BOGOTÁ, Colombia, Nov. 9, 2023
/PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced
today the Ecopetrol Group's financial results for the third quarter
and cumulative year to date for 2023, prepared under International
Financial Reporting Standards in Colombia.
In 3Q23, the Ecopetrol Group generated an
EBITDA of COP 16.0 trillion, an
EBITDA margin of 45.7%, and a net profit of COP 5.1 trillion. The results were leveraged on
the outstanding operating performance attributed to: i) a
production level of 741 mboed, a milestone not reached since the
fourth quarter of 2015; ii) a throughput of 410 mbd, with the
Cartagena Refinery achieving its second-best level in history, and
iii) transported volumes of 1,126.7 mboed, a figure on par with
pre-pandemic levels. The above was offset by:i) a lower Brent-COP
ratio; ii) a higher effective tax rate; iii) the deterioration of
crude and product spreads; iv) an inflationary effect on costs; and
v) a decline in exploratory assets.
Table 1: Financial Summary Income Statement
– Ecopetrol Group
Billion
(COP)
|
|
3Q
2023
|
3Q
2022
|
∆ ($)
|
∆ (%)
|
|
9M
2023
|
9M
2022
|
∆ ($)
|
∆ (%)
|
Total
sales
|
|
35,130
|
43,438
|
(8,308)
|
(19.1 %)
|
|
108,284
|
119,796
|
(11,512)
|
(9.6 %)
|
Depreciation and
amortization
|
|
3,417
|
3,056
|
361
|
11.8 %
|
|
9,665
|
8,361
|
1,304
|
15.6 %
|
Variable
cost
|
|
12,617
|
16,982
|
(4,365)
|
(25.7 %)
|
|
41,682
|
45,390
|
(3,708)
|
(8.2 %)
|
Fixed cost
|
|
4,571
|
4,397
|
174
|
4.0 %
|
|
13,524
|
11,700
|
1,824
|
15.6 %
|
Cost of
sales
|
|
20,605
|
24,435
|
(3,830)
|
(15.7 %)
|
|
64,871
|
65,451
|
(580)
|
(0.9 %)
|
Gross
income
|
|
14,525
|
19,003
|
(4,478)
|
(23.6 %)
|
|
43,413
|
54,345
|
(10,932)
|
(20.1 %)
|
Operating and
exploratory expenses
|
|
2,709
|
1,781
|
928
|
52.1 %
|
|
7,378
|
5,986
|
1,392
|
23.3 %
|
Operating
income
|
|
11,816
|
17,222
|
(5,406)
|
(31.4 %)
|
|
36,035
|
48,359
|
(12,324)
|
(25.5 %)
|
Financial income
(loss), net
|
|
(630)
|
(1,853)
|
1,223
|
(66.0 %)
|
|
(4,180)
|
(5,366)
|
1,186
|
(22.1 %)
|
Share of profit of
companies
|
|
109
|
218
|
(109)
|
(50.0 %)
|
|
607
|
657
|
(50)
|
(7.6 %)
|
Income before income
tax
|
|
11,295
|
15,587
|
(4,292)
|
(27.5 %)
|
|
32,462
|
43,650
|
(11,188)
|
(25.6 %)
|
Income tax
|
|
(5,307)
|
(5,115)
|
(192)
|
3.8 %
|
|
(14,236)
|
(14,309)
|
73
|
(0.5 %)
|
Net income
consolidated
|
|
5,988
|
10,472
|
(4,484)
|
(42.8 %)
|
|
18,226
|
29,341
|
(11,115)
|
(37.9 %)
|
Non-controlling
interest
|
|
(902)
|
(959)
|
57
|
(5.9 %)
|
|
(3,392)
|
(2,786)
|
(606)
|
21.8 %
|
Net income
attributable to owners of Ecopetrol
|
|
5,086
|
9,513
|
(4,427)
|
(46.5 %)
|
|
14,834
|
26,555
|
(11,721)
|
(44.1 %)
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
16,038
|
21,142
|
(5,104)
|
(24.1 %)
|
|
48,466
|
59,249
|
(10,783)
|
(18.2 %)
|
EBITDA
Margin
|
|
45.7 %
|
48.7 %
|
-
|
(3.0 %)
|
|
44.8 %
|
49.5 %
|
-
|
(4.7 %)
|
The financial information included in this report has not been
audited. It is expressed in billions or trillions of Colombian
pesos (COP) or US dollars (USD), or thousands of barrels of oil
equivalent per day (mboed) or tons, as noted. Specific figures in
this report were rounded to the nearest decimal place for
presentation purposes.
