BOGOTA, Colombia, May 3, 2016 /CNW/ --
- Amid the lowest Brent price of the last 12 years, in the
first quarter of 2016 the Group achieved a net income
attributable to shareholders of Ecopetrol of COP$363
billion.
- Net income attributable to shareholders of Ecopetrol,
increased 127% as compared to the first quarter
of 2015.
- Solid cash flow generation with an Ebitda margin of 39.5%,
resulting in an Ebitda of COP$4.1 trillion for the first
quarter of 2016.
- Group's savings amounted COP$421 billion during the first
quarter of 2016. The Company continues to demonstrate its capacity
to adapt under an adverse price scenario.
Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) ("Ecopetrol" or the
"Company") announced today Ecopetrol Group's financial results for
the first quarter of 2016, prepared and filed in Colombian pesos
(COP$) and under International Financial Reporting Standards (IFRS)
applicable in Colombia.
Table 1: Summary of the Group's Consolidated Financial
Results
(COP$
Billion)
|
1Q
2016*
|
1Q
2015*
|
Change ($)
|
Change (%)
|
Total
sales
|
10,485
|
12,301
|
(1,816)
|
(14.8%)
|
Operating
profit
|
1,599
|
2,357
|
(758)
|
(32.2%)
|
Net Income
Consolidated
|
611
|
356
|
255
|
71.6%
|
Non-controlling
interest
|
(248)
|
(196)
|
(52)
|
26.5%
|
Net (loss) income
attributable to Owners of Ecopetrol **
|
363
|
160
|
203
|
126.9%
|
Other comprehensive
income attributable to Owners of Ecopetrol **
|
(416)
|
1,097
|
(1,513)
|
(137.9%)
|
EBITDA
|
4,137
|
4,782
|
(645)
|
(13.5%)
|
EBITDA
Margin
|
39.5%
|
38.9%
|
|
|
|
* 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 view of the President of Ecopetrol S.A., Juan Carlos Echeverry G.:
"The price environment in the first quarter of 2016 continued
to defy the oil industry, which saw the value of crude reach
US$28/barrel, a 12 year record low.
Ecopetrol, however, managed to generate profits amid this
challenging environment, focusing its efforts on reducing costs,
increasing efficiency, producing profitable barrels and
prioritizing cash generation.
During the first quarter of 2016 the price of Ecopetrol´s
crude basket fell 43% and its refining margin fell 24% in
comparison to those of the same period of 2015. The actions
undertaken to operate more efficiently and with lower costs,
coupled with the positive impact of the devaluation of the exchange
rate over our revenues and the recording of a lower financial net
loss allowed to register a growth of 127% in net profit
attributable to shareholders and to improve the EBITDA margin
compared to those of the first quarter of 2015. Additionally, the
Company maintained its operating margins and EBITDA at
approximately COP$4,000 billion compared to the same
quarter.
Savings in costs and expenses contributed to the obtained
results, these amounted to COP$421 billion in the first quarter of
the year, against a target of COP$1,600 billion for all 2016. The
efficiencies are mainly due to the optimization of purchasing and
contracting plans, better procurement strategies and renegotiation
of contracts.
The reduction of the lifting cost, cash cost of refining and
transportation costs, reported in the first quarter of 2016,
compared to the same period last year, are a result of the progress
made by the company pursuant to the Transformation Plan, the
devaluation of the COP/USD exchange rate and austerity and activity
reduction measures implemented in all business segments. Ecopetrol
is working so that the obtained efficiencies become structural even
in an environment of increasing prices in order to ensure
profitable operations and financial sustainability.
The adjustments in CAPEX and OPEX implemented since 2015, in
line with lower oil prices and the strategic prioritization of
value over volume led to programmed lower activity and lower
production in the first quarter of 2016, which came to 737 thousand
barrels equivalent per day, compared to 773 thousand in the first
quarter of 2015. This fall also reflects the natural decline and
the temporary closure of some fields caused by low profitability or
judicial decisions. Once market conditions and cash availability
improve, the Company expects to increase levels of investment in
exploration and production and give way to investments that have
been postponed in this low crude oil price environment.
