Future cash flow, uncertain due to “circumstances beyond control”: Pemex

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Mexican oil (Pemex) said that they have the capacity to maintain operational continuity and meet their obligations; however, he warned that he has no certainty about the future cash flow, especially since the Covid-19 generated damages.

“We believe we have the ability to meet our payment obligations and our operational continuity. However, our future cash flow it is uncertain due to out-of-control circumstances, ”he explained in the document.

He noted that the results of the operation and financial conditions were negatively affected by the fall in oil prices and anticipated that the negative effects will continue.

Pemex submitted the Annual Report to the Securities and Exchange Commission (SEC), the US body charged with overseeing that publicly-listed companies comply with laws, regulations and disclose information to investors.

He added that an “adverse impact due to a sustained decrease in oil prices below the 2020 budget average and due to the slowdown in the economy could have an adverse impact on our results of operations, cash flows and may require additional actions to face that
deficit”.

It also reads: Pemex loses 293 million pesos a day for gasoline

Pemex said it analyzes the impact it will have on the business plan 2019-2023 the fall in oil prices, which will imply adjusting the budget to reflect the impacts on cash flow, due to the decrease in income from the sale of oil and derivatives, the volume of production, government support, tax benefits and the peso-dollar parity.

He warned that there is the possibility of having accounting consequences due to the drop in income, the value of inventories, the devaluation of fixed assets, everything that could affect financial control. In addition, there may be difficulties in obtaining financing on favorable terms.

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