February 26, 2019 / 10:36 PM / 3 months ago

UPDATE 2-Colombia's Ecopetrol says 2018 net profit soars to $3.72 bln

(Adds explanation for Q4 net profit fall)

BOGOTA, Feb 26 (Reuters) - Colombian state-run oil company Ecopetrol SA said on Tuesday its net profit in 2018 was 11.55 trillion pesos ($3.72 billion), 74.6 percent higher than in 2017.

It was the company’s highest annual net profit in five years, Chief Executive Felipe Bayon said in a statement to regulators, thanks to “capital discipline and an efficiency plan.”

Earnings before interest, taxes, depreciation and amortization were up 33.5 percent in 2018, compared with the year before, to 30.8 trillion pesos.

The company pre-paid some $2.5 billion of debt in 2018. It had $12.1 billion in debt at the close of the year.

The company has said it will invest between $3.5 billion and $4 billion in 2019, more than its spending in 2018, as part of an ambitious plan to boost production and explore for more oil to replenish dwindling reserves.

Some 80 percent of the investment will be focused in upstream projects, mostly in Colombia, the company said in November, while another portion will be spent in the United States, Brazil and Mexico.

Ecopetrol fell just short of its 2018 spending goal of between $3 billion to $3.5 billion, spending $2.9 billion, the results showed. The missed investment goal was already a reduction from an original spending target of between $3.5 billion and $4 billion for 2018.

The company said it met its production goal last year, reaching average output of 720,000 barrels per day equivalent.

Ecopetrol has said it expects 2019 output to reach between 720,000 and 730,000 bpd equivalent.

Exploration spending will increase to about $460 million this year, the company has said.

Ecopetrol was plagued last year by near-continuous attacks on its oil pipelines, generally attributed to leftist rebels.

There have so far been 12 attacks in 2019 on the Cano Limon, Trasandino and Mansoya Orito pipelines.

Ecopetrol had reserves equivalent to just over seven years of crude and gas production at the end of 2018, well below the average of nearly 12 years for the world’s top oil and gas companies.

The government said last month it is considering selling as much as 8.9 percent of Ecopetrol to fund spending this year. The state owns 88.49 percent of the company.

Fourth-quarter net profit fell to 2.64 trillion pesos, down 22.8 percent from the same period in 2017, the company said.

Earnings before interest, taxes, depreciation and amortization were up 21.9 percent in the final quarter of 2018, compared with the same period the year before, to 7 trillion pesos.

Though sales were up in the fourth quarter, net profit fell because of lower crude prices and accounting adjustments, Bayon told reporters. ($1 = 3,101.41 Colombian pesos) (Reporting by Julia Symmes Cobb, additional reporting by Carlos Vargas; editing by Grant McCool)

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