U.S. Refiner Phillips 66 Discussing Asset Sale

Phillips 66 (NYSE:PSX), a petroleum refinery headquartered in Houston, is in active discussions around selling some of its assets, announced the company's CEO. The strategy of offloading $3 billion in non essential assets during this year was drawn up last year in an attempt to streamline costs and assets to increase returns. The sale timeline for these assets remains undefined, according to Mark Lashier.

"There are no immediate pressures... The sale will become relevant when someone values these assets more than us," said Lashier on Thursday. 2023 was a challenging year for the US-based refining company, as it experienced a 46% drop in profits in the year’s second quarter to end with adjusted earnings of $1.8 billion, down from $2.3 billion recorded in Q2 2022. Despite an uptick to $2.1 billion in Q3, adjusted earnings still fell below analyst expectations. But it did report a refinery utilization of 95%, the highest in recent years.

Elliott Investment Management, an activist investor, in November claimed a $1 billion stake in the refinery due to dissatisfaction with the company's performance. It also submitted a proposal to Phillips 66, highlighting how it could improve whilst chiding the company's high operational expenses.

But even prior to Elliott Investment's entry to its shareholding, Phillips 66 had tagged $3 billion in non-essential assets as candidates for likely sale in 2024. Back then, Lashier acknowledged that they had identified which assets would be sold, although he didn't specify which ones. He emphasized the refinery was not "in a hurry", and those assets were delivering "good value" at present. Phillips 66's share value lifted 34.63% over the past year to $135.55.