Ecopetrol’s 2024 Earnings Distribution Proposal: An In-depth Analysis
On March 4, 2025, Ecopetrol S.A., Colombia’s leading oil and gas company, made an important announcement regarding the proposed distribution of its 2024 earnings. The proposal, which has been approved by the board of directors, is intended to be submitted for the consideration of the General Shareholders’ Meeting scheduled for March 28, 2025.
Ecopetrol’s 2024 Net Income
The proposed earnings distribution begins with Ecopetrol’s net income after provision for income tax, which amounted to COP 14,934,704,561,251 (approximately USD 3.8 billion).
Release of Reserves from Previous Years
The next component of the earnings distribution is the release of reserves from previous years, totaling COP 12,502,312,256,016 (approximately USD 3.3 billion). These reserves are the result of the company’s successful exploration and production activities in the past.
Occasional Reserve for Sustainability
The third element of the earnings distribution is an occasional reserve for sustainability, which amounts to COP 11,993,230,652,653 (approximately USD 3.2 billion). This reserve is intended to ensure the long-term financial sustainability of the company and its ability to continue investing in research and development, as well as in the exploration and production of oil and gas resources.
Excess Fiscal Depreciation Reserve
The final component of the earnings distribution is the excess fiscal depreciation reserve, which is a result of Article 130 ET. of the Colombian tax code. This reserve, totaling COP 8,473,319,210,524 (approximately USD 2.2 billion), represents the amount by which the company’s depreciation expenses exceeded the amounts allowed by tax regulations in previous years.
Impact on Shareholders
The proposed earnings distribution will have a significant impact on Ecopetrol’s shareholders, as it represents a substantial portion of the company’s earnings. The exact distribution of these funds, including the allocation to dividends, share buybacks, and investments, will be determined by the General Shareholders’ Meeting.
Impact on the World
Beyond the direct impact on Ecopetrol’s shareholders, the company’s earnings distribution proposal also has broader implications for the global economy. As a major player in the oil and gas industry, Ecopetrol’s financial performance and investment decisions can influence global energy markets and prices. Additionally, the company’s continued investment in research and development, as well as its exploration and production activities, contribute to the global supply of oil and gas resources.
Conclusion
Ecopetrol’s proposed distribution of 2024 earnings represents a significant milestone for the company and its shareholders. The earnings, which include net income, reserves from previous years, an occasional reserve for sustainability, and an excess fiscal depreciation reserve, total over COP 40 trillion (approximately USD 10.7 billion). The exact distribution of these funds will be determined by the General Shareholders’ Meeting, but their impact will be felt both by Ecopetrol’s shareholders and the global community, as the company continues to play a crucial role in the oil and gas industry and the global economy.
- Ecopetrol S.A. announces proposed distribution of 2024 earnings
- Net income after tax: COP 14,934,704,561,251
- Reserves from previous years: COP 12,502,312,256,016
- Occasional reserve for sustainability: COP 11,993,230,652,653
- Excess fiscal depreciation reserve: COP 8,473,319,210,524
- Impact on shareholders: Determined by General Shareholders’ Meeting
- Impact on the world: Influences global energy markets and prices
