MOSCOW (MRC) -- Phillips 66, a diversified energy manufacturing and logistics company, has announced third-quarter 2021 earnings of US402 million, compared with earnings of USD296 million in the second quarter of 2021, as per the company's press release.
Excluding special items of USD1.0 billion, primarily an impairment of the Alliance Refinery following Hurricane Ida, the company had adjusted earnings of USD1.4 billion in the third quarter, compared with second-quarter adjusted earnings of USD329 million.
“In the third quarter, we delivered a significant improvement in earnings and cash generation,” said Greg Garland, Chairman and CEO of Phillips 66. “Our Midstream, Chemicals, and Marketing and Specialties businesses continued to deliver strong results. In Refining, we saw a notable improvement in realized margins, operated well and navigated hurricane-related challenges.
“So far this year we have reduced debt by USD1 billion, further strengthening our balance sheet. We recently increased the dividend, reflecting our confidence in the company’s strategy and cash flow recovery, as well as our commitment to a secure, competitive and growing dividend. We will continue to focus on debt repayment, disciplined capital allocation, and delivering attractive shareholder returns.
“Earlier this week we announced an agreement to buy-in Phillips 66 Partners. The transaction simplifies our structure and asset ownership across our integrated portfolio. We believe both PSX shareholders and PSXP unitholders will benefit from the combination.
“In addition, we recently announced our greenhouse gas emissions intensity reduction targets, demonstrating our commitment to sustainable providing energy today and in the future. Our targets are measurable, achievable and meaningful. We believe achieving the targets will drive value for shareholders and other stakeholders. We are expanding our presence in the battery supply chain through our investment in NOVONIX and announced a collaboration with Plug Power to identify and advance green hydrogen opportunities. We will continue to focus on lower-carbon initiatives that generate strong returns.”
The Chemicals segment reflects Phillips 66’s equity investment in Chevron Phillips Chemical Company LLC (CPChem). Chemicals third-quarter 2021 pre-tax income was USD631 million, compared with USD623 million in the second quarter of 2021. Chemicals results in the third quarter included a USD2 million reduction to equity earnings for pension settlement expense and USD1 million of maintenance and repair costs related to Hurricane Ida. Second-quarter results included an USD18 million reduction to equity earnings for pension settlement expense and USD16 million of winter-storm-related maintenance and repair costs.
CPChem’s Olefins and Polyolefins (O&P) business contributed USD613 million of adjusted pre-tax income in the third quarter, compared with USD593 million in the second quarter. The USD20 million increase was primarily due to higher polyethylene sales volumes driven by continued strong demand, partially offset by higher utility costs. Global O&P utilization was 102% for the quarter.
CPChem’s Specialties, Aromatics and Styrenics (SA&S) business contributed third-quarter adjusted pre-tax income of USD37 million, compared with USD82 million in the second quarter. The decrease was driven by lower margins.
As MRC informed earlier, US Refiner Phillips 66 said on 30 September it would cut greenhouse gas emissions by 30% from its operations by 2030, amid mounting pressure on the industry to join the fight against climate change and cut carbon emissions by mid-century.
We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Headquartered in Houston, the company has 14,100 employees committed to safety and operating excellence. Phillips 66 had USD56 billion of assets as of Sept. 30, 2021.
MRC