PEMEX Reports Net Loss of MX$255.9 Billion in 2Q24

In 2Q24, PEMEX reported total revenue of MX$409.5 billion (US$22.28 billion), marking a 1.1% decline compared to the same period of the previous year. This decrease was primarily due to a 16.1% drop in export sales, driven by a lower volume of crude oil sold and the appreciation of the peso against the dollar. However, domestic sales saw an increase of 12.5%, boosted by higher prices for crude oil and oil products.

In previous weeks, President Andrés Manuel López Obrador announced that gasoline production in Mexico had increased while oil exports decreased. He highlighted that despite a slight rise in the price of the oil mix, the country is utilizing more crude oil in its refineries to produce fuels locally rather than purchasing them from abroad. However, imports still show increases, while production remains lacking. PEMEX reported an average production of 267Mb/d of gasoline at the end of May, a 10% decrease compared to April but an annual increase of 2%. Diesel production, however, fell by 23.6% month-on-month and 4.5% year-on-year, closing at 144Mb/d. 

The cost of sales, including impairments, amounted to MX$356.3 billion, a 1.0% increase. This rise is attributed to a MX$28.6 billion increase in operating expenses, mainly taxes and duties, and an MX$11.8 billion increase in amortization. These increases were partially offset by a MX$9.0 billion reduction in inventory variation and an MX$8.1 billion reversal in fixed asset impairments, compared to a MX$25.9 billion impairment in 2Q23.

During the quarter, taxes and duties totaled MX$58.9 billion, a 15.3% decrease due to the reduction in the DUC rate from 40% in 2023 to 30% in 2024. Consequently, the DUC decreased by 29.6% compared to the same quarter last year.

The DUC is one of the most significant taxes PEMEX must pay to the government for each barrel of oil extracted. In recent years, the government has supported PEMEX by reducing this tax. Under the current administration, PEMEX has received direct transfers and DUC deductions totaling approximately MX$1.4 trillion, as reported by MBN 

During the first three months of this year, fiscal support for PEMEX amounted to MX$123.2 billion in the form of direct support or fiscal waivers According to data from the Mexican Petroleum Fund (FMP), PEMEX had not paid this tax from October of last year to January of this year. This translates to four consecutive months where the federal government provided relief to the oil company by deferring this payment. Through a Presidential Decree, PEMEX was allowed to pay the DUC for October, November, and December of 2023 until Feb. 26 of this year, as reported in the Annual Treasury Report for 2023. 

PEMEX reported a net loss of MX$255.9 billion for the 2Q24, in contrast to a net profit of MX$25.4 billion in the same period last year. Factors contributing to this change include a decline in total sales, an increase in exchange rate losses, a decrease in gains from derivative financial instruments, and a rise in the cost of sales. These factors were partially mitigated by a reduction in fixed asset impairments and lower taxes and duties.

PEMEX's total financial debt decreased by 1.8% compared to the end of 2023, reaching MX$1,826.5 trillion. The exchange rate as of June 30, 2024, was MX$18.3773 per dollar. PEMEX has revolving credit lines totaling US$5.9 billion and MX$20.5 billion, which are fully utilized.