Forward-looking statements: This release contains statements
that may be considered forward-looking statements concerning
Ecopetrol's business, operational and financial results, and
prospects for growth. These are forward-looking statements and, as
such, are based solely on management's expectations regarding
Ecopetrol's future and its ongoing access to capital to fund
Ecopetrol's business plan. Such forward-looking statements depend
primarily on changes in market conditions, government regulations,
competitive pressures, and the performance of the Colombian economy
and the industry, to mention a few, and are therefore subject to
change without notice.
Statement from Ricardo Roa Barragán, President,
Ecopetrol S.A.
Within the framework of Ecopetrol's
15th anniversary celebration on the New York Stock Exchange, we
hosted our Investor Day, during which we reaffirmed our 2040
Strategy, "Energy that Transforms". Among the key points presented
to the market, I would like to highlight the following: i) our
steadfast commitment to the Strategy, preserving the value of
our hydrocarbon business while accelerating the growth of new
low-emission solutions; ii) continue working towards a just
and equitable energy transition; iii) leverage the strong
performance and promising outlook ISA contributes toward our
diversification into the electric energy sector; and iv)
preserve rigorous capital discipline to ensure sustainable
competitive returns.
In alignment with our strategic objectives and thanks to the
dedication of the entire Ecopetrol Team, we take great pride in
presenting the third-quarter 2023 operational and financial results
of the Ecopetrol Group. Once more, I would like to underscore the
exceptional operating and financial performance across all our
lines of business, even within the dynamic market landscape. Our
unwavering devotion to financial sustainability and the
creation of value for all our stakeholders remains
the cornerstone of our efforts.
As we have consistently demonstrated throughout the year, we are
resolute in our determination to effectively manage and
closely monitor the challenges we foresee on the short-term
horizon, including i) climate-related difficulties resulting from
the "El Niño" phenomenon; ii) environmental and physical security
concerns; iii) ongoing environmental licensing issues and iv)
mitigating the cash effect of FEPC debt.
I would like to start by highlighting several key
developments that support the strategic direction of the
Ecopetrol Group. Among these, the Glaucus-1 well discovery in the
COL-5 Block of the Colombian Caribbean. This discovery
unequivocally confirms the presence of a gas field, expanding the
gas province that was already delimited with the Gorgon and
Kronos wells. The development of this gas province in the southern
Caribbean holds the potential to
substantially contribute to the country's energy security and
further support the ongoing energy transition process. In a move
aimed at fortifying our presence in the international market, our
new trading company, Ecopetrol US Trading (EUST), headquartered in
Houston, Texas, began operating
this quarter. This strategic step underscores our commitment to
solidify our global commercial strategy and enlarge our
international footprint. Acknowledging the Company's financial
and operating resilience, I am pleased to report that, in
September, Moody's Investors Service reaffirmed Ecopetrol S.A.'s
investment-grade rating.
In the third quarter of 2023, several noteworthy
operating and financial milestones were achieved: i) our
quarterly production reached its highest level since 4Q15, standing
at 741 mboed; ii) our refineries demonstrated exceptional
performance with throughputs exceeding 400 mbd; iii) transported
volumes reached 1,127 mbd, a figure comparable to pre-pandemic
levels. The following financial milestones were also realized: i)
we made significant progress in reducing the accounts receivable
with the Fuel Price Stabilization Fund (FEPC), closing the quarter
with an outstanding balance of COP 25.7
trillion. During the quarter, we offset COP 8.0 trillion against dividends payable to the
Nation and received COP 1.9 trillion
in cash, while the average monthly accrual continued to decrease;
ii) we executed a record CAPEX, marking the highest investment over
the past seven years, totaling COP 6.8
trillion (COP 19.2 Trillion
for 9M23); iii) we transferred COP 21.6
trillion to the Nation, bringing the total amount to date to
COP 45.1 trillion as of September 2023.
In addition to our exceptional operational achievements,
Ecopetrol delivered outstanding results in its key financial
indicators. Our revenues for 3Q23 totaled COP 35.1 trillion, net income COP 5.1 trillion, with an EBITDA of COP 16 trillion, and EBITDA margin of 46%
reported for the quarter. For the year-to-date, consolidated
revenues stand at COP 108 trillion,
and net income at COP 15 trillion,
with an EBITDA of COP 48 trillion,
and an EBITDA margin of 45% were reported. Additionally, our
positive financial health is reflected in the following key
indicators: the gross debt/EBITDA ratio stood at 1.7 times, the
ROACE reached 12.5%, and the third quarter of 2023 closed with a
cash balance of COP 14.1
trillion.
Our hydrocarbons business line reported significant
progress and achievements to September, with 15 exploratory wells
successfully drilled, surpassing our annual target by an impressive
60%. During 3Q23, in addition to the gas discovery in the Glaucus-1
well, we announced five onshore discoveries. These six discoveries,
together with the recent Magnus-1 discovery in October,
collectively mark a total of 10 exploratory successes for 2023.
