Enap achieves US$326.4mn in profits in the third quarter of 2024 despite international context

By Enap
November 8, 2024

This is a machine translation of the original release, issued in Spanish.

• The company achieved these results in a challenging scenario for the fuel and refined products market, with lower prices, and where a set of measures implemented since the end of 2023 have been key.
• Record production levels, significant improvements in logistics and distribution processes and the extension of the contract with Methanex are some of the highlights of the quarter.

Santiago, November 8, 2024.- The National Petroleum Company (Enap) announced today its financial results for the third quarter of this year, a period in which it obtained profits of US$326.4 million. Likewise, its EBITDA reached US$795.4 million accumulated through September 2024.

The company explained these figures by the decrease in the gross margin in nominal terms from US$1,103.8 million at the end of the first nine months of 2023 to US$763.7 million obtained in the same period in 2024. This decrease is related to the reduction in the average international refining margins for the period from US$27.4 to US$16.4/bbl for gasoline and from US$33.7 to US$21.3/bbl for diesel, which was partially offset by the optimization of the cost of the crude oil purchase basket.

Enap's general manager, Julio Friedmann, stressed that internal management measures, especially those aimed at generating stability in production, have partially mitigated the price drops of the products sold by the company and, at the same time, continued to reduce the company's debt.

“Despite the reduction in international refining margins, something we expected to happen, we are developing a more efficient operation. In a year marked by high oil prices, OPEC production cuts and geopolitical conflicts that threaten global supply, Enap obtained third quarter results that allow it to project its financial sustainability in the long term and that to date are above what was planned for this year,” he said.

Regarding financial costs, in the third quarter these showed a drop of US$9.1 million, going from US$171.6 million in the first nine months of 2023 to US$162.4 million during the same period in 2024. This is due to the decrease in financial debt, which fell from around US$3.9 billion at the end of the same quarter of the previous year to approximately US$3.6 billion as of September 30 of this year.

The analysis by business line shows that Refining and Marketing (R&C), that is, the company in charge of transporting oil and its derivatives to Chile, refining it in the plants and distributing the products in the country, obtained a Pre-Tax Result (PTR) of US$306.1 million for the third quarter. As for the Exploration and Production (E&P) line - which is in charge of extracting gas and oil in Chile and three other countries - this third quarter of 2024 obtained a RAI of US$151.6 million. Of this total, US$142.7 million correspond to the foreign operation of the subsidiary Enap Sipetrol and US$8.2 million to Magallanes.

Management milestones for the quarter

Friedmann reiterated that “we are working responsibly to continue fulfilling our commitments and build an increasingly sustainable company. The management of the management team and our workers has been positive and has allowed us to anticipate a challenging context, as we set out to do several months ago, by executing structuring projects that will allow us to better face this scenario.”

This effort to anticipate scenarios, developed since the end of 2023, has allowed the company to achieve a set of achievements in terms of production and efficiency. Thus, for example, the company increased the total production of petroleum products, while additionally increasing the proportion of production of valuable products that generate a better margin (for example: kerosene production increased by 32% during 2024).

In recent months, the Aconcagua and Bío Bío refineries reached historic fuel production records, while in August production from Enap's wells in Ecuador reached its highest record.

Additionally, since mid-year, the company has implemented a set of actions to optimize the coordination of production, distribution and marketing processes, aimed at improving the standard and reliability in the delivery of products to customers by reducing, for example, the costs associated with ship demurrage. In addition, all scheduled maintenance processes at the refineries have improved during 2024 in time and form compared to previous years.

Also in August, the company closed with Methanex the extension of the natural gas contract in Magallanes until 2030, which provides greater certainty for future gas volumes and allows Enap to continue making new investments in natural gas exploration and development.