In exploration, the deep water appraisal well Leon 2 in the
Gulf of Mexico of the United States was completed. This one is
operated by Repsol, which holds a 60% stake. The remaining 40%
belongs to Ecopetrol America Inc. The Company is awaiting the
results of the evaluation of the information provided by the well,
located in one of the regions with the greatest potential for
hydrocarbons in deep waters in the world.
Between the first quarter of 2015 and 2016 the gross margin
of the refining segment decreased by US$4.5 per barrel mainly as a result of market
conditions marked by lower spreads between prices of middle
distillates and the price of oil.
The Cartagena refinery
continued its boot and stabilization process, obtaining a regular
operation of the delayed coking, catalytic cracking and diesel
hydro-treaters units. As of March 31,
28 units of a total of 34 were operational. It is expected that all
units in the complex will be in full operation by the second half
of 2016. Additionally, loads of crude up to 140 thousand barrels of
oil a day have been achieved.
Test of high viscosity crude transportation were started in
February 2016. Satisfactory results
were obtained moving oil with a viscosity of 405 centistokes (cSt).
This project, along with the expansion of capacity in Ocensa
(P-135) will reduce the cost of dilution which is key to the
production of heavy crudes, which today represent about 58% of the
total production of the Group.
In December 2015 the Company
imposed a significant cut on its 2016 investments compared to the
levels of previous years with the approval of a budget of
US$4,800 million. The need to
preserve the financial sustainability of the Company with the low
oil prices environment prompted a further cut in the investment
plan for 2016, which now will range between US$3,000 and US$3,400 million. The expected
production was adjusted to this new reality from 755 thousand
barrels per day to approximately 715 thousand barrels of oil
equivalent per day.
2016 is a transition year for the Ecopetrol Group during
which the cycle of investments in Midstream and Downstream will
conclude with some transport projects and the startup of the
Cartagena refinery. From 2017 on
the Company will devote a greater proportion of its investments to
Upstream.
Financing needs for this year are in the US$1,500 - US$1,900 million range, without taking
into account the resources that may be obtained from the Company´s
divestment plan. To date, US$475
million has already been obtained through credit facilities
with local and international banks.
Cash flow was also leveraged by the results of the auction of
Ecopetrol´s stake in ISA held in April
2016, which allowed allotting shares in the amount of
COP$377 billion.
Shareholders also contributed to the financial strengthening
of the Company with the decision not to distribute dividends
in 2016, which was made during the last general meeting of
shareholders.
Operational excellence, focus on capital discipline,
rationalization of investments and rotation of the portfolio of
assets to generate cash flow have enabled Ecopetrol to successfully
navigate the current price environment.
Ecopetrol continues to position itself for the future by
strengthening its portfolio of exploration and production in order
to seize opportunities that may be generated in the next cycle of
higher crude oil prices. In this way we can ensure growth in the
long term, financial sustainability and value creation for
Ecopetrol."
The complete report is available
in www.ecopetrol.com.co
------------------------------------------
Ecopetrol is the largest company in Colombia and is an integrated oil & gas
company; it is among the top 50 oil companies in the world and
among the four top ones in Latin
America. Besides Colombia -
where it generates over 60% of the national production - it has
exploration and production activities in Brazil, Peru
& the US (Gulf of Mexico).
Ecopetrol owns the largest refinery in Colombia and 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
& 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 further information, please contact:
Head of Corporate Finance and Investor Relations
María 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] 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. All financial information
in this report is unaudited.
Logo - http://photos.prnewswire.com/prnh/20090209/ARM001LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/ecopetrol-group-announces-its-results-for-the-first-quarter-of-20161-300262321.html
SOURCE Ecopetrol S.A.