YPF Sociedad Anónima — Form 20-F Summary
Period and basis: Annual report for the fiscal year ended December 31, 2022, not a standalone fourth-quarter report. YPF is Argentina’s integrated oil and gas leader, operating primarily in Argentina; the Argentine Republic owns 51%. Financial statements are audited IFRS statements presented in U.S. dollars. YPF changed its presentation currency from pesos to dollars in 2022 and retrospectively presented comparative periods in dollars.
Financial and operating results
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | US$18.757 billion | US$13.682 billion |
| Gross profit; gross margin | US$5.073 billion; 27.1% | US$3.053 billion; 22.3% |
| Operating profit; operating margin | US$2.482 billion; 13.2% | US$699 million; 5.1% |
| Net profit | US$2.234 billion | US$16 million |
| Operating cash flow | US$5.693 billion | US$4.201 billion |
| Cash used in investing activities | US$4.016 billion | US$2.547 billion |
| Cash used in financing activities | US$1.227 billion | US$1.600 billion |
| Cash and cash equivalents, year-end | US$773 million | US$611 million |
| Loans, year-end | US$7.088 billion | US$7.379 billion |
Current assets were US$5.143 billion and current liabilities US$4.783 billion, implying working capital of approximately US$360 million. Of loans, 93.2% accrued fixed interest and 96.8% were denominated in U.S. dollars. The filing separately reports US$10.585 billion of total debt-related contractual payments, including interest over the instruments’ lives; US$2.2 billion was scheduled within one year. These figures are not directly comparable to the balance-sheet loan principal.
Capital expenditures and investments rose to US$4.230 billion from US$2.654 billion; 74.5% of 2022 spending was allocated to Upstream. YPF reported a simple operating-cash-flow-less-investing-cash-flow surplus of US$1.677 billion in 2022. It is not identified in the filing as a defined free-cash-flow measure.
Material changes and business performance
- Revenue increased 37.1% year over year, while operating profit rose US$1.783 billion and net profit increased from US$16 million. Higher domestic fuel prices and sales volumes were major contributors; operating costs and expenses also increased.
- Segment operating profit was US$1.306 billion in Upstream, US$1.523 billion in Downstream and US$90 million in Gas and Power. Central Administration and Others recorded a US$401 million operating loss.
- Total hydrocarbon production increased 7.2% to 503 thousand boe/day. Oil production was 226 thousand barrels/day, up 7.2%; natural gas production rose 5.0%. Unconventional production reached 223.8 thousand boe/day, 44.5% of YPF’s total.
- Proved reserves rose to 1.187 billion boe from 1.143 billion boe. The reported reserves replacement ratio was 124%; proved undeveloped reserves represented 50% of total proved reserves.
- Refinery throughput averaged 285.5 thousand barrels/day versus 270.2 thousand in 2021, the highest level in five years. Domestic liquid-fuel sales volume increased 12.9%.
- Net financial results improved to a US$128 million gain from a US$271 million loss. Income tax expense was US$822 million, up from US$699 million.
Outlook, risks and unusual items
- 2023 outlook: Management planned approximately US$5 billion of capital expenditures, about 20% above 2022, with roughly half directed to shale. It forecast year-over-year oil production growth of about 8% and gas growth of about 3%, including shale oil growth of 30% and shale gas growth of 15%. These are management estimates, not guarantees; the filing says spending may be reduced if operating cash flow is weaker than expected.
- YPF set a maximum reference net-leverage target of 1.75 times EBITDA. The filing text does not provide a clear 2022 EBITDA value with which to compare this target.
- Plans include expanding Vaca Muerta evacuation and processing infrastructure, refinery upgrades and continued evaluation of a large-scale LNG opportunity. A 100 MW first stage of the Zonda solar farm was expected to enter commercial operation in 2023.
- Key exposures include Argentine inflation, peso depreciation, foreign-exchange and capital controls, regulated or constrained domestic energy prices, import/export restrictions, sovereign and political risk, financing access, commodity-price volatility, and dependence on government counterparties. Argentine CPI inflation was 94.8% in 2022 and the official peso exchange rate depreciated 72.4% against the U.S. dollar.
- Other material risks include Vaca Muerta investment and infrastructure execution, reserve estimation and replacement, concession renewal, environmental and climate obligations, operational and safety incidents, labor disruption, cyber threats, and debt covenant or refinancing risk. YPF reported compliance with its own debt covenants; Metrogas received a lender waiver for an interest-coverage covenant.
- Contingencies and subsequent developments: On March 31, 2023, after year-end, a U.S. court granted YPF summary judgment in the Petersen/Eton Park case, dismissing claims against YPF; the case against Argentina continued and plaintiffs could seek to appeal. In April 2023, YPF Defendants agreed to pay US$287.5 million, plus interest and subject to conditions and court approvals, as their share of a US$575 million Maxus settlement. The filing expected payment and releases in the second half of 2023.
- There was no material impairment charge reversal in 2022 for the Gas–Neuquina Basin CGU; its US$2.585 billion carrying value approximated recoverable value. Deloitte identified this impairment assessment as a critical audit matter. Management also disclosed that a hypothetical sustained reduction of US$5/barrel in oil prices and US$0.50/mmBtu in gas prices would increase upstream impairment by approximately US$1.04 billion before tax, all else equal.
- The filing reports no dividends for fiscal years 2019–2021. A proposed reserve for future dividends is not a declaration or payment of a dividend. Deloitte issued an unqualified opinion on the financial statements and found internal control over financial reporting effective.
Investor verification priorities
- Confirm the distinction between US$7.088 billion of balance-sheet loans and US$10.585 billion of contractual debt payments, including interest, and review the maturity schedule and foreign-exchange access constraints.
- Track actual 2023 capital spending, production growth, shale well economics and whether midstream capacity keeps pace with Vaca Muerta output.
- Assess domestic fuel and gas pricing, regulated-market exposure, government receivables and the collectability and terms of Plan GasAr incentives.
- Review the final status, payment amount and court approvals for the Maxus settlement, and any appeal or further proceedings involving Petersen/Eton Park.
- Test proved-reserve additions, undeveloped-reserve conversion, price assumptions and impairment sensitivity against subsequent operating results.
- Verify whether dividend reserves result in an approved distribution, taking account of capital needs, debt service, legal restrictions and currency controls.