BOGOTA, Colombia, March 2, 2015 /CNW/ -- Ecopetrol S.A. (BVC:
ECOPETROL; NYSE: EC; TSX: ECP) announced today its audited
financial results, both consolidated and unconsolidated, for the
fourth quarter and full year 2014, prepared and filed in Colombian
pesos (COP$) in accordance with the Public Accountancy Legal
Framework (Regimen de Contabilidad Publica, RCP) of Colombia's General Accounting Office.
Some figures in this release are presented in U.S. dollars
(US$), as indicated. The financial results in the main body of this
report have been rounded to one decimal place. Figures presented in
COP$ billion are equivalent to COP$1 thousand million
(COP$1,000,000,000). Additionally, some 2013 figures have been
reclassified to be comparable to those of 2014.
Summary of Ecopetrol S.A.'s financial results
Unconsolidated
|
(COP$
Billion)
|
4Q
2014*
|
3Q
2014*
|
Var.
%
|
4Q
2013*
|
Var. %
**
|
2014
|
2013
|
Var.
%
|
Total
sales
|
12,794.4
|
14,579.9
|
( 12.2%)
|
16,201.3
|
(21.0%)
|
58,092.6
|
62,514.2
|
( 7.1%)
|
Operating
profit
|
1,067.6
|
3,875.6
|
( 72.5%)
|
3,876.7
|
(72.5%)
|
13,656.9
|
19,635.2
|
( 30.4%)
|
Net Income
|
(616.7)
|
2,355.6
|
( 126.2%)
|
2,629.7
|
(123.5%)
|
7,812.7
|
13,352.9
|
( 41.5%)
|
Earnings per share
(COP$)
|
(15.00)
|
57.29
|
( 126.2%)
|
64.00
|
(123.4%)
|
190.01
|
324.76
|
( 41.5%)
|
EBITDA
|
2,488.0
|
5,471.9
|
( 54.5%)
|
5,272.2
|
(52.8%)
|
22,434.9
|
28,501.3
|
( 21.3%)
|
EBITDA
Margin
|
19%
|
38%
|
|
33%
|
|
39%
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
(COP$
Billion)
|
4Q
2014*
|
3Q
2014*
|
Var.
%
|
4Q
2013*
|
Var. %
**
|
2014
|
2013
|
Var.
%
|
Total
sales
|
14,822.8
|
18,091.4
|
( 18.1%)
|
17,960.3
|
( 17.5%)
|
68,925.3
|
70,428.7
|
( 2.1%)
|
Operating
profit
|
1,128.1
|
4,670.0
|
( 75.8%)
|
4,209.8
|
( 73.2%)
|
16,601.9
|
21,834.7
|
( 24.0%)
|
Net Income
|
(844.0)
|
2,279.4
|
( 137.0%)
|
2,426.6
|
( 134.8%)
|
7,510.2
|
13,106.5
|
( 42.7%)
|
EBITDA
|
2,438.6
|
5,468.9
|
( 55.4%)
|
4,901.4
|
( 50.2%)
|
22,382.2
|
28,013.7
|
( 20.1%)
|
EBITDA
Margin
|
16%
|
30%
|
|
27%
|
|
32%
|
40%
|
|
|
|
|
|
|
|
|
|
|
* Not
audited
|
** Between 4Q 2014
and 4Q 2013
|
In the opinion of Ecopetrol's CEO, Javier Gutierrez:
"In 2014, we obtained important achievements, such as the
discoveries in offshore exploratory blocks; the strengthening of
the transportation segment, which continues the optimizations
needed to achieve competitive margins at the level of the best in
the industry; and the generation of positive EBITDA in the refining
segment as we enter the final phase of the Cartagena Refinery
project.
Affiliates of the Corporate Group contributed to the positive
results. Ecopetrol America Inc. reached a production of 7.7 mboed
in the fourth quarter of 2014, thereby beginning to generate
revenues that will allow its future sustainability. As far as
petrochemicals, Propilco significantly increased its earnings,
benefiting from better international prices of raw material and
higher volumes of propylene supply from the Barrancabermeja
refinery.
The Corporate Group's average yearly production was 755.4
mboed, 33 mboed below that of the previous year, due to operating
environment situations (-22 mboed), attacks (-5 mboed),
environmental constraints (-9.5 mboed), offset by the increase in
production of affiliates and subsidiaries (+3.5 mboed).
The average sales price of the basket of Ecopetrol crude, gas
and products was US$10.6 per barrel
lower than in 2013, which, coupled with a 7% devaluation of the
average exchange rate, had a significant impact on our financial
results.
