Mexico's Pemex Posts Wider Third-Quarter Loss, Hit By Weaker Peso

  • Mexican state-owned oil company, Petroleos Mexicanos (Pemex), reported a deeper third-quarter (Q3) net loss on Tuesday, October 29, hurt mostly by a weaker exchange rate even as it benefited from support from the country's new government. EBITDA generation in Q3 2024 amounted to US$4.31Bn, only slightly up (roughly 1.2%) from its Q3 2023 level.
  • The company, in a filing with the Mexican stock exchange, posted a loss of around US$4.5Bn in the third quarter of 2023, but Mexico's peso currency weakened more than 13% in the year since, according to London Stock Exchange Group (LSEG) data. While Pemex mostly operates in U.S. dollars, like nearly all oil companies, it uses pesos for most of its local costs.
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  • Revenue for the country's biggest company totalled 426 billion pesos (US$21.63Bn) during the July-to-September period, down nearly 8% year-over-year due in large part to lower crude oil export sales.
  • In recent years, Pemex has sought to reduce its crude oil exports while prioritising refining. But it has mostly failed to reduce foreign motor fuel purchases in line with government targets, with gasoline and diesel import volumes consistently higher than Pemex's output.
  • During the third quarter, it processed 962,000 barrels per day (bpd) of crude, up by nearly a quarter compared to the year-ago period. The quarterly performance of its refining unit yielded 278,000 bpd of gasoline and 186,000 bpd of diesel, the filing showed.
  • President Claudia Sheinbaum took office at the start of this month, mostly pledging to continue generous government support for the heavily-indebted Pemex, much like her predecessor. In its filing, Pemex said it had received 145 billion pesos in assistance from state coffers during the third quarter. Furthermore, the company noted that its financial debt as at September 30, 2024, totalled $97.3Bn, down by almost $9Bn relative to the end of 2023.
  • Some close to Sheinbaum have suggested she might be more open to some form of Pemex partnerships with private oil companies in a push to boost production despite the company's massive debt load. The new president has said she would target what she has described as a sustainable oil output of 1.8 million bpd.

(Source: Reuters)