By Oliver Griffin
BOGOTA, Aug 4 – Colombian oil company Ecopetrol on Tuesday reported a 99% fall in second-quarter net profit, beating analysts’ forecasts it would make a loss, and said it would invest up to $13 billion over the next three years.
The majority state-owned company reported a net profit of 25 billion pesos ($6.6 million) in the second quarter, compared with 3.49 trillion pesos in the year-ago period.
Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 76% to 2 trillion pesos.
Analysts had forecast Ecopetrol would swing to a loss, due to the fall in global oil prices.
“We presented second-quarter results that aren’t good,” Chief Executive Felipe Bayon told reporters in a virtual press conference, citing the impact of coronavirus and an oil price war earlier this year.
Ecopetrol’s results were slightly more robust than those of regional peers Petroleos Mexicanos and Brazil’s Petroleo Brasileiro SA, which reported quarterly losses of around $1.9 billion and $524 million, respectively.
Total sales in the second quarter plummeted to 8.44 trillion pesos, from 18.31 trillion pesos a year earlier, the company said.
Net profit in the first half of the year fell 98% to 158 billion pesos, while EBITDA for the first six months declined 54% to 7.25 trillion pesos.
The company plans to make organic investments of $11 billion to $13 billion from 2020 to 2022, primarily in Colombia, and expects to increase production to 720,000 barrels of oil equivalent per day (boepd) by 2022.
Production in the first half of 2020 was 706,000 boepd, within Ecopetrol’s guidance range.
Falling production and profits from Ecopetrol will negatively impact the spending power of Colombia’s government, which received 3.2 trillion pesos in dividends from Ecopetrol in December.
While Bayon said Ecopetrol has strengthened its position, he warned of more uncertainty.
“We don’t know how much longer this situation will last, if we’re talking months or more,” he said.
($1 = 3,768.39 Colombian pesos) (Reporting by Oliver Griffin and Julia Symmes Cobb, editing by Louise Heavens and Jane Merriman)