Ecopetrol Group Announces Second Quarter 2019 Results

BOGOTÁ, Colombia, Aug. 12, 2019 /PRNewswire/ -- Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) announced today the Ecopetrol Group's financial results for the second quarter of 2019, prepared in accordance with International Financial Reporting Standards applicable in Colombia.

     Table 1: Income Statement Financial Summary - Ecopetrol Group

              Billion (COP)  2Q 2019              2Q 2018                       Delta ($)            Delta (%)    6M 2019     6M 2018      Delta ($)       Delta (%)


              Total sales                                               18,309                16,987                            1,322                  7.8%      34,251       31,630           2,621             8.3%

       Depreciation and amortization                                         2,052                 1,899                              153                  8.1%       4,023        3,670             353             9.6%

       Variable cost                                                         6,777                 5,818                              959                 16.5%      12,893       11,019           1,874            17.0%

       Fixed cost                                                            2,385                 2,040                              345                 16.9%       4,531        3,915             616            15.7%

              Cost of sales                                             11,214                 9,757                            1,457                 14.9%      21,447       18,604           2,843            15.3%

              Gross income                                               7,095                 7,230                            (135)               (1.9%)      12,804       13,026           (222)          (1.7%)


       Operating expenses                                                    1,137                   846                              291                 34.4%       1,890        1,462             428            29.3%

              Operating income                                           5,958                 6,384                            (426)               (6.7%)      10,914       11,564           (650)          (5.6%)


       Financial income (loss)                                               (391)                (620)                             229               (36.9%)       (776)     (1,189)            413          (34.7%)

       Share of profit of companies                                             72                    96                             (24)              (25.0%)         233          182              51            28.0%

              Income before income tax                                   5,639                 5,860                            (221)               (3.8%)      10,371       10,557           (186)          (1.8%)


       Income tax                                                          (1,872)              (2,093)                             221               (10.6%)     (3,546)     (3,973)            427          (10.7%)

              Net income consolidated                                    3,767                 3,767                                0                  0.0%       6,825        6,584             241             3.7%


       Non-controlling interest                                              (280)                (248)                            (32)                12.9%       (593)       (450)          (143)           31.8%

              Net income attributable to owners of Ecopetrol             3,487                 3,519                             (32)               (0.9%)       6,232        6,134              98             1.6%


              EBITDA                                                     8,307                 8,609                            (302)               (3.5%)      15,665       15,759            (94)          (0.6%)

              EBITDA Margin                                              45.4%                50.7%                                               (5.3%)       45.7%       49.8%                         (4.1%)


The figures included in this report are not audited. The financial information is expressed in billions of Colombian pesos (COP) or US dollars (USD), or thousands of barrels of oil equivalent per day (mboed) or tons, and this is so indicated where applicable. For presentation purposes, certain figures of this report were rounded to the nearest decimal place.

In words of Felipe Bayón Pardo, CEO of Ecopetrol:

"In the first half of 2019 the Ecopetrol Group reported a net profit of COP 6.2 trillion and an EBITDA of COP 15.7 trillion, equivalent to an EBITDA margin of 45.7%.

These results demonstrate the financial and operational strength of the company, which faced a challenging market environment during the second quarter, given the decline in international prices for Brent, naphtha and gasoline, as well as operating restrictions throughout the first half of the year, due to the scheduled maintenances in some fields and at the refineries, in order to achieve the highest standards of integrity in our operations.

On the positive side, we note the spread in the crude basket of -6.4 USD/bl in the first half of the year, supported by the strengthening of heavy crudes in the region and the commercial strategy of seeking higher-value markets, which helped offset the performance of international refined product prices. The 12% devaluation in the exchange rate compared to the first half of 2018 also favored our results.

The Ecopetrol group's first-half production totaled 726,000 barrels of oil-equivalent per day, increasing 2% compared to the same period the previous year, in line with the 2019 target. The positive results of the drilling campaign in fields such as Akacias and Rubiales, and the solid performance of the recovery program, which contributed 30% of production in the semester, partially mitigated the impact of the scheduled maintenances at the Oripaya, Cusiana and Cupiagua fields.

Sales volumes totaled 913,000 barrels-equivalent per day, increasing 4.2% compared with the first half of 2018, primarily driven by higher crude exports, and refined products from the Cartagena refinery.

On the exploratory front, the Ecopetrol Group continued to expand its presence throughout Colombia, with the award of five blocks by the National Hydrocarbons Agency during the 2019 Permanent Area Allocation Process (PPAA). Further, three of the 10 exploratory wells that were drilled demonstrated the presence of hydrocarbons.

