Mexico's Pemex 3Q Net Loss Shrinks on Higher Sales, Operating Gains

What happened

Mexico's state-owned oil company Pemex reported a third-quarter net loss of 10.8 billion Mexican pesos ($574.5 million), narrower than the year-earlier loss, as sales rose 28.5% and operating results improved.

Confirmed

Global impact / market context

A smaller loss and an operating profit mean Pemex keeps more money from each sale after running costs, which eases pressure on cash needed to service $77.6 billion of debt and fund oil and fuel production.

Analyst inference

Higher domestic fuel sales and favorable petroleum product prices lifted revenue, while lower fixed-asset impairment costs helped. These gains were partly offset by costlier product purchases, higher taxes and duties, and a foreign-exchange loss, leaving the company unprofitable overall.

Analyst inference

What to watch

1. Crude oil and condensate output slipped 0.4% to 1.64 million barrels a day, while natural gas production rose 7.9% to 5.017 billion cubic feet a day. Confirmed
2. Watch whether Pemex keeps lifting refinery runs, which reached 1.14 million barrels a day, the most since 2014, since more processed crude can support fuel sales and revenue. Proposed
3. Track the $77.6 billion debt load, flat since June, because taxes, duties, product purchases and currency losses could pull results back toward losses if revenue growth slows. Analyst inference

Evidence

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