BOGOTÁ, D.C., Aug. 4, 2022
/PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced
today the Ecopetrol Group's financial results for the second
quarter of 2022. The financial results were prepared in accordance
with the International Financial Reporting Standards applicable in
Colombia.
Table 1: Financial Summary Income Statement -
Ecopetrol Group
Billion
(COP)
|
|
2Q
2022
|
2Q
2021
|
∆ ($)
|
∆ (%)
|
|
6M
2022
|
6M
2021
|
∆ ($)
|
∆ (%)
|
Total
sales
|
|
43,885
|
19,444
|
24,441
|
125.7 %
|
|
76,358
|
36,650
|
39,708
|
108.3 %
|
Depreciation and
amortization
|
|
2,725
|
2,328
|
397
|
17.1 %
|
|
5,305
|
4,566
|
739
|
16.2 %
|
Variable
cost
|
|
16,343
|
6,761
|
9,582
|
141.7 %
|
|
28,408
|
12,999
|
15,409
|
118.5 %
|
Fixed cost
|
|
4,010
|
2,342
|
1,668
|
71.2 %
|
|
7,303
|
4,378
|
2,925
|
66.8 %
|
Cost of
sales
|
|
23,078
|
11,431
|
11,647
|
101.9 %
|
|
41,016
|
21,943
|
19,073
|
86.9 %
|
Gross
income
|
|
20,807
|
8,013
|
12,794
|
159.7 %
|
|
35,342
|
14,707
|
20,635
|
140.3 %
|
Operating and
exploratory expenses
|
|
2,199
|
1,457
|
742
|
50.9 %
|
|
4,205
|
2,637
|
1,568
|
59.5 %
|
Operating
income
|
|
18,608
|
6,556
|
12,052
|
183.8 %
|
|
31,137
|
12,070
|
19,067
|
158.0 %
|
Financial income
(loss), net
|
|
(1,991)
|
(831)
|
(1,160)
|
139.6 %
|
|
(3,514)
|
(1,484)
|
(2,030)
|
136.8 %
|
Share of profit of
companies
|
|
237
|
62
|
175
|
282.3 %
|
|
439
|
115
|
324
|
281.7 %
|
Income before income
tax
|
|
16,854
|
5,787
|
11,067
|
191.2 %
|
|
28,062
|
10,701
|
17,361
|
162.2 %
|
Income tax
|
|
(5,309)
|
(1,768)
|
(3,541)
|
200.3 %
|
|
(9,193)
|
(3,304)
|
(5,889)
|
178.2 %
|
Net income
consolidated
|
|
11,545
|
4,019
|
7,526
|
187.3 %
|
|
18,869
|
7,397
|
11,472
|
155.1 %
|
Non-controlling
interest
|
|
(1,075)
|
(295)
|
(780)
|
264.4 %
|
|
(1,826)
|
(587)
|
(1,239)
|
211.1 %
|
Net income
attributable to owners of Ecopetrol
|
|
10,470
|
3,724
|
6,746
|
181.1 %
|
|
17,043
|
6,810
|
10,233
|
150.3 %
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
22,211
|
9,428
|
12,783
|
135.6 %
|
|
38,106
|
17,615
|
20,491
|
116.3 %
|
EBITDA
Margin
|
|
50.6 %
|
48.5 %
|
-
|
2.1 %
|
|
49.9 %
|
48.1 %
|
-
|
1.8 %
|
Financial information included in this report has not been
audited and is expressed in billion 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.
In words of Felipe Bayón Pardo, CEO of Ecopetrol:
"The Ecopetrol Group's figures for the period ending
June 2022 mark a new historical
milestone for the Company, having achieved the best quarterly and
half-yearly financial results in our history. During these first
six months, the Company achieved a net income of COP 17.0 trillion, which exceeds the result for
the full year of 2021.
These results are a reflection of: i) the effort and
commitment of more than 18,000 direct employees and all the
Ecopetrol Group's contractors to our growth, diversification, and
financial profitability targets, and our 2040 "Energy that
Transforms" strategy, ii) the strength, stability, and reliability
of our business segments, iii) a solid commercial strategy allowing
the seizing of benefits even in adverse market conditions, iv) the
capture of efficiencies by more than COP 1
trillion, allowing us to mitigate certain inflationary
pressures seen across all industries on a global scale; and, v) the
Company's strict capital discipline.
