EM LATAM CREDIT: Argentina's YPF SA (YPFDAR; Caa1/B-/CCC) 4Q 2024 Results
“Net loss $284 million, -85% y/y, estimate profit $156.4 million” – BBG
Neutral for yields
• Argentina integrated oil and gas exploration company YPF 4Q 2024 results were good enough not to affect the overall credit profile. YPF issued a 8NC3 (average life) at 8.5% in January that was last quoted 8.2% and traded in a 7.93-8.5% range since then.
• 4Q Revenue fell 10% sequentially but rose 13% y/y while adjusted 4Q EBITDA fell 22% y/y but increased 15% full year. Production was up 2% y/y, dragged down by a drop of 11% in NGLs. Crude oil exports rose 97% while shale oil production increased 10% sequentially and 26% y/y.
• Net leverage fell from 1.7x to 1.6x. Net debt grew 9% to USD7.4bn while EBITDA rose 15% to USD4.7bn. YPF continues to be a shale oil story exploiting the Vaca Muerta region vast reserves, but as the national oil company of Argentina the fate of the bonds is somewhat tied to the performance of the sovereign over the longer term.
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EQUITY TECHS: E-MINI S&P: (H5) Bear Threat Still Present
- RES 4: 6178.75 High Dec 6 and key resistance
- RES 3: 6162.25 High Jan 24
- RES 2: 6147.75 High Jan 31
- RES 1: 6069.00 High Feb 3
- PRICE: 6054.75 @ 14:42 GMT Feb 5
- SUP 1: 5935.50 Low Feb 3
- SUP 2: 5892.37 76.4% retracement of the Aug 5 - Dec 6 bull leg
- SUP 3: 5842.50 Low Jan 14
- SUP 4: 5809.00 Low Jan 13 and a key resistance
Monday’s initial sell-off in the S&P E-Minis contract and breach of support at 5948.00, the Jan 27 low, strengthens a bearish threat and cancels - for now - a recent bullish theme. An extension down would open 5892.37, a Fibonacci retracement point. Initial resistance is at 6069.00, Tuesday’s intraday high. Gains are considered corrective, however, a stronger rally would expose key resistance at 6178.75, the Dec 6 high.
AUD: FX Exchange traded Option
FX Exchange trade Option, looking for AUD upside, covers the next RBA meeting on the 18th Feb.
- AUDUSD (7th Mar) 64.00c, bought for 0.26 in ~1.74k.
US DATA: Final Services PMI As Expected, 31-Month High For Job Creation
The final January releases for the S&P Global US services and composite PMIs were broadly as expected, with a small upward revision from the flash release.
- Services: 52.9 (cons 52.9, prelim 52.8) in January final after 56.8 in Dec.
- Composite: 52.7 (cons 52.5, prelim 52.4) in January final after 55.4 in Dec. The 55.4 in Dec was the highest since Apr 2022.
- The press releases notes a 31-month high of job creation: "The US service sector remained in growth territory at the start of 2025, despite posting weaker rises in both activity and new orders.
- “Companies expressed confidence in the outlook and took on extra staff to the largest degree in more than two-and-a-half years. Meanwhile, inflationary pressures strengthened."
- Inflation details: "Higher labor costs was the main factor behind a further sharp increase in input prices in January. The rate of inflation reached a three-month high and was broadly in line with the series average. Higher prices for materials and utilities were also recorded.”
- “In line with the picture for input costs, the pace of output price inflation also quickened in January as companies passed through higher cost burdens to customers. The solid increase in charges was the fastest since last September."
- Full press release here.
