Ecopetrol's (EC) Q2 Earnings Decline Y/Y On Lower Oil Price
Zacks Investment Research | Aug 21, 2019 08:59AM ET
Ecopetrol S.A. (NYSE:EC) reported second-quarter 2019 net income of 3,487 billion Colombian pesos, lower than 3,519 billion Colombian pesos in the June quarter of 2018. However, revenues of 18,309 billion Colombian pesos improved from 16,987 billion Colombian pesos reported in the corresponding period last year.
Cartagena refinery’s lower margin and decline in oil price realization hurt the company’s profit, partially offset by higher crude transported volumes.
Segmental Performances
Being an integrated energy firm, Ecopetrol operates through Exploration and Production, Transportation and Logistics, and Refining and Petrochemicals segments.
Exploration and Production: The company generates operating income of 3,877 billion Colombian pesos from this business, which is below 4,449 billion Colombian pesos a year ago. The decline in realization of oil price hurt the segment.
The company produced 723 thousand barrels of oil equivalent per day (mboed), up from 720.9 mboed in the June quarter of 2018. Crude volumes — representing almost 82.3% of total production — were 594.9 thousand barrels per day (mbd), up from 593.2 mbd in the prior-year quarter.
Average realized Brent oil price was reported at $68.5 per barrel, down from $75 a year ago.
Transportation and Logistics: The unit contributed operating profit of 2,157 billion Colombian pesos, up from 1,932 billion Colombian pesos in second-quarter 2018. This was because of a rise in transported volumes of crude oil.
Refining and Petrochemicals: Ecopetrol incurred an operating loss of 75 billion Colombian pesos at this segment against a profit of 3 billion Colombian pesos in the comparable quarter last year. Lower margin from Cartagena refinery hurt the segment’s performance.
Financial Position
Through second-quarter 2019, the company invested $745 million of capital. Of the total capital budget, 75% was allotted to production.
As of Jun 30, 2019, Ecopetrol had cash and cash equivalents of 5,524 billion Colombian pesos while total debt, including short-term and long-term loans plus borrowings, was roughly 37,467 billion Colombian pesos. The company’s debt-to-capitalization ratio was roughly 40%.
Zacks Rank and Key Picks
Ecopetrol carries a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include World Fuel Services Corporation (NYSE:INT) , Delek Logistics Partners, L.P. (NYSE:DKL) and TC PipeLines, LP (NYSE:TCP) . All the stocks carry a Zacks Rank #2 (Buy). You can see Zacks Investment Research
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.