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Ecopetrol’S Dividend Debate: Profits Slide, Payout Holds
(MENAFN- The Rio Times) Ecopetrol, Colombia's state-owned oil giant, presents its 2024 financials today at the General Shareholders' Assembly, proposing a $214-per-share dividend.
The company earns $3.57 billion ($14.9 trillion pesos) in profits, down 21.7% from $4.56 billion ($19 trillion pesos) in 2023, yet plans to distribute $2.09 billion ($8.7 trillion pesos).
This 58% payout splits into two installments-April 4 and June 27-for minority shareholders, based on an exchange rate of 4,171.88 pesos per dollar. Profits drop $0.98 billion ($4.1 trillion pesos) due to lower oil prices and rising debt, despite a record 746,000 barrels daily output.
Revenue reaches $31.96 billion ($133.3 trillion pesos), but financial expenses climb 50.4% to $0.70 billion ($2.9 trillion pesos). The board reserves $3.98 billion ($16.6 trillion pesos) to strengthen finances and support green energy projects.
Critics doubt the payout's prudence. Experts point to negative cash flow weakening capital, depressing stock prices, and alarming rating agencies. Political chaos and governance troubles further erode value, with warnings aimed at high-risk investors only.
Defenders see value. Analysts highlight the 10% yield, topping Colombia's market and drawing moderate to aggressive investors over fixed-income options.
In addition, the payout fits Ecopetrol's 45-60% norm, balancing returns with reinvestment. Still, declining reserves and a ban on new oil contracts loom large.
Ecopetrol drives Colombia's economy, funding over 11% of the budget through taxes and royalties. President Gustavo Petro's fossil fuel reduction slashes dividends 31% to $1.8 billion in 2025. The company pivots, launching a $28.5 million hydrogen plant and securing $1.27 billion ($5.3 trillion pesos) in efficiencies.
Dividends attract capital, calculated as a profit percentage-58.9% this year-weighing rewards against needs. Questions persist: sustain payouts or fortify reserves? The $3.98 billion buffer targets debt and renewables, yet challenges endure.
The company earns $3.57 billion ($14.9 trillion pesos) in profits, down 21.7% from $4.56 billion ($19 trillion pesos) in 2023, yet plans to distribute $2.09 billion ($8.7 trillion pesos).
This 58% payout splits into two installments-April 4 and June 27-for minority shareholders, based on an exchange rate of 4,171.88 pesos per dollar. Profits drop $0.98 billion ($4.1 trillion pesos) due to lower oil prices and rising debt, despite a record 746,000 barrels daily output.
Revenue reaches $31.96 billion ($133.3 trillion pesos), but financial expenses climb 50.4% to $0.70 billion ($2.9 trillion pesos). The board reserves $3.98 billion ($16.6 trillion pesos) to strengthen finances and support green energy projects.
Critics doubt the payout's prudence. Experts point to negative cash flow weakening capital, depressing stock prices, and alarming rating agencies. Political chaos and governance troubles further erode value, with warnings aimed at high-risk investors only.
Defenders see value. Analysts highlight the 10% yield, topping Colombia's market and drawing moderate to aggressive investors over fixed-income options.
In addition, the payout fits Ecopetrol's 45-60% norm, balancing returns with reinvestment. Still, declining reserves and a ban on new oil contracts loom large.
Ecopetrol drives Colombia's economy, funding over 11% of the budget through taxes and royalties. President Gustavo Petro's fossil fuel reduction slashes dividends 31% to $1.8 billion in 2025. The company pivots, launching a $28.5 million hydrogen plant and securing $1.27 billion ($5.3 trillion pesos) in efficiencies.
Dividends attract capital, calculated as a profit percentage-58.9% this year-weighing rewards against needs. Questions persist: sustain payouts or fortify reserves? The $3.98 billion buffer targets debt and renewables, yet challenges endure.
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