Regarding our Competitive Returns pillar, this quarter
we recorded consolidated revenues of COP
43.9 trillion, a net income of COP
10.5 trillion, an EBITDA of COP 22.2
trillion, and an EBITDA margin of 51%, the highest in the
Company's history. For the six-month period ended June 2022, our consolidated revenues amounted to
COP 76.4 trillion, a net income of
COP 17.0 trillion, an EBITDA of
COP 38.1 trillion, and an EBITDA
margin of 50%. As of June 30, 2022,
the Gross Debt/EBITDA leverage ratio was 1.6x and the return on
average capital employed (ROACE) was 17.1% for the same period.
Thanks to the Company's financial strength, in early July, S&P
Ratings maintained its long-term international rating at BB+ with a
stable outlook.
The Company's operational, commercial and financial
results reflect the effects of international crude oil prices
(average Brent of 112 USD/Bl for
2Q22) and the exchange rate effect (average TRM of
3,915 COP/USD for 2Q22), which
allowed us to attain a better realization price of our crude basket
(+39.8 USD/Bl in 2Q22 vs. 2Q21), an
increase in the volume of local product sales (+24.8% in 2Q22 vs.
2Q21) and an increase in exports (+14.9% in 2Q22 vs. 2Q21) driven,
among other initiatives, by the recent entry into operation of
Ecopetrol Trading Asia. We highlight the consolidation of our
domestic crude oil purchasing strategy, which has allowed us to
diversify sources of supply for refinery feedstocks and improve
refining margins. In addition, we implemented a series of
initiatives to anticipate and counteract inflationary pressures and
limitations in the global supply chains.
In line with the Group's target to protect its liquidity
position and its focus on guaranteeing the annual investment plan,
during the quarter we reached an agreement with the Ministry of
Finance and Public Credit (MHCP for its Spanish acronym) for the
payment and compensation of the COP 14.1
trillion account receivable due to us from the Fuel Price
Stabilization Fund, (FEPC for its Spanish acronym), as of 1Q22. The
accrued FEPC subsidy for 2Q22 due to us amounts to COP 10.6 trillion, which, by virtue of the
provisions of the Government's Medium-Term Fiscal Framework, are
expected to be partially paid from fiscal surpluses during the
current fiscal year or with resources approved by Congress as part
of the 2023 Budget for such purpose.
There are several operational milestones I would like to
highlight regarding our Grow with the Energy Transition
strategic pillar:
On the exploration front, some of the most noteworthy
activities are the concurrent activity of 2 drill-rigs in the
Piedemonte and 2 in offshore areas, the recently announced
confirmation of the presence of natural gas in deep waters in the
Colombian Caribbean with the exploratory well Uchuva-1, the
agreement reached with Oxy for joint exploration in deep waters in
the northeast of the country and the acquisition of onshore seismic
in Colombia stands out. Finally,
it is worth noting that 60% of the hydrocarbon volumes identified
in the exploratory portfolio correspond to gas, which illustrates
the alignment between hydrocarbon exploration and the energy
transition targets proposed by both Ecopetrol and the
Nation.
In production, we recorded an average of 704.6 mboed
during 2Q22, an increase of 43.7 mboed as compared to 2Q21, falling
on the high end of our 2022 production target.
Gas, our transition fuel, continues to hold a
prominent role in the Ecopetrol Group's activities. During 2Q22,
the contribution of gas to overall production was 20%. In our
efforts to more effectively capitalize gas opportunities, and
ensure their alignment with the 2040 Strategy, the Gas Vice
Presidency was renamed the Low Emission Solutions Vice Presidency,
to consolidate the gas, biogas, LPG, energy, renewables, hydrogen
and CCUS (Carbon Capture, Use and Storage) areas under one vice
presidency.
In addition to the above, the positive operating and
financial results from our operations in the Permian basin
reached historical records, surpassing the results achieved in
2021. Cumulative production as of June, 2022 was 26.8 mboed (net
for Ecopetrol before royalties), almost doubling the contribution
of 1H21. On the other hand, we continued working to reduce
our emissions intensity through our zero routine flaring initiative
and the substitution of ~36% of the volume of diesel used in our
completion activities with compressed natural gas (CNG). Based on
the good results to date, I am pleased to announce that Occidental
Petroleum Corp. ("Oxy") and Ecopetrol have agreed to optimize
activity in the Midland area and expand the partnership to cover
about 21,000 acres in the Delaware
area, thereby strengthening Ecopetrol's presence in the Permian.
