In a year full of challenges due to the coronavirus (COVID-19) and the extension of the dry season, the EPM Group obtained revenues of $ 14.1 billion in the third quarter of 2020

This Grupo EPM release was published using machine translation.

Medellín, October 29, 2020 | In a year marked by the coronavirus pandemic (COVID-19) and the effects it has had on the world economy, as of September 30, 2020 the EPM Group obtained revenues of $ 14.1 trillion with a growth of 6%, thanks to the responsible management of finances and diversification of the service portfolio in six countries, which includes water supply, wastewater management; generation, distribution and transmission of energy; natural gas and solid waste management.

Between January and September 2020, the EPM Group had an operating result of COP 3.2 trillion, a 7% decrease compared to the previous year and a 23% margin. Ebitda was $ 4.3 trillion, with a decrease of 4% and an Ebitda margin of 31%. In the same period, the net result of the Business Group was $ 1.3 trillion with a 9% margin, while in EPM Parent Company it was $ 1.2 trillion with a 17% margin.

Of the $ 14.1 trillion in income achieved by the Business Group for the January-September period, EPM Parent Company contributed 51%, foreign subsidiaries 33% and national energy and water subsidiaries 16%.

COVID-19 effect

Grupo EPM is no stranger to the global impacts caused by the coronavirus (COVID-19). The companies made significant financial and cash efforts to implement the special measures decreed by the authorities for the pandemic and their own initiatives to allow the most vulnerable families access to public services.

As of September 30, 2020, the Group presented lower results of almost $ 500 billion (mainly due to lower income of $ 369 billion and higher costs and expenses of $ 124 billion), an increase in the balance in accounts receivable for $ 269 billion in EPM, lower collection of $ 360 billion (EPM $ 267 billion), mainly deferred for $ 308 billion (EPM $ 241 billion); discount for timely payment of $ 19 billion (EPM $ 10 billion) and frozen financing installments of $ 31 billion (EPM $ 16 billion).

Although the result of the operation for the third quarter of 2020 was very positive, the results continue to be impacted by lower cash income and higher costs in the provision of services, due to the effects of the drought season and the low hydrology in Colombia. lasted until the end of last August. Another factor that weighed on the results for the period was the lower demand for water, energy and gas associated with economic activity, as a consequence of COVID-19.

In addition, the effect of a higher net accounting expense, excluding cash, due to an exchange difference of $ 748 billion, mainly caused by the restatement of the debt in dollars associated with the accumulated devaluation of the Colombian peso of 18.36%. As of September 30, 2020, there was a $ 603 billion reversal of the expense due to exchange difference compared to March, given the revaluation of the Colombian peso as of the second quarter of this year. Additionally, the Company has taken actions to develop its foreign exchange risk hedging strategy that has allowed it to significantly improve its risk profile in the face of currency volatility.

Development engine

Despite the effects indicated, in its commitment to the community, the development of the territories and the generation of employment, between January-September 2020, the EPM Group advanced investments in infrastructure projects for $ 1.9 trillion, which have been fundamental to boost the economy, in one of the most complex moments of humanity.

EPM is the engine of development in the region. Of the transfers accounted for $ 1,488 billion in favor of the Municipality of Medellín for the 2020 period, the Company has made payments for $ 1.3 trillion, which add to the well-being of all Medellinians, in that higher purpose of contributing to the harmony of the life for a better world.

Grupo EPM's financial situation

Total assets: $ 62.8 billion, with a growth of 14%.

Liabilities: $ 37.9 billion, with a growth of 23%.

Equity: $ 24.9 billion, with an increase of 3%.

Investments in infrastructure: $ 1.9 trillion.

Financial situation of EPM Parent Company

Total assets: $ 53.8 billion, with a growth of 14%.

Liabilities: $ 28.9 trillion, with a 26% growth.

Equity: $ 24.9 billion, with an increase of 2%.

Investments in infrastructure: $ 1.3 billion.

Debt / Ebitda Indicator: in Grupo EPM this indicator closed the third quarter at 4.41, compared to 3.80 in 2019. In EPM Parent Company it was 6.03, compared to 4.83 in 2019. Discounting the reserve of Cash available, the Net Debt / Ebitda indicator was 3.40 for Grupo EPM and 4.77 for EPM Parent Company.

Estimated results for 2020

For this year, Grupo EPM estimates a profit that may range between $ 2.0 billion and $ 2.4 billion. For this, among other factors are considered: the coronavirus pandemic (COVID-19) with its effect on the demand for public services and the payment of the bill, the evolution of energy prices in the medium and long term, macroeconomics and the behavior of the exchange rate, as well as the incorporation of the new subsidiary Afinia to the financial statements. This estimate may present variations related to unforeseen events or abrupt changes in or due to the listed variables and other effects not considered.

Based on the above, the projection of surpluses to the Municipality of Medellín in 2021 is estimated between $ 1.1 billion and $ 1.3 billion.