BOGOTA, Colombia, Aug. 5, 2015 /PRNewswire/ -- Ecopetrol S.A.
(BVC: ECOPETROL; NYSE: EC; TSX: ECP) announced today Ecopetrol
Corporate Group's financial results for the second quarter and the
first half of 2015, prepared and filed in Colombian pesos (COP$)
and on the basis of International Financial Reporting Standards
(IFRS).
According to Article 3 of Decree 2784 of December 28, 2012, the application date of the
new technical framework is December 31,
2015, therefore, the financial information presented prior
to this date is subject to adjustments.
As indicated in paragraphs 9 and 18 of International Accounting
Standard 27 "Consolidated and Separated Financial Statements,"
Ecopetrol and its Corporate Group must present their financial
information on a consolidated basis, combining the financial
statements of the parent company and its subsidiaries line by line,
adding assets, liabilities, shareholder's equity, revenues and
expenses of a similar nature, removing the reciprocal items between
the Corporate Group and recognizing the non-controlling
interest.
The financial results in this report are not comparable line by
line with the previously issued financial results for the second
quarter of 2014, which were prepared in accordance with the Public
Accounting Regime (Regimen de Contabilidad Publica) as adopted by
the Colombian National Accounting Office. For the sake of
comparison, the financial results that were already reported in the
second quarter of 2014 are presented in this report under IFRS.
Some figures in this release are presented in U.S. dollars (US$)
as indicated. The exhibits in the main body of this report have
been rounded to one decimal. Figures expressed in billions of COP$
are equal to COP$1 thousand million.
Table 1: Summary of the Group's Consolidated
Financial Results
A
|
B
|
C
|
D
|
E
|
F
|
G
|
H
|
I
|
J
|
(COP$
Billion)
|
2Q
2015*
|
2Q
2014*
|
Change
($)
|
Change
(%)
|
1Q
2015*
|
1H
2015*
|
1H
2014*
|
Change
($)
|
Change
(%)
|
Total
sales
|
14,009.6
|
16,932.2
|
(2,922.6)
|
(17.3%)
|
12,300.9
|
26,310.5
|
34,903.5
|
(8,593.0)
|
(24.6%)
|
Operating
profit
|
3,549.2
|
4,912.2
|
(1,363.0)
|
(27.7%)
|
2,357.9
|
5,907.1
|
11,176.8
|
(5,269.7)
|
(47.1%)
|
Net Income
Consolidated
|
1,695.5
|
2,758.7
|
(1,063.2)
|
(38.5%)
|
355.9
|
2,051.5
|
6,823.6
|
(4,772.1)
|
(69.9%)
|
Non-controlling
interest
|
(188.9)
|
(161.9)
|
(27.0)
|
16.7%
|
(195.9)
|
(384.9)
|
(338.6)
|
(46.3)
|
13.7%
|
Equity holders of
Ecopetrol**
|
1,506.6
|
2,596.8
|
(1,090.2)
|
(42.0%)
|
160.0
|
1,666.6
|
6,485.0
|
(4,818.4)
|
(74.3%)
|
Other comprehensive
income
|
459.1
|
(421.6)
|
880.7
|
(208.9%)
|
710.9
|
1,170.1
|
(288.9)
|
1,459.0
|
(505.0%)
|
EBITDA
|
4,508.0
|
6,519.8
|
(2,011.8)
|
(30.9%)
|
3,058.5
|
7,566.5
|
14,217.9
|
(6,651.4)
|
(46.8%)
|
EBITDA
Margin
|
32%
|
39%
|
|
|
25%
|
29%
|
41%
|
|
|
|
|
|
|
|
|
|
|
|
|
* These figures are
included for illustration purposes only. Unaudited.
|
|
|
|
|
|
|
** According to
IAS-1, "Presentation of financial statements", paragraph 83, the
company must include in the statement of comprehensive results the
results attributable to non-controlling interest (minority
interest) and the results attributable to shareholders of the
controlling company.
|
In the opinion of Ecopetrol's CEO Juan
Carlos Echeverry G.:
"Ecopetrol is disciplined with its costs adjustment program,
aimed to gain efficiencies in different areas. Thus, we have
already obtained savings of COP$0.6 trillion. These savings are
mainly the result of renegotiations with our contractors. We have
solidified our long term relationship; our allies understand that
the current circumstances call for extraordinary actions, and the
mutual commitment to mitigate the effects of this scenario of low
oil prices.
The Barrancabermeja refinery is now more efficient, thanks to
the operation of the new turbo gas unit, which will translate into
efficiencies in the energy generation cycle and a lower emission of
greenhouse effect gases of 200 thousand tons equivalent per year.
We also improved the cost of drilling by lowering the average
number of days required by well, in Castilla and Chichimene fields,
from 34 days in 2014 to 28 in 2015.
Facing a challenging oil price scenario, the Company is
adopting the adjustments required, based on its recently announced
strategy, to continue searching for efficient and profitable
barrels.
In our transformation plan we identified 630 initiatives
throughout the Company, aiming at savings of COP$ 1.4 trillion in
2015. We are promoting ethic and transparency in our purchase and
contracting processes, and investment projects.
We continue to prioritize the lives of people and workers,
the well-being of the communities in which we operate and the
environment. The accident frequency index in Ecopetrol was reduced
by 38% between the second quarter of 2014 and the same period of
2015, from 0.77 to 0.49 accidents per million hours of labor,
reflecting improved labor conditions.
On another front, Ecopetrol was subject of an irrational wave
of attacks against our transportation infrastructure in June, in
some provinces located next to Venezuela and Ecuador´s borders. The Company
demonstrated, once again, its capacity to face the crisis by
deploying 500 workers to stop the leakage in the Mira River and do
all the cleaning tasks necessary to mitigate the damage
caused.
