financial results nd quarter, 2008...1,550 1,545 (5) -0.3% 2007 2008 apr - jun apr - jun 6/28...
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Financial Results2nd Quarter, 2008
July 30, 2008
2/28
This report contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the Mexican National Banking and Securities Commission and the U.S. Securities and Exchange Commission, in our annual report, in ouroffering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties.
We may include forward-looking statements that address, among other things, our: • drilling and other exploration activities; • import and export activities; • projected and targeted capital expenditures and other costs, commitments and revenues; and liquidity.
Actual results could differ materially from those projected in such forward-looking statements as a result of various factors that may be beyond our control. These factors include, but are not limited to:
• changes in international crude oil and natural gas prices; • effects on us from competition; • limitations on our access to sources of financing on competitive terms; • significant economic or political developments in Mexico; • developments affecting the energy sector; and • changes in our regulatory environment.
Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of their dates, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. These risks and uncertainties are more fully detailed in PEMEX’s most recent Form 20-F filing, as amended, with the U.S. Securities and Exchange Commission (www.sec.gov) and the PEMEX prospectus filed with the National Banking and Securities Commission (CNBV) and available through the Mexican Stock Exchange (www.bmv.com.mx). These factors could cause actual results to differ materially from those contained in any forward-looking statement.
The U.S. Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this document, such as total reserves, probable reserves and possible reserves, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, as amended, “File No. 0-99”, available from us at www.pemex.com or Marina Nacional 329, Floor 38, Col. Huasteca, Mexico City 11311 or at (52 55) 1944 9700. You can also obtain this Form from the SEC ‘s website, www.sec.gov. Investors are also welcome to review the annual report to the CNBV, available at www.pemex.com.
EBITDA and free cash-flow are non-US GAAP measures.
Forward-Looking Statementsand Cautionary Note
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Content
2Q08 Main Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
4/28
2Q08 Financial Highlights
Apr - Jun
EBITDA (1)
Total sales
Billion pesos
Net income (Loss)
Change
• Income before taxes and duties increased 36.3%, to 248.4 billion pesos, as compared to the second quarter of 2007.
• Net income for the second quarter of 2008 totaled 16.7 billion pesos.
(1) Earnings before interests, taxes, depreciation and amortization. Excludes IEPS.Numbers may not total due to rounding.
Billion dollars
Income before taxes and duties
286.8 84.8 29.6%371.6
2007 2008Apr - Jun Apr - Jun
36.1
182.3 248.4 66.1 36.3% 24.1
38.3 16.7 (21.6) 1.6
215.6 303.9 88.3 41.0% 29.5
2008
-56.4%
5/28
• Crude oil production averaged 2,801 thousand barrels per day during 2Q08, a 11.5% decrease compared to the second quarter of 2Q07.
Numbers may not total due to rounding.
2Q08 Operating Highlights
Production Change
– Crude Oil
– Natural Gas Liquids
• Petroleum Products
• Natural Gas
• Liquid Hydrocarbons
Thousand barrels per day, except natural gas in million cubic feet per day
3,593 3,182 (410) -11.4%
3,166 2,801 (364) -11.5%
-10.7%427 381 (46)
6,033 6,861 828 13.7%
1,550 1,545 (5) -0.3%
2007 2008Apr - Jun Apr - Jun
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Content
2Q08 Main Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
7/28
67% 64%
36%33%
Apr - Jun 2007 Apr - Jun 2008
2,134 1,798
1,0321,003
ProductionThousand barrels per day
Upstream: Crude Oil
• Total crude oil production decreased, on average, by 364 Mbd:
– Heavy and light crude oil production decreased 15.7 and 4.3%, respectively, primarily due to the decline of Cantarell.
– Extra-light crude oil production increased 3.4%, due to the completion of wells in the Delta del Grijalva project.
Numbers may not total due to rounding.
Light and Extra-lightHeavy
-11.5%
3,166 2,801
8/28
56% 62%
42%44%
Apr - Jun 2007 Apr - Jun 2008
3,394 4,232
2,6302,639
6,033
ProductionMillion cubic feet per day
Upstream: Natural Gas
Non-associatedAssociated
• Natural gas production increased 828 MMcfd, due to:
- An increase of 838 MMcfd in associated gas, as a result of higher volumes produced in Ku-Maloob-Zaap and Crudo Ligero Marino projects.
- A 0.4% decrease in non-associated gas, due to lower production in the Burgos and Lankahuasa projects.
Numbers may not total due to rounding.
