Saudi Aramco Base Oil Company – Luberef (2223) Q1 2026 earnings summary

Executive summary

• Achieved strong Q1 2026 performance with net income up 16% year-over-year to SAR 258 million, marking milestones in strategic expansion into high-value GCC markets and maintaining operational excellence with zero recordable incidents and over 44 million man-hours without lost time injury.

• Revenue for Q1 2026 reached SAR 2,158 million, up from SAR 2,128 million year-over-year, with EBITDA at SAR 337 million and EPS rising to SAR 1.53.

• Advanced key strategic initiatives, including final-stage discussions for Jeddah feedstock supply, Group III slating program, and OEM approvals for GIII base oils under aramco ULTRA® brand.

• Progressed Growth II project to 71% completion, targeting full delivery in H2 2026.

• Expanded market presence into Qatar, Bahrain, and Kuwait, reinforcing GCC footprint.

Financial highlights

• Net income reached SAR 258 million, up 16% year-on-year, despite a 12% decline in sales volumes; revenue was SAR 2,158 million, EBITDA SAR 337 million, and EPS SAR 1.53.

• Base oil crack margins compressed by 14% to 1,513/MT due to higher feedstock costs, offset by strong by-product margins, especially diesel.

• Free cash flow compressed to SAR 41 million due to higher capex and working capital build-up post-Yanbu refinery startup.

• Closed Q1 with a cash balance of SAR 1,397 million after SAR 153 million in capex.

• Dividends of SAR 588.91 million were approved for the year ended December 31, 2025.

Outlook and guidance

• Full-year base oil sales target revised to 1.15 million metric tons, reflecting Q1 disruptions; no further production changes anticipated.

• Growth II project on track for completion in H2 2026, with a planned 30-day Yanbu shutdown and capex estimated at 300–350 million.

• Crack margins expected to improve in Q2 as base oil prices catch up with feedstock costs.

• Remaining turnaround expenses for the year expected at SAR 90–100 million.

• Management continues to monitor regional geopolitical developments and macroeconomic volatility, with no material impact identified on going concern.