins and throughput volumes. For the nine months ended September 30, 2024, the gross refining margin was reported at $2,069.0 million, a notable decrease from $4,489.1 million in the prior year, indicating the impact of lower crude oil prices and reduced demand.
| Period | Gross Refining Margin (in millions) |
|---|---|
| 2024 | $2,069.0 |
| 2023 | $4,489.1 |
Furthermore, throughput volumes decreased slightly, with an average of 927.2 thousand bpd for the nine months ended September 30, 2024, compared to 919.6 thousand bpd in the same period of 2023.
| Period | Average Throughput (thousand bpd) |
|---|---|
| 2024 | 927.2 |
| 2023 | 919.6 |
A Deep Dive into PBF Energy Inc. (PBF) Profitability
Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross margin was $(288.2) million, compared to $1,227.8 million for the same period in 2023, indicating a significant decline. The gross refining margin was $429.6 million, or $5.00 per barrel of throughput for Q3 2024, down from $1,923.1 million or $22.24 per barrel in Q3 2023.
Operating Profit Margin: The operating income (loss) for the three months ended September 30, 2024 was $(386.3) million, compared to $1,077.1 million in Q3 2023.
Net Profit Margin: The net loss for Q3 2024 was $(289.1) million, translating to a net income loss available to common stockholders of $(285.9) million, or $(2.49) per diluted share. In contrast, for Q3 2023, the net income was $794.1 million, or $6.11 per diluted share.
Trends in Profitability Over Time
In the nine months ended September 30, 2024, the net loss was $(247.6) million, whereas for the same period in 2023, the net income was $2,210.4 million. This shift indicates a drastic change in profitability.
Comparison of Profitability Ratios with Industry Averages
The gross profit margin for the nine months ended September 30, 2024, was $(63.7) million, compared to $2,314.6 million for the same period in 2023. The average industry gross margin typically hovers around 10%-15% depending on market conditions, suggesting that the company is currently underperforming relative to its peers.
Analysis of Operational Efficiency
Operational efficiency can be assessed through the gross margin per barrel of throughput, which was $(3.35) for Q3 2024, a stark contrast to $14.20 for Q3 2023. The refining operating expense per barrel for the nine months ended September 30, 2024, was $7.39, compared to $7.80 for the same period in 2023.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Margin | $(288.2) million | $1,227.8 million | $(63.7) million | $2,314.6 million |
| Gross Refining Margin | $429.6 million | $1,923.1 million | $2,069.0 million | $4,489.1 million |
| Operating Income (Loss) | $(386.3) million | $1,077.1 million | $(315.8) million | $2,998.7 million |
| Net Income (Loss) | $(289.1) million | $794.1 million | $(247.6) million | $2,210.4 million |
| Net Income (Loss) per Diluted Share | $(2.49) | $6.11 | $(2.09) | $16.76 |
Overall, the significant declines in gross and net profit margins reflect challenges in operational efficiency and cost management, compounded by unfavorable market conditions affecting refining margins.
Debt vs. Equity: How PBF Energy Inc. (PBF) Finances Its Growth
Debt vs. Equity: How PBF Energy Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, PBF Energy Inc. reported total debt of $1,254.4 million, compared to $1,245.9 million at December 31, 2023. The company’s net debt stood at $277.7 million during the same period, reflecting a significant change from $(537.6 million) at the end of the previous year, indicating a shift in liquidity management.
Debt-to-Equity Ratio
The debt-to-equity ratio for PBF Energy Inc. is calculated as follows: Total debt of $1,254.4 million divided by total equity of $6,019.6 million yields a debt-to-equity ratio of approximately 0.21. This is below the industry average of approximately 0.5, suggesting a more conservative leverage position compared to peers in the energy sector.
Recent Debt Issuances and Refinancing Activity
PBF Energy has been active in managing its debt portfolio. In 2023, the company redeemed its 2025 Senior Notes, incurring a loss on extinguishment of debt amounting to $5.7 million. Additionally, the issuance of 2030 Senior Notes was completed, contributing to a reduction in overall interest expenses, which totaled $49.2 million for the nine months ended September 30, 2024, down from $55.2 million the previous year.
Credit Ratings
As of September 30, 2024, PBF Energy holds a credit rating that reflects its financial stability and capacity to meet obligations, though specific ratings were not detailed in the provided financial statements. The company's operational liquidity was reported at over $3.4 billion, including $927.0 million in cash and approximately $2.5 billion available under its revolving credit facility.