This agreement allows us to access a greater share of production
(75%) while deferring carry obligations to 2025. The activity in
Delaware will start in 4Q22 and
its contribution to production and reserves will be reflected in
the targets set for 2023.
Regarding unconventional reservoirs in Colombia, during 2Q22 the environment and
community relationship plan continued, which consisted of different
meetings and conversations held at the local and regional levels,
as part of Ecopetrol's efforts to facilitate and make viable the
Kalé and Platero Comprehensive Research Pilot Projects (PPIIs for
their Spanish acronyms).
The midstream segment reported its best result of the
last two years. Total volumes transported increased to 1,077 mbd,
or by 11.8% as compared to 2Q21 results. These figures are
attributed to an increase in production and additional third-party
barrels captured, as well as an increase in transported refined
products.
The downstream segment registered record operating and
financial results in the quarter, with a total throughput of 365.1
mbd and an integrated gross margin of 29
USD/Bl (vs. 360.4 mbd and 9.5
USD/Bl in 2Q21 respectively). This was the result of a high
operational availability of the units, an active inventory
optimization, a strategic scheduled shutdowns plan that allowed us
to capture the good margins observed in the market, and a
successful commercial strategy for products and petrochemicals,
where volumetric maximization and the incorporation of additional
products to the portfolio were key factors. During the first half
of the year, 75% of the planned shutdowns for 2022 were executed.
Additionally, we achieved the mechanical completion of the
Interconnection of the Cartagena Crude Oil Plants (IPCC for its
Spanish acronym) at the Cartagena
refinery, whose commissioning and start-up is in progress and is
expected to stabilize its operation during 3Q22. With this project
we expect to capitalize on the benefits of a higher refining
capacity reaching values of 420 - 430 mbd.
ISA reported strong quarterly financial
results, with a 14.5% growth in revenues and a 10.1% growth in
EBITDA, as compared to the same period in 2021. ISA's subsidiary
CTEEP was awarded the bid for one of the largest energy
transmission projects in Brazil in
recent history, further consolidating its leadership in this
market. During this semester, ISA's contribution to the Ecopetrol
Group following its consolidation added COP
0.6 trillion to net income (net of non-controlling interest)
and COP 4.2 trillion to
EBITDA.
In our Generate Value Through TESG pillar, we can
highlight the following milestones for 2Q22:
On the environmental front we continue moving forward
with the maturation and implementation of an ambitious renewable
energy plan, supported by solar, wind and geothermal projects in
locations where the Ecopetrol Group already operates. To this end,
the company has moved forward with the development and construction
of two additional Solar Ecoparks, which would increase installed
capacity by 49 MW, and subsequently contribute to the 400 MW target
set for 2023. At the end of 1H22, the Ecopetrol Group has achieved
the incorporation of 119 MW of renewable energy in its supply
matrix, which represents 9% of the Group's installed capacity
(MW).
During 2Q22, a reduction of 4,281 tons of CO2e and
operational cost-savings of COP 2,610
million were achieved supported by the Castilla, San
Fernando and Cenit solar Ecoparks in 2Q22.
Additionally, we announced our commitment to having more than
200 sustainable vehicles to be used by our employees. These
vehicles will reduce CO2e emissions by more than 500 tons per year,
or the equivalent of planting more than 16,000 trees. Along these
lines, our target for 2025 seeks that more than half of our
employees to use sustainable means of transport.
During the quarter we also announced our adhesion to the
Hydrogen Council as executive members furthering our effort to
promote the domestic use of hydrogen as an energy resource while
announcing the group of partner companies to develop our hydrogen
roadmap. In this line, we also signed a three-year agreement with
Toyota to conduct mobility tests using green hydrogen, which will
initiate in 4Q22.
On the social front, we allocated resources for
projects and initiatives of the sustainable development portfolio
for a total of COP 154 billion
accumulated as of 1H22.
The results obtained in the 2022 Merco Talent ranking are
also notable as Ecopetrol was recognized as the company with the
highest capacity to attract and retain talent in the country. The
presence of Ecopetrol S.A. in first place, Reficar in sixth place,
and Cenit in eighth place in the specialized oil and hydrocarbon
sector ranking, as well as the presence of ISA in second place in
the specialized energy sector ranking, stand out.
