DALLAS -- Alon USA Energy Inc. has announced net income of $27.5 million for the three months ended June 30, 2005, compared to net income of $15.3 million for the three months ended June 30, 2004, an increase of $12.2 million or 79.7%.
This represents the highest quarterly income in the company's history, it said. Net income for the six months ended June 30, 2005, was $49.9 million, compared to net income of $16.8 million for the six months ended June 30, 2004, an increase of $33.1 million or 197%. This represents the highest six-month period income [image-nocss] in the company's history, it added.
Operating income for the three months ended June 30, 2005, was $49.5 million, compared to operating income of $33.8 million for the three months ended June 30, 2004, an increase of $15.7 million or 46.4%. Operating income for the six months ended June 30, 2005, was $93.8 million compared to operating income of $42.6 million for the six months ended June 30, 2004, an increase of $51.2 million or 120.2%.
Alon's six-month 2005 results included a gain on disposition of assets which was related to the contribution of three product pipelines and three product terminals to Holly Energy Partners LP (HEP) in the first quarter of this year. The gain contributed $17.8 million to net income and $29.2 million to operating income for the six months ended June 30, 2005. The HEP transaction also netted Alon approximately $118 million in cash. This cash, plus an increase in cash from operating activities to $49 million for the six months ended June 30, 2005, compared to $23.9 million for the six months ended June 30, 2004, allowed Alon to retire total debt of $33.8 million in the first six months of this year. As of June 30, 2005, Alon's cash and cash equivalent balance was $168.5 million which was $10.6 million greater than its total debt balance of $157.9 million.
The first half 2005 results include the effects of a 25 day major, five- year cycle turnaround completed in the first quarter of this year at which time the Big Spring refinery's crude oil throughput capacity was increased from 62,000 barrels per day to 70,000 bpd. Due to the Big Spring refinery expansion, total refinery throughput for second-quarter 2005 increased to a record 72,107 bpd compared to 62,578 bpd for second-quarter 2004.
The second quarter results benefited from an increase in diesel/jet fuel yields compared to gasoline yields in the second quarter when average diesel and jet fuel prices were higher than average gasoline prices.
Alon's first half 2005 results have benefited from record industry refining margins and above average differentials between WTI and WTS crude oil. For the second quarter 2005, Gulf Coast 3-2-1 crack spreads increased to an average of $10.18 per barrel compared to an average of $9.09 per barrel for the second quarter 2004, and for second-quarter 2005, WTI/WTS crude differentials increased to an average of $3.74 per barrel compared to an average of $2.87 per barrel for second-quarter 2004.
Because Alon is within the SEC required 25 day "quiet period" following its initial public offering, the company will not sponsor a second quarter earnings conference call, it said.
Alon USA Energy, headquartered in Dallas, is an independent refiner and marketer of petroleum products, operating primarily in the Southwestern and South Central regions of the United States. It owns and operates a sour crude oil refinery in Big Spring, which has a crude oil throughput capacity of 70,000 bpd. Alon markets gasoline and diesel products under the FINA brand name and is a leading producer of asphalt in Texas. It also operates convenience stores in West Texas and New Mexico under the 7-Eleven and FINA brand names and supplies motor fuels to these stores from Big Spring.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.