BOGOTA,
Colombia, Feb. 29, 2024 /PRNewswire/ -- We ended
2023 with strong operational results that drove achievements across
the entire company. We have achieved the second-best financial
results in history by following our financial planning, enhancing
our traditional business, and managing the steps toward the energy
transition.
Throughout 2023, it's worth noting that Brent
crude oil prices experienced a decline in 2023 compared to 2022,
dropping from USD 99 per barrel to
USD 82 per barrel. This decline can
be attributed primarily to the slow economic recovery in
China and an increase in non-OPEC
crude oil supply. Moreover, geopolitical challenges and
inflationary pressures further impacted our operational costs
during this period.
Nevertheless, Ecopetrol's commercial strategy
capitalized on increased demand for our crude oils due to OPEC+
production cuts and limitations in Canadian crude supply.
Simultaneously, differentials for our refined products remained
strong compared to historical levels, allowing us to leverage the
growth in our refinery capacity.
In addition to this, in 2023, we achieved
significant milestones:
- In hydrocarbons, we achieved the highest annual production
figure in the last eight years (737 mboed), the highest annual
volumes transported (1,113 kbd), including the highest movement
through multipurpose pipeline (306 mboed) in the history of the
Company, and a historical record for consolidated refining
throughputs (420 mboed).
- In exploration, we achieved an exploratory success rate reached
50%, with Glaucus-1 standing out, confirming the offshore potential
of the Colombian Caribbean in Gorgon. Additionally, the commencing
drilling of the Orca Norte-1 well, 100% by Ecopetrol.
- In investments, we achieved a 97% execution rate for the
year, the highest level in the last 8 years (COP 27.2 trillion).
- We closed the year with a balance of COP
20.5 trillion in the Fuel Price Stabilization Fund (FEPC)
and an accumulation rate lower by ~44% compared to 2022.
- In January 2024, we successfully
issued bonds in the international market as part of the company's
refinancing strategy, demonstrating strong investor appetite for
our debt securities.
- We transferred COP 58 trillion to
the Nation, marking a historical annual record.
Financial results were aligned with operational
dynamics and exceeded the main goals outlined in our Financial
Plan. In the fourth quarter of 2023, we recorded revenues of
COP 34.8 trillion, a net profit of
COP 4.2 trillion, an EBITDA of
COP 12.3 trillion, and an EBITDA
margin of 35%. For the full year, we achieved consolidated revenues
of COP 143.1 trillion, a net profit
of COP 19.1 trillion, an EBITDA of
COP 60.7 trillion, and an EBITDA
margin of 42%. The gross debt/EBITDA indicator stood at 1.7 times,
the return on capital employed (ROACE) was 11.5%, and the cash
balance was COP 14.3 trillion.
The hydrocarbons business line recorded
notable achievements in 2023, including declaring 11 successful
wells, with three exploratory successes in the fourth quarter:
Zorzal Este-1, Magnus-1, and Bisbita Centro-1. The Orca Norte-1
well, drilled in 2023 and appraised in January 2024, confirmed the presence of two gas
accumulations in reservoirs other than the Orca-1 discovery,
triggering a re-evaluation of the original project while expanding
the gas potential of La Guajira Offshore.
In terms of production, we achieved an
average of 737 thousand barrels of oil equivalent per day (mboed)
in 2023, reflecting a 27 mboed increase compared to 2022.
Significant contributions came from the Rubiales and Caño Sur
Fields in Colombia and the Permian
in the United States. Notably,
secondary and tertiary recovery methods accounted for approximately
41% of daily production, primarily through air and water injection
in Chichimene and Castilla.
In the midstream segment, total
transported volumes for 2023 amounted to 1,113 thousand barrels per
day (mbd), marking a 42 mbd increase compared to 2022, leveraging a
historic EBITDA of the segment in 2023 of COP 11.8 trillion. This increase was primarily
attributed to more significant crude oil volumes transported due to
increased production in the Llanos region, enhanced refinery
production, and operational optimizations in transportation
systems.
The downstream segment achieved a record
annual throughput of 420 thousand barrels per day (kbd), alongside
a gross integrated margin of 17.6 USD
per barrel. This success was driven by the continuous operation of
the Cartagena Crude Plants Interconnection (IPCC) and an average
operational availability of 95%, the highest in the last 5
years.
On the commercial front, establishing the
commercial subsidiary Ecopetrol US Trading (EUST) during 4Q23
marked a significant milestone. EUST achieved an EBITDA of
USD 19.5 million and sold 9.3 million
barrels of crude oil and products in its inaugural quarter of
operation. Additionally, our subsidiary Ecopetrol Trading Asia
continued to strengthen its presence in the Asian market, with
approximately 53% of our exports directed to the continent.
