Colombia's Ecopetrol publishes Q2 results

Press release from Ecopetrol:

During the Second Quarter of 2024 (2Q24), Ecopetrol Group confronted a challenging environment, which continues to be impacted by several external variables, including the revaluation of the Colombian peso, inflationary pressures, and a decrease in the prices of our refined products. We managed these challenges with resilience, maximizing operational savings, controlling costs, and improving the realization prices of our crude oil.

During 2Q24, Ecopetrol generated revenues of COP 32.6 trillion, an EBITDA of COP 14.1 trillion, a net income of COP 3.4 trillion, and an EBITDA margin of 43%. It is worth highlighting, the dividend payment as of June, of COP 1.5 trillion to our minority shareholders and COP 9.1 trillion to the majority shareholder, rewarding their trust in this company.

Regarding the Fuel Price Stabilization Fund (FEPC), we emphasize the sustained reduction of the outstanding account balance, which totaled COP 12.1 trillion at the end of June, a 61% decrease compared to the same period in 2023.

In the Hydrocarbons business line, for the second quarter of the year, we highlight the strength of our traditional business, closing with a production of 758 kboed (+30.2), transported volumes of 1,152 kbd (+54.7), and refinery throughputs of 424 kbd (-3.4). It is also noteworthy, the Uchuva-2 delineation well, which confirms the extension of the gas discovery in the Caribbean Offshore, providing significant information for the development of this new production frontier in the Colombian Caribbean, and supports the gas potential that has been foreseen in the region.

These results, along with a high-quality commercial strategy, allowed us to capture margins and new market opportunities, strengthening the prices of the crude basket by USD 10.3 USD/Bl, compared to the same period of 2023. The strong performance of our Houston subsidiary, EUST, is remarkable, selling 14 million barrels of crude and products in 2Q24, achieving an EBITDA of USD 24 million and a net income of USD 19 million, totaling an EBITDA of USD 61 million for the 1H24 and USD 48 million in net income.

In the Energies for the Transition business line, as of June, we achieved an accumulated energy optimization of 1.21 petajoules, anticipating the 1.1 petajoules target for 2024. With this result, we contribute to the reduction of Greenhouse Gases with 104,312 tons of CO2 equivalent greenhouse gases, with estimated savings of over COP 72 billion.

Finally, in the Transmission and Toll Roads business line, during 2Q24, ISA was awarded two private contracts in Colombia: the first for the execution of the Atlántico photovoltaic connection project, and the second, through Transelca, to develop the connection to the Valledupar I, II, and III photovoltaic plant in the department of Cesar.

Concerning our technology, environment, social and governance (TESG) strategy, we would like to highlight the following achievements for the quarter:

On July 31st, the Colombian Petroleum Institute (ICP) transformed into the Colombian Petroleum and Energy Transition Institute (Icpet) which will have the mission of driving the energy transition in the country.

By the end of 2Q24, we reduced emissions by 136,408 tCO2e on the environmental front, a 176% compliance level versus the plan for the first half of the year.

In the social dimension, we highlight that the Ecopetrol Group allocated resources for the execution of the Sustainable Territorial Development Portfolio for COP 118,195 million in 2Q24 and a total of COP 183,988 million so far this year, which includes social, environmental, and strategic relationship investment as mandatory.

On the Governance front, during 2Q24, we secured first place in the Merco Talent ranking for the third consecutive year, which identifies the 100 companies with the best capacity to attract and retain talent in Colombia. Additionally, in the Great Place to Work® workplace environment study, we received the "Very Satisfactory" certification, reflecting our excellent work for our employees.

Regarding the Innovation and Technology agenda, Ecopetrol's efforts for safe and intelligent operations stand out, through the adoption of Artificial Intelligence for IT Operations - AIOPS. This technology has ensured an availability of over 95.5% for critical technological services and optimized operational and information technology functions within the organization.

We will continue strengthening relationships with all our stakeholders, focusing on generating sustainable value while advancing towards the energy transition.

Ricardo Roa Barragán

President, Ecopetrol

In 2Q24, the Ecopetrol Group reported a net income of COP 3.4 trillion and an EBITDA of COP 14.1 trillion, achieving an EBITDA margin of 43%. These results were driven by exceptional operational performance, demonstrated by increased production and transportation volumes along with stable refinery throughputs. The quarter benefited from improved crude oil spreads and higher Brent prices. However, the results were impacted by external factors in market variables.