In the finance area, this quarter was better than the
previous due to the growth trend shown by crude and product prices,
while the exchange rate, which holds a negative correlation to
these, reversed part of the trend toward devaluation shown in the
first quarter. This was achieved despite the deterioration in
environment conditions around June of this year, stemming from
attacks on transport infrastructure, which as we have repeatedly
said, not only affected operations but caused irreparable damages
to the environment and surrounding communities.
Production in the second quarter reached 768 thousand barrels
equivalent a day, in line with the goal of 760 thousand barrels
equivalent a day, announced for 2015, representing an increase of
5% compared to production in the second quarter of 2014. This was
the result of the opening of new facilities and the new drilling
campaigns in the fields Castilla and Chichimene, as well as the
normal operation of Cano Limon field
throughout most of the quarter.
In exploration, drilling continued on the well Kronos,
located offshore in the southern Caribbean (operated 50-50 by Anadarko in
partnership with Ecopetrol), and drilling began on the well Sea
Eagle in the U.S. Gulf of Mexico
(operated by Murphy, 35%; Petrovietnam, 15%; and Ecopetrol America
Inc, 50%). In July, Kronos well confirmed the presence of gas in
ultra-deep waters. The discovery proves the geological model
proposed for an unexplored area, with high hydrocarbon
potential.
The refining margin of the Barrancabermeja refinery was
17.20 US$ per barrel in second
quarter 2015, 58% more than in the same period of 2014
(10.9 US$ per barrel). This was the
result of better prices of refined products compared to crude and
the higher yield of medium distillates.
The volume of crude transported in the second quarter of 2015
declined by 4% compared to the first quarter of this year, due to
the increased number of attacks on transport infrastructure, with 2
in the first quarter and 44 in the second, 36 of these in the month
of June. Compared to the second quarter of 2014, volume transported
increased by 7.8%.
In our commercial activity, in line with our strategy of
diversifying the destination of our products, we exported to
South Korea and the U.S. East
coast. Also, with the purpose of increasing our footprint in the
Asian market, we announced our first shipment of crude to
Japan, following the conclusion of
negotiations with the company JX Nippon, which bought 2 million
barrels of Castilla crude to supply its refining systems.
The improved financial result in the second quarter of 2015
compared to the first quarter of 2015 is the outcome of better
crude realization prices, which increased from 43 US$ per barrel in the first quarter to
53 US$ per barrel in the second.
Although cost of sales showed an increase of 10% compared to the
first quarter, given the higher costs of maintenance, purchases and
product imports, when compared to the same period of 2014 we
had a reduction of 11%, reflecting the cost optimization strategies
that are gradually beginning to materialize. In line with this, we
achieved a 2.32 US$ per barrel
reduction of our lifting cost, as a result of optimizations,
between the second quarter of 2015 and the same period of
2014.
Our operating expenditures continued under control. Although
in the first quarter of 2015 we recorded the applicable wealth tax
for year 2015, in the second quarter of 2015 financial expenses
were also reduced due to a lower impact of the exchange rate
difference.
Thus, in the second quarter of 2015, the Corporate Group's
net revenue, attributable to Ecopetrol shareholders, was COP$1.5
trillion pesos, compared to COP$0.16 trillion in the first quarter
of 2015 and COP$2.6 trillion in the second quarter of
2014.
On another note, this past May
26, we announced to the market our new 2015-2020 strategy,
aimed at profitable growth in exploration and production and
maximization of efficiencies in transport and refining.
The strategy prioritizes value over volume, with emphasis on
financial discipline, streamlining investments and divestment of
non-strategic assets. The plan also foresees profound
transformations within the organization, both in the business
segments as well as in project management, technology, environment
relations and investment portfolio management.
One month after launching our strategy, we successfully
placed bonds in the international market for US$1,5 billion, with an 11-year term and 3 times
oversubscribed. The issue demonstrated, once again, the appetite
and confidence of institutional investors in our
company.
Also during the quarter, the risk rating agencies Fitch
Ratings, Standard & Poor's Ratings Services and Moody's
Investors Service, confirmed Ecopetrol's ratings of BBB, BBB and
Baa2, respectively, all with stable outlook, providing us the
support needed to continue with our strategic plans as an
investment grade issuer in the international capital
market.
We remain focused on generating value for our stakeholders
and we work every day to generate clean, profitable
barrels."
The complete report is available in www.ecopetrol.com.co
Ecopetrol is the largest company in Colombia and is an integrated oil and gas
company; it is among the top 40 oil companies in the world and
among the top four oil companies in Latin
America. Besides Colombia –
where it generates over 60% of the national production – it has
exploration and production activities in Brazil, Peru,
and the US (Gulf of Mexico).
Ecopetrol owns the largest refinery in Colombia, most of the pipeline and
multi-product pipeline network in the country, and is significantly
increasing its participation in bio-fuels.
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 and Section 21E of the U.S. Securities
Exchange Act of 1934. 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
and gas, our exploration and production activities, market
conditions, applicable regulations, the exchange rate, Ecopetrol'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 further information, please contact:
Head of Corporate Finance and Investor Relations (a)
Maria Catalina Escobar
Phone: (+571) 234 5190
E-mail: investors@ecopetrol.com.co
Media Relations (Colombia)
Jorge Mauricio Tellez
Phone: + 571-234-4329
e-mail: mauricio.tellez@ecopetrol.com.co
[1] Net income attributable to Ecopetrol's shareholders under
IFRS.
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SOURCE Ecopetrol S.A.