In the low-emission solutions business
line, natural gas and liquified petroleum gas ("LPG") contributed
22% of the Group's total production during 4Q23. In renewables, we
avoided emitting approximately 26,294 tons of CO2 equivalent, which
were reduced through the operation of our Brisas, Castilla, and San
Fernando solar parks, CENIT solar parks, and the Cantayús Small
Hydroelectric Plant.
As part of our commitment to incorporating
non-conventional sources of renewable energy into our energy
matrix, we have integrated 472 MW (under construction, operation,
and execution). Additionally, in the field of energy efficiency,
optimization of 3.89 PJ (thermal energy 3.37 PJ and electrical
energy 0.52 PJ) was achieved, resulting in a reduction of emissions
by 274 thousand tons of CO2 equivalents in the Group operations,
thanks to the adoption of energy optimization technologies.
In the transmission and toll roads
business line, notable operational and financial achievements were
recorded in 2023, contributing close to 15% (COP 9.1 trillion) to the Group's EBITDA. Several
projects were awarded and commenced operations in Latin America during this period. In
Chile, ISA Intervial was awarded
the Orbital Sur Santiago concession with a reference CAPEX of
USD 500 million (~ COP 1.9 trillion). In Peru, in consortium with Grupo Energía de
Bogotá, construction projects totaling USD
833 million (~ COP 3.2
trillion) were awarded.
Regarding TESG results:
Concerning our commitment to the
environment, around 39 million cubic meters of water were
reused in operations during 4Q23, helping to alleviate pressure on
water resources. Additionally, 581,532 tons of CO2
equivalent was reduced throughout the year, surpassing the
established target by 40%. Moreover, there was an impressive 76%
decrease in events associated with operations affecting the
environment, marking the best performance in this area in the last
five years.
At the COP 28
Climate Change Conference in Dubai, the company reiterated its
commitment to ambitious goals, such as achieving net-zero carbon
emissions by 2050 (scopes 1 and 2), eliminating routine gas flaring
by 2030, and striving for zero net methane emissions by 2030.
Furthermore, the company was recognized by the United Nations
Environment Program (UNEP) for its advancements in measuring,
reporting, and reducing methane emissions.
By the end of 2023, nearly 300 initiatives were
registered for the circular economy. These initiatives
included 14 projects of asphalt modified with recycled plastic for
use in road sections (845 tons of asphalt, equivalent to 6 million
plastic bags). Likewise, a successful test of chemical recycling
was implemented at the Barrancabermeja Refinery, for processing
pyrolytic oil from difficult-to-recycle plastic waste to produce
circular polypropylene for food packaging, among other
applications.
In the social dimension, in 2023, we
reported the lowest occupational injury rate in our history, making
us one of the top five oil companies in the world1.
However, we express regret for the two fatalities in the Tesoro 29
well accident in April 2023. I
appreciate the hard work and dedication of all our Ecopetrol Group
subsidiaries, especially each employee who daily spares no effort
to maintain safety standards and protect the integrity and lives of
our employees.
In terms of socio-environmental investment,
approximately COP 587.4 billion was
allocated to the Territorial Development Portfolio. This portfolio
encompasses strategic and obligatory investments in social,
environmental, and community relations, fostering economic and
social progress in the country and reducing social disparities.
Projects were implemented in various areas, including education,
inclusive rural development, entrepreneurship, business
development, and public and community infrastructure. Additionally,
through the works in lieu of taxes mechanism, Ecopetrol spearheaded
the execution of 46 projects totaling COP
416.8 billion in 2023.
In terms of innovation and technology, the
Econova Innovation network, consisting of 5 innovation centers
across different regions, achieved significant milestones in 2023.
These include mobilizing approximately 110 stakeholders, creating
120 job opportunities, and accelerating the development of 30
ventures focused on ICT's2, education, health and
welfare, among other accomplishments.
Looking ahead to 2024, we remain committed to
prioritizing capital discipline, meticulously managing costs, and
enhancing efficiencies to generate value for all stakeholders. Our
objective is to safeguard the integrity and value of our
traditional business while advancing towards portfolio
diversification and a just energy transition.
Ricardo Roa
Barragan
President Ecopetrol S.A.
Bogotá D.C., February 29,
2024, Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced
today the Ecopetrol Group's financial results for the fourth
quarter and cumulative year to date for 2023, prepared in
accordance with International Financial Reporting Standards in
Colombia.
