Operational Updates Trigger Positive Movement
Vertex Energy Inc (VTNR) shares have experienced an upward trajectory in today’s trading. This comes against the backdrop of a significant ~57% decline in the company’s stock value over the past month.
Operational Analysis
On Tuesday, the company delivered an operational update for the fourth quarter of 2023, providing insights into its throughput volumes, yield of finished conventional fuel products, and renewable diesel production.
Vertex Energy expects conventional throughput volumes of approximately 67,000 barrels per day (bpd), slightly below the previous guidance of 68,000-71,000 bpd. The reduction is attributed to a strategic curtailment in throughput due to market conditions and downtime for transformer replacement.
The projected yield of finished conventional fuel products such as gasoline, diesel, and jet fuel is in the range of 65%-67%, aligning with the earlier guidance and indicating the sustained benefits of yield optimization initiatives introduced in the second quarter of 2023.
In renewable diesel production, Vertex expects a daily output of 3,900 barrels, slightly below the forecasted range of 4,000 to 6,000 bpd. The yield on renewable throughput volumes is anticipated to be around 96%, also marginally lower than the previous range of 97% to 98%.
Additionally, Benjamin P. Cowart, the President and CEO of Vertex, highlighted the company’s focus on enhancing liquidity through leveraging cash invested in hard assets, securing approximately $80 million in liquidity as of December 31st, 2023.
Market Opportunity and Price Action
Looking ahead to the first quarter of 2024, Cowart underlined the company’s proactive response to improving crack spreads and enhanced margin efficiency. This has positioned Vertex to increase production rates for both conventional fuels and renewable diesel, aligning production capacity with evolving market conditions.
In terms of price action, VTNR shares rallied by 13.5% to reach $1.635 in the latest trading session on Thursday.
