YPF hits record profits as Argentina's economy stumbles on domestic demand

Argentina's country risk rose for a fifth consecutive session to 465 basis points on Monday, drifting away from the 400-point floor it had touched weeks earlier, and the divergence between that deterioration and the record-breaking historical results just published by YPF captures, better than any other data point, the two-speed economy that defines this moment of Javier Milei's government.

YPF, whose shares trade on the New York Stock Exchange under the ticker YPF, reported the highest adjusted EBITDA in its history for the second quarter of 2026: USD 2.804 billion, a 150% year-on-year jump, with a 43% margin on revenues not seen in two decades. Net income of USD 1.205 billion was the second-highest in the company's history. The engine was Vaca Muerta: shale oil production averaged 213,000 barrels per day during the quarter, a 47% year-on-year advance, and the company projects reaching 250,000 barrels before year-end. Argentina, according to a BBVA Research report, could contribute 1.1% of global oil production in 2026, up from a marginal share barely a decade ago. For the first time in the country's history, crude oil displaced soybean meal as the leading single export product in the first half, a milestone that reshapes the internal geopolitics of foreign-currency-generating sectors.

This energy-sector strength was the backdrop to the day's other major transaction: YPF accepted Edenor's USD 780 million offer to acquire the 70% stake in Metrogas and Metroenergía. Edenor, controlled by businessmen José Luis Manzano and Daniel Vila, already held 9.23% of Metrogas through its Integra Capital vehicle. The deal, advised by Citigroup, fits within YPF's 4x4 strategic plan, under which chairman Horacio Marín seeks to concentrate capital and management attention exclusively on Vaca Muerta. Closing is subject to regulatory approvals. Edenor, whose shares trade on the NYSE under the ticker EDN, thus takes control of the country's leading gas distributor, with 2.4 million customers in the City of Buenos Aires and eleven districts of the Greater Buenos Aires area.

The counterpoint to this energy dynamism is a domestic economy that cannot gain traction. Retail sales at SMEs fell 3.8% year-on-year in July, accumulating a 2.7% contraction in the first seven months of the year, according to the Confederación Argentina de la Mediana Empresa. The public spat between Marcos Galperín — who noted that Mercado Libre is growing at 38% in constant currency and that its volume may already exceed what CAME measures — and the trade group itself illustrates a real but incomplete phenomenon: e-commerce is gaining share in a market that, in aggregate terms, still is not expanding. The UBA's Observatorio de Psicología Social Aplicada survey is telling: 59% of Argentines rate the economic situation as bad or very bad, 61% cite lack of employment as the main problem, and 53% expect no improvement in the next twelve months. Wages projected by companies — a 27% nominal annual increase according to Mercer — fall short of market inflation expectations, which the BCRA's Relevamiento de Expectativas puts at 29.8% for all of 2026. Sales of 0km cars fell 30.3% year-on-year in July and the market has accumulated a 12.8% drop so far this year, well below the 650,000 vehicles projected at the start of the year. Construction, for its part, has lost between 62,000 and 65,000 formal jobs since November 2023, one-third of the total destruction of private wage-earning positions in the period.

On the financial front, Monday's session was marked by tension. The Merval recovered 1.1% in pesos, breaking a six-session losing streak, though measured in dollars via the contado con liquidación it remained below the 2,000-point mark. Sovereign bonds retreated 0.7% on average. The rebound in country risk no longer responds primarily to external factors — the S&P 500 and Nasdaq are trading at all-time highs — but to internal signals: pre-electoral uncertainty, activity data that fails to consolidate, and a Buenos Aires City CPI that jumped to 2.9% in July, foreshadowing that Thursday's national print will exceed recent readings. The wholesale dollar held below the 1,500-peso threshold, contained by indirect official interventions via sales of futures contracts and dollar-linked securities, while the blue-market rate climbed ten pesos to 1,535, with the BCRA buying just USD 13 million in the spot market.

Adding to this is a political controversy that has dented confidence in economic management: Deputy Marcela Pagano filed a criminal complaint against Minister Luis Caputo and BCRA President Santiago Bausili over the allocation of 4 trillion pesos from the latest debt auction to accounts at commercial banks instead of the Treasury's usual account at the Central Bank. The Economy Ministry explained that the decision aimed to avoid excessive liquidity absorption at a moment of stressed rates, but the initial lack of clarity from Bausili himself at the press conference fueled the political noise. The episode comes as the Secretaría de Finanzas, as reported by Infobae, took advantage of banks' preference for financing the State — amid record delinquency in private credit — to extend peso-debt maturities beyond the 2027 elections.

The week ahead concentrates several catalysts. Thursday brings July's CPI print, which the market estimates at between 2% and 2.2% nationally — above June's 1.9% and with potential for an upside surprise. Wednesday features the auction of the Bonar 2029, the instrument through which the Treasury seeks to attract dollars for its financing program in the absence of access to international markets, whose reopening moves further away as long as country risk fails to fall to sustainable levels. In addition, the government of La Rioja begins issuing on August 17 the Chachos, its provincial quasi-currency, injecting 4 billion pesos in debt-cancellation bonds to 80,000 beneficiaries — a sign that strains in provincial accounts, which in 2025 posted a primary deficit for the first time in a decade according to PwC, have not disappeared. Vaca Muerta oil production, the evolution of BCRA reserves — which closed Monday at USD 49.567 billion — and exchange rate behavior heading into the inflation data will be the variables the market watches most closely.

**YPF (NYSE: YPF)** — The state-controlled oil company reported record adjusted EBITDA of USD 2.804 billion in the second quarter of 2026, a 150% year-on-year increase driven by Vaca Muerta shale production, which advanced 47% to 213,000 barrels per day. Simultaneously, YPF accepted Edenor's USD 780 million offer to divest its 70% stake in Metrogas and Metroenergía, in line with its strategy of concentrating investment in unconventional hydrocarbons.

**Edenor (NYSE: EDN)** — The electricity distributor controlled by José Luis Manzano and Daniel Vila agreed to purchase the majority stake in Metrogas for USD 780 million, in a deal advised by Citigroup that turns Edenor into the controlling shareholder of the country's leading gas distributor, with 2.4 million customers in the Buenos Aires metropolitan area. The closing is subject to regulatory approvals.

**MercadoLibre (NASDAQ: MELI)** — The company announced a USD 91 million investment to build its first warehousing center in Argentina's interior, in Estación Juárez Celman, Córdoba, with capacity for 6 million products and 2,000 direct jobs. The investment is part of the USD 3.4 billion plan committed to Argentina in 2026, against the backdrop of 38% growth in transaction volume in constant currency during the last quarter.