When you visit your local CITGO to fill-up with gas, grab a snack, a hot cup of coffee, some groceries, and your breakfast, lunch or dinner, you're walking into a locally owned and operated business.
HOUSTON, May 7, 2021 /PRNewswire/ -- Despite the unprecedented challenge COVID-19 presented for refiners, CITGO Petroleum Corporation continued to make strong progress in optimizing operational performance, aggressively managing costs and building on strategic initiatives to strengthen corporate governance, compliance and business ethics. CITGO results for FY 2020 were heavily affected by ongoing pandemic-driven market challenges affecting the entire refining sector – and the impact of two Gulf Coast hurricanes.
The CITGO Petroleum Corporation Board of Directors recently reviewed the Company's 2020 fourth quarter and annual financial results with the PDVSA Ad Hoc board. Since 2019, the new CITGO Board and management team have remained committed to transparency and are releasing publicly the Company's first annual results and performance report in nearly 15 years. The report can be accessed here.
"2020 presented CITGO with a series of unprecedented challenges," said President and CEO Carlos Jordá. "Our ability to persevere – through the COVID pandemic, hurricanes and the recent severe winter storm with widespread utility outages – and still enhance our operational performance, safety and corporate governance is again a testament to the dedication and professionalism of all our employees. Thanks to these efforts, we believe CITGO is well-positioned to take advantage of anticipated improvements in market conditions in 2021."
The Company reported a net loss of approximately $(255) million for the fourth quarter of 2020, along with EBITDA1 of approximately $(264) million and adjusted EBITDA of approximately$(204) million. For the year ended December 31, 2020, the Company reported a net loss of approximately $(667) million, along with EBITDA of approximately $(328) million and adjusted EBITDA of approximately$(432) million.
The Lake Charles refinery was safely shutdown and restarted twice in 2020 due to the impacts of Hurricanes Laura and Delta, which struck the Gulf Coast within six weeks of each other. In both cases the refinery experienced no safety issues or hydrocarbon releases arising from the direct impact of the storms.
"The efforts of our Lake Charles employees – executing hurricane shutdown and restart procedures twice amidst a global pandemic – were nothing short of extraordinary," said CEO Carlos Jordá.
Throughout the year, the Company achieved record-setting performance in both safety and environmental. Specifically, in the area of OSHA occupational safety incidents, 2020 marked the Company's best performance over the last five years and also represented the best year ever for process safety as measured by API process safety standards. Similarly, 2020 was the best year ever for environmental performance after a record-setting performance in 2019, calculated using a combination of metrics such as overall criteria air emissions, number of reportable releases to air and water, and specific types of operational deviations.
In addition to the continued emphasis on safety and environmental performance, the CITGO Board of Directors and management team have made corporate governance, compliance and business ethics a continued priority. Important milestones in these areas were achieved in 2020, most notably the appointment of a Chief Compliance & Ethics Officer, updating the Company's code of business conduct and the issuance of the Company's first-ever ESG report.
Q4 and Full Year 2020 Highlights:
Notable personnel changes:
COVID-19 and its development into a pandemic in March 2020 created significant economic disruption throughout the year, with full-year real GDP growth expected to contract by 3.5% relative to the previous year. The refining industry realized the worst of the crisis in the second quarter, as product demand and refinery utilization reached their lowest points. While recovery has been bumpy, market conditions indicated some improvements in the latter part of the year, as the number of new cases declined, some restrictions eased and vaccines emerged on the horizon. Changes in key drivers during the year include the following:
"While we remain cautiously optimistic that these key drivers will steadily improve this year as the vaccinated population continues to grow, at the same time we will continue to aggressively manage our costs and liquidity. We believe this proactive approach will better position us for additional challenges that 2021 may bring," concluded Jordá.
Headquartered in Houston, Texas, CITGO Petroleum Corporation owns and operates three large-scale, highly complex refineries, with a combined crude capacity of approximately 769,000 barrels-per-day, located in Lake Charles, La.; Lemont, Ill.; and Corpus Christi, Texas, has ownership/equity interest in 40 active refined product storage and transfer terminals, and has access to over 120 third-party and related party terminals through exchange, terminaling and similar arrangements. CITGO Petroleum Corporation is owned by CITGO Holding, Inc.
Certain information included in this release may be deemed to be "forward-looking statements" under applicable securities and other laws that involve risks and uncertainties. These statements relate to, among other things, expectations regarding our industry, business strategy, goals and expectations concerning our market position and future operations or performance. We have used the words "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "will," "would" and similar terms and phrases to identify forward-looking statements, which speak only as of the date of this release.
Any forward-looking statements are not guarantees of future events and are subject to risks and uncertainties that could cause actual events, developments and business decisions to differ materially from those contemplated by these forward-looking statements. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions (including current market conditions), expected future developments and other factors they believe to be appropriate. Although we believe the assumptions upon which these forward-looking statements are based are reasonable, any of these assumptions could prove to be inaccurate, and the forward-looking statements based on these assumptions could be incorrect. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or could otherwise materially affect our financial condition, results of operations and cash flows. We caution readers that these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the results that are projected, expressed or implied. These risks and uncertainties include, among others, risks related to the effects of the ongoing COVID-19 pandemic, general economic activity, developments in international and domestic petroleum markets, and refinery turnarounds and operations. Readers are cautioned not to place undue reliance on these forward-looking statements.
The forward-looking statements contained in this release are made only as of the date of this release. We disclaim any duty to update any forward-looking statements.
Reconciliation of net income (loss) to Adjusted EBITDA
(unaudited, in millions of U.S. dollars)
Three Months Ended
Net income (loss)
Interest expense, including finance lease
Income tax expense (benefit)
Depreciation and amortization
Amortization of loan origination fees in interest
Insurance litigation recovery - Athos
Litigation recovery - credit card interchange fees
LIFO inventory permanent dip impact
Hurricane Laura expenses, net of insurance recoveries
Loss on early extinguishment of debt
Gerd inventory impairment
PDVIC insurance recovery impairment
Litigation judgement - 303 hydraulic fluid
Property impairments and loss on retirement of assets
The primary items affecting adjusted EBITDA during 2020 and 2019 were:
1 EBITDA and Adjusted EBITDA are non-GAAP financial measures. Please see the reconciliation at the end of this press release for more information.
SOURCE CITGO Corporation