/cloudfront-us-east-2.images.arcpublishing.com/reuters/J3B767VC3VJEZNKMMO77SMFLHE.jpg "Mexico’s 2024 budget eases Pemex liquidity stress, Moody’s says")
Signage of Petroleos Mexicanos (Pemex) is pictured at the company’s headquarters in Mexico City, Mexico July 26, 2023. REUTERS/Raquel Cunha/File Photo Acquire Licensing Rights
MEXICO CITY, Sept 13 (Reuters) – Mexico’s proposed 2024 budget eases Pemex’s (PEMX.UL) liquidity stress but the state energy company’s fundamentals remain weak, Moody’s Investors Service said on Wednesday.
“We assume these measures will help the company repay debt during 2024, avoiding a default, but do not address Pemex’s structural liquidity pressures as incorporated in our negative outlook,” the ratings agency said in a report.
Mexico’s government presented on Friday the budget in which it projected an overall cut of 36% to Pemex, but included a capital injection of 150 billion pesos ($8.25 billion).
Pemex’s cash flow generation and credit metrics will likely remain weak for the next three years “as it increases fuel production while grappling with limited capital investment ability, high debt maturities and volatile oil and fuel prices,” Moody’s said.
“We also expect the next administration – which is set to take office in late 2024 – will find it increasingly burdensome to replicate the current government’s level of support.”
Reporting by Carolina Pulice and Noe Torres; Editing by Stefanie Eschenbacher and Richard Chang
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