(Reuters) - Valero Energy Corp (VLO.N) posted a better-than-expected first quarter profit as the independent U.S. refiner benefited from higher refining margins.
Valero has a diverse set of refineries that allows it to take advantage of volatile crude price differentials and process lower-quality feedstock into high-value refined products such as gasoline and distillates.
“Our refineries are well-situated to take advantage of discounted heavy sour and domestic sweet crude oils versus Brent and to meet the growing demand for refined products in Latin America,” Chief Executive Joe Gorder said in a statement.
Valero said refining margins, or the difference between buying of crude and average selling price of refined products, rose 6.1 percent to $2.21 billion in the first quarter ended March 31.
The company reported higher refining margins at its U.S. mid-continent and West Coast regions. Gulf of Mexico and North Atlantic margins narrowed slightly.
San Antonio, Texas-based Valero has also been investing heavily in logistics assets such as pipelines and storage facilities to reduce costs and increase margins.
The company maintained its $2.7 billion capital expenditure forecast for the year.
Net income attributable to Valero shareholders rose to $469 million, or $1.09 per share, from $305 million, or $0.68 per share, a year earlier.
Excluding items, Valero earned $1 per share, beating analysts’ average estimate by 6 cents, according to Thomson Reuters I/B/E/S.
Revenue rose 21.4 percent to $26.44 billion.
Reporting by Yashaswini Swamynathan in Bengaluru; Editing by Saumyadeb Chakrabarty and Shailesh Kuber