Saudi Aramco Base Oil Co - Luberef (SAU:2223)

Q2 2026 Saudi Aramco Base Oil Company - Luberef SJSC Earnings Call Transcript

Aug 3, 2026 / 01:00 PM GMT

Release Date Price: ﷼127.4 (+1.92%)

Transcript

Key Points

Positve

Record-high base oil crack margin of 2,732 SAR per metric ton in H1 2026, up 49% year-over-year and 52% above the 10-year historical average.
Exceptional financial performance with net income of 992 million SAR, a 113% increase year-over-year, and EBITDA of 1,184 million SAR, up 94%.
Strong safety record with zero total recordable incidents and over 44.4 million man-hours without a lost time injury, alongside 100% mechanical availability.
Robust balance sheet with a negative gearing ratio of 20% and strong free cash flow generation, up 346% year-over-year, supporting a 4 SAR per share interim dividend.
Strategic progress on Growth 2 project (73% complete) and new initiatives like the Assassana program and MOU with Abar Industries to boost local content and downstream development.
Agility in rescheduling the planned shutdown to October to capitalize on favorable market conditions, demonstrating proactive value-capture management.

Negative

Geopolitical tensions in the Bab el-Mandeb region have forced export rerouting via the Cape of Good Hope, increasing freight costs and transit times by 45-60 days.
Byproduct margins (e.g., diesel) declined significantly in Q2, turning negative at -12 SAR per metric ton, due to falling feedstock and fuel prices.
Inventory revaluation losses of approximately $40-50 million in Q2 due to a dramatic drop in feedstock prices, negatively impacting net income.
Growth 2 project completion delayed, with the vacuum distillation unit scope pushed to H1 2027, potentially delaying full capacity expansion and Group 3 production ramp-up.
Record crack margins are not expected to last, with management acknowledging market normalization and potential margin declines in the future.
Uncertainty around the duration of the Bab el-Mandeb disruption and its impact on export volumes and working capital, with no clear timeline for resolution.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

2223.SE - Saudi Aramco Base Oil Company - Luberef SJSC
Q2 2026 Saudi Aramco Base Oil Company - Luberef SJSC Earnings Call
Aug 03, 2026 / 01:00PM GMT

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Presentation
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Assalamu alaykum wa rahmatullahi wa barakatuh. Na rahabu bikum jami'an. We had al-bith fasorte. Limuna kashitila tajinis falawal la ama al-finu sittura shirin lashiri katilubrif. When not done the nowhere, ilan haad al-bith sayitim watas jirahu tofir nusfatil min ma'atir jamatim bil loghatir al-biya. Wadhalika ribamanil tasil al-fa'al majami al-mustafireen wal mustamine. Hello everyone, good afternoon. My name is Sara Khalghandi. I'm the Investor Relations Manager at Lubret. It is my pleasure to welcome you in today's audio webcast, where we will be discussing our performance for the first half of 2026. I'm also pleased to be joined virtually by our President and Chief Executive Officer,

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