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Tesoro continues string with $27.7 million loss for fourth quarter Other refining operations revive, but Tesoro says geography hurt Allen Baker PNA Contributing Writer
Tesoro Petroleum Corp. added to its string of losses this year with $27.7 million in red ink for the fourth quarter, including $12.2 million in charges for losses on asset sales. The company made $4 million in the same quarter a year ago.
But since then, the San Antonio, Texas, company has racked up quarterly losses of $55.6 million, 17.9 million, $15.8 million and the current $27.7 million to post a total loss for the year of $117 million.
While some major oil companies showed profitable results from downstream operations, notably ExxonMobil and ConocoPhillips, Tesoro, along with ChevronTexaco, continued to show a loss.
Industry crack spreads in the West Coast market, where Tesoro does its business, remained flat with the third quarter, according to Tesoro CEO Bruce A. Smith, while spreads along the Gulf of Mexico and on the East Coast showed gains of over 30 percent.
Big debt looms Huge debt payments resulting from a nearly $1 billion acquisition of a refinery in California last May have hurt the company in a tough period for the industry as a whole. Under pressure from creditors, Tesoro has sold $200 million in assets, including retail outlets in Alaska and elsewhere, over the last few months. More sales are planned to cut the debt further.
Operating earnings for the quarter totaled $15.4 million, but interest and financing costs gobbled up $50.6 million, compared with $21.4 million in the 2001 quarter, resulting in the loss.
Still, depreciation was $37.8 million, so cash flow remained positive.
Debt totaled $1.98 billion at the end of 2002, up from $1.15 billion a year earlier, boosting the debt-to-capitalization ratio to 69 percent from 60 percent.
Margins remain thin Refining margin was $5.20 a barrel for the quarter, only a small decline from $5.31 a year ago, and better than the 2002 average of $4.38. That compares with $5.59 a barrel for the third quarter, though, and $5.87 a barrel in margin for 2001 as a whole.
Total refining throughput averaged 473,400 barrels a day, up from 356,800 a year ago when the company didn’t own the California refinery. For the Alaska and Washington state refineries, which the company lumps together in its operating numbers, throughput was 145,100 barrels a day, down 13 percent from the same quarter a year earlier.
On the retail end, fuel margin was 15 cents a gallon in the quarter, down a third from 22 cents a year earlier. It was a marginal improvement over 14 cents in the third quarter. Merchandise margin was 28 percent, little changed from other recent quarters.
Total fuel sales rose to 194 million gallons from 154 million, a 29 percent gain. The number of stations selling Tesoro fuel was down a little to 641 from 671 a year ago.
Revenue for the fourth quarter was $2.00 billion, up 58 percent from $1.26 billion a year earlier but down from $2.17 billion in the third quarter.
The annual revenue number was $7.12 billion, up 37 percent from the 2001 figure of $5.18 billion.
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