YPF Profit Fell After Argentina Ordered Gasoline Price Cuts
YPF SA, Argentina’s largest company, said first-quarter profit fell by 26 percent after the government decided to cut gasoline prices to relieve consumers amid a global energy slump.
Net income slid in the quarter to 2.1 billion pesos ($238.4 million), or 5.42 pesos a share, from 2.88 billion pesos, or 7.3 pesos, a year earlier, the Buenos Aires-based oil producer said in a statement to Argentina’s regulator Thursday. Excluding one-time items, per-share profit missed the 5.56-peso average forecast of five analysts surveyed by Bloomberg.
While other oil companies including BP Plc and Royal Dutch Shell Plc have announced spending cuts of more than $40 billion, Argentina’s state-run producer has said it plans to keep its $6 billion annual capital budget target intact and maintain its workforce. The state-controlled company, which was nationalized in 2012, is mainly investing in the Vaca Muerta shale formation in southern Argentina.
In December, with Brent crude prices down about 50 percent from a June high, the Argentine government set the fourth-quarter price of Medanito light oil at $83.90 a barrel and Escalante heavy at $74. The price has protected YPF from the huge declines that prompted cost cutting by major oil producers elsewhere.
At the same time, the government ordered companies to cut prices at the pump by 5 percent. YPF has about 60 percent of the retail gasoline market.
Crude oil output rose 2.3 percent while natural gas production jumped 18 percent in the quarter, the company said. Sales rose 13.2 percent to 34.7 billion pesos while investment fell 23 percent to 12.4 billion pesos.
The earnings report was released after the close of regular trading in Argentina. YPF’s American depositary receipts fell 2 percent to $30.28 in New York. The ADRs have gained 14.4 percent year to date