GENERAL INFORMATION ABOUT THE COMPANY
PetroPeru is a Peruvian state-owned company under private law dedicated to the transportation, refining, distribution, and commercialization of fuels and other petroleum products.
YEAR 2020
2020 was a difficult year for the whole world. At the beginning of the year, Peru was paralyzed due to the quarantine carried out to combat COVID-19. In this same year, the hydrocarbon sector suffered the biggest crisis in global history, which was aggravated by the world economic crisis that affected the demand for hydrocarbons, causing the price of a barrel of oil to fall by up to 70% worldwide.
All this resulted in a net loss of 67 MMUS$ in 2020, caused by the fall in international oil prices and the decrease in domestic demand, which led to a drop in sales. However, it was possible to obtain an EBITDA of MMUS$ 131 thanks to good operating performance and the implementation of measures to optimize expenses.
The Company was able to generate resources for the State for a total of MM$ 1,027.5 million, thus remaining one of the largest contributors to the Peruvian State.
PetroPeru managed to maintain national leadership in the fuels market, with 44% of market share. It is also the leader in the gasoline and diesel market with 65% and 55% of market share, respectively.
Investments of MMUS$ 821 were executed, which will allow expansion of the operating capacity. The Company continued with the development of infrastructure projects such as the "Talara Refinery Modernization Project," which reached 97.2% completion. This will be one of the most modern refineries on the southern Pacific coast. Likewise, at the Conchán Refinery, a new testing laboratory was started up, one of the most modern laboratories in Latin America. Finally, at the Iquitos Refinery, two double-hulled barges came into operation, which will reduce the cost of transporting crude oil through the Amazonian rivers.
In mid-2020, the international risk rating agencies S&P Global Ratings and Fitch Rating ratified PETROPERÚ's risk rating as issuer for long-term debt financial instruments in foreign currency, obtaining a rating of BBB- and BBB+, respectively. However, being a state-owned company, the company's ratings are strongly linked to the Peruvian government, so in December 2020 the rating outlook was revised from stable to negative.
What happened in 2021?
The international price of crude oil showed an upward trend at the end of the first quarter of 2021, closing at US$ 56.16 per barrel (US$ 20.48 per barrel as of March 31, 2020), affecting the value of inventories and being the main factor of the favorable result in the period. This is due to the recovery of fuel demand both in the world and in the country.
At the end of the first quarter of 2021, the company recorded a net profit of 44 MMUS$, a significant increase compared to the net loss recorded as of March 2020, which amounted to -135 MMUS$. This is mainly explained by the higher volume of inventories and higher margin in the commercialization of products, thanks to the recovery of international hydrocarbon prices and lower operating expenses. However, it was offset by a decrease in revenues, caused by the new isolation measures imposed by the government.
1,409 million barrels (MBL) less were sold at a lower price equivalent to 5 US$BL (dollars per barrel), which represented 179,588 MM$ of lower income, caused by the lower traffic of the population due to the pandemic.
The Current Liquidity and Acid Test ratios have increased significantly due to the cash balance of US$ 547 obtained with the Bond issue made in February 2021. However, they will decrease as this cash is used in the progress of the Talara Refinery works.
There was a higher rate of return on assets (ROA), equal to 1.5%, due to the increase in operating profit recorded as of March 2021. There is also a higher return on equity (ROE), equal to 2.3%, mainly explained by the net profit of 43.4 as of March 2021 vs. the loss of - 134.7 MMUS$ as of March 2020.
For the second quarter of 2021, the international price of crude oil showed an upward trend at the end of June, closing at US$ 73.47 per barrel.
The company's accumulated net income amounted to 71 MMUS$, contrary to the net loss recorded as of June 2020, which amounted to -197 MMUS$. This increase is also explained by an increase in sales revenues by MM$ 389.3 and an increase in the price of 11.7 US$BL, due to a relative increase in the population traffic.
The Liquidity and Acid Test indicators decreased with respect to the previous quarter, going from 0.95 to 0.85 and from 0.64 to 0.54, respectively. However, they increased with respect to the same quarter of the previous year.
The ROA ratio increased from the previous quarter by one percentage point and increased by 3.6 percentage points year-over-year, from -1.1% to 2.5%. This was mainly due to the increase in operating income, as a loss was recorded in June 2020. The ROE index had an increase of 1.4 percentage points compared to the previous quarter and 15.2 percentage points compared to the same quarter of the previous year, going from -11.5% to 3.7%. This is mainly explained by the higher accumulated net income recorded at the end of June 2021.
