The Strategist

Pemex loses $ 23B in Q1 due to peso rate

05/01/2020 - 02:50

Pemex, the Mexican oil and gas corporation, published the company's results for January-March 2020. The report shows that the net loss for this period amounted to $ 23.44 billion, of which almost $20 billion are “foreign exchange losses” resulting from the depreciation of the national currency and recalculation of balances of foreign currency debt.

Matthew Rutledge via flickr
Matthew Rutledge via flickr
“In December 2019 (when calculating the amount of debt), the exchange rate of 18.4520 pesos per US dollar was used, and in March 2020 - 23.5122. Thus, the depreciation of the Mexican peso in relation to the valuation of debts is significantly affected the US dollar. However, this is not affecting the cash flow of Petroleos Mexicanos," - reads a quarterly report published on the company's website.

The total financial debt of the company to international lenders in terms of pesos increased by 24.2% compared to the end of 2019 and amounted to 2,463.9 billion pesos or 104.8 billion US dollars.

According to the text of the document, Pemex operating results for the reporting period showed a profit of $ 1.259 billion. EBITDA was $ 2.2 billion with a return of 18.7%.

The increase in oil production in the 1st quarter amounted to 3.7% to the level of 1,759 thousand barrels per day, natural gas production grew from 103.8 to 105.8 million cubic meters per day.

Pemex's total sales in the first quarter compared with the previous year fell by 20.3% to $ 11.8 billion, which can be explained by a decrease in the value of Mexican export oil mix, lower prices for gasoline and diesel, and a decrease in demand in the domestic and export markets. COVID-19. The average volume of oil exports in the 1st quarter decreased by 66 thousand barrels per day to 1,166 thousand.

After the onset of the oil crisis, Pemex, a Mexican oil corporation, announced that it had the resources to ensure liquidity of all operations and debt servicing through revolving credit lines and, in addition, it received insurance payments from the pool of insurers envisaged when the oil price fell below $ 49 per barrel.