Balancing Debt Financing and Equity Funding
PBF Energy maintains a strategic balance between debt and equity financing to support its growth initiatives. As of September 30, 2024, total equity amounted to $6,019.6 million, reflecting a decrease from $6,631.3 million at the end of the previous year. This decrease in equity is attributed to net losses and other comprehensive losses during the period.
| Financial Metric | As of September 30, 2024 | As of December 31, 2023 |
|---|---|---|
| Total Debt | $1,254.4 million | $1,245.9 million |
| Net Debt | $277.7 million | $(537.6 million) |
| Total Equity | $6,019.6 million | $6,631.3 million |
| Debt-to-Equity Ratio | 0.21 | 0.19 |
| Interest Expense | $49.2 million | $55.2 million |
| Operational Liquidity | $3.4 billion | $4.6 billion |
In summary, PBF Energy Inc. demonstrates a strategic approach to managing its debt and equity structure, reflecting a commitment to maintaining financial health while navigating industry challenges.
Assessing PBF Energy Inc. (PBF) Liquidity
Assessing Liquidity and Solvency
Current Ratio: As of September 30, 2024, the current ratio was 1.33, calculated from total current assets of $5,109.3 million and total current liabilities of $3,825.5 million.
Quick Ratio: The quick ratio, which excludes inventory, was approximately 0.99 as of September 30, 2024, reflecting a strong liquidity position despite potential inventory liquidations.
Analysis of Working Capital Trends
Working capital at September 30, 2024, was $1,283.8 million, down from $2,379.3 million at December 31, 2023. The decline indicates tighter liquidity, attributed to increased current liabilities and reduced current assets.
Cash Flow Statements Overview
| Cash Flow Category | 2024 (in millions) | 2023 (in millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | $373.1 | $1,032.6 |
| Net Cash Used in Investing Activities | $(805.0) | $(105.8) |
| Net Cash Used in Financing Activities | $(374.9) | $(1,237.9) |
The operating cash flow decreased significantly from $1,032.6 million in 2023 to $373.1 million in 2024, reflecting operational challenges. Investing activities saw a substantial increase in cash outflows due to capital expenditures.
Potential Liquidity Concerns or Strengths
As of September 30, 2024, operational liquidity was reported at more than $3.4 billion, including $927.0 million in cash and approximately $2.5 billion in available borrowing under the Revolving Credit Facility. Outstanding letters of credit stood at approximately $62.5 million, indicating a manageable level of contingent liabilities. However, the decrease in working capital signals a need for careful cash management moving forward.
Is PBF Energy Inc. (PBF) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company involves several key metrics that help determine whether it is overvalued or undervalued in the current market. This includes examining the price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, along with stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
As of September 30, 2024, the diluted earnings per share (EPS) was $(2.49). The stock price was approximately $31.25, giving a P/E ratio of -12.55. This negative ratio indicates that the company is currently experiencing a net loss, which can suggest undervaluation relative to its earnings potential if the losses are temporary.
Price-to-Book (P/B) Ratio
The book value per share is $52.20, with total equity reported at $6,019.6 million as of September 30, 2024. The stock price of $31.25 results in a P/B ratio of 0.6, indicating that the stock is trading below its book value, which could suggest it is undervalued in the market.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as market capitalization plus total debt minus cash. Assuming total debt of $1,254.4 million and cash and equivalents of $927.0 million, the EV is approximately $7,346.7 million. The EBITDA for the last 12 months was approximately $150.4 million, leading to an EV/EBITDA ratio of 48.8, indicating a high valuation relative to earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the last 12 months, the stock price has seen significant fluctuations. The stock reached a high of $45.00 and a low of $25.00. As of September 30, 2024, the price was $31.25, reflecting a decrease of approximately 30% from its 12-month high, suggesting a bearish trend in the market.
Dividend Yield and Payout Ratios
The company declared a dividend of $0.275 per share on October 31, 2024, payable on November 27, 2024. With a current stock price of $31.25, the dividend yield is approximately 0.88%. The payout ratio is not directly calculable as the company reported a net loss; thus, the sustainability of future dividends may be in question.
Analyst Consensus on Stock Valuation
Analysts currently have varying opinions on the stock. The consensus rating includes 4 Buy, 3 Hold, and 2 Sell recommendations. The average target price set by analysts is around $35.00, indicating a potential upside of approximately 12% from the current market price of $31.25.
| Metric | Value |
|---|---|
| P/E Ratio | -12.55 |
| P/B Ratio | 0.6 |
| EV/EBITDA | 48.8 |
| 12-Month High | $45.00 |
| 12-Month Low | $25.00 |
| Current Stock Price | $31.25 |
| Dividend Declared | $0.275 |
| Dividend Yield | 0.88% |
| Analyst Consensus | 4 Buy, 3 Hold, 2 Sell |
| Average Target Price | $35.00 |
Key Risks Facing PBF Energy Inc. (PBF)
Key Risks Facing PBF Energy Inc.
