Western Refining profit nearly triples in early 2015 as demand, margins rise

Western Refining reported first-quarter net income, excluding special items, of $113.3 million, up from $40.3 million in the same period of 2014, the El Paso, Texas-based refiner said on Tuesday. 

Including special items, the company recorded first quarter 2015 net income of $106.0 million, as compared to net income attributable to Western of $85.5 million for the first quarter of 2014.

Special items in the first quarter of 2015 consisted primarily of a non-cash, unrealized pre-tax hedging loss of $20.1 million and a non-cash lower of cost or market inventory adjustment of $15.7 million.

"The first quarter was an outstanding start to 2015 for Western, both operationally and financially," said Jeff Stevens, Western's CEO. "Our refineries operated very well, margins were good, and expenses were in line with expectations. In our retail business, we saw an increase in fuel volumes and merchandise sales. In April, we completed the line fill on the TexNew Mex pipeline and began flowing crude oil from the Four Corners region to our Delaware Basin system."

During the first quarter, Western paid a dividend of $0.30/share of common stock and repurchased approximately $25 million shares of common stock totaling approximately $54 million in cash to shareholders in the first quarter ending March 31.

In April, Western's Board of Directors approved a $0.34/share dividend for the second quarter, a 13% increase over the first quarter dividend.

"Building on momentum from the first quarter, the second quarter is off to an exceptionally strong start," Stevens said. "In the southwest US, gasoline demand is up and we are seeing strong gasoline margins in the second quarter. We began construction of the Bobcat pipeline which should be completed later in 2015 and will allow us to enhance the Delaware Basin assets by moving crude oil barrels eastward.

"Overall, Western is well positioned to have another very successful year," he said.