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PARSIPPANY, N.J. - PBF Energy Inc. (NYSE: PBF), currently trading near its 52-week low of $18.97 and down over 56% in the past year according to InvestingPro data, announced plans to resume operations at its Martinez, California refinery, which was shut down after a fire on February 1, 2025. The refinery, with a capacity of 157,000 barrels per day, will restart in two phases, with some units including the crude unit expected to begin operations early in the second quarter of 2025. The remaining units should be operational by the fourth quarter of 2025.
During the initial phase, the refinery is projected to process between 85,000 to 105,000 barrels per day and produce limited amounts of gasoline, jet fuel, and intermediates. The timing of the restart is subject to various factors, such as regulatory permits and the availability of critical equipment.
PBF Energy anticipates that the cost of repairs and the restoration of full refinery operations will be predominantly covered by insurance, after a deductible and retentions of $30 million. The company also expects that its business interruption insurance will significantly mitigate the financial impact of the downtime, covering ongoing costs and potential lost margin opportunities from April 3, 2025, until full operations resume.
President and CEO of PBF, Matt Lucey, expressed the company’s commitment to a safe and environmentally responsible restoration of the refinery. He acknowledged the efforts of first responders during the fire and apologized for the inconvenience caused to the community. Lucey thanked the employees, contractors, and advisors involved in the recovery process and emphasized the refinery’s role in supplying critical transportation fuels, particularly to the California market.
This update is based on a press release statement from PBF Energy Inc., which is one of North America’s largest independent refiners. The company, along with its subsidiaries, operates oil refineries and related facilities across several states and is also a 50% partner in the St. Bernard Renewables joint venture, focusing on sustainable fuel production. Despite current challenges, including a gross profit margin of just 1.11%, InvestingPro’s Fair Value analysis suggests the stock may be undervalued. Investors can access the complete Pro Research Report, along with 12 additional ProTips and extensive financial metrics, through an InvestingPro subscription.
In other recent news, PBF Energy’s fourth-quarter earnings for 2024 fell short of expectations, reporting an earnings per share (EPS) of -$2.82 against a forecast of -$1.97. Revenue also missed projections, coming in at $7.35 billion compared to the anticipated $7.76 billion. The company’s financial performance was impacted by a fire at the Martinez refinery, leading to a complete shutdown of operations at this facility, which represents 15% of PBF Energy’s total capacity. JPMorgan and TD Cowen have both revised their price targets for PBF Energy, with JPMorgan lowering it to $31 and TD Cowen reducing it to $19, both citing concerns about the Martinez refinery’s shutdown and the company’s financial outlook.
Analysts from TD Cowen have projected that if the Martinez facility remains closed for the entire first quarter, it could result in a financial headwind of approximately $100 million, with additional costs of $20 million for each subsequent month of closure. PBF Energy’s fourth-quarter results were further affected by a weak margin environment, a challenge faced by many in the industry. The company is focusing on a $200 million business improvement plan, targeting cost savings in areas such as energy usage and turnaround. Despite these challenges, PBF Energy maintains a strong balance sheet and is committed to achieving its cost-saving goals by the end of 2025.
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