Company Background
Yacmientos Petroliferos Fiscales (YPF) is the largest producer of oil and natural gas products in Argentina. This oil company has its headquarters in Buenos Aires. It has 10,000 employees worldwide. The first state-owned oil company in the world, YPF was founded in 1922. It quickly grew to produce the major share of oil and natural gas for Argentina. In 1993, as part of the President Menem's policy for the privatization of state industries, the government issued 160 million shares representing 45.3% ownership over the company. These shares brought in $3.04 billion of revenue for the government.
YPF has operations in Argentina, Bolivia, Brazil, Ecuador, Venezuela,
the US and Indonesia.
Objectives
In its 1997 annual report (the most recently published), YPF has formally stated its goals in the form of the following vision:
"An international energy company, based on the integrated business of
hydrocarbons, focalized [sic] in Latin America, with high standards
of
efficiency, profitability and responsibility."
Subsidiaries and Ventures
In 1995, YPF acquired Maxus, one of the United States' largest oil companies. Maxus continues to carry on exploration and production activities in the US, Indonesia, Ecuador, Bolivia and Venezuela.
Products and Services
The company's products include crude oil, refined fuels, lubricants, LPG, petrochemicals, compressed natural gas. YPF divides its activities into two broad areas termed: upstream and downstream. The upstream activities consisting of exploration and production. The company owns numerous production extensive network of pipelines and storage facilities.
The downstream activities consist of the refining, marketing and distribution.
YPF controls reserves of 1.45 billion barrels of crude oil and 9.736
trillion cubic feet of natural gas.
Production...barrels per year cubic feet per year
Financial Summary
Financial Highlights (All figures in millions of Pesos, 1 Peso
= 1 $ US.)
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Capital Stock
The company has 353 million shares outstanding. It's major shareholders as of January 20, 1999 are:
Stock Ownership
| Shareholder | Percent Ownership |
| Argentine government | 20.3% |
| Brandes Investment Partners | 5.1% |
| Santa Cruz/Chubut provinces | 4.7% |
| Parez Companc | 2.0% |
| YPF employees | 0.6% |
The government is currently planning to sell 14.99% of its share, amounting to 52,914,700 class A shares at $38 per share. Bidding on these shares should begin early in 1999.
Stock Price and Trade Volume over Time
Measures of Stock Performance
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Competition
YPF makes more than half of all petroleum products refined in Argentina.
Recent Events and Trends
The price of oil has been depressed for most of the past year, selling for 28% less in in Q3, 1998 (14.22 P/barrel) than in Q2, 1997 (19.80 P/barrel). YPF responded by putting into effect cost-control measures throughout the company. Over the same period, YPF strove to increase its efficiency. Accompanying the drop in oil prices was a 23% increase in total worldwide crude oil sales, 83 thousand barrels per day in Q3, 1998 from 68 thousand the same period, 1997. In Q3, 1998, YPF increased its domestic crude oil deliveries to 440 thousand barrels per day from 434 thousand per day the previous year.
Worldwide average natural gas sales price decreased 1%, from $2.26 per thousand cubic feet from $ 2.28 per thousand cubic feet in Q8, 1997. Domestic production of natural gas was also up: 1,557 million cubic feet per day in Q3, 1998 compared to 1,266 million cubic feet per day in Q3, 1997.
The increased production of oil and gas will enable YPF to meet the increasing demand for oil and gas products while at the same time improve operating margins.
Performance Analysis
YPF last reported its results for the third quarter, 1998 (ending September 1998).
Net income at 159 million pesos in Q3, 1998 showed no real change from the 157 million figure from Q2, 1998. The figure was, however, 30'% lower than the 226 million earned in 1997. This decline was largely due to the depressed oil prices. While not significantly different from what was reported in the preceding quarter (1,408 million), the total revenue for Q3, 1,393 million Pesos is 11.8% lower than the 1,580 million in Q3, 1997.
The last dividend was 0.22 Peso/share, paid on November 27-30, 1998.
In November, 1998, YPF issued US $125 million in negotiable obligations at a coupon rate of Libor plus 1.75% at three year maturity.