HOUSTON - Vertex Energy, Inc. (NASDAQ:VTNR), a specialty refiner and marketer of high-quality refined products, today announced updated financial and operational guidance for the second quarter of 2024, indicating expected reductions in direct operating expenses and capital expenditures, along with consistent conventional and renewable fuel production.
The Houston-based company expects a 7% decrease in direct operating expenses to between $3.90 and $4.10 per barrel, and a 29% reduction in capital expenditures, now forecasted to be between $15 million and $17 million. These figures represent significant savings compared to previous mid-point guidance.
In terms of production, Vertex (NASDAQ:VRTX) anticipates conventional throughput at its Mobile Refinery in Alabama to be around 68,000 barrels per day (bpd), which is at the lower end of the previously provided guidance range of 68,000 to 72,000 bpd. Despite market challenges, the company has maintained a consistent capacity utilization rate of 89-91% for conventional fuels and a finished product yield profile of 64-68%.
Renewable diesel production is also expected to align with prior guidance, with an estimated throughput of approximately 3,000 bpd. The company has completed a planned shutdown of its hydrotreater, ceasing production of renewable diesel, and is now focusing on conventional fuel production.
Key commodity price averages for the second quarter in local markets served by Vertex include Conventional Blendstock for Oxygenate Blending (CBOB) gasoline at $96.53 per barrel, ultra-low sulfur diesel at $102.58 per barrel, jet fuel at $103.33 per barrel, and Louisiana Light, Sweet Crude oil at $83.69 per barrel.
Vertex Energy's CEO, Benjamin P. Cowart, expressed satisfaction with the company's performance, noting that it aligns with guidance and reflects a commitment to improving margins, reducing costs, and operating efficiently.
The information provided in this article is based on a press release statement from Vertex Energy, Inc. Investors should note that all forward-looking statements are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially from those projected.
InvestingPro Insights
As Vertex Energy, Inc. (NASDAQ:VTNR) strives to improve its financial position by reducing direct operating expenses and capital expenditures, it is important to consider additional metrics that provide a broader picture of the company's performance.
According to InvestingPro, the company's market capitalization currently stands at $103.33 million, indicating its size in the competitive industry landscape. Furthermore, the firm's price-to-earnings (P/E) ratio is notably negative at -0.69 for the last twelve months as of Q1 2024, underscoring the challenges it faces in achieving profitability.
InvestingPro Tips reveal that analysts have recently revised their earnings upwards for the upcoming period, suggesting that there may be optimism about the company's future performance. Moreover, it is worth noting that the company has experienced a significant return over the last week, with a price total return of 48.85%. This could reflect a positive market response to the company's latest operational updates or other external factors influencing investor sentiment.
Investors interested in a deeper analysis can find an additional 11 InvestingPro Tips for VTNR, which can be accessed with a subscription. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Despite recent gains, it's important to recognize that Vertex Energy operates with a significant debt burden and has been quickly burning through cash, as highlighted by InvestingPro Tips. Moreover, the company is trading at a low revenue valuation multiple, with a revenue of $3,181.37 million and a gross profit margin of 4.49% for the last twelve months as of Q1 2024. These figures may raise concerns about the company's financial sustainability and its ability to generate sufficient cash flows in the near term.
Investors should consider these insights alongside the company's operational guidance to better understand the potential risks and opportunities associated with Vertex Energy. As always, forward-looking statements should be taken with caution, and a thorough due diligence process is recommended before making any investment decisions.
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