Saudi Aramco Base Oil Company – Luberef (2223) Q4 2025 earnings summary

Executive summary

• Completed the largest turnaround in company history at Yanbu, involving 7,000 personnel and 900 asset inspections, maintaining a zero total recordable incident rate for six consecutive years and over 43 million man-hours without a lost time injury.

• Achieved high operational reliability with 99–99.1% mechanical availability and received ISO certification for Occupational Health and Safety Management, along with multiple industry awards.

• Advanced strategic growth initiatives, including the Yanbu Growth II project reaching 68% completion and signing an MoU for a Group III+ base oil facility in Jazan.

• Extended feedstock allocation for Jeddah operations and secured long-term supply contracts, supporting market leadership in Group I base oils.

• Board recommended a cash distribution of 3.5 per share for H2 2025, reflecting a commitment to sustainable shareholder returns.

Financial highlights

• Revenue for 2025 was SAR 8.1 billion, with net income at SAR 855 million, down 12% year-over-year due to a 15% decline in base oil sales volumes from the turnaround.

• EBITDA for 2025 was SAR 1,148 million, down 10% year-over-year, and free cash flow was SAR 1,073–1,148 million, a 33% decrease, mainly due to higher capital expenditure and working capital movements.

• Base oil crack margin rose to SAR 1,911/ton, up 12% year-over-year, exceeding the 10-year historical average.

• CapEx for 2025 was SAR 444 million, up 119% year-over-year, with allocations for sustaining, turnaround, and growth projects.

• Q4 2025 net income was SAR 61–110 million, with base oil sales volume at 223 thousand MT and EBITDA at SAR 180 million.

Outlook and guidance

• 2026 production target is 1.25 million metric tons of base oil, factoring in a 30-day Yanbu shutdown and a 12-day Jeddah inspection.

• Growth II project on track for H2 2026, enabling full-range Group I, II, and III base oil production, with CapEx projected at SAR 300–350 million.

• Dividend of SAR 588.9 million recommended for H2 2025, with a payout policy targeting 60–80% of free cash flow.

• Integration of Group III into aramcoULTRA® base oil slate progressing, with test completion expected in Q1 2026.

• High base oil demand expected in H1 2026, with potential oversupply concerns mitigated by rising demand.