Saudi Aramco Base Oil Company - Luberef SJSC (2223.SE): 2Q Record Quarter On Elevated Margins

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Saudi Aramco Base Oil Company - Luberef SJSC (2223.SE): 2Q Record Quarter On Elevated Margins

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03 Aug 2026 00:00:00 ET │ 11 pages

Saudi Aramco Base Oil Company - Luberef SJSC

(2223.SE)

2Q Record Quarter On Elevated Margins

Buy CITI'S TAKE

Price (02 Aug 26 15:00) SAR125.00

Luberef's 2Q EBITDA ($226M) betters the previous peaks of 2022, albeit Target price SAR146.00

lower than market expectations on a weaker by-product contribution. Expected share price return 16.8%

Resilient FCF generation allows for a 1H dividend of 4.5 SAR (7% DY Expected dividend yield 7.1%

annualized), which alongside a high-grading growth story, still points to

Expected total return 23.9% potential upside from here.

Market Cap SAR21,094M

US$5,617M2Q Summary — EBITDA of $226M is lower than market estimates (VA consensus

$280M) as higher base oil margins ($967/t) and volumes are offset by weaker by-

product cracks. CFFO is above quarterly peaks of 2022 and although FCF sees

tailwinds from ongoing growth capex, the financial framework can comfortably Oliver G ConnorAC

accommodate the rising distributions. We note that the scheduled Yanbu 3Q

+44-20-7986-4043

turnaround is delayed until October to maximize leverage to elevated prompt cracks

oliver.connor@citi.com(the Growth II project will now start up in 1H27, previously 4Q26).

Alastair R Syme

Implications — Tightness in refined product spreads has been a recurring theme alastair.syme@citi.com

from Middle East tensions and we'd argue that Luberef still offers plenty of operating

leverage to this. And whilst we see limited upside to spot cracks ($1200/t), we Tianhong Bi, CFA

believe the valuation is yet to fully capture the long term growth potential in the tianhong.bi@citi.com

business (Jazan GIII) even under mid-cycle conditions (c$500/t).