Bazan reported its second quarter results this morning, 12 August 2026. The company reports in US dollars.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
The Quarter
| $ millions | The quarter | A year ago | Change |
|---|---|---|---|
| Revenue | 2,701 | 1,469 | +84% |
| Reported EBITDA | 381 | 44 | +766% |
| Depreciation and amortisation | (52) | (52) | |
| Other expenses, net | (9) | (13) | |
| Operating profit (loss) | 320 | (21) | |
| Financing expenses, net | (40) | (27) | +48% |
| Share in associates' profits | 35 | - | |
| Income tax | (52) | 11 | |
| Net profit (loss) | 263 | (37) | |
| Adjusted EBITDA | 317 | 76 | +317% |
| Adjusted net profit | 169 | (5) |
And for the first half: revenue of $4,642 million against $3,029 million - up 53% - and a swing from a net loss of $68 million to a net profit of $255 million.
Note that I have not recorded percentage changes on the profit lines. When the base is negative, a percentage change is a meaningless number. A swing from loss to profit is a crossing, not a rate.
What Drove It
Two things, and both appear explicitly in the report.
The first - prices. The average price of the refining product basket rose from $657 per tonne to $1,114 per tonne. In polymers, from $1,300 to $1,749 per tonne.
And the average price per barrel in the oil asset investment segment rose from $63 to $99 - with the effective price, after hedges realised in the period, standing at $77 per barrel.
And the second - volume. The company notes that the rise in volumes sold stems mainly from the missile attacks in the comparable quarter a year ago - that is, from a comparison base that was damaged.
And this holds for both segments alike, in refining and in polymers.
The Segments
| $ millions | The quarter | A year ago |
|---|---|---|
| Refining | 2,473 | 1,290 |
| Polymers | 224 | 172 |
| Other | 4 | 7 |
| Total | 2,701 | 1,469 |
Refining turnover almost doubled, and it accounts for 91.6% of total revenue.
And in the oil asset investment segment, which is Bazan's share in the associate Cantium at an effective holding rate of 52%, turnover rose to $134 million from $95 million.
The Most Important Note in the Report
Bazan itself notes something in the report that is easy to miss: in refining and petrochemicals, sales turnover is not the main determinant of results.
What determines them is the refining margin - the difference between revenue from selling the product basket and the cost of the raw materials and energy required to produce it. And in addition, the utilisation of the production facilities.
And that is a material note for reading this report. Turnover of $2,701 million sounds impressive, but it mainly reflects that more expensive crude passed through the plant. A refiner can post record turnover and lose money, if the margin closes.
In this case the margin did not close - it opened, and that is what makes the quarter strong. But turnover itself is not the evidence for it. Adjusted EBITDA is.
The Number I Prefer
Bazan also publishes adjusted figures, which remove the accounting effects in the refining segment - assuming no inventory balances and no hedges against them:
| $ millions | The quarter | A year ago |
|---|---|---|
| Reported EBITDA | 381 | 44 |
| Adjusted EBITDA | 317 | 76 |
| Adjusted operating profit | 226 | 11 |
| Adjusted net profit | 169 | (5) |
And the difference between 381 and 317 is inventory gains - the profit created when inventory bought at a low price is sold at a high one.
That is real profit, and the cash comes in. But it is a result of timing, not of operations, and it becomes a loss just as readily when prices fall.
And for the half the picture reverses: reported EBITDA of $470 million against adjusted EBITDA of $471 million - meaning that over six months the inventory effects almost entirely cancel out.
What Did Worsen
Net financing expenses rose to $40 million from $27 million in the quarter, and for the half to $64 million from $45 million - up 42%.
That is a meaningful increase in a year in which the company returned to profitability, and it merits monitoring.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This is an excellent quarter, and I think many readers will take more from it than it actually says.
The company swung from a loss to a $263 million profit. That is real, and it is large.
But two facts from the report itself demand a careful reading.
The first - the comparison base. The company writes explicitly that the rise in volumes sold stems mainly from the missile attacks in the comparable quarter a year ago. Meaning part of the improvement is not an improvement but a return to normal functioning. This quarter should be compared to a normal quarter, not a damaged one - and a normal quarter is not what we have here.
And the second - prices. The refining product basket almost doubled, from $657 to $1,114 per tonne, and the oil price rose from $63 to $99 per barrel. Prices like these are not a management decision. They are weather.
And from there comes the point I consider the most substantive in the report, and it is in fact a note from the company itself: in refining, sales turnover is not the story. The margin is the story. Turnover of $2.7 billion mainly says that expensive crude passed through the plant.
Which is why the number I look at is adjusted EBITDA: $317 million against $76 million. It removes inventory gains, which are a matter of timing, and leaves what the plant actually produced. It too shows an enormous improvement, so the quarter passes the test - but it is $64 million below the reported figure, and that is a gap worth knowing about.
And what I put an asterisk on is the half year, precisely because it normalises. Over six months reported EBITDA and adjusted EBITDA are almost identical - $470 million against $471 million. That is fine evidence that inventory effects cancel out over time, and that the underlying profitability is real. And in my view that is the strongest piece of evidence in the entire report, far more than any percentage change against a quarter hit by missiles.
