In September we reported the second-quarter results of Ecopetrol, highlighting its capacity to adapt and overcome tough situations. We expressed our surprise regarding its performance despite the scenario. In this quarter, the oil company confirmed its strengths and kept registering historical results.
In addition, Ecopetrol completed the purchase of 51.4% of ISA’s total shares, becoming the principal shareholder in Interconexiones. In this quarter, the firm already considered the acquisition of the subsidiary, further improving its financial results.
The firm experienced an important growth in sales, increasing by 89.3% in comparison to the same quarter last year. The increase is explained by three main things: higher weighted average sale price of crude oil, gas, and related products, primarily due to higher reference prices; higher service revenues, explained by the consolidation of ISA’s September results; and higher sales volumes due to the recovery in national demand.
While sales in Colombia accounted for 49% of total sales, international sales represented 51%.
As the normalization of the pace of activities continues, costs are increasing as well. In this quarter, costs of sales grew by COP 6.2 trillion, translating into an increase of 73.8% vis-á-vis 3Q20. Variable costs rose 122.7% as a result of higher purchases of gas, crude oil, and refined product to satisfy the increase in demand, given the economic reactivation. In addition, the costs were influenced by the exchange rate COP/USD, increasing them by COP 0.3 trillion.
On the other hand, fixed costs grew as well, increasing by 43.4% compared to the prior-year quarter. The increases are explained by more contracted service, maintenance activities, operation supplies, and other operational activity costs, all associated with the normalization of activities.
In this quarter, the firm kept making history and registered the best quarter in a decade, reporting consolidated revenues of 23.3 trillion. Likewise - as it is expected - EBITDA experienced a stunning growth, leaping from COP 5.2 trillion in 3Q20 to 10.3 trillion. It is understandable to think that these results are only due to a reboot in the economy; however, EBITDA also increased in comparison to the previous quarter in which it ended up at 7.4 tn. Accumulated EBITDA 9M closed at 27.9 trillion in comparison to the same period last year.
Net income is another concept that presented stout results, being 4.5 times higher than that presented in 3Q20. Net income closed at COP 3.8 tn, translating into an increase of 345.3%.
The results obtained in these last concepts reflect the recovery path in production, the increasing demand concerning fuels, and the greater volumes transported.
As of September 30, the oil firm’s total assets ended up at COP 241.2 trillion, translating into an increase of 59.5% compared to June 30, 2021. In the same way, total liabilities increased as well, going from 88.6 trillion to 147.4 trillion. The increase in both concepts is likely to be due to the acquisition of a large part of ISA’s shares.
In the same sense, the increase in equity is explained by the incorporation of ISA. Total equity went from COP 62.5 tn to 93 tn. representing an increase of 49.8%.
Regarding its cash flow, the firm closed the third quarter of the year with a cash balance of COP 13.1 trillion of which 36% is in Colombian pesos and 64% in dollars. The main liquidity flows were from operating activities, financing recourse, and debt service.
In its third quarterly report, the firm announced its achievements, one of which is well-worth highlighting. Ecopetrol signed contracts for a one-year supply of diesel and regular motor gasoline with Primax Colombia S.A and organization Terpel S.A for an estimated of USD 3,159 million.
Ecopetrol keeps beating its records and with the acquisition of ISA, the recovery in the pace of activities, and the diversification in its portfolio, its situation could not be better.
