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

Executive summary

• Achieved record sales and production volumes in 2024, with sales up 4% and production up 5% year-over-year, despite regional geopolitical challenges and normalized base oil crack margins.

• Maintained a zero total recordable incident rate for the fifth consecutive year, with over 38 million man-hours worked without lost-time injuries.

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

• Free cash flow was SAR 1,606 million, with cash conversion at 126%.

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

Financial highlights

• Revenue reached SAR 10,036 million, up from SAR 9,489 million year-over-year.

• EBITDA was SAR 1,272 million, down 33% year-over-year.

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

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

• Q4 2024 net income was SAR 208 million, down 23% from Q4 2023.

Outlook and guidance

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

• Yanbu Growth II project targets mechanical completion by December 2025 and pre-commissioning by January 2026, with initial commercial capacity of 1.25 million metric tons in 2026.

• Capex guidance for 2025: SAR 100–140 million maintenance, SAR 170–190 million turnaround, SAR 250–350 million Yanbu Growth II.

• Local/domestic sales expected to remain at 30% of total base oil volumes.

• Board recommended dividend payout policy targets 60–80% of free cash flow.