Argentina's YPF Says Q2 Net Profit Up 8%

Argentina's state-controlled energy company YPF had an 8% increase in second quarter net profit to 833 million pesos ($181 million), it said in its first earnings statement reflecting performance since the company was nationalized in May.

Reporting late on Friday, YPF said the company had a net profit of 771 million pesos in the second quarter of 2011.

YPF said second quarter operating profit was 1.86 billion pesos, up 25.5% from the second quarter of 2011. Quarterly ordinary revenues rose 17.7% to 16.08 billion pesos, thanks to higher liquid fuel prices, it said.

The government grabbed a 51-% stake in YPF from Repsol after accusing the Madrid-based parent company of under investing in Argentine production. Spain was incensed by the nationalization and is helping Repsol press for compensation that may take years to settle.

"These earnings seem positive, but it is too early to say whether YPF will turn out to be one of the well-run state oil companies, such as Petrobras in Brazil and Ecopetrol in Colombia, or one of the poorly run ones," said Ignacio Labaqui, who analyzes Argentina for Medley Global Advisors in New York.

Argentine President Cristina Fernandez easily won re-election last October, promising to increase state involvement in Latin America's No. 3 economy.

The 59-year-old Peronist leader is part of a bloc of regional governments - including Venezuela, Ecuador and Bolivia - bent on regaining control of their natural resources from foreign companies.

YPF's first-half net profit was 2.13 billion pesos ($462 million), down from a revised 2.37 billion pesos in the same 2011 period, the statement said.

The Fernandez administration, also on Friday, ordered a tax hike on biodiesel exports, a move it said was needed to bring down domestic fuel prices.

YPF on Thursday opened a diesel fuel refinery near the city of La Plata that is expected to produce 1.75 billion liters per year as part of Argentina's plan for regaining energy self-sufficiency after