Crown's earnings fall 57% in quarter Refining woes overwhelm gains in retail division

July 26, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

Crown Central Petroleum yesterday reported a 57 percent decrease in second-quarter earnings as a poor performance by the company's refining operations was too much for the retail division to overcome.

The Baltimore-based oil refiner and marketer reported net profit of $3 million for the quarter ending June 30, down from $7 million earned during the corresponding quarter in 1995. On a per-share basis, earnings plummeted from 72 cents to 31 cents.

For the first six months of the year, Crown had a net loss of $10 million, or $1.03 a share, a larger loss than the $3.1 million, or 32 cents a share, for the corresponding period in 1995. The company has reported losses every year since 1991.

In the second quarter, Crown's Gulf Coast refining margins declined 80 cents a barrel, while the price the benchmark West Texas Intermediate crude oil increased by 11 percent.

"Essentially, our finished-goods prices didn't keep pace with an increase in raw materials," said John Wheeler, senior vice president of finance.

The company's combined refinery operations lost $200,000, down from a net profit for the same quarter in 1995 of $16.2 million.

In a year-old agreement, Crown's Pasadena, Texas, refinery will process 20,000 barrels a day of crude oil from Statoil North America Inc. The company will provide refined products to Statoil. Wheeler said the agreement, which will give Crown a predictable source of crude oil and market for its products, will take some of the volatility out of the refining operations.

Profits for the company's retail marketing operations soared more than 200 percent from $3.4 million during the second quarter of 1995 to $10.5 million in the second quarter of 1996. Margins were 16 cents a gallon, double the margins of the first quarter. The company also reported a 6 percent increase in gasoline volume.

"We outpaced the industry" in that category, Wheeler said.

Pub Date: 7/26/96

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