PEMEX Reports Earnings for Two Consecutive Years

In 2023, PEMEX recorded earnings of MX$109.920 billion, marking two consecutive years of positive results, as per information disclosed by the state-owned company to the Mexican Stock Exchange (BMV).

In 4Q23, PEMEX reported profits of MX$106.920 billion, surpassing the losses of MX$96.617 billion reported in the same period of 2022. The profit for 2023 exceeded the MX$99.998 billion reported at the end of 2022. Octavio Romero, PEMEX CEO, acknowledged these improvements stating: "Not only has the operational and financial deterioration been halted, but there is now momentum for growth and maximum utilization of our oil wealth."

Romero emphasized the continued support from the federal government, as the 2024 federal budget includes a contribution of MX$145 billion to the company's assets. This assistance is in addition to the reduction in the DUC for the year, decreasing from 40% to 30%, which, he stated, "will exceed the amounts due for debt maturities throughout the year."

The state-owned company reported receiving approximately MX$869 billion in direct contributions between 2019 and 2023, complemented by savings of MX$500 billion resulting from reduced DUC payment rates and MX$229 billion in fiscal benefits in the years 2020, 2021, and 2023. PEMEX's total financial debt stood at US$106 billion at the end of 2023, reflecting a reduction of 14.2% compared to 2022.

The NOC also reported debt to its suppliers, which increased by 27.5% compared to the previous year, marking the highest debt level in 13 years. According to PEMEX's own data, the obligations to suppliers and contractors amounted to MX$359.8 billion by the end of 4Q23. This figure represents an increase of MX$77.5 billion compared to the same period in 2022.

However, an analysis conducted by IMCO reveals an even starker picture, showing that the current debt level is a staggering 575% higher than what was reported in December 2011, highlighting the magnitude of the financial strain on PEMEX.

Despite the mounting debt, PEMEX managed to disburse MX$413.937 billion to its suppliers throughout 2023. However, the company has not provided specific details regarding its payment strategy or whether it plans to utilize recent tax benefits to address its outstanding obligations.

PEMEX recently resumed payments to its suppliers toward the end of last year. However, the prioritization of large service companies over private operators has raised concerns among industry stakeholders.