Ecopetrol Group's financial results for the second quarter and cumulative year to date for 2023
BOGOTÁ,
Thanks to the efforts of our world-class team, it is an honor to present the operating and financial results of the Ecopetrol Group for 2Q23. I would like to highlight not only our resilience and competitiveness, but also the excellent operational and financial performance across all our business lines within a challenging market environment, as well as our firm commitment to financial sustainability and value creation for all our stakeholders.
In
In terms of the market, during the first half of the year, several factors impacted the price of crude oil, including the possibility of a recession in the developed world, high interest rates and banking pressures in
Some of the most significant operational milestones reached in 2Q23 include: i) record production of the last three years (728.0 mboed), driven by fields such us Permian, Caño Sur and Rubiales; ii) record in combined throughput of 428 mbd in refineries and iii) the closing of the negotiation of the 2023-2026 Collective Bargaining Agreement, among others. Regarding financial milestones, the following are noteworthy: i) Progress in reducing the account receivable from the Fuel Price Stabilization Fund-FEPC- During the quarter,
Along with the outstanding operational performance, Ecopetrol reported outstanding financial indicators. Revenues of
It's important to highlight that the EBITDA and Net Profit for the first semester of 2023 are the second best reported in history for this period, which has enabled the payment of
Our Hydrocarbons business line has achieved excellent operating performance, supported by an increase in production, record refinery throughput and availability, as well as an increase in volumes transported as compared to 2Q22. By the end of June, ten exploratory wells had been drilled,
In terms of production, we reached an average of 728.0 mboed in the quarter, an increase of 23.4 mboed compared to 2Q22. The contribution and incremental production in the Caño Sur and Rubiales fields in
In the Midstream segment, total volumes transported increased by 20.3 mbd compared to 2Q22 for a total of 1,098 mbd, primarily explained by greater production availability at the refineries and higher hydrocarbon production in the Llanos area. The above was achieved, despite the damage caused by third parties that were addressed by means of seven reversal cycles of the Bicentenario pipeline in 2Q23 and ten reversal cycles in 1H23.
The Downstream segment reached an historical quarterly record high in combined throughput of 428 mbd, supported by the continuous operation of the Cartagena Crude Oil Plant Interconnection Project (IPCC) and an operational availability above
On the commercial front, our subsidiary Ecopetrol Trading Asia stands out, having successfully sold more than 85 million barrels of crude oil in the Asian market to date, exceeding our initial goal set in 2021 by
During 2Q23, the Carbon Trading desk offset close to 35 thousand tons of CO2 through carbon credits from a Natural Climate Solutions project in
In the Low-emission Solutions business line, which includes, among others, the natural gas, LPG, hydrogen, and renewable energy businesses, it is worth noting that natural gas and LPG accounted for
On the hydrogen front, both of our refineries' industrial green hydrogen production projects were selected for the British Government's Climate Finance Accelerator program as initiatives that have a significant climate impact and alignment with national emission reduction strategies. These projects are progressing in their technical and financial maturity in partnership with our collaborators. In terms of mobility, with the support of CENIT and H2B2, the first hydrogen supply was delivered to the SITP bus in
The Transmission and Toll Roads business line's operating and financial results remained positive. Contributions from ISA amounted to
In terms of TESG results, the following are worth highlighting:
In the environmental dimension in 2Q23, Ecopetrol implemented comprehensive water management practices, reusing 38.4 million cubic meters of water in its operations thus reducing pressure on water resources. Furthermore, the company was able to avoid the emission of 183,695 tCO2e during 1H23, achieving
In the social dimension, we successfully concluded the negotiation of a new Collective Bargaining Agreement with 13 labor unions. The commitment, dedication, and professionalism of the negotiating teams were outstanding. In addition, the Ecopetrol Group remains steadfast in its commitment to the sustainable development of the territory, contributing resources and benefiting various sectors such as education, sports, health, as well as rural development and access to public services to close social gaps. At the end of 2Q23,
Among social investments, contributions to improve access to essential public services such as natural gas, water, and energy are also noteworthy. Our Social Gas Program allowed the certification of 4,843[2] new gas connections for households in the departments of Atlántico, Santander, and Casanare. In terms of access to water, the contribution of
During the 1H23 benefits of
In terms of corporate governance, Ecopetrol completed the first phase for the implementation of the human rights risk management cycle (HRRM) with the Orinoco Regional and Eastern Andean Regional Vice Presidencies. In addition, during 2Q23, the annual training program for the Board of Directors of Ecopetrol S.A. began, to promote best practices in corporate governance, energy transition, and TESG, among others.
