Refiner Marathon sinks to loss as US fuel demand dries up
Derek Brower and Myles McCormick
Marathon Petroleum Corp, the US’s biggest independent refiner, reported an adjusted loss of $868m in the first quarter, down from a $1.2bn profit a year ago, as demand for fuel in the world’s largest market remained depressed due to the coronavirus pandemic.
The company, which on Sunday announced its plan to sell its Speedway retail unit to Seven & i in a $21bn all-cash deal, also reiterated its intention to “indefinitely idle” its Gallup and Martinez refineries and potentially convert one of them to renewable diesel.
“Our second-quarter results reflect a full three months of the challenges Covid has created for our business,” said Michael Hennigan, Marathon’s chief executive. “We began April with demand at historic lows. Despite seeing some recovery during the quarter, demand for our products and services continues to be significantly depressed.”
Before adjustments, second-quarter income came in at $9m, including a net pre-tax benefit of $1.4bn, Marathon said. It added that it was on track to meet a target to reduce capital spending this year by $1.4bn and cut operating costs by $950m.