Results First Quarter 2020 - Adapting to a challenging environment
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Results First Quarter 2020 - Adapting to a challenging environment
Jan 6, 2021
In presenting the results of the first quarter, President Felipe Bayón said that “2020 began as a year with growth prospects with a clearly defined path to go. However, at the end of the first quarter of the year, we faced challenging and unexpected market conditions, which were reflected in a fall of more than 65% in the price of Brent crude compared to the end of 2019, due to external shocks such as the strong increase in oil supply and the expansion of COVID-19 worldwide, which have generated a significant contraction in demand for both crude and products.
This unprecedented crisis found Ecopetrol Group in a solid operational and financial position, with an investment portfolio competitive with the industry and a level of leverage that provides the flexibility and elements to face this situation.
Although this scenario demands a rapid response and requires significant adjustments in the short term, the focus on capital discipline, cash flow protection, and production and reserve growth remain the cornerstones of a sustainable value promise in the medium and long term.
The life and safety of people in all our operations remains the highest priority.
That is why, in response to the emergency caused by the COVID-19, we implemented in a timely manner the remote work, even before the authorities dictated the mandatory isolation measures, applying the concept of "minimum operational vitality" to ensure the continuity of our business safely. Currently, of the 13,000 employees of Ecopetrol Group, more than 9,000 work remotely via a secure digital connection."
The President recalled that "Ecopetrol Group has allocated contributions in social investment in the country for more than COP$69 billion to face the pandemic. These resources are being used to strengthen the health system and humanitarian aid in different regions of the country.
Regarding the financial results he explained that "in the first quarter of 2020 Ecopetrol Group reached a net profit of COP 133 billion and an EBITDA of COP 5.3 billion. These results are mainly explained by the sharp fall in the international price of Brent crude, which went from 64 USD/Bl in 1Q19 to 51 USD/Bl in 1Q20 and a strong weakening of the basket of crude and products.
Strengthening our trading strategy has allowed us to react in a timely manner and adapt to market conditions. In this way, we have been able to anticipate crude oil sales, continue the diversification of final clients and the execution of tactical coverage," indicated President Bayón.