Overview of Risks
PBF Energy Inc. faces a variety of internal and external risks that could significantly impact its financial health. These risks include industry competition, regulatory changes, and fluctuating market conditions, particularly in the energy sector.
Industry Competition
The refining industry is highly competitive, with numerous players vying for market share. As of September 30, 2024, the company reported a net loss of $289.1 million for the third quarter of 2024, compared to a net income of $794.1 million in the same quarter of 2023. This stark change illustrates the pressure from competitive pricing and market dynamics.
Regulatory Changes
Regulatory compliance presents a significant risk. The company is subject to stringent environmental regulations that could lead to increased operational costs. Non-compliance could result in substantial fines and operational disruptions. The company must also purchase Renewable Identification Numbers (RINs) to comply with the Renewable Fuel Standard (RFS), which creates additional financial obligations due to market volatility in credit prices.
Market Conditions
- Fluctuations in crude oil prices directly affect profit margins. The average cost of hydrocarbon inventories was approximately $84.62 per barrel as of September 30, 2024.
- The company's gross refining margin significantly decreased to $429.6 million in Q3 2024 from $1,923.1 million in Q3 2023.
Operational Risks
Operational risks include the dependency on a limited number of suppliers for crude oil and feedstocks. Any disruption in supply could impact production levels. The company has agreements with major suppliers, including a year-to-year crude supply agreement with Saudi Aramco, covering up to 100,000 bpd.
Financial Risks
Financial risks are compounded by the company’s debt levels. As of September 30, 2024, PBF Energy reported total debt of $1,254.4 million against total equity of $6,019.6 million. The total debt to capitalization ratio stood at 17%. Additionally, a 1% increase in interest rates could potentially increase annual interest expenses by approximately $23.6 million.
Mitigation Strategies
The company employs various strategies to mitigate these risks:
- Utilizing a diversified supplier base to reduce dependency on any single source.
- Implementing rigorous compliance programs to adhere to regulatory requirements and minimize potential fines.
- Maintaining operational liquidity of over $3.4 billion as of September 30, 2024, to ensure sufficient cash flow for operational needs.
Table of Financial Metrics
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (Loss) | $(289.1 million) | $794.1 million |
| Gross Refining Margin | $429.6 million | $1,923.1 million |
| Total Debt | $1,254.4 million | $1,245.9 million |
| Total Equity | $6,019.6 million | $6,631.3 million |
| Total Debt to Capitalization Ratio | 17% | 16% |
Future Growth Prospects for PBF Energy Inc. (PBF)
Future Growth Prospects for PBF Energy Inc.
Key Growth Drivers:
- Product Innovations: Ongoing investment in renewable diesel facilities, with capital expenditures of $770.9 million for the nine months ended September 30, 2024, focused on safety enhancements and facility improvements.
- Market Expansions: Crude supply agreements with Saudi Aramco for up to 100,000 bpd and Shell Trading for 65,000 bpd through 2026.
- Acquisitions: Strategic partnerships and investments in logistics to enhance operational efficiencies and expand market reach.
Future Revenue Growth Projections:
Projected revenues are expected to recover as refining margins stabilize. For the nine months ended September 30, 2024, revenues were $25,764.0 million, down from $29,186.1 million in the same period of 2023. Earnings estimates suggest a move towards profitability with anticipated improvements in crude oil prices and processing margins.
Strategic Initiatives:
- Expansion of refining capacity, aiming for increased throughput. As of September 30, 2024, throughput was 935.6 bpd, a slight decrease from 939.7 bpd in 2023.
- Investment in environmental compliance and regulatory requirements to enhance operational capabilities and sustainability.
Competitive Advantages:
- Strong operational liquidity of over $3.4 billion as of September 30, 2024, providing a buffer for investment and growth.
- Robust refining margin performance, with a gross refining margin of $429.6 million for the three months ended September 30, 2024.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income (Loss) | ($289.1 million) | $794.1 million |
| Gross Refining Margin | $429.6 million | $1,923.1 million |
| Capital Expenditures | $770.9 million | $940.3 million |
| Operational Liquidity | $3.4 billion | $4.6 billion |
Overall, PBF Energy Inc. is positioned to leverage its operational strengths and strategic initiatives to capitalize on future growth opportunities within the energy sector.
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Article updated on 8 Nov 2024
Resources:
- PBF Energy Inc. (PBF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PBF Energy Inc. (PBF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View PBF Energy Inc. (PBF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.