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

Executive summary

• Achieved the largest turnaround in company history, involving 7,000 personnel and 900 assets, with zero total recordable incident rate for six consecutive years and over 43 million man-hours without a lost time injury.

• Extended feedstock allocation for the Jeddah facility until 2030, reinforcing Group I base oil market leadership.

• Advanced strategic growth initiatives, including signing an MoU for Group III+ base oils and progressing the Growth II project to 68% completion, targeting H2 2026.

• Received ISO certification for Occupational Health and Safety Management and the CSR Silver Award.

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

Financial highlights

• Revenue for 2025 reached SAR 8.1 billion, with net income at SAR 855 million, down 12% from 2024 due to a 15% decline in base oil sales volumes.

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

• Base oil crack margin improved 12% year-over-year to SAR 1,911/ton, driven by favorable feedstock costs and commercial optimization.

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

• Cash conversion reached 93%, ending the year with a net cash position of SAR 1,373 million and a gearing ratio of -10%.

Outlook and guidance

• 2026 production target is 1.25 million metric tons of base oil, accounting for 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.

• Remaining turnaround expenses for 2026 estimated at SAR 120–140 million; growth CapEx projected at SAR 300–350 million.

• High base oil demand expected in H1 2026, with potential for stable crack margins despite new global capacity.

• Board recommended a dividend of SAR 588.9 million for H2 2025.