S&P Global Ratings announced that Ecopetrol’s standalone credit profile remains at BB+ while its global rating was lowered from BB to BB‑, with a stable outlook. The downgrade follows Colombia’s sovereign rating cut on April 8, 2026, and aligns the company’s credit risk more closely with the country’s economic and fiscal conditions.
The rating action reflects Ecopetrol’s close ties to the Colombian state and its role in national fiscal revenue. By tying the company’s credit risk to Colombia’s sovereign rating, the agency signals that any future changes in the country’s rating will directly affect Ecopetrol’s global rating.
Ecopetrol’s 2025 financials show a net profit of $2.2 billion, down 39.5% from 2024’s $3.6 billion, and revenue of $29.2 billion, a 10.2% decline from $32.5 billion. The company transferred COP 35 trillion to the nation in dividends, taxes, and royalties, with COP 11.7 trillion paid in dividends in 2025 and a COP 1.6 trillion transfer to the Fuel Price Stabilization Fund.
Segment performance shows hydrocarbons driving 81% of EBITDA, transmission and toll roads 25%, and energy transition and gas 12%. The heavy dividend payouts and FEPC transfers have pushed free cash flow below expectations, raising concerns about future financial flexibility.
S&P cited Colombia’s sovereign downgrade as a result of continued underperformance in fiscal consolidation amid the upcoming election period. The downgrade also highlighted the impact of the company’s dividend policy on its free cash flow metrics.
Management highlighted in its Q4 2025 earnings call that operational efficiency and a 121% reserves replacement ratio helped offset a 15% decline in crude prices, and that renewable energy capacity reached 951 MW, surpassing the 2030 goal.
Investors reacted negatively to the rating change, citing concerns over the company’s governance after CEO Ricardo Roa Barragán took an extended leave, a COP 5.3 trillion tax claim, and a broader decline in oil prices.
The downgrade underscores the vulnerability of Ecopetrol’s credit profile to Colombia’s sovereign risk and signals that future changes in the country’s rating will directly affect the company’s global rating.
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