2013 Argentina Blog: YPF Sees Steady Earnings, Output, but also One-off Knockdown
The Argentine energy firm saw a big jump in revenues in the second quarter, but took a hit from an arbitration ruling and damage sparked by an April storm.
Argentina’s biggest energy company, YPF, released its second quarter report to investors August 12 at its Buenos Aires headquarters with cause for optimism. The report showed revenues went up 36.4 percent to $3.97 billion, compared to the $2.91 billion it made in the same period last year. Furthermore, profits went up 30.9 percent, year on year.
- YPF CEO Miguel Galuccio will join AS/COA’s Buenos Aires Conference on August 22. Tune in to the conference live at www.as-coa.org/Argentina2013.
- Access YPF’s second quarter report in Spanish or view a presentation in English.
But these uplifting figures don’t take into account a one-off payout resulting from a recent negative arbitration ruling. Nor do they account for money lost from a massive flood and huge fire that ripped through its main refinery during a devastating storm.
The arbitration ruling found YPF, at the time under Repsol management, responsible for the 2009 withdrawal of contracts for gas exports and deliveries to AES Uruguaiana and Transportadora de gas del Mercosur, the company reported to investors.
Incorporating the penalty and infrastructure damage into calculations shows quarterly net profits actually fell 35.8 percent to $97.23 million. YPF has to pay $155.4 million due to the unfavorable ruling.
Oil and gas figures were also revealed, showing that in this second quarter over last, crude output grew a shy 0.4 percent and natural gas liquids were up 8.8 percent. Natural gas production jumped 5.1 percent this quarter compared to the year’s first, demonstrating the company staved off decline in production.
Refining and distribution took a hit, with the report saying, “second quarter activities were affected by the consequences of an unprecedented storm” that caused flooding and fire at the company’s La Plata refinery. This brought processing activities down 15.9 percent compared to the same quarter last year.
In the report, the company explains a decision was made following the blaze to spend money on importing refined fuels and gasoline to meet customer demands and sales commitments. This, in turn, brought expenditure on purchases up 44 percent year on year.
Not all was dire; sales were up 30.3 percent compared to second quarter 2012. Petrol and diesel were mostly responsible for the uptick, with both prices and sale volumes rising this year.