Argentine Oil Major YPF Achieves Profit Growth and Production Boost

In the second quarter of 2024, YPF, Argentina’s leading oil company, declared a net profit of $535 million. This represents a 41% increase from last year.

Compared to the first quarter, however, it’s a 19% decline. The company’s revenue exceeded expectations, surpassing analysts’ forecasts by $475 million.

YPF announced a 5% rise in total hydrocarbon production year-over-year. Notably, the unconventional output from Vaca Muerta now accounts for 52% of total production.

The company’s adjusted EBITDA reached $1.204 billion, up 20% year-over-year but down 3% from the previous quarter.

The company’s net debt rose to $7.457 billion from $7.200 billion in Q1 and $6.312 billion the previous year. Its leverage ratio remained constant at 1.7x.

The net cash flow from operating and investing activities showed improvement, recording a deficit of $257 million, an improvement from the previous year’s $284 million deficit.

This quarterly decline was due to higher costs from a December devaluation and reduced oil production caused by June’s extreme weather in southern Argentina.

Financial Performance and Market Impact

However, increased seasonal gas sales, higher fuel prices, and oil exports offset these effects. Adjustments in Metrogas tariffs also contributed.

Revenue growth stemmed from higher fuel prices and increased hydrocarbon production. YPF’s total revenues hit $4.935 billion, a 15% increase over the previous quarter and 13% year-over-year.

This surge was primarily driven by higher sales of natural gas and agricultural products, increased local diesel demand, better fuel prices, and more oil exports.

On Wall Street, YPF’s stock climbed 3.94% to $19.78, marking a 15% increase year-to-date. The company’s market capitalization now stands at $10.850 billion.

YPF also noted advances in exploratory activities in Vaca Muerta and Palermo Aike, promising areas for unconventional resources.

The company spent $1.200 billion on capital expenditures in Q2, totaling $2.369 billion for the first half of the year.