In 2023, the Ecopetrol Group generated the
second-best financial result in its history, obtaining a net profit
of COP 19.1 trillion, an EBITDA of
COP 60.7 trillion, and an EBITDA
margin of 42%. These results were leveraged on outstanding
operating performances across all business segments, reflected in
increased production, refinery throughputs, transported volumes,
and crude and product sales. The above was achieved despite i)
lower prices compared to 2022, ii) the effect of inflation on
costs, and iii) a higher effective tax rate.
Table 1: Financial Summary Income Statement –
Ecopetrol Group
Billion (COP)
|
|
4Q 2023
|
4Q 2022
|
∆ ($)
|
∆ (%)
|
|
12M 2023
|
12M 2022
|
∆ ($)
|
∆ (%)
|
Total sales
|
|
34,794
|
39,678
|
(4,884)
|
(12.3 %)
|
|
143,079
|
159,474
|
(16,395)
|
(10.3 %)
|
Depreciation and
amortization
|
|
3,540
|
3,049
|
491
|
16.1 %
|
|
13,205
|
11,410
|
1,795
|
15.7 %
|
Variable
cost
|
|
14,224
|
16,015
|
(1,791)
|
(11.2 %)
|
|
55,906
|
61,406
|
(5,500)
|
(9.0 %)
|
Fixed cost
|
|
5,543
|
4,943
|
600
|
12.1 %
|
|
19,067
|
16,642
|
2,425
|
14.6 %
|
Cost of sales
|
|
23,307
|
24,007
|
(700)
|
(2.9 %)
|
|
88,178
|
89,458
|
(1,280)
|
(1.4 %)
|
Gross income
|
|
11,487
|
15,671
|
(4,184)
|
(26.7 %)
|
|
54,901
|
70,016
|
(15,115)
|
(21.6 %)
|
Operating and
exploratory expenses
|
|
3,787
|
3,655
|
132
|
3.6 %
|
|
11,155
|
9,635
|
1,520
|
15.8 %
|
Operating income
|
|
7,700
|
12,016
|
(4,316)
|
(35.9 %)
|
|
43,746
|
60,381
|
(16,635)
|
(27.6 %)
|
Financial income
(loss), net
|
|
(1,486)
|
(1,469)
|
(17)
|
1.2 %
|
|
(5,665)
|
(6,835)
|
1,170
|
(17.1 %)
|
Share of profit of
companies
|
|
199
|
112
|
87
|
77.7 %
|
|
805
|
768
|
37
|
4.8 %
|
Income before income tax
|
|
6,413
|
10,659
|
(4,246)
|
(39.8 %)
|
|
38,886
|
54,314
|
(15,428)
|
(28.4 %)
|
Income tax
|
|
(454)
|
(2,945)
|
2,491
|
(84.6 %)
|
|
(14,692)
|
(17,254)
|
2,562
|
(14.8 %)
|
Net income consolidated
|
|
5,959
|
7,714
|
(1,755)
|
(22.8 %)
|
|
24,194
|
37,060
|
(12,866)
|
(34.7 %)
|
Non-controlling
interest
|
|
(851)
|
(844)
|
(7)
|
0.8 %
|
|
(4,243)
|
(3,630)
|
(613)
|
16.9 %
|
Net income attributable to owners of Ecopetrol before
impairment
|
|
5,108
|
6,870
|
(1,762)
|
(25.6 %)
|
|
19,951
|
33,430
|
(13,479)
|
(40.3 %)
|
(Expense) recovery for
impairment long-term assets
|
|
(2,087)
|
(282)
|
(1,805)
|
640.1 %
|
|
(2,098)
|
(288)
|
(1,810)
|
628.5 %
|
Deferred tax of
impairment
|
|
1,207
|
263
|
944
|
358.9 %
|
|
1,209
|
264
|
945
|
358.0 %
|
Net income attributable to owners of
Ecopetrol
|
|
4,228
|
6,851
|
(2,623)
|
(38.3 %)
|
|
19,062
|
33,406
|
(14,344)
|
(42.9 %)
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
12,251
|
15,996
|
(3,745)
|
(23.4 %)
|
|
60,718
|
75,244
|
(14,526)
|
(19.3 %)
|
EBITDA Margin
|
|
35.2 %
|
40.3 %
|
-
|
(5.1 %)
|
|
42.4 %
|
47.2 %
|
-
|
(4.8 %)
|
The financial information included in this report
has yet to be audited. It is expressed in billions or trillions of
Colombian pesos (COP) or U.S. dollars (USD), or thousands of
barrels of oil equivalent per day (mboed) or tons, as noted.
Certain 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. Therefore, they are subject to
change without notice.
1 According with the International
Association of Oil and Gas Producer
2 Information and Communications Technologies
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SOURCE Ecopetrol S.A.