XX%
6,861
XX%13.7%
9/28
93% 91%
9%7%
Apr - Jun 2007 Apr - Jun 2008
157 160
1612 • The number of exploratory wells was 16, an increase of 4 wells compared to 2Q07, due to higher activity in the Veracruz and Burgos basins.
• Development wells totaled 160, representing an increase of 3 wells, due to higher activity in the Aceite Terciario del Golfo project.
Upstream: DrillingNumber of wells completed
ExplorationDevelopment
Numbers may not total due to rounding.
4.1%
169 176
10/28
Main advances during the second quarter of 2008• Completion of 3 development wells,• 14 major and 14 minor workovers,• Commencement of operations of the NRU at Ciudad Pemex, Tab.
Upstream: Developments
External factors, not controlled by PEMEX, could affect the execution of the programmed activities.
Program for the second half of 2008• Completion of gas pipeline from Sihil Alfa platform to Akal J1
compression platform,• completion of pipeline from Sihil Alfa platform to Akal J2
production platform,• completion of the NRU, and• completion of 10 development wells.
Cantarell
KMZ
Main developments during the second quarter of 2008• Completion of 6 development wells,• 5 major and 8 minor workovers,• On May 24, 2008, the KMZ project registered a record of 725 Mb.
Program for the second half of 2008• Completion of drilling platform Lum A,• Completion of the housing and production platforms Ku H, and• Completion of 11 development wells.
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Content
2Q08 Main Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
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3,280 3,203
1,157 1,070
427 381
Apr - Jun 2007 Apr - Jun 2008
3,651 3,477
Apr - Jun 2007 Apr - Jun 2008
74% 75%
26% 25%
Apr - Jun 2007 Apr - Jun 2008
Dry gas productionMillion cubic feet per day
Downstream: Natural Gas Processing
SweetSour
Numbers may not total due to rounding.
Natural gas liquids productionThousand barrels per day
On-shore natural gas processing Million cubic feet per day
-4.8%
-10.7%
-3.7%
4,436 4,273
13/28
63% 59%
41%37%
Apr - Jun 2007 Apr - Jun 2008
760
469 519
814
Crude oil processThousand barrels per day
Light Crude
• Total crude oil processing decreased by 0.3%, due to the operating program aimed at increasing the utilization of deep conversion equipment.
• During 2Q08 primary distillation capacity utilization rate decreased to 83.8%, from 84.2 in 2Q07.
Downstream: Oil Refining
Numbers may not total due to rounding.
Heavy Crude
1,283 1,279
-0.3%
14/28(1) Includes transfers from La Cangrejera petrochemical complex.(2) Includes LPG from Pemex-Gas and Basic Petrochemical and Pemex-Refining, jet fuel, furfural extract, among others.Numbers may not total due to rounding.
Production of petroleum productsThousand barrels per day (Mbd)
• During 2Q08 production of petroleum products decreased by 5 Mbd.
• Production of fuel oil decreased by 4.2 whereas the production of diesel increased by 8.1%.
Downstream: Petroleum Products
Gasoline(1)
DieselFuel OilOthers(2)
Change
27%21% 20%28%
22% 23%30%30%
Apr - Jun 2007 Apr - Jun 2008
-0.5%
8.1%
-4.2%
-3.8%
-0.3%
420
318 305
459
437
334 361
461
1,550 1,545
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Downstream: Variable Refining Margin and Service Stations
12.3
-1.1
Apr - Jun 2007 Apr - Jun 2008
Variable refining marginDollars per barrel
Number of franchised gas stationsAs of December of
• The decrease was primarily a result of higher crude oil prices.
• As of June 30, 2008, the number of franchised gas stations was 8,121.
2007 2008
5.6%
7,690
8,121
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84%
9% 9%
85%
7%6%
Apr - Jun 2007 Apr - Jun 2008
EthyleneAmmonia
Others
• During 2Q08, the increase in petrochemicals production was primarily driven by:
- a decrease in the production of vinyl chloride,
- lower production of aromatics and derivatives, and
- an increase of ammonia.
Downstream: Petrochemicals ProductionPetrochemicals productionThousand tons
Numbers may not total due to rounding.
Change
3,167 3,097
20.7%
-2.2%
2.4%
-4.2%
278 285
2,5922,706
221183
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Content
2Q08 Main Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
18/28
88% 91%
12% 9%
Apr - Jun 2007 Apr - Jun 2008
International Trade
1,410
Volume of Crude Oil Exports(1)
Thousand barrels per day
LightHeavy
Mexican crude mix average price Dollars per barrel:
(1) At 60º F, does not include processing agreements.Numbers may not total due to rounding.
