YPF Quarterly Profit Rises to 1.4 Billion Pesos on Production

YPF SA (YPF), Argentina’s largest oil company, said third-quarter profit climbed 87 percent on higher production.

Net income increased to 1.4 billion pesos ($237 million), or 3.6 pesos a share, from 756 million pesos, or 1.92 pesos, a year earlier, Buenos Aires-based YPF said in a statement to Argentina’s regulator after the market closed today. That’s above the per-share profit excluding some items of 2.37-pesos estimated by Santiago Wesenack, an analyst who covers the company for Raymond James SA in Buenos Aires.

President Cristina Fernandez de Kirchner’s government seized a 51 percent YPF stake from Madrid-based Repsol SA in April 2012 after the company’s output had declined at an average 6 percent rate for almost a decade. Argentina expropriated YPF to stem fuel imports that doubled to $9.4 billion in 2011 and cost the country $10 billion in 2012.

“Increased sales of fuel and natural gas triggered the results,” YPF said in the statement.

YPF, after securing shale partnerships with Chevron Corp. (CVX) and Dow Chemical Co., is seeking more international partners for a $37 billion, 5-year expansion plan to develop the Vaca Muerta shale formation at the world’s second-largest shale gas deposit and fourth-largest shale oil reservoir in Argentina’s Patagonia region.

Dollar Debt

Crude output increased 3.4 percent in the quarter from a year earlier, YPF said today. YPF’s oil and natural gas production increased for six and five consecutive months, respectively, the company said Nov. 1.

YPF increased cash on hand by 1.8 billion pesos in the quarter to 6.9 billion pesos. While debt increased by 2 billion pesos in the period, the net total debt was unchanged at 19.2 billion pesos. The average cost of peso debt was 19.89 percent and 5.4 percent for dollar debt.

The earnings report was released after the close of regular trading in New York. The market in Buenos Aires is closed tomorrow for a bank holiday. YPF’s American depositary receipts gained 6.8 percent to close at $21.35 in New York. The ADRs have increased 47 percent this year.

YPF is scheduled to have an earnings conference call with investors at 8:30 a.m. New York time tomorrow. To access the webcast: http://www.ypf.com/InversoresAccionistas/Paginas/Home.aspx

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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