EPM 1Q 2017 Net Income Jumps 460% Year-on-Year
Empresas Publicas de Medellin (EPM) – now a multinational electric power, water, sewer and natural-gas utility – announced April 27 that its first quarter (1Q) 2017 net income soared 460% year-on-year, to COP$606 billion (US$206 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA) likewise rose 98% year-on-year, to COP$1.1 trillion (US$374 million), although revenues dipped slightly year-on-year, to COP$3.57 trillion (US$1.2 billion) because of a dip in electric power sales prices, according to the company, whose sole owner is the municipality of Medellin.
The improving profits “make it easier for the EPM Group to deliver [dividends] this year to the municipality of Medellín totalling COP$1 trillion [US$340 million] for social development programs,” according to the company.
Surging profits also help enable EPM to invest COP$3.8 trillion (US$1.3 billion) in the continuing construction of Colombia’s biggest hydropower plant: the 2.4-gigawatt “Hidroituango” plant in Antioquia as well as a massive sewage-treatment plant in the Medellin suburb of Bello, the company added.
EPM general manager Jorge Londoño de la Cuesta pointed out that the improved 1Q 2017 results versus 1Q 2016 reflect the impact of wetter weather in Colombia this year versus last year (resulting in improved hydropower output) as well as repairs and replacement of cables that had been damaged by fire during 1Q 2016 at its Guatape, Antioquia, hydropower plant.
Meanwhile, thanks to continuing portfolio diversification, EPM Group subsidiaries accounted for 51% of revenues and 36% of EBITDA in 1Q 2017, while the parent company accounted for 49% of revenues and 64% of EBITDA.
EPM’s general manager also touted improved financial risk-rating reviews during the last quarter.
“On the one hand, Moody’s ratified EPM’s financial strength by raising our international risk rating to ‘Baa2’ with a ‘stable’ outlook,” Londoño de la Cuesta said. “In turn, Fitch Ratings revised the outlook for EPM’s international debt rating from ‘negative’ to ‘stable’ and ratified its ‘BBB+’ rating. Fitch also reiterated the local ‘AAA’ [risk] rating, the maximum possible in Colombia,” he said.
Financial debt of the EPM Group stood at 36% — one percentage point lower than in 2016. Meanwhile, the corporate debt-to-EBITDA ratio indicator improved to 3.16, compared to 4.29 in 2016, the company added.