Resilient and sustainable value creation.
| Metric | Value |
|---|---|
| Earnings per Share | SAR 5.08 |
| Cash Conversion | 93% |
Dear Shareholders,
It is my pleasure to present Luberef’s financial performance for the year ended December 31, 2025. Throughout the year, we operated in a complex market environment shaped by volatility in global trade routes, evolving industry dynamics, and internal operational milestones. Against this backdrop, Luberef maintained a solid financial position, supported by disciplined financial management, resilient margins, and continued progress on our strategic growth agenda.
Financial Performance Overview
In 2025, Luberef generated total revenue of SAR 8.1 billion, compared to SAR 10.0 billion in the prior year. Net income for the year amounted to SAR 855 million, representing a 12 percent year-on-year decrease, primarily driven by lower sales volumes following the planned turnaround, partially offset by improved base oil crack margins and continued cost discipline.
EBITDA for the year stood at SAR 1.1 billion, reflecting a 10 percent decline year on year. This reduction was less pronounced than the decrease in sales volumes, which declined by approximately 15 percent, highlighting the resilience of Luberef’s margin structure, effective cost management, and the benefit of stronger crack margins during the year.
Earnings per share amounted to SAR 5.08, decreasing by 12 percent year on year. While EPS was impacted by lower volumes, it continued to reflect the underlying strength of our core business, supported by margin resilience, disciplined operating cost control, and the continued efficiency of our asset base.
Return On Average Capital Employed (ROACE) stood at 21 percent, compared to 22 percent in the prior year. ROACE remained at a healthy level, underscoring the quality of Luberef’s assets and the Company’s continued focus on efficient capital deployment in a normalized pricing environment.
Sales, Production, and Margins
During 2025, base oil sales volumes reached 1,102 thousand metric tons, a 15 percent decrease year-on-year, largely attributable to the planned turnaround executed to ensure long-term asset integrity, operational reliability, and adherence to the highest global safety standards. While volumes were temporarily impacted, this intervention was essential to safeguarding sustainable operations over the long term.
Base-oil crack margins averaged SAR 1,911 per ton, representing a 12 percent year-on-year increase, supported by lower feedstock prices and effective commercial optimization. This improvement in margins partially offset the impact of reduced sales volumes and reflects Luberef’s ability to adapt to changing market conditions.
Cash Flow, Liquidity, and Capital Allocation
Operating cash flow for the year amounted to SAR 1.5 billion, reflecting a 16 percent decrease year-on-year, primarily due to lower earnings and working capital movements associated with the turnaround and market volatility.
Free cash flow for the year stood at SAR 1.1 billion, compared to SAR 1.6 billion in 2024. The year-on-year decrease was primarily due to higher cash outflows related to Growth II capital expenditure and scheduled turnaround expenses.
Cash conversion remained strong at approximately 93 percent, supported by resilient operating cash generation and disciplined working capital management during the year.
Luberef maintained a strong balance sheet, underpinned by conservative liquidity management and a prudent capital structure. The Company ended the year with a gearing ratio of -10 percent, providing continued flexibility to fund strategic growth initiatives while supporting sustainable shareholder returns.
Capital Expenditure and Strategic Investment
Capital expenditure increased in 2025 as activities related to the Growth II project advanced, including procurement and early execution works.
Net cash outflows from investing activities amounted to SAR 378 million, reflecting the phasing of Growth II project and scheduled turnaround expenses.
Managing Risk and Enhancing Resilience
Throughout the year, we actively managed operational and market risks arising from logistics disruption, freight cost volatility, and global supply chain constraints. A key development in 2025 was the reduction in freight exposure through the execution of affreightment agreements, which improved cost visibility, mitigated volatility, and strengthened supply reliability for our customers.
Shareholder Value and Financial Discipline
At the core of our financial strategy remains a commitment to sustainable shareholder value creation. In 2025, we continued to balance cash returns to shareholders with reinvestment in strategic growth, ensuring that capital allocation decisions support both near-term resilience and long-term value generation.
Outlook
Looking ahead, Luberef enters 2026 with a strengthened operational foundation following the completion of the planned turnaround and continued progress on Growth II. While market conditions are expected to remain dynamic, our strong balance sheet, resilient margins, and disciplined execution position us to navigate volatility and deliver sustainable long-term returns for our shareholders.
Saud Fouad Kamakhi Chief Financial Officer