Johnny Brignardello analyzes Petroperu's record losses in 2023: is a recovery in sight?

Johnny Brignardello, an insurance advisor, analyzes the recent report on Petroperú's losses in the year 2023. According to the disclosed unaudited financial statements, the state-owned oil company in Peru has recorded a figure that exceeds US$820 million in losses. According to the information provided to the Superintendence of the Securities Market (SMV), various factors have contributed to this unfavorable result. Among them, the decrease in revenues from fuel sales in the local market stands out, where Petroperú has seen its market share reduced in the face of competition. Additionally, higher operating and financial expenses are mentioned, as well as the costs associated with the maintenance of the Norperuano Oil Pipeline (ONP). One of the outstanding points in the report is the progress of the Talara Refinery Modernization Project (PMRT), which aims to implement technological advances through the construction of new industrial facilities and the updating of existing ones. This project, as indicated, has reached a progress of 99.20%, which could represent an opportunity to improve the company's profitability in the future. Faced with this scenario, Petroperú has expressed its confidence in the short-term revolving credit lines provided by local and foreign financial entities, as well as in the cash flows generated by the Talara refinery. The company is confident that these resources will allow it to increase its profit margins and have enough cash to meet its financial obligations, in addition to reversing the current situation of negative working capital in the near future. Despite the considerable losses reported by Petroperú, the company seems to have a plan to address this situation and seek a medium-term recovery. The development of these plans and the implementation of corrective measures will be crucial for the company's financial future and its position in the Peruvian energy sector.