The increase in the effective income tax rate prevented Ecopetrol’s profits from growing, not only quarterly, but also annually. This is clear from an analysis carried out by the brokerage firm Casa de Bolsa, in which it even explains that despite the drop registered in the profits of the Colombian oil company in the first three months of the year (13.9 percent), the They exceeded the expectations that not only this firm had, but also the other market agents.
(Also read: After the quarterly report, Ecopetrol shares fall in Colombia and New York)
“If it were not for the increase in the effective income tax rate explained by the tax reform, of +16.9 percentage points quarterly and +9.9 percentage points annually, placing the effective rate at 44.5 percent, the profit for the first quarter of 2023 (of Ecopetrol) would have increased annually and quarterly,” Casa de Bolsa points out.
The report also indicates that in those first three months of 2023, although the company’s profits decreased compared to what was obtained a year ago, they were 2.9 percent above the expectations of the commission agent.
The firm’s analysts also explained that Ecopetrol’s sales easily exceeded what could be expected based on the fundamentals (volumes, prices and exchange rate), given the excellent performance of the spread of the product basket ( refining), which was located at 17.6 dollars a barrel, decreasing
just 0.4 percentage points compared to the fourth quarter of 2022 and increasing 10.8 points when compared to the first quarter of that same year.
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And the analysis adds that a quarterly decrease in costs and expenses was reduced.
The state majority company reported two new successful wells: Arrecife Norte-1, located in the department of Córdoba, which evidenced the presence of natural gas in the Ciénaga de Oro Formation, and Tororoi-1, located in the department of Casanare , which evidenced the presence of light crude oil. Regarding refining, Ecopetrol reinforced a quarterly historical record in consolidated cargo of 412,000 barrels per day.
“We highlight the operational stability, including the recent start-up of the interconnection of the Cartagena crude plants (IPCC) in an international situation that supports refining margins,” described the incoming president of Ecopetrol, Ricardo Roa Barragán.
In the transportation segment, which includes oil pipelines and polyducts, the total volume transported grew by 49,400 barrels per day for a total of 1.09 million barrels per day. This is explained by the increase in refined products and a greater production of hydrocarbons in the Llanos area, which increased transportation by oil pipelines.
To this extent, the president of the company mentions that “2023 began with outstanding operating and financial results when compared to the first quarter of 2022.”
energy referent
To which he added that “he will continue working so that Ecopetrol continues to be a benchmark for the energy sector, with excellent operational and financial performance and a global benchmark for the energy transition”, and described that “he is enthusiastic about the future, with many opportunities for forward leveraged by a solid corporate governance”.
However, from the presidency of Ricardo Roa to the oil company, on April 24, until May 9, there was a 12.49 percent drop in the company’s share price on the Stock Market of Colombia (BVC). This decline was due to the drop in the international price of oil, the ex-dividend period, the arrival of Roa and his statements regarding the exploration contracts.
“What I am telling you is that with the contracts that we have in force today we must be more successful in the search and discovery of oil and gas reserves to guarantee that security. About them, we are going to take advantage of the base. As long as that is the policy, we are not going to have space to sign new contracts. With the existing ones, we are going to continue searching and being more effective,” Roa said one day after taking over on the radio.
Another of the elements that could have generated this volatility is associated with the frequent declarations of the Minister of Mines and Energy, Irene VélezFaced with this same issue, which is recurring in the government of Gustavo Petro.
To which was added that the president wanted, through the National Development Plan (PND), that Ecopetrol became a power generator for the National Interconnected System. Measure that did not happen.
