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CVR Refining Reported Strong 3Q17 Results, Stock Rose 11%

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CVR Refining Reported Strong 3Q17 Results, Stock Rose 11% PART 1 OF 2

CVR Refining Announced Distributions after 7 Quarters

Earnings rise

CVR Refining (CVRR) reported its 3Q17 results on November 1, 2017. The company’s adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) for the quarter rose to $138.6 million from $75.3 million in 3Q16. Higher throughput volumes contributed to CVR Refining’s earnings in 3Q17. The refinery throughput of crude oil and other feedstocks was 213,606 bpd (barrels per day) in 3Q17—compared to 206,733 bpd in 3Q16.

CVR Refining Announced Distributions after 7 Quarters

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Improved refining margins helped CVR Refining’s performance during the quarter. We’ll discuss the company’s refining margins in the next part of the series.

The above graph shows the available cash for distribution, capital expenditures, and per unit distribution for CVR Refining over the last 11 quarters. As the graph shows, CVR Refining produced positive available cash for distribution after seven quarters.

Distributions

CVR Refining announced a per unit distribution of $0.94 for 3Q17. As the above graph shows, CVR Refining announced a distribution after seven quarters. It’s a variable distribution MLP.

The total capital expenditure for 3Q17 was ~$18.7 million. CVR Refining expects total capital spending of ~$110 million in 2017.

RIN costs

The RIN (renewable identification number) costs continued to have a negative impact on CVR Refining’s performance for the quarter. “However, the over-priced and volatile RIN price continue to adversely affect our business. Unless the Administration and EPA step up to fix this broken program, the future viability of merchant refiners will continue to be at risk,” said Jack Lipinski, CVR Refining’s CEO.

Blaming the Trump Administration for not doing enough on this front, Lipinski said on the 3Q17 earnings call, “I find this troubling because the RINs system is contrived and manipulated, and I’m also surprised that the Trump administration caved and failed to drain the swamp as promised.”

To learn more about RINs and how they have been impacting CVR Refining, read How Higher Costs Weakened CVR Refining’s Q2 Numbers.

Alon USA Partners (ALDW) is scheduled to report its 3Q17 results on November 9, 2017. Calumet Specialty Products Partners (CLMT) will report its results on November 10, 2017.

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