YPF Sociedad Anónima — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023; this is an annual report, not a standalone fourth-quarter filing. Consolidated financial statements are prepared under IFRS as issued by the IASB and presented in U.S. dollars. Deloitte & Co. S.A. issued unqualified opinions on the financial statements and internal control over financial reporting.
Business context and key financial metrics
YPF is Argentina’s leading integrated energy company, with operations concentrated in Argentina and businesses spanning upstream, refining and marketing, and gas and power. Argentina’s government owns 51% of YPF’s shares. Domestic sales of fuels and natural gas represented 69.3% of 2023 revenue.
| Metric | FY2023 | FY2022 | Change or context |
|---|---|---|---|
| Revenue | US$17.311 billion | US$18.757 billion | Down 7.7% |
| Gross profit | US$3.458 billion | US$5.073 billion | Gross margin about 20.0%, versus 27.0% |
| Operating profit/(loss) | (US$1.248 billion) | US$2.482 billion | Operating margin about (7.2%), versus 13.2% |
| Net profit/(loss) | (US$1.277 billion) | US$2.234 billion | Net margin about (7.4%), versus 11.9%; parent-attributable loss was US$1.312 billion |
| Net cash from operating activities | US$5.913 billion | US$5.693 billion | Up 3.9% |
| Net cash used in investing activities | US$5.332 billion | US$4.016 billion | Higher mainly due to capital spending |
| Net cash from/(used in) financing activities | US$278 million | (US$1.227 billion) | Borrowings net of repayments supported financing cash flow |
| Cash and cash equivalents | US$1.123 billion | US$773 million | Year-end balance |
| Loans | US$8.190 billion | US$7.088 billion | US$1.508 billion current; 98% denominated in U.S. dollars |
Operating cash flow less reported investing cash outflow was approximately US$581 million. Separately, capital expenditures and investments were US$5.724 billion, 75.3% allocated to upstream. Total debt commitments including interest were reported at US$10.593 billion, including US$1.852 billion due within one year; this is a different measure from the US$8.190 billion loan balance. Management said liquidity and available credit facilities were sufficient for current needs. At year-end, the company reported US$1.123 billion of liquidity, with 84% in currencies other than pesos, mainly U.S. dollars.
Material changes and operating performance
- The US$2.288 billion impairment charge on property, plant and equipment and intangible assets was the principal driver of the operating loss, versus a US$123 million charge in 2022. It included US$1.782 billion associated with planned disposals of mature upstream assets and US$506 million related mainly to natural-gas market competition and expected pricing.
- Revenue fell as export sales of grains and flour, domestic diesel prices, and fertilizer prices declined. Production costs rose 13.0%, while total costs rose 0.7% as lower purchases partly offset higher production costs.
- Net financial results were a US$897 million gain, up from US$128 million, mainly reflecting greater peso devaluation, a larger net monetary liability position in pesos and gains on fair-value assets; higher debt interest and accretion costs partly offset the gains. Income tax expense increased to US$1.020 billion from US$822 million.
- Total hydrocarbon production increased 2.0% to 514 thousand barrels of oil equivalent per day. Crude-oil production rose 7.4%; natural-gas production fell 3.3%. Unconventional production continued to grow, and crude-oil exports to Chile resumed through the reactivated Trans-Andean pipeline.
- Refinery throughput rose to 294.4 thousand barrels per day from 285.5 thousand, with utilization of 89.7%. The company reported its highest crude processing since 2016 and highest gasoline and middle-distillate production since 2007. Domestic liquid-fuel market share was about 56.8%.
- Proved reserves totaled 1.072 billion barrels of oil equivalent, down from 1.187 billion. The reserve replacement ratio was 39%, with 72 million barrels of oil equivalent added against 187 million produced. Proved undeveloped reserves were 473 million barrels of oil equivalent, 44% of total proved reserves.
Outlook, commentary and risks
- Management’s strategy prioritizes Vaca Muerta shale development, infrastructure to evacuate growing production, cost efficiency, refinery adaptation for shale crude, and reduction or divestment of mature conventional assets. On February 29, 2024, the Board approved a process to dispose of 55 blocks; completion, proceeds and any further carrying-value adjustments remain subject to negotiations, approvals and closing conditions.
- The company established an approximately US$5 billion capital expenditure program for 2024, concentrated on unconventional development. Management said spending may be reduced if operating cash flow is below expectations.
- Argentina’s 2023 CPI inflation was 211.4%, and the peso/U.S. dollar exchange rate rose 355.7% during the year. Regulatory changes, foreign-exchange controls, inflation, fuel and gas pricing, import restrictions and government payment delays may affect margins, cash collection, debt service and investment plans.
- YPF is exposed to regulated domestic energy prices and relies in part on government counterparties. Natural-gas export permissions and domestic-supply priorities can affect export commitments; the filing describes past disruptions and force-majeure declarations.
- Material litigation includes the Petersen and Eton Park case. The District Court ruled for YPF in March 2023, but plaintiffs appealed. In April 2024 they separately sought turnover of the Argentine Republic’s YPF Class D shares to satisfy a judgment against the Republic. YPF states it is not a party to that turnover motion; the outcome could affect control, debt change-of-control provisions and market value.
- Other risks include reserve-estimation uncertainty, operational and infrastructure constraints, environmental and climate obligations, litigation, labor disruption, cybersecurity and refinancing access. Attempted cyberattacks increased in 2023, including malware infections, with no material operational impact reported. YPF was in compliance with its debt covenants at year-end; Metrogas received a creditor waiver for an interest-coverage covenant.
Most important facts for investors to verify
- Review the assumptions and valuation evidence behind the US$2.288 billion impairment, especially the US$1.782 billion charge for assets planned for disposal, and track realized sale proceeds and closing approvals.
- Reconcile the US$8.190 billion loan balance with the US$10.593 billion debt commitment measure, near-term maturities, interest obligations and access to foreign currency for repayment.
- Monitor the Petersen/Eton Park appeal and the share-turnover motion, including potential implications for Argentina’s control and YPF’s change-of-control debt provisions.
- Test whether 2024 cash generation can support the approximately US$5 billion capital program while maintaining liquidity and funding Vaca Muerta and infrastructure plans.
- Track local fuel and gas pricing versus costs, government receivable collections, export permissions and the effect of Argentina’s macroeconomic and regulatory changes.