Ecopetrol’s 2022 Earnings Distribution Proposal

Instant Max AI

(Ecopetrol, 28.Feb.2023) — Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) hereby informs of the company’s 2022 earnings distribution proposal, approved by the company’s Board of Directors, which will be submitted for the consideration of the General Shareholders’ Meeting that will take place on 30 March 2023:

2022 EARNINGS DISTRIBUTION PROPOSAL
(Colombian Pesos- COP)
Net income after provision for income tax33,406,291,190,569
+ Release of reserves from previous years2,491,377,064,039
Occasional reserve for sustainability1,982,295,460,676
Excess fiscal depreciation reserve (Art.130 ET.)509,081,603,363
– Legal reserves of the current year3,849,710,722,420
Legal reserve (10%)3,340,629,119,057
Excess fiscal depreciation reserve (Art. 130 ET.)509,081,603,363
Available to the Shareholders32,047,957,532,188
It is proposed to distribute as follows:
For dividend payments:
Ordinary Dividend -According to dividend policy (Payout1 60% of Net Income)20,023,830,314,125
Extraordinary Dividend (Payout 13% of Net Income)4,358,369,637,161
Subtotal (Total payout of 73%):24,382,199,951,286
Allocated to occasional reserve for sustainability:7,665,757,580,902
Total:32,047,957,532,188
Total ordinary dividend payable per share COP 487
Total extraordinary dividend payable per share COP106
Total dividend payableCOP 593

A 60% dividend payout ratio established in the policy was applied to net income, resulting in a dividend per share with decimals, which was rounded to the nearest number in COP/share resulting in a payout not surpassing 60%. The payout percentage shown is rounded to the first decimal place.

2 A 13% extraordinary dividend was applied to net income, resulting in a dividend per share with decimals, which was rounded to the nearest number in COP/share. The payout percentage shown is rounded to the first decimal place.

The earnings distribution proposal, consistent with the company’s current dividend policy, proposes an ordinary dividend distribution of 60%1 of Ecopetrol’s Net Income in 2022, equivalent to COP 487 per share.

Additionally, the Board of Directors of the company, taking into consideration the solid operating and financial performance in all of Ecopetrol´s business lines, is also proposing an extraordinary dividend of 13%2 of Ecopetrol’s Net Income in 2022, equivalent to COP 106 per share, for a cumulative total dividend of COP 593 per share, which distribution would be the highest in the Company´s history.

The payment of dividends to minority shareholders will be made in three equal installments on 27 April, 28 September and 21 December 2023. On the other hand, for the dividend due to our majority shareholder, it is expected to be applied to offset the balance due to Ecopetrol for the accounts receivable related to the Fuel Price Stabilization Fund (FEPC by its Spanish acronym) for the second, third and a portion of the fourth quarter of 2022. Such payment would be expected to be applied in full no later than 31 December 2023.

Likewise, the Board of Directors proposes the allocation of COP 7,665,757,580,902 to an occasional reserve to support the company’s financial sustainability and flexibility in the execution of its strategy. 

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