In July, the process of setting new crude transport tariffs was completed, which will allow a moderate increase in the midstream segment's revenues, ensuring its financial stability for the next four years and the generation of cash for the group. Operationally, we highlight that production barrels that had been being transported by tanker, are now being transported by pipeline, as a result of the segment's commercial management.

In the downstream segment, during the second quarter we carried out a scheduled maintenance at the hydrocracking unit of the Cartagena refinery, which together with the one completed at the Barrancabermeja refinery in the first quarter, will ensure operational stability, the quality of the diesel produced and will prepare us to take advantage of future benefits of the MARPOL (International Convention for the Prevention of Pollution from Ships) regulation. Throughput for the quarter totaled 379,000 barrels of oil per day, in line with the business plan target.

This segment's financial results continued to be impacted by the unfavorable pricing environment for international refined products, primarily naphtha and gasoline, combined with the appreciation in heavy crudes, which comprise our refineries' feedstock.

Regarding the investment plan, the Ecopetrol Group executed USD 1,392 million in the first half of 2019, increasing 38% versus the first half of 2018, of which 81% was allocated in the upstream segment, consistent with the Ecopetrol Group's growth strategy.

Continuing with the efficiency strategies, we launched the new 2019 - 2023 phase, with a target of COP 8.0 trillion, involving initiatives which seek efficiencies mainly through the optimization of capex and operating costs as well as the increase of revenues and margins. During the first half of the year, COP 958 billion in efficiencies were incorporated, concentrated largely in optimizing investments in drilling and facilities construction. This is in addition to the COP 10.2 trillion of accumulated savings between 2015 and 2018.

On the environmental front, Ecopetrol S.A. was the first company in Colombia's Oil and Gas sector to verify its reduction in greenhouse gas emissions from operating processes. The firm Ruby Canyon Engineering verified the reduction of over one million tons of CO2-equivalent between 2013 and 2017. In environmental terms, this would be equivalent to reforesting 100,000 hectares of forest.

Social and environmental investments in the first half of 2019 totaled COP 28,339 million, confirming our commitment to the environment and communities.

Additionally, in the first half of 2019 we prepared the logistics system to ensure the delivery of the ultra-low-sulfur diesel and natural gas required by the new buses of the Bogotá Mass Transportation System (Transmilenio), which began operating in June. We thus contributed to the technological renovation of this important transportation system's fleet.

Finally, in our international expansion front, I would like to highlight two very important events. The first one is the approval by the Brazilian Ministry of Mines and Energy of Ecopetrol's 10% stake in the Saturno block, located in the central region of the Santos Basin in the Brazilian Pre-salt; and second, our entry into the Midland in the Permian basin, the area with the fastest growth and highest yield in the United States, to participate in exploiting non-conventional reservoirs. This is transformational news for Ecopetrol and the country.

All this became possible through our strategic alliance with a first-tier operator as Occidental. This will facilitate an increase in our reserves and production, as well as consolidate our knowledge in the exploitation of non-conventional reservoirs. This is a critical step forward along the path of sustainability and profitable growth that we have been laying out for over two years, with a view to generating more value added for our shareholders.

We remain committed to profitable growth in production and reserves, with sustainable results, safe operation and operational excellence, generating integrated value in harmony with the environment and our communities."

To review the full report please visit the following link:

Ecopetrol is Colombia's largest firm and is an integrated oil company that is among the 50 largest in the world and the four largest in Latin America. In addition to Colombia, where it generates over 60% of the country's production, it is active in exploration and production in Brazil, Peru and the United States (Gulf of Mexico). Ecopetrol operates the largest refinery in Colombia, most of the country's oil-pipeline and polyduct network, and is significantly increasing its share of bio-fuels.

This press release contains statements relating to business prospects, estimates of operating and financial results, and Ecopetrol's growth prospects. All are projections, and therefore are based solely on management's expectations of the company's future and its continuous access to capital to finance the company's sales plan. Achieving these estimates in the future depends on its performance under given market conditions, regulations, competition, performance of the Colombian economy and industry, among other factors; therefore, they are subject to change without prior notice.

For further information, contact:

Capital Markets Manager
María Catalina Escobar
Telephone: +571-234-5190 - Email:

Media Relations (Colombia)
Jorge Mauricio Tellez
Telephone: + 571-234-4329 - Email:

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SOURCE Ecopetrol S.A.