In terms of health and safety, the Company reported
historical results, with a TRIF indicator of 0.30 accidents per
million hours worked in 2Q22 and 0.26 accumulated at the end of
1H22, the latter with a 57% improvement over the same period of the
previous year. We also highlight an intense semester in scheduled
plant shutdowns for maintenance in the refineries with no
recordable injuries, evidencing the Company's commitment to safety
and good practices.
On the corporate governance front, an extraordinary
General Shareholders' Meeting was held on June 17, where a modification to the maximum term
for the payment of dividends to the Nation was approved, extending
the term until October 2022, as well
as the distribution of an extraordinary dividend of COP 168 per share. The above, in response to a
request from the MHCP within the framework of the agreement for the
payment of the outstanding account receivable balance due to us
from the FEPC. This dividend was paid to our more than 250,000
minority shareholders on June 30,
2022.
Finally, on the Cutting-Edge Knowledge pillar,
science, technology, and innovation (STI) play a crucial role in
the implementation of the 2040 Strategy, for which the Science,
Technology and Innovation Vice Presidency (VTI for its Spanish
acronym) was created, which contains the Digital Vice Presidency
(VDI for its Spanish acronym) and the Colombian Petroleum Institute
(ICP for its Spanish acronym) and coordinates the teams responsible
for the STI agenda across all segments of the Ecopetrol Group's
value chain.
On the Science, Technology, and Innovation front, we
conducted the first 5G pilot test for industrial application in
partnership with Accenture, Claro, and Microsoft. This test was
conducted as part of maintenance operations at the Barrancabermeja
refinery, with the use of secure devices for real-time remote
assistance, which enabled a three-day reduction in maintenance, and
the optimization of activities worth more than USD 1 million. Additionally, an automation
plan for the VTI's laboratories and pilot plants was undertaken
with the participation of 13 domestic and international
companies.
All the Ecopetrol Group's employees will continue working
towards generating value for all our stakeholders, taking advantage
of the opportunities that align with the pillars of our 2040
Strategy, which focuses on a responsible energy transition through
organized and decisive progress in our decarbonization plan within
the framework of our country's energy security and that of the
regions where we operate as a Group."
Bogotá D.C., August 8, 2021
-----------------------------------------
Ecopetrol is the largest company in Colombia and one of the main integrated energy
companies in the American continent, with more than 18,000
employees. In Colombia, it is
responsible for more than 60% of the hydrocarbon production of most
transportation, logistics, and hydrocarbon refining systems, and it
holds leading positions in the petrochemicals and gas distribution
segments. With the acquisition of 51.4% of ISA's shares, the
company participates in energy transmission, the management of
real-time systems (XM), and the Barranquilla - Cartagena coastal highway concession. At the
international level, Ecopetrol has a stake in strategic basins in
the American continent, with Drilling and Exploration operations in
the United States (Permian basin
and the Gulf of Mexico),
Brazil, and Mexico, and, through ISA and its subsidiaries,
Ecopetrol holds leading positions in the power transmission
business in Brazil, Chile, Peru,
and Bolivia, road concessions in Chile, and the telecommunications sector. This
press release contains business prospect statements, operating and
financial result estimates, and statements related to Ecopetrol's
growth prospects. These are all projections and, as such, they are
based solely on the expectations of the managers regarding the
future of the company and their continued access to capital to
finance the company's business plan. The realization of said
estimates in the future depends on the behavior of market
conditions, regulations, competition, and the performance of the
Colombian economy and the industry, among other factors, and are
consequently subject to change without prior notice.
This release contains statements that may be considered
forward-looking statements within the meaning of Section 27A of the
U.S. Securities Act of 1933, as amended, and Section 21E of the
U.S. Securities Exchange Act of 1934, as amended. All
forward-looking statements, whether made in this release or in
future filings or press releases, or orally, address matters that
involve risks and uncertainties, including in respect of the
Company's prospects for growth and its ongoing access to capital to
fund the Company's business plan, among others. Consequently,
changes in the following factors, among others, could cause actual
results to differ materially from those included in the
forward-looking statements: market prices of oil & gas, our
exploration, and production activities, market conditions,
applicable regulations, the exchange rate, the Company's
competitiveness and the performance of Colombia's economy and industry, to mention a
few. We do not intend and do not assume any obligation to update
these forward-looking statements.
For more information, please contact:
Head of Capital Markets
Tatiana Uribe Benninghoff
Email: investors@ecopetrol.com.co
Head of Corporate Communications
Mauricio Téllez
Email: mauricio.tellez@ecopetrol.com.co
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SOURCE Ecopetrol S.A.