Mexico’s state oil company, Petróleos Mexicanos (Pemex), has announced a significant decline in its net profit for the second quarter of this year. The drop in sales, largely due to lower oil and product prices, has impacted the company’s financial performance.
During the April-to-June period, Pemex reported a net profit of 25.4 billion Mexican pesos ($1.5 billion), a considerable decrease from the 125.2 billion pesos achieved in the same quarter last year. Despite lower sales and asset impairment charges, Pemex was able to partially offset these factors with reduced costs, increased exchange gains resulting from the appreciation of the Mexican peso, and lower taxes.
Sales experienced a significant decline of 43%, amounting to 414.2 billion pesos. Additionally, operating profit contracted from 257.4 billion pesos to 21.5 billion pesos.
On a positive note, Pemex’s production of crude oil and condensates registered growth of 7.1%, reaching 1.88 million barrels per day. The company’s refineries also processed an increased volume of crude oil, with 826,000 barrels per day compared to 796,000 barrels per day in the second quarter of 2022. Furthermore, natural gas production witnessed a 5.2% increase, reaching 4.051 billion cubic feet per day.
Despite some favorable aspects, Pemex’s debt has risen to $110.5 billion from $107.7 billion at the end of 2022, primarily due to the strengthening of the Mexican peso against the U.S. dollar. When evaluated in peso terms, the debt actually experienced a decrease of 9.8% from the end of the previous year.
Overall, these financial results highlight the challenges faced by Pemex in a volatile market. The company will need to continue navigating these difficulties and implementing strategies to sustain and enhance its performance in the future.
By Anthony Harrup
