Mexico’s Pemex Q2 losses widen to 52.2bn Pesos

Pemex26 July 2014, News Wires – State-owned oil company Pemex reported a wider second quarter loss hurt by higher sales costs, declining asset values and higher taxes, the company said on Friday.

Losses totaled 52.226 billion pesos ($4.02 billion) for the quarter, led by losses at the company’s refining unit, compared to a total loss of 49 billion pesos during the year earlier period.

Revenue during the quarter rose 4.1 percent to 409 billion pesos, however, mainly because of higher domestic sales and exports, compared to revenue of 393 billion pesos during the second quarter last year.

Sales costs for the quarter rose 13.2 percent, or by 24.4 billion pesos, as a result of preexisting obligations and higher production costs, the company said. “Inside and outside the company, the environment has grown more complex,” said Pemex Chief Financial Officer Mario Beauregard in a call with analysts.

The company’s tax burden during the quarter rose about 5 percent to nearly 218 billion pesos. Mexico’s government relies on oil revenues to fund about a third of the federal budget.

“In the short and medium term, Pemex will continue to be the most important fiscal contributor to the Mexican government,” said Beauregard.

The CFO said that he expects energy reforms to gradually lessen taxes levied on Pemex. Late last year, Mexico’s Congress passed landmark energy reform legislation that ended Pemex’s 75-year monopoly on oil production and aims to lure significant new streams of private investment via new contracts to boost output. 

– Reuters

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