It is important to mention that the exchange rate has two
effects on the company's financial results: regarding operations, a
higher exchange rate has a positive effect given that 60% of our
sales are dollar denominated, although some of our purchases are
also dollar denominated, but in a lower share; on the other hand,
devaluation has a negative impact on non-operational results due to
the Colombian peso valuation of the dollar denominated
debt.
Our net income in 2014 was COP$7,813 billion, 41% below that
of 2013. This decline is explained by several factors, starting
with the 7% drop in our revenues, in line with the decrease in
production volumes and prices. Cost of sales, specifically variable
costs, decreased 2% as a result of lower purchase price of crude,
gas and products, offset by higher purchase volumes of naphtha as
crude diluent. As for fixed costs, there was an increase of 18%,
the result basically of the inclusion of transportation costs based
on the Ship or Pay (SoP) fee as part of the implementation of the
new transportation model beginning with the start-up of Cenit in
April of 2013 (total fixed costs increased COP$1.7 trillion, of
which COP$1.23 trillion correspond to the SoP fee). It should be
noted that these additional costs generated by the new
transportation business model are offset by the operating income of
our affiliate Cenit. As a result of all of the above factors and
variables, gross income decreased 23%.
Operating income for the year decreased 30%, affected
additionally by higher exploratory expenditures resulting from an
extended campaign, which in total had a higher cost of COP$646
billion more than the prior year. Furthermore, in a downward price
situation as seen since mid-2014, it was necessary to revise the
value of assets, inventories and oil investments. This analysis
reflected adjustments in operating expenditures from oil
investments and decline in the valuation of assets for a total of
COP$571 billion.
Non-operating variables also affected results negatively, due
mainly to higher expenditures derived from U.S. dollar-denominated
debt interest and higher expenditures because of the difference in
exchange rate on the outstanding debt balance.
Taking into account the above, pre-tax net income fell 36%,
which, combined with a higher effective tax rate at 40.48% levels
(compared to 34.48% in 2013), resulted in net income for the period
of COP$7,813 billion, a decrease of 41% compared to that of 2013.
EBITDA margin was 39%, a very competitive level compared to other
companies in the industry.
In the fourth quarter of 2014, there were several important
highlights among which I will mention the following:
In production, the field Chichimene set a record in
production of 80 thousand barrels a day, and we began 8 secondary
improved recovery pilots, bringing the total pilots underway for
the year to 13.
In exploration, we announced two discoveries: 1) the well
Orca in offshore waters of Colombia, offering a promising perspective for
this basin; and 2) the well Nueva
Esperanza-1, confirming the potential of the CPO-09 block in
Meta province. These two discoveries add to others announced in
2014 in Colombia (Tibirita, Golosa
and Cacica) and the U.S. Gulf Coast (Leon and Rydberg).
In transportation, we completed the expansion of the Ocensa
Delta Project and began the operation of 23,500 additional barrels
per day in the Santiago-Porvenir system.
In refining, we obtained 96.3% completion of the Cartagena
refinery modernization project.
In December, we announced our investment plan for 2015 of
US$7.86 billion, in accordance with
the current price situation and in line with the strategy of value
generation and emphasis on production.
Ecopetrol is a company that responds swiftly to challenging
situations. For this reason, we have initiated a cost and
expenditure optimization plan in pursuit of structural savings and
economies of scale that allow us to operate in a cost-effective
manner, within a context of low prices, which will continue to
affect financial results in 2015, but without compromising the
strength and sustainability.
Regarding the claims of possible illegal payments on behalf
of third parties to former employees of Ecopetrol, we want to
emphasize that we have a zero tolerance corruption policy and
therefore we have filed a complaint to the authorities, we have
collaborated on a timely basis with the judicial system in order to
clarify such events and so that those responsible be convicted, as
well as imposing internal sanctions and
penalties.
During the last years Ecopetrol has strengthened its internal
control system, of which the Ethics and Compliance office is part
of, in order to prevent, detect and penalize inappropriate
behaviors that affect our ethics and Corporate Governance. The
Board of Directors, the senior management, and all of the employees
are committed in this anti-corruption
crusade".
The full report is available in www.ecopetrol.com.co
For further information, please contact:
Investor Relations Director (A)
Claudia Trujillo
Phone: +571-234-5190
e-mail: investors@ecopetrol.com.co
Media Relations (Colombia)
Jorge Mauricio Tellez
Phone: +571-234-4329
Fax: +571-234-4480
e-mail: mauricio.tellez@ecopetrol.com.co
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SOURCE Ecopetrol S.A.