Skip to content
    PBF
    Earnings call· Jun 2026(Q2 FY26)

    PBF Energy Q2 FY26 earnings call PBF

    Jul 30, 2026 Source

    Executive summary

    PBF Energy Q2 FY26 — Strong Refining Margins and Significant Debt Reduction

    PBF Energy capitalized on extraordinary market dislocations driven by global conflicts, achieving significant debt reduction and strong financial results. The company is focused on operational efficiency, balance sheet strengthening, and strategic flexibility to navigate a prolonged period of elevated refining margins and product inventory normalization. Management expects to be in a net cash position by year-end, underscoring a commitment to balance sheet resilience.

    Highlights

    5

    • Reduced net debt by over $1.4 billion in Q2, ending with $855 million net debt and 15% net debt to capital.

    • Ended Q2 with $894 million in cash, expected to reach $1.5 billion by end of July.

    • Reported adjusted net income of $6.22 per share and adjusted EBITDA of $1.24 billion in Q2.

    • Martinez refinery fire-affected units safely restarted in May, producing a full product slate.

    • RBI program resulted in a 20% reduction in purchased natural gas (per barrel, price-adjusted) relative to the 2024 baseline.

    Concerns

    2

    • A loss of containment event at Chalmette in May resulted in a pre-treater and reformer being taken offline until Q3 repairs, causing increased naphtha production and a slight reduction in gasoline yield.

    • Unplanned work related to Toledo's FCC during Q2 led to lower-than-expected throughput.

    Guidance & targets

    3
    CategoryTargetConfidence
    Total capital expenditure
    $850 million
    medium materiality
    High
    Martinez insurance recoveries finalization
    finalization of the claim
    high materiality
    Medium
    Martinez insurance recovery payment
    one more payment, very similar to the last payment
    high materiality
    High

    Operational metrics

    21
    Adjusted net income per share
    $6.22
    Q2 FY26

    Excluding special items.

    Adjusted EBITDA
    $1.24 billion
    Q2 FY26

    Excluding special items.

    Martinez incremental OpEx
    $23 million
    Q2 FY26

    Related to the Martinez refinery incident, excluded from adjusted results.

    Insurance recoveries gain
    $250 million
    Q2 FY26

    Fifth unallocated payment related to the Martinez fire, excluded from adjusted results.

    Charge for senior notes repayment
    $2 million
    Q2 FY26

    Related to the repayment of $800 million senior notes due 2028, excluded from adjusted results.

    RBI initiative charges
    $9 million
    Q2 FY26

    Associated with the RBI initiative, excluded from adjusted results.

    Total insurance recoveries (Martinez)
    $1.25 billion
    as of Q2 FY26

    Net of deductibles and retention, including amounts received in 2025.

    SBR net income
    $27.5 million
    Q2 FY26

    From investment in SBR.

    SBR EBITDA
    $40 million
    Q2 FY26

    From investment in SBR.

    Renewable diesel production
    15,100
    Q2 FY26

    Production was as expected and reflected reduced rates because of a catalyst change completed in April.

    Working capital benefit
    $430 million
    Q2 FY26

    Driven by a reduction in above-average inventory levels from Q1 and benefits from net payable position in a higher price environment.

    Consolidated CapEx
    $189 million
    Q2 FY26

    Includes refining, corporate, and logistics. Excludes $56 million related to Martinez rebuild.

    Martinez rebuild capital
    $56 million
    Q2 FY26

    Capital invested related to the Martinez rebuild, excluded from consolidated CapEx.

    Cash balance
    $894 million
    end of Q2 FY26

    Cash and equivalents.

    Net debt
    $855 million
    end of Q2 FY26

    Total net debt.

    Net debt to capital
    15%
    end of Q2 FY26

    Net debt to capital ratio.

    Net debt reduction
    over 62%
    Q2 FY26

    Percentage reduction in net debt during the second quarter.

    Gross debt reduction
    over $1 billion
    Q2 FY26

    Achieved by fully paying down borrowings on ABL facility and refinancing $802 million of senior notes due 2028.

    RBI energy efficiency program
    20%vs 2024 baseline
    Q2 FY26

    Result of a circuit-wide energy efficiency program.

    Strategic procurement savings
    $60 million
    annual

    Expected annual savings from renegotiating or rebidding over 60 contracts in goods and services.

    RFS program cost
    $14
    ongoing

    Cost imposed by the RFS program, much of which is borne by the consumer.

    Industry KPIs

    2
    MetricValueDetails
    Pipeline throughput storage90,000barrels per day
    Basin level production volume25,000-30,000barrels per day

    Deals & partnerships

    1
    Air ProductsRepurchase of 2 hydrogen plants servicing the Torrance refinery.

    Owning and operating these assets will improve the overall reliability of Torrance by allowing closer management of operating details and coordination of maintenance and turnarounds with the rest of the refinery.

    Capital programs

    5
    Martinez hydrocracker turnaroundunderway
    Start: Q3 FY26

    Scheduled to begin in the third quarter and finish in October. Shifted from the end of Q2.

