Ecopetrol(US:EC)2025-05-07 15:00Financial Data and Key Metrics Changes - The first quarter of 2025 saw stable financial performance despite lower Brent prices, with net income at COP 3.1 trillion and EBITDA at COP 13.3 trillion, resulting in an EBITDA margin of 42% [37] - The refining margin decreased by $3.9 per barrel compared to the same period last year, attributed to various factors including product differentials and scheduled maintenance [22][21] - The company executed $672 million in investments during the first quarter, achieving 17% progress on its investment plan [18][9] Business Line Data and Key Metrics Changes - In hydrocarbons, average production reached 745,000 barrels of oil equivalent per day, marking the highest crude oil production in Colombia in the last five years [17] - The midstream segment experienced a 2% decrease in transported volumes compared to Q1 2024, primarily due to scheduled maintenance at the Barrancabermeja refinery [19] - The refining throughput for Q1 2025 was 396,000 barrels per day, a nearly 7% reduction from the same period in 2024 [21] Market Data and Key Metrics Changes - Ecopetrol supplied approximately 68% of Colombia's natural gas demand during Q1 2025, reaffirming its critical role in national energy security [32] - The company reported a significant contribution from the energy efficiency program, generating savings of nearly COP 23 billion and avoiding over 90,000 tons of CO2 equivalent emissions [32][8] Company Strategy and Development Direction - The company is focused on diversifying its hydrocarbon portfolio and increasing reserves, with significant investments in exploration and production, particularly in the Permian and offshore Brazil [16][13] - Ecopetrol is committed to renewable energy, aiming to achieve over 1,000 megawatts of solar generation capacity this year [7] - Strategic projects are underway to enhance refining capacity and improve product quality, contributing to the energy transition and reducing fuel imports [25][24] Management's Comments on Operating Environment and Future Outlook - Management highlighted the high global uncertainty and volatility in Brent prices due to geopolitical tensions and OPEC+ supply increases, but expressed confidence in the company's strategies to navigate these challenges [4] - The company anticipates that Brent prices may fall below financial projections for 2025, prompting proactive measures to enhance operational and financial resilience [45][49] - Management emphasized the importance of maintaining capital discipline and operational continuity amid market fluctuations [48] Other Important Information - The company has made significant progress in its efficiency program, achieving cost reductions and optimizing operations across all segments [26] - Ecopetrol's cash balance closed at COP 17 trillion, generating a positive free cash flow of COP 1.4 trillion [40] - The company is actively managing its debt levels and has secured a loan facility to meet operational cash requirements [41] Q&A Session Summary Question: Impact of falling oil prices on EBITDA and revenue - Management confirmed that each dollar change in Brent impacts EBITDA by COP 740 million and net profit by COP 370 million, with a breakeven for production at below $55 per barrel [56][60] Question: VAT implications and future payments - Management clarified that the new VAT ruling will require ongoing payments, with expectations to recover approximately 93% of the VAT through tax returns [68][69] Question: Sensitivity of production to CapEx reduction - Management indicated that while there is flexibility in CapEx, priority will be given to investments that protect production and reserves, with no current plans to cut back on production [76][75]