Mexico's Pemex swings to profit on currency gains, lower taxes

MEXICO CITY (Reuters) - Mexican national oil company Petroleos Mexicanos (Pemex) on Wednesday reported a third-quarter net profit of 1.4 billion pesos ($64 million), helped by currency gains and a lower tax bill.

FILE PHOTO: A logo of the Mexican state oil firm PEMEX is pictured at Cadereyta refinery, in Cadereyta, on the outskirts of Monterrey, Mexico August 27, 2020. REUTERS/Daniel Becerril

The swing to profit marked a reversal from the same period last year, when Pemex posted a 87-billion-peso loss.

Pemex’s performance during the July-to-September period was weighed by lower sales volumes due to depressed economic activity in the coronavirus pandemic, as well as a slide in international oil prices, the firm said in a filing.

It’s export mix of crude averaged about $38 per barrel, down 30% from the same quarter last year due to lower demand.

The company’s tax bill fell to about 42 billion pesos, down 43% from a year earlier thanks to lower prices as well as government-backed tax reduction packages.

Aided by a stronger peso, Pemex said it posted currency gains of 36 billion pesos, compared to a currency loss of nearly the same amount during the third quarter last year.

Financial debt rose to $110.3 billion, up by nearly a quarter compared to the beginning of this year, though this was mostly due to currency exchange fluctuations and the use of existing lines of credit.

Like nearly all oil companies, Pemex operates mostly in U.S. dollars in terms of its sales and income.

Pemex’s crude and other liquids output averaged 1.66 million barrels per day, down 2% compared to the year-ago period.

Meanwhile, revenue totaled 239 billion pesos during the third quarter, down nearly a third compared to the 350 billion pesos reported a year earlier.

Lower revenue was due to a 41% drop in national sales as well as a nearly 19% fall in export revenue, the company said.

Reporting by David Alire Garcia and Ana Isabel Martinez; Editing by Emelia Sithole-Matarise and Bernadette Baum and Kirsten Donovan