Saudi Aramco Base Oil Company – Luberef (2223) Q3 2024 earnings summary

Executive summary

• Q3 2024 and 9M 2024 saw a decline in net income and cash flow due to lower crack margins and higher feedstock costs, despite stable or slightly higher sales volumes and operational excellence.

• Revenue for 9M 2024 was SAR 7,409 million, up 6% year-over-year, but net profit dropped 38% to SAR 764 million.

• Strategic initiatives included progress on the lubeHUB project, a conditional agreement for a new facility, and an MoU with Bahri Chemicals for logistics collaboration.

• The inaugural Sustainability Report was published, marking a milestone in ESG efforts.

• The company operates as a single business unit with major operations in Jeddah, Yanbu, and the UAE.

Financial highlights

• Q3 2024 revenue was SAR 2,495 million, nearly flat year-over-year; 9M 2024 revenue reached SAR 7,409 million.

• Net income for Q3 2024 was SAR 226 million, down from SAR 340 million in Q3 2023; 9M 2024 net income was SAR 764 million, down from SAR 1,241 million.

• EBITDA for Q3 2024 was SAR 280 million, down from SAR 441 million; 9M 2024 EBITDA was SAR 987 million, down 37% year-over-year.

• Free cash flow for Q3 2024 was SAR 62 million, compared to SAR 105 million in Q3 2023; 9M 2024 FCF was SAR 1,051 million, down 39% year-over-year.

• Basic and diluted EPS for 9M 2024 was SAR 4.54, compared to SAR 7.38 year-over-year.

Outlook and guidance

• 2024 base oil volumes expected to grow mid-single digits year-over-year, with domestic market accounting for ~30% of total.

• Maintenance capex projected at SAR 80-100 million; Yanbu Growth II project capex estimated at SAR 150-200 million.

• Annual depreciation charge to be reduced by SAR 44 million due to revised asset lives.

• SAR 938 million of debt repaid in March 2024; dividends to remain at 60-80% of free cash flow.

• Strategic initiatives and cost optimization efforts are expected to drive future value and strengthen market position.