    Toledo FCC turnaroundpushed

    Planned Q4 turnaround pushed to the first half of 2027 due to unplanned work and key maintenance performed during a Q2 outage.

    Chalmette crude unit and coker turnaroundpushed

    Scheduled Q4 turnaround shifted to 2027 after careful evaluation and management of change.

    Paulsboro crude unit turnaroundscheduled
    Start: late fall

    Expected to have an uninterrupted run until the Paulsboro crude unit turnaround late in the fall. Cannot be pushed due to equipment inspections and mechanical integrity deadlines.

    Chalmette pre-treater and reformer repairsunderway
    Start: May

    Result of a loss of containment event in May, taking units offline until repairs are complete later in Q3.

    Risks & headwinds

    3
    Ongoing disruptions in the Middle East and Eastern EuropeOngoing, with product inventories expected to take an extended period (well into 2027) to normalize.

    Initially trapped 15 million barrels a day of crude and 5 million barrels a day of product; global refining utilization down roughly 10% year-on-year; over 5 million barrels of refining capacity offline globally.

    Mitigation: PBF's crude slate flexibility and proximity to stable crude supply in the Americas; strengthening balance sheet; improving reliability and efficiency through initiatives like RBI.

    Hurricane season impactCurrent (midst of hurricane season).

    Potentially dramatic effect upon both products and crude.

    Mitigation: Commercial team's focus on dynamic product demands and ensuring refineries are kept full on inbound and empty on outbound.

    RFS program cost burdenOngoing.

    Imposing $14 per barrel of cost.

    Mitigation: Ongoing discussions with Washington to adjust the RFS program to lower costs without impacting agricultural volumes.

    What to watch in Q3 FY26

    5

    Martinez insurance recovery payment

    Q3 FY26
    Current$250 million received in Q2
    TargetOne more payment, similar to last

    Why it matters

    Significant cash inflow, finalizes a major incident's financial impact.

    My expectation is I think there's going to be one more payment, I think, it's going to be very similar to the last payment. And my hope would be that by the time we talk on our next earnings call, it will be in-house.

    Q&A highlights

    7

    What is the timeframe for product market normalization, and have mid-cycle margins structurally moved up due to global supply impacts and damaged refineries?

    Management confirmed that the floor for mid-cycle margins has risen due to acute and long-lasting impacts of global conflicts on refining capacity. Crude normalization is expected in weeks to months, while product normalization, particularly for inventories, will take months to quarters, extending well into 2027.

    “I see the floor has been risen unquestionably and the consequence of all the damage, I think, it could be a long time.”

    asked by Manav Gupta · answered by Matthew Lucey

    2 min read5 chapters

    Detailed Narrative

    01

    Market Dislocation and Refining Dynamics

    Global conflicts have created significant dislocations in oil markets, with an initial impact of roughly 15 million barrels a day of crude and 5 million barrels a day of product effectively trapped. While crude flows show flexibility with alternative routing and strategic reserves, product inventories are drawn down globally, and U.S. markets must incentivize products to stay home. U.S. refining is critical infrastructure, especially on the West and East Coasts which are structurally short capacity and rely on imports, reinforcing the need for domestic production.

    02

    Operational Highlights and Turnarounds

    The Martinez refinery's fire-affected units were safely restarted in May and are now producing a full product slate. An upcoming hydrocracker turnaround at Martinez is scheduled for Q3-October. Chalmette experienced a loss of containment in May, taking a pre-treater and reformer offline until Q3 repairs, though throughput was maintained. Planned Q4 Toledo FCC and Chalmette crude unit/coker turnarounds have been strategically pushed to 2027 to optimize operations and capitalize on current market conditions.

    03

    Strategic Initiatives and Cost Savings

    PBF's Refining Business Improvement (RBI) program is yielding tangible results, including a 20% reduction in purchased natural gas on a per barrel and price-adjusted basis relative to the 2024 baseline. Turnaround performance has seen marked improvement, moving PBF among industry leaders in execution. A new strategic procurement organization is halfway through renegotiating over 60 contracts, with an expectation of $60 million in annual savings from goods and services.

    04

    Balance Sheet Strengthening

    PBF significantly strengthened its balance sheet in Q2, reducing net debt by over $1.4 billion. The company ended the quarter with $894 million in cash and approximately $855 million in net debt, resulting in a net debt to capital ratio of 15%. This deleveraging included fully paying down borrowings on its asset-backed lending facility and refinancing $802 million of senior notes due 2028 with available cash and $500 million of new senior notes due 2034. Management expects to be in a net cash position by the end of Q3 or Q4.

    05

    Martinez Insurance Recoveries and SBR Performance

    PBF received a $250 million insurance recovery in Q2 related to the Martinez fire, bringing total recoveries to $1.25 billion net of deductibles since 2025. The bulk of rebuild spending is complete, with additional funds expected in H2 2026. The SBR renewable diesel facility produced 15,100 barrels per day in Q2, reflecting reduced rates due to a catalyst change. Improved performance is noted post-catalyst change, with robust margins driven by high distillate margins and elevated RINs pricing.

    AI-generated summary of the company’s earnings call. Not investment advice.