CFE Registers 2Q24 Loss Despite Revenue Increase

CFE reported a net loss of MX$76.69 billion (US$4.208 billion) at the end of the 2Q24, compared to the MX$55.68 billion in profit registered in the same period last year. According to its financial statements filed with the Mexican Stock Exchange (BMV), the company also posted a loss before taxes of MX$88.881 billion, significantly higher than the profit of MX$60.05 billion recorded between April and June of the previous year.

In terms of operating profit, CFE saw a decline of MX$4.797 billion or 9.8%, dropping from MX$48.733 billion to MX$43.936 billion. Gross profit also decreased by MX$14.259 billion, a drop of 27%, falling from MX$52.694 billion to MX$38.435 billion, according to the report. Despite these losses, CFE reported quarterly income of MX$173.952 billion, an increase of 1.2% compared to the same period in 2023.

For the cumulative period from January to June, revenues reached MX$321.702 billion, up 2.5% from MX$320.623 billion in the first half of 2023. "Revenues from energy sales, the company's main line of business, increased by 4.7%, from MX$229.758 billion at the end of June 2023 to MX$240.598 billion in the same period of 2024. This reflects the dynamism of the Mexican economy, with higher electricity sales volumes in the residential, industrial, commercial, and agricultural sectors," CFE explained.

However, revenues from fuel sales to third parties and energy transportation, a secondary source of income, were affected by lower natural gas prices during the first half of 2024, resulting in a reduction of MX$5.238 billion, or 24.6%, compared to 2Q23.

CFE's administrative expenses, including salaries, maintenance, Wholesale Electricity Market (MEM) costs, and other expenses, increased by 12.7% compared to the same period in 2023. This was mainly due to the revision of the 2024-2026 Collective Bargaining Agreement. In 2Q24, CFE's operating costs reached MX$247.603 billion, a marginal increase of 0.6% compared to the same period in 2023.

CFE attributed this stability to a 12% reduction in the cost of its own and third-party fuels, driven by a 22% decrease in natural gas prices due to increased inventories and storage levels in the United States, influenced by warmer temperatures during the winter of 2024. This increase is also related to the company's Investment Program, designed to ensure the supply of electricity in response to growing demand, ensuring efficiency, quality, reliability, continuity, safety, and sustainability, without increasing electricity rates in real terms for end users.

Manuel Bartlett, Director General, CFE, highlighted weeks before that the strengthening of CFE has been possible through the support of President Andrés Manuel López Obrador. Bartlett emphasized that this backing has secured a promising future for the utility. Bartlett expressed his gratitude to the president for entrusting him with the responsibility of leading CFE, underscoring the company’s significance as the most important company in the country due to its impact across all sectors of society, he said. 

“The current administration has focused on rescuing CFE to ensure its operational, administrative, and financial viability and continuity. This effort aims to successfully overcome the challenges in the electricity sector arising from nearshoring, the energy transition, and to promote a more equitable and inclusive Mexico by providing basic public services at affordable conditions to rural and urban communities facing disadvantages,” mentions the report.