Saudi Aramco Base Oil Company – Luberef (2223) Q4 2025 earnings summary

Executive summary

• Completed the largest turnaround in company history at Yanbu, involving 7,000 personnel and 900 assets, maintaining operational excellence and a zero total recordable incident rate for six consecutive years and over 43 million man-hours without a lost time injury.

• Net income for 2025 declined 12% year-over-year to SAR 855 million, primarily due to a 15% drop in base oil sales volume from the turnaround, despite higher crack margins and continued operational reliability.

• Advanced strategic growth initiatives, including 68% completion of the Yanbu Growth II project (targeted for H2 2026), signing an MoU for Group III+ base oils, and extending feedstock allocation for Jeddah until 2030.

• Transformation and cost optimization initiatives delivered over SAR 100 million in value.

• Board recommended a cash distribution of 3.5 per share for H2 2025, reflecting commitment to sustainable shareholder returns.

Financial highlights

• Revenue for 2025 reached SAR 8.1 billion, with net income at SAR 855 million, down 12% year-over-year due to a 15% decline in base oil sales volumes.

• EBITDA for 2025 was SAR 1,148 million, down 10% year-over-year; free cash flow was SAR 1,073 million, a 33% decrease, mainly due to higher CapEx and working capital needs.

• Base oil crack margin improved to SAR 1,911/ton, up 12% year-over-year and above the 10-year historical average.

• CapEx for 2025 was SAR 444 million, up 119% year-over-year, with SAR 153 million for sustaining, SAR 144 million for turnaround, and SAR 147 million for growth.

• Cash conversion reached 93%, ending the year with SAR 1,373 million in net cash and a gearing ratio of -10%.

Outlook and guidance

• 2026 production target is 1.25 million metric tons, accounting for a 30-day Yanbu shutdown and a 12-day Jeddah inspection, with 30% of sales targeted for the domestic market.

• Remaining turnaround expenses for 2026 expected at SAR 120–140 million; growth CapEx guidance is SAR 300–350 million.

• Growth II project on track for H2 2026, enabling full-range Group I, II, and III base oil production; Group III+ project in Jazan under pre-FEED, with more clarity on CapEx and timing expected by Q2 2026.

• Integration of Group III into aramcoULTRA® base oil slate progressing, with test completion expected in Q1 2026.

• Dividend of SAR 588.9 million recommended for H2 2025.