CFE Profit Increased 270% in 1Q23
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CFE Profit Increased 270% in 1Q23

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Eliza Galeana By Eliza Galeana | Junior Journalist & Industry Analyst - Wed, 05/03/2023 - 14:57

CFE reported net profit of MX$32.1 billion (US$1.7 billion) in 1Q23, as a result of higher revenues, lower operating costs and a profit from currency fluctuation. This represented an increase of 270% over the same period in 2022, when the state company reported gains of MX$8.6 billion (US$479.9 million). According to a statement released by CFE, these have been the best results since 2017, when it registered profits of MX$36.3 billion (US$2.02 billion). 

"CFE’s favorable results observed in 1Q23 show a broad resilience capacity to successfully overcome adverse events, such as the COVID 19 pandemic, as well as disruptions observed in fuel prices during the last two years," the company said.

CFE pointed out that since the beginning of 2023, the price of gas stabilized. Its operating costs stood at MX$123.05 billion in 1Q23, 6.1% less than in the same period of 2022, when there was speculation in fuel prices due to Russia’s war against Ukraine. The 8.8% appreciation of the Mexican peso against the US dollar was also favorable for the company. This phenomenon generated a net profit effect due to exchange rate fluctuations of MX$40.5 billion (US$2.2 billion). Moreover, CFE revenues stood at MX$148.7 billion (US$8.3 billion), an increase of 7.1% due to higher electricity sales. “This increase in sales is due to a higher electricity demand of 1,900GWh, mainly from the industrial and domestic sectors,” CFE’s report reads.

These numbers showcase a strong improvement against last year, when CFE reported a net loss of MX$15.6 billion (US$874.4 million) in 2022, which represented an improvement of 85.3% over 2021’s figures when the company’s losses amounted to MX$106.2 billion (US$5.9 billion). 

"Despite that over the last two years, CFE has faced adverse circumstances derived from substantial increases in fuel prices, the state productive company has guaranteed electricity supply to more than 47 million users throughout the country, without increasing electricity tariffs above inflation, which has contributed to preserving the purchasing power of households in the country, particularly low-income households and the agricultural sector," CFE stated. 

The report pointed out that CFE’s operational and financial results will continue to improve in the coming months due to the entry into operation of new productive infrastructure projects with more modern, efficient and sustainable technology; increased electricity sales due to the expansion of the Mexican economy and the reduction and stabilization of fuel prices.

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