Petroperú closed 2023 in the red: it recorded losses of more than US$1 million

Petróleos del Perú – Petroperú SA published its audited financial statements (EEFF) for 2023, in which it confirms that it recorded a loss of US$1,064,381, after recording a drop of US$271,219 in 2022.

According to a fact of importance raised before the Superintendency of the Securities Market (SMV), the company’s current liabilities, at the end of 2023, exceeded current assets by US$3,542,448 million (US$171,818 thousand as of December 31, 2022). .

Among the factors observed by PWC, there was a decrease in sales in the domestic market due to increased competition offering greater discounts and better commercial conditions, a situation that the Company has not been able to address due to not having an optimized refining margin with the progressive implementation of the NRT.

There were also higher operating expenses of US$330 million, as a result of a higher consumption of supplies and materials for the operation of the units in process and auxiliaries and a higher depreciation expense for the units put into operation. As well as the recognition of losses due to impairment of property, plant and equipment of US$334,875.

The auditing company also recalls the events that occurred in Petroperú in the years 2021 and 2022 “that have generated investigations into alleged irregularities committed by the former general management and related officials, which affected its corporate governance and the efficiency of its management.”

The closing in red was also affected by the increase in trade accounts payable, as a result of the increase in credit terms agreed with suppliers of crude oil, refined products, goods and services, as well as the increase in short-term bank loans due to the need for liquidity to finance commercial operations.

The obligation for the working capital loan received from the Ministry of Economy and Finance (MEF) in May 2022 was also transferred to the short term, for US$750,000, and the temporary presentation as a current liability of the CESCE loan.

There is also a “degraded credit rating.” In this regard, as of the date of issuance of this report, the Fitch Ratings and Standards & Poors (S&P) agencies assigned the Company a CCC+ and CCC credit rating, respectively. However, the main shareholder (MEF) issued a letter to the rating agency Fitch Ratings expressing the State’s financial support for the Company.

“In 2023, the Company’s Board of Directors commissioned the consulting firm Arthur D. Little to conduct a study of its financial position and corporate governance, in order to define, among other things, a recovery plan. This report considered it essential to obtain financial support from the government, which has not materialized to date, which means a risk that the Company will not be able to manage the current adverse liquidity situation,” the report concludes.