Exports distribution100% = Mbd
Far East
7%
79%
13%
1%
-18.3% United States of America
Rest of America
Europe
1,410
56.9 104.1
1,5111,287
123
2141,725
1,410
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International Trade: Other Products
157167
155223
516494Petroleum ProductsThousand barrels per day
PetrochemicalsThousand tons
Exports
Dry GasMillion cubic feet per day
Source: P.M.I.® except dry gas
Imports
10299
-5.7%
-30.8%
-63.5%
4.4%
3.2%
17.0%
346 404
Apr - Jun 2007 Apr - Jun 2008
60163
Apr - Jun 2007 Apr - Jun 2008
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Content
2Q08 Main Financial Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
21/28
Income Statement: Sales Breakdown
Sales in Mexico Exports
Sales In México
Petro-leum products
Petro-chem.
Crude, gas & condensates
Petro-leum products
Petro-chem.Exports(1)
Petro-leum products
Petro-chem.
Crude, gas & condensates
(1) Includes revenue from services.Numbers may not total due to rounding.
286.8
371.6
123.0 22.6 6.2
138.0 31.9 8.2
12.2% 40.9% 32.0% 41.4% 66.2% -4.7%
120.8 0.8
170.8 21.6 0.8
13.0 134.9
193.4
151.9
178.1
Billion pesos
29.6%
Apr - Jun
Apr - Jun
2007
2008
17.3% 43.4%
Dry gas
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Income Statement: Costs and Operating Expenses
+ +
+ +
=
=
General Expenses
Cost of Sales
Sales Costs and Op. Expenses
Distribution Admin. Cost of the Reserve for Labor Obligations
Billion pesos
Numbers may not total due to rounding.
113.2
155.0
37.0%
6.3
9.3
14.0
17.2
48.1% 23.1%Apr - Jun
2007
Apr - Jun2008
242.8
286.8 133.5
371.6 181.6
29.6% 36.1%
20.7
42.8
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Income Statement: Net Income
Billion pesos
Other Net Revenues (Expenses)(1)
27.4%
Apr - Jun
Apr - Jun
2007
2008CFR(2) Income
Before Taxes & Duties
Taxes & Duties
(1) Includes subsidiaries and associates.(2) Comprehensive Financing Result.Numbers may not total due to rounding.
Operating income
Net Income (Loss)
23.9%
153.338.3
144
(4.7)33.6
182.3
190.0
64.9(6.5)
16.7231.7248.4
+ + = - =
60.9%23.9% 36.3%
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567 503
75 128
204148
459499
Jun 07 Jun 08
Consolidated Balance Sheet
117 44
760 817
411 431
Jun 07 Jun 08
Total Assets:
Change
Assets Liabilities & Equity
ChangeTotal Liabilities + Equity:
Numbers may not total due to rounding.
Billion pesos
0.4%
5.0%
7.5%
-62.1%
1,288.4 1,293.0 1,288.4 1,293.0 0.4%
-11.2%
-8.1%
37.3%Other
Current
Fixed
Debt
OthersEquity:
Reserve for Labor Obligations
71.0%
25/28
382388
Jun 07 Jun 08
Total and Net Debt
74.284.2
492.3419.1
Total DebtTotal Debt
Billion pesos
Numbers may not total due to rounding.
Total and Net DebtBillion pesos
Numbers may not total due to rounding.
Long Term
Short Term
• Total debt decreased 63.2 billion pesos.
• Net debt decreased 6 billion pesos.
Net DebtNet Debt
13% 17%
83%87%
Jun 07 Jun 08
566.5 503.3
-11.2%
-1.7%
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Content
2Q08 Main Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
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Other Relevant Topics(1)
• In May 2008, Global Reporting Initiative (GRI) granted PEMEX’s Sustained Development Report the highest grade (A+).
• PEMEX is the first Mexican company to receive this recognition.
Transparency and Disclosure
• On July 22, 2008, PEMEX and the Petroleum Workers Union signed the wage revision contract. The new agreement includes a 4.8% salary increase and a 1.9% increase in benefits.
• These increases, which are similar to other contract increases in the industrial sector, will go into effect on August 1, 2008.
1) From March 1, to April 29, 2008.
WageRevision
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Content
2Q08 Main Highlights
Upstream
Downstream
International Trade
Financial Results
Other Relevant Topics
Questions and Answers
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