YPF (YPF) Q3 2024 earnings summary

Executive summary

• Achieved strong Q3 2024 results with adjusted EBITDA up 13% sequentially and 47% year-over-year, despite demand contraction and severe weather in Patagonia impacting conventional production.

• Revenues rose 7% sequentially and 18% year-over-year to $5.3B, driven by higher gas sales, shale production, and local fuel price hikes, partially offset by higher costs and lower conventional output.

• Shale oil production grew 36% year-over-year, now nearly half of total output; company became Argentina's largest oil exporter at 40,000 barrels/day.

• Advanced key infrastructure projects, including the Vaca Muerta Oil Sur Pipeline (VMOS) and the Andes Project for mature field divestment.

• CAPEX totaled $1.35B, up 13% sequentially but down 7% year-over-year, with over 70% allocated to upstream, especially shale oil projects.

Financial highlights

• Q3 revenues reached $5.3 billion, up 7% sequentially and 18% year-over-year, driven by higher gas sales, oil exports, and improved fuel prices.

• Adjusted EBITDA was nearly $1.4 billion, up 13% sequentially and 47% year-over-year, mainly due to fuel price recovery and shale output expansion.

• Net income surged to $1.5 billion, almost triple the previous quarter, aided by a positive income tax effect and absence of prior-year impairment charges.

• Free cash flow was negative $173 million, impacted by higher debt service and crude purchases, partially offset by increased upstream payables.

• Gross profit increased 10% sequentially and 99% year-over-year to $1.62B.

Outlook and guidance

• Targeting a lifting cost of $15/boe for the year, revised from $13, due to inflation and ongoing mature field divestments.

• Expecting unconventional production to increase 30–40% in 2025, with average shale oil production guidance of 160,000 barrels/day, potentially conservative.

• Anticipates neutral cash flow in 2025, turning positive from 2026 onward; CapEx to remain at current levels but focused on Vaca Muerta.

• Maintains 2027 shale oil production guidance of 250,000 barrels/day, with updates expected in April.

• LNG project in Río Negro advancing, with FID expected by 2H25.