Finally, I would like to reiterate my commitment to the Ecopetrol Group's 2040 Strategy. We are currently working with the Board of Directors to strengthen this roadmap, maintaining excellent operational and financial performance, ensure the safety of our operations, and contribute to social development. This will be supported by solid corporate governance and transparency. We will continue to strengthen our relationships with all our stakeholders, with a focus on generating sustainable value as we move forward on the path of a sustainable energy transition.
Ricardo Roa Barragán
President of Ecopetrol S.A
Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced today the Ecopetrol Group's financial results for the second quarter and cumulative year to date for 2023, prepared in accordance with International Financial Reporting Standards in
The first semester of 2023 ranks as the second-best financial result in the history of The Ecopetrol Group for the same period, achieving an EBITDA generation level of
Table 1: Financial Summary Income Statement – Ecopetrol Group
Billion (COP) | 2Q 2023 | 2Q 2022 | ∆ ($) | ∆ (%) | 6M 2023 | 6M 2022 | ∆ ($) | ∆ (%) | ||
Total sales | 34,300 | 43,885 | (9,585) | (21.8 %) | 73,154 | 76,358 | (3,204) | (4.2 %) | ||
Depreciation and amortization | 3,239 | 2,725 | 514 | 18.9 % | 6,248 | 5,305 | 943 | 17.8 % | ||
Variable cost | 13,718 | 16,343 | (2,625) | (16.1 %) | 29,065 | 28,408 | 657 | 2.3 % | ||
Fixed cost | 4,530 | 4,010 | 520 | 13.0 % | 8,952 | 7,303 | 1,649 | 22.6 % | ||
Cost of sales | 21,487 | 23,078 | (1,591) | (6.9 %) | 44,265 | 41,016 | 3,249 | 7.9 % | ||
Gross income | 12,813 | 20,807 | (7,994) | (38.4 %) | 28,889 | 35,342 | (6,453) | (18.3 %) | ||
Operating and exploratory expenses | 2,314 | 2,199 | 115 | 5.2 % | 4,670 | 4,205 | 465 | 11.1 % | ||
Operating income | 10,499 | 18,608 | (8,109) | (43.6 %) | 24,219 | 31,137 | (6,918) | (22.2 %) | ||
Financial income (loss), net | (2,044) | (1,991) | (53) | 2.7 % | (3,549) | (3,514) | (35) | 1.0 % | ||
Share of profit of companies | 155 | 237 | (82) | (34.6 %) | 497 | 439 | 58 | 13.2 % | ||
Income before income tax | 8,610 | 16,854 | (8,244) | (48.9 %) | 21,167 | 28,062 | (6,895) | (24.6 %) | ||
Income tax | (3,336) | (5,309) | 1,973 | (37.2 %) | (8,929) | (9,193) | 264 | (2.9 %) | ||
Net income consolidated | 5,274 | 11,545 | (6,271) | (54.3 %) | 12,238 | 18,869 | (6,631) | (35.1 %) | ||
Non-controlling interest | (1,187) | (1,075) | (112) | 10.4 % | (2,490) | (1,826) | (664) | 36.4 % | ||
Net income attributable to owners of Ecopetrol before impairment | 4,087 | 10,470 | (6,383) | (61.0 %) | 9,748 | 17,043 | (7,295) | (42.8 %) | ||
(Expense) recovery for impairment long-term assets | 0 | 0 | 0 | - | 0 | 0 | 0 | - | ||
Deferred tax of impairment | 0 | 0 | 0 | - | 0 | 0 | 0 | - | ||
Net income attributable to owners of Ecopetrol | 4,087 | 10,470 | (6,383) | (61.0 %) | 9,748 | 17,043 | (7,295) | (42.8 %) | ||
EBITDA | 14,585 | 22,211 | (7,626) | (34.3 %) | 32,427 | 38,106 | (5,679) | (14.9 %) | ||
EBITDA Margin | 42.5 % | 50.6 % | - | (8.1 %) | 44.3 % | 49.9 % | - | (5.6 %) |
The financial information included in this report has not been audited and 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. For presentation purposes, certain figures in this report were rounded to the nearest decimal place.
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, the performance of the Colombian economy and the industry, to mention a few and therefore, they are subject to change without notice.
[1] Included in the
[2] Correspond to physical connections.
For more information, please contact:
Head of Capital Markets (a)
Carolina Tovar Aragón
Email: investors@ecopetrol.com.co
Head of Corporate Communications
Marcela Ulloa
Email: marcela.ulloa@ecopetrol.com.co
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SOURCE Ecopetrol S.A.