In terms of production performance, we achieved an
average of 741 mboed during the quarter, marking an increase of 20
mboed in comparison to 3Q22. The contributions and production
growth observed in key areas including the Caño Sur and Rubiales
fields in Colombia, along with our
operations in the Permian region in the
United States are worth noting. Furthermore, decarbonization
efforts remain a focal point, as evidenced by the successful
reduction of carbon emissions of 351 thousand tCO2e in the first
nine months of 2023 in the upstream segment.
The midstream segment increased total transported volume
by 52 mbd versus 3Q22, resulting in a total of 1,127 mbd
transported in 3Q23. This growth is primarily attributed to the
higher crude volumes transported, particularly associated with
greater production levels in the Llanos region.
Our refining segment attained a consolidated throughput
of 410 mbd, and a combined gross margin of USD 20.6 USD/Bl. This combined gross margin
represents the second highest achieved this year and ranks as the
third highest historically. These achievements were possible
because of the uninterrupted operation of the Cartagena Crude Oil
Plant Interconnection project (IPCC), underpinned by an average
operational availability of 95%. This performance compares
favorably to 3Q22 when we reported a combined throughput of 395 mbd
and a combined gross margin of 20.3
USD/Bl.
On the commercial front, in addition to the opening of
our trading subsidiary in Houston,
we are pleased to highlight the improved realized prices of our
export crude basket, increased international sales, and the
performance of our subsidiary, Ecopetrol Trading Asia, which has
successfully marketed over 100 million barrels of crude in the
Asian market to date.
In addition, our Carbon Trading desk is making considerable
strides in advancing our decarbonization strategy within our
commercial operations. Notably, in 2023, we have executed three
carbon-offset crude oil shipments, offsetting a total of 181
thousand tons of CO2 emissions.
During 3Q23, in our low-emissions solutions business
line, natural gas and LPG collectively contributed 23% of the
Group's overall hydrocarbon production. In renewable energy, our
solar parks, including Brisas, Castilla, and San Fernando,
alongside the Cantayús Small Hydroelectric Plant, collectively
reduced emissions by 18,974 tons of CO2 equivalent by the end of
September. Additionally, these initiatives yielded cost savings of
nearly COP 28,155 million.
Our transmission and toll roads business line continues
to record positive operating and financial results. ISA accounted
for 12% of the Group's EBITDA for 3Q23. During this same period,
our subsidiary achieved total revenues of COP 3.2 trillion and an EBITDA of COP 1.9 trillion. During 3Q23, ISA, through ISA
CTEEP, secured the winning bid for Lot One in Brazil, in addition to three expansion
projects. In Peru, the
Transmantaro Consortium was awarded three projects, and ISA
finalized an agreement with Cenit for a pumping station connection
contract at El Copey substation. In toll roads, we continue to make
significant progress in the execution of the Ruta del Loa project,
as well as ongoing work in the concessionaires Ruta de la Araucanía
and Ruta de Los Ríos.
The following are some of the most significant TESG
milestones:
Concerning the environment, Ecopetrol continued to
demonstrate our commitment to integral water management practices
during 3Q23, successfully reusing 38.8 million cubic meters of
water in its operations, and effectively alleviating the pressure
on local water resources. Furthermore, a total reduction of 423,199
metric tons of CO2 equivalent was reported as of September. This
achievement represents a 102% compliance with our annual emissions
reduction plan.
During 3Q23, Ecopetrol introduced the "Taskforce on
Nature-related Financial Disclosures (TNFD) recommendations
framework, in which it actively participated as member. This
engagement has allowed us to better identify environmental impacts
and dependencies related to nature while effectively managing the
associated risks and opportunities. In parallel, we presented our
third specialized report on climate change management following the
recommendations of the Task Force on Climate-Related Financial
Disclosures (TCFD).
In the social dimension, by the end of 3Q23 we have
allocated COP 298,589 million for the
implementation of our Territorial Development Portfolio. This
portfolio encompasses a range of strategic and mandatory
investments in social, environmental, and community-related
initiatives.
Turning to our innovation and technology agenda, we have
captured benefits totaling COP 1.5
trillion in the first nine months of 2023. Of these,
approximately 55% were focused on business technology advancements,
including water polishing tests. Additionally, approximately 41% of
the benefits were channeled into our digital transformation
initiatives.
Our long-term goal aims for portfolio diversification while
preserving the integrity and value of our traditional business.
Additionally, our focus maintains strict capital discipline to
ensure profitable and sustainable growth in our business lines and
value generation for all our stakeholders as we progress toward a
just and equitable energy transition.
CONTACT: investors@ecopetrol.com.co
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SOURCE Ecopetrol S.A.