PBF Energy (NYSE:PBF) executives used the company’s fourth-quarter 2025 earnings call to highlight progress toward restarting its Martinez, California refinery, point to improving crude oil differentials as a key earnings lever, and outline additional cost-reduction targets under its Refinery Business Improvement (RBI) program.
Martinez restart: construction nearly complete, operations targeted by early March
Chief Executive Officer Matt Lucey said the company is “on the cusp of restarting” Martinez, with construction work expected to be finished over the weekend and the facility turned over to operations next week for a “safe and methodical restart.” Management said it expects the refinery to be fully operational in early March.
In response to questions about the West Coast market, Lucey described California as “particularly interesting” with a tighter product market and fewer buyers for California crude. He said the company expects to benefit from both dynamics as it returns Martinez to service, citing product import needs in the state and improved utilization of infrastructure such as pipelines.
Fourth-quarter results: adjusted earnings and insurance recovery
Chief Financial Officer Joe Marino reported that, excluding special items, PBF posted adjusted net income of $0.49 per share and adjusted EBITDA of $258 million for the fourth quarter.
Marino detailed special items that management excluded from adjusted results, including incremental operating expenses tied to the Martinez refinery and St. Bernard Renewables (SBR), insurance recoveries, and inventory adjustments. He said the company recorded a $394 million gain on insurance recoveries related to the Martinez fire in the fourth quarter, reflecting a third unallocated payment received during the period. That brought total insurance recoveries in 2025 to $894 million net of deductibles and retention.
Marino said proceeds received so far have been unallocated and the company will continue working with insurers on potential additional interim payments, with timing and amounts dependent on incurred covered expenditures and calculated business interruption losses. Lucey told analysts PBF expects property-related capital rebuild costs to be “fully covered,” while business interruption recovery will follow a more nuanced modeling and negotiation process.
Marino also said the company incurred $41 million of incremental operating expense at Martinez in the fourth quarter—$164 million year-to-date—which PBF treated as a special item because it related to temporary equipment and other fire-related non-capital expenses. Management expects to recover a portion through insurance, though the amount will be determined as claims are finalized.
Market outlook: crude differentials and refining balances
Lucey said PBF exited 2025 on a “strong trajectory,” with fourth-quarter results improving sequentially and benefiting from improving crude differentials. He and other executives repeatedly emphasized widening sour crude differentials as a central tailwind for 2026.
Answering UBS’s Manav Gupta, Lucey said PBF can process “upwards of 55% or 60%” medium and heavy sour crude across its throughput capacity, equating to roughly 200 million barrels a year. He added that, on an annual basis, “every dollar you get on crude diff equates to a $200 million improvement” for the business.
Management attributed widening differentials to factors including the OPEC+ taper beginning in 2025 and the potential for additional Venezuelan barrels to enter open markets. Company executives described the impact of sanctions being lifted as effectively “instantaneous” for U.S. refining markets, while also noting longer-term investment would be required for sustained Venezuelan production growth.
In a separate exchange, an executive identified in the transcript as Tom discussed the product environment, citing seasonal factors in gasoline and tightening inventories in certain regions. He said the company remains constructive on products, pointing to tight refining balances and the nature and timing of new capacity additions, which he said are more heavily weighted toward Asia and have a high petrochemical yield.
RBI program: $230 million achieved, $120 million more targeted
PBF’s RBI initiative remained a major theme of the call. Lucey said the company achieved $230 million in efficiencies in 2025 and now expects to reach a total of $350 million in run-rate savings by the end of 2026, implying an additional $120 million still to come.
Bukowski provided more detail on the savings achieved to date:
- $230 million of annualized run-rate savings achieved by the end of 2025.
- Management said this includes about $160 million in operating expense reduction versus a 2024 benchmark, which Bukowski characterized as about $0.50 per barrel.
- $70 million reduction in capital and turnaround expenditures, comparing against a year with similar turnaround scope.
- Over 1,300 initiatives identified, with more than 500 implemented to date; average value per initiative was described as roughly $500,000.
- A centrally led procurement initiative expected to deliver more than $35 million in annual savings.
Asked about inflation and energy costs, Marino said RBI savings targets are presented net of inflation. He also said the company’s 2026 operating expense guidance embeds higher natural gas price assumptions than 2024, and that a $1 increase in natural gas prices would increase costs by about $100 million.
Capital spending, renewables, and balance sheet priorities
On operations and maintenance, Bukowski said refineries outside Martinez ran “reasonably well” during the quarter aside from minor issues. PBF began a 2026 turnaround at Torrance in January; management said the mechanical portion was completed as planned and units were in the startup phase. Turnaround activity is expected to be heavier at the beginning and end of 2026, with the middle quarters relatively light.
Marino said cash invested in consolidated capital expenditures was $124 million in the fourth quarter, excluding approximately $273 million of capital expenditures related to the Martinez incident. He said 2025 capital spending excluding Martinez was approximately $629 million, though he cautioned it appeared lower than expected due to capital pools not yet cash settled at year-end that will flow through in 2026.
Regarding St. Bernard Renewables, Marino said PBF recorded a $21 million loss tied to its equity investment in SBR. He said SBR produced an average of 16,700 barrels per day of renewable diesel in the fourth quarter, with results reflecting broader renewable market conditions, including improved credit pricing offset by higher feedstock costs and volatility tied to tariffs and regulatory uncertainty.
PBF ended the quarter with $528 million in cash and approximately $1.6 billion of net debt. Marino said net debt to capitalization was 28% and liquidity was about $2.3 billion based on current commodity prices, cash, and availability under the company’s ABL facility. The board approved a regular quarterly dividend of $0.275 per share, and Marino said cash dividends paid totaled $126 million in 2025.
Management said reducing debt is a near-term focus when market conditions are strong. Lucey told analysts the company aims to blend debt repayment with shareholder returns, emphasizing the value of deleveraging given refining’s cyclical nature.
About PBF Energy (NYSE:PBF)
PBF Energy, Inc is an independent petroleum refiner organized in 2008 and headquartered in Parsippany, New Jersey. The company began trading on the New York Stock Exchange in July 2012 under the ticker symbol PBF. Since its formation, PBF Energy has grown through acquisitions and operational optimization, positioning itself as a leading supplier of refined petroleum products in the United States.
The company owns and operates five refineries located along the U.S. Gulf Coast, East Coast and in the Pacific Northwest, with a combined crude oil processing capacity of approximately 900,000 barrels per day.
