Rise in costs deteriorates Pemex results in the third quarter

Petróleos Mexicanos (Pemex) reported that in the third quarter of 2022 a net loss of 52,000 million was recorded, compared to a net loss of 77,200 million in the third quarter of 2021.

According to the company, this is mainly explained by the increase in the cost of sales, the increase in deterioration and the foreign exchange loss caused by the depreciation of the peso against the dollar during the third quarter of the year.

During the third quarter, total sales increased 56.5% compared to the same period of the previous year, mainly due to a 69.3% increase in domestic sales and a 44.5% increase in export sales.

“The most important variables that explain this variation are the increase in prices worldwide and in the volumes sold,” according to the state oil company.

On the other hand, in this quarter the cost of sales including impairment increased 84.1%, mainly as a result of an increase of 204,900 million in purchases of products for resale. In this quarter there was an impairment of fixed assets of 7,300 million, compared to a reversal of impairment of 6,000 million in the same period of the previous year.

Regarding taxes and duties, the total of this item was 103,900 million pesos, with an increase of 37.8% compared to the third quarter of 2021, mainly due to the increase in the price of the Mexican export mix. The amount generated by concept of the right to shared utility (DUC) increased by 36.4% compared to the same period of the previous year.

The state oil company also reported that the total financial debt decreased by 5.2% compared to the end of 2021, “mainly due to the objective of maintaining a net indebtedness close to zero, to the support of the federal government and to the liability management operations that are carried out. they have been doing”.

As of September 30, 2022, the exchange rate was 20.3058 pesos per dollar, for which the financial debt registered a balance of 2,132 million pesos, or 105,000 million dollars.

Therefore, the financial resources of the company are located as follows: the Pemex group has revolving lines of credit for liquidity management up to a total of 7,700 million dollars and 37,000 million pesos.

With regard to prices, they showed a downward trend in the quarter, after central banks in various countries accelerated increases in interest rates in response to high levels of inflation, which increased the outlook related to an economic recession and its effects on the growth of global oil demand, as reported by Pemex.

Also, the perspective that the demand for oil in China could contract this year, for the first time in two decades, due to its “Covid Zero” policy, influenced. Additionally, Russian crude oil exports proved resilient, reducing the uncertainty related to its availability.

On the other hand, prices found support in the low available production capacity of OPEC and in the weak gains in commercial inventories of the OECD and the United States.

Starting from the operating performance, the net cost of the employee benefit period is added (not including medical service, pension payments and seniority premium, since they represent cash outflows), depreciation, amortization and deterioration of wells, pipelines , property, plants and equipment. And as of the fourth quarter of 2019, the concept of undeveloped wells is also included, since it corresponds to facilities that were drilled, but did not reach the production stage, so they do not generate cash flows. For this reason, revenue before depreciation, amortization and taxes (EBITDA) in the third quarter of this year stood at 174.5 billion pesos, an increase of 34 percent.

Regarding budget investment activities, as of September 30, 2022, 317.6 billion pesos have been spent, which represents 66.5% of the approved budget.

In addition, in this quarter Petróleos Mexicanos and the Petroleum Workers Union of the Mexican Republic (STPRM) concluded the 2022-2023 salary review with a salary increase of 4.00% and an increase in benefits of 2.25%, “with which it is guaranteed workers the respect and fulfillment of their rights and benefits established by law. This salary increase in global terms means that when adding the salary increase and benefits, there was an increase of 6.25%, the highest since the Union published its contracts and of course, the largest of the current administration.

annual accrued

Petróleos Mexicanos obtained a net profit of 195,615 million pesos in the accumulated of the first three quarters of the year, with which for the first time since 2017 the company did not report losses in this period.

It should be remembered that the profits of the Mexican state oil company Pemex soared nine times in the second quarter of this year compared to the same period last year, to 6,529 million dollars, driven by higher global crude oil prices and local sales, as well as for a tax refund.

karol.garcia@eleconomista.mx