YPF (YPF) Q2 2024 earnings summary

Executive summary

• Shale oil production increased 20% year-over-year, driven by Vaca Muerta, with exports to Chile up 25% sequentially and zero fuel imports in downstream operations.

• Record operational efficiency achieved in drilling and fracking, and all-time high gasoline production at La Plata Refinery in May.

• Revenues rose 15% quarter-over-quarter to $4,935M, driven by higher gas sales, agricultural exports, increased diesel demand, and improved fuel prices, partially offset by lower gasoline demand.

• Adjusted EBITDA reached $1.2B, down 3% sequentially but up 20% year-over-year, impacted by higher costs in dollar terms and reduced conventional output due to severe weather, offset by higher gas sales and oil exports.

• Net income was $535M, a 19% decrease from 1Q24, mainly due to lower operating and equity income, despite improved financial results.

Financial highlights

• Revenues reached nearly $5 billion, up 15% sequentially and 13% year-over-year, driven by higher gas sales, local diesel demand, and improved fuel prices.

• Adjusted EBITDA was $1.2 billion, down 3% sequentially but up 20% year-over-year, maintaining a 24% margin.

• Net income was $535 million, down 19% sequentially but up 41% year-over-year; EPS: $1.32 (-20.5% q/q, +53.5% y/y).

• CapEx was $1.2 billion, up 3% sequentially but down 6% year-over-year, with over 70% invested in upstream shale operations.

• Negative free cash flow of $257 million due to higher working capital needs and regular debt service.

Outlook and guidance

• Shale oil production expected to average over 120,000 barrels per day in 2024, with current production near this target.

• Lifting costs for core shale hub forecasted at $4.4 per barrel in the second half of the year.

• Net cash flow expected to be neutral in 2025, with positive cash flow anticipated from 2026 onward, excluding LNG and M&A.

• Efficiency programs in both upstream and downstream segments are expected to further improve margins and operational performance.

• Strategic projects include new fuel specification upgrades, pipeline expansions, and LNG development, with FID expected by 2H25.