YPF posted losses of 85 billion pesos (US$ 1.105 billion) for the second quarter, the state oil company reported last Monday in a communiqué.
This figure amply exceeded the negative result of 33.36 billion pesos registered for 2019 while the first quarter of this year (almost untouched by the pandemic) recorded a profit of 6.35 billion pesos.
The firm’s communiqué indicated that "this result includes a net operating loss of 36 billion pesos before considering the effect registered by the deterioration of asset value."
One factor influencing the loss was the accounting adjustment made after revaluing the gas assets at a loss of 57 million pesos due to the fall in world prices.
Oil sales contracted 85 percent in the immediate wake of the quarantine beginning on March 20 and later in the quarter stabilised around the level of a 45 percent fall, informed YPF.
In the case of diesel, the fall bottomed out at 50 percent before stabilising at a decline of 20 percent in the last 10 weeks.
This reduction of sales affected company income which reached 134 billion pesos (US$ 1.74 billion), 17 percent less than the second quarter of 2019 even in nominal terms.
Fuel prices have remained frozen since late 2019 with world oil prices at record lows.
"The company was undergoing a complex situation from the economic and financial standpoint which was then compounded by the effects generated by the Covid-19 pandemic," the communiqué pointed out.
The slump also hit hydrocarbon output, which fell nine percent as against the previous quarter.
The firm highlighted that the plunge fell within the framework of a worldwide decline as a result of the pandemic.
"Oil production nationwide fell by almost 11 percent in the same period and worldwide the drop was over 15 percent between April and June," the report specified.
"In this tough context for the global oil and gas industry, most of the oil majors reported negative results on a huge scale, including massively downscaling the value of their assets," the report affirmed.
Faced with these circumstances, YPF announced that it was "comprehensively reviewing its cost structures to achieve an operation competitive internationally while promoting efficiencies permitting us to prepare the scenario for when we overcome this situation" while at the financial level it had recently managed to "improve its debt profile."
"With all these actions being implemented, some operational and financial results are being seen which permit us to glimpse that the most critical moment of the difficult situation compounded by the effects of the pandemic are very slowly beginning to fade away,” the report maintained.
Argentina's economy, now hit by the pandemic, has been in recession since 2018 with almost 40 percent of its 44 million inhabitants poverty-stricken. In the first five months of this year the economy shrank by 13.2 percent and the International Monetary Fund has projected negative growth of -9.9 percent for this year.