YPF Cites 3Q:21 Production Recovery [PDF Downloads]

(YPF, 10.Nov.2021) — YPF reported another quarter with strong profitability amid continuous recovery in O&G production, while maintaining positive free cash flow leading to further deleveraging.

MAIN HIGHLIGHTS OF THE QUARTER

• Profitability remained strong with Adjusted EBITDA surpassing the $1bn threshold for the second consecutive quarter, expanding 6.5% q/q.

• While local crude and fuel prices were not fully aligned with international parities, we continued to benefit from the high global price environment, particularly on non-fuels such as petrochemicals.

• Oil and gas production expanded for the third consecutive quarter (7.5% q/q), accumulating a 17.2% increase in 9M21. During 3Q21, natural gas led the recovery (14.1% q/q), exceeding our commitments within the Plan GasAR.

• Shale activity remained our primary focus, with total shale output already accounting for a third of our consolidated production. Shale oil production averaged 52.1Kbbl/d in 3Q21 (or +27.7% y/y), while shale gas output from our operated areas reached a historical record of 10.3Mm3/d (or +120.5% y/y).

• Continued ramping up capex activity (+19.8% q/q), reaching the highest number of completed horizontal wells in any given quarter while maintaining a healthy backlog of DUCs.

• Domestic fuel sales resumed their recovery trend after mobility restrictions were relaxed, reaching pre[1]pandemic levels – consumption of gasoline and diesel expanded by 22.4% and 7.9% q/q, respectively.

• Total OPEX for the quarter expanded by 6.3% sequentially, primarily as a result of increased activity together with a negative combination of macro variables such as inflation, wages, and devaluation. However, despite of the latter, the cumulative 9M21 OPEX still came at 15.3% below the pre-pandemic levels of 9M19, showcasing that cost efficiencies remain well in place.

• Cash flow was positive for the sixth consecutive quarter at $144mn – accumulating $740mn during 9M21 – allowing to further reduce our net debt by $44mn sequentially to $6,455mn (down by a total of $621mn in the first nine months of the year). Net leverage down to 2.0x, after peaking at 4.9x in 1Q21.

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