Saudi Aramco Base Oil Company – Luberef (2223) Q4 2024 earnings summary

Executive summary

• Achieved increased sales volumes in 2024 despite regional geopolitical challenges, with production up 5% and sales up 4% year-over-year, and over five years without a lost time incident, totaling over 38 million man-hours worked.

• Net income declined 36% to SR 972 million due to lower margins, partially offset by higher volumes.

• Healthy cash generation continued, with free cash flow at SR 1,606 million and cash conversion at 126%.

• Board recommended a cash dividend of 3.08 SAR per share (SR 518 million) for H2 2024.

Financial highlights

• Revenue increased to SR 10,036 million from SR 9,489 million year-over-year.

• EBITDA fell to SR 1,272 million from SR 1,912 million, reflecting margin pressure.

• Base oil sales volume rose to 1,295 thousand metric tons, a 4% increase year-over-year.

• Base oil crack margin dropped to SR 1,703/ton from SR 2,068/ton.

• Earnings per share for 2024 was 5.78 SAR, down from 8.98 SAR in 2023.

• Q4 2024 net income was SR 554 million, up from SR 371 million in Q4 2023.

• Q4 2024 free cash flow was SR 554 million, up 49% from Q4 2023.

Outlook and guidance

• 2025 base oil volumes expected at 1.2 million MT due to planned turnaround and catalyst replacement shutdowns.

• Domestic market targeted to account for ~30% of total base oil volumes in 2025.

• Maintenance capex expected at SR 100-140 million, turnaround capex at SR 170-190 million, and Yanbu Growth II project capex at SR 250-350 million in 2025.

• Focus for 2025 is on executing the Yanbu Growth II project, enabling production of Group III base oils and enhancing production flexibility.

• Board recommended dividend of SR 518 million for H2 2024.