Marathon Petroleum posts lower Q4 net income on reduced refining margins

Marathon Petroleum Corp. (MPC) reported net income of $1.5 billion for fourth-quarter 2023, compared with net income of $3.3 billion for fourth-quarter 2022. The fourth-quarter 2023 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.5 billion, compared with $5.8 billion for fourth-quarter 2022. The decrease in net income and adjusted EBITDA from a year ago was driven by lower refining margins.

In fourth-quarter 2023, the company returned approximately $2.8 billion of capital to shareholders through $2.5 billion of share repurchases and $311 million of dividends. Through Jan. 26, the company repurchased an additional $900 million of company shares. The company currently has about $5.9 billion available under its share repurchase authorizations.

For full-year 2023, MPC’s net income was $9.7 billion, compared with net income of $14.5 billion for full-year 2022. Adjusted net income was $9.7 billion for full-year 2023. This compares with adjusted net income of $13.5 billion for full-year 2022.

Refining, marketing

Adjusted EBITDA for the Refining & Marketing (R&M) segment was $2.2 billion in fourth-quarter 2023, versus $4.6 billion for fourth-quarter 2022, reflecting lower margins. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $299 million in fourth-quarter 2023 and $442 million in fourth-quarter 2022.

R&M margin was $17.79/bbl for fourth-quarter 2023, versus $28.82/bbl for fourth-quarter 2022. Crude capacity utilization was roughly 91%, resulting in total throughput of 2.93 million b/d for fourth-quarter 2023. This compared with total throughput of 2.89 million b/d for four-quarter 2022.

Refining operating costs were $5.67/bbl for fourth-quarter 2023, versus $5.62/bbl for fourth-quarter 2022.

Midstream

Midstream segment adjusted EBITDA was $1.6 billion in fourth-quarter 2023, versus $1.4 billion for fourth-quarter 2022. The results were primarily driven by higher total throughputs and higher rates.

Strategic update

MPC's standalone (excluding MPLX) capital spending outlook for 2024 is $1.25 billion. About 65% of overall spending is focused on growth capital and 35% on sustaining capital. MPC's $825 million of growth capital is focused on opportunities that enhance margins and reduce cost.

At its 363,000-b/d Los Angeles refinery, the company is advancing projects to improve reliability and lower costs. The improvements focus on integrating and modernizing utility systems and increasing energy efficiency, with the added benefit of addressing new regulations mandating further reductions in emissions. The improvements are expected to be complete by end 2025.

At its 593,000-b/d Galveston Bay refinery, the company is building a 90,000 b/d high-pressure distillate hydrotreater. This project is anticipated to improve the site’s ability to produce higher value finished products and is expected to be complete by end-2027.

MPLX announced a capital outlook of $1.1 billion. The capital spending plan focuses on advancing growth projects anchored in the Marcellus and Permian basins, aiming to expand its value chains, particularly around natural gas and NGL.