CFE Reports Consecutive Losses and Growing CostsBy Cinthya Alaniz Salazar | Wed, 08/04/2021 - 11:38
The Federal Electricity Commission (CFE) reported approximately MX$15 million in losses and a 50.5 percent increase to operating costs since their first trimester report in April, now totaling more than MX$279 million.
This is the second trimester the state-owned agency reported mounting costs, which it maintains is a result of increased natural gas prices that have been affected by an escalating domestic demand and the climate emergency experienced in Texas early this year where Mexico receives most of its natural gas import from.
In April, after its first trimester report, CFE had reported a 68 percent jump to operating costs valued at almost MX$64 million. In other words, in the first half of the year the company has expanded its running expenses by a whopping 118.5 percent.
Correspondingly, it also indicated a total debt of MX$395 million, up by 8.7 percent from the end of last year. The company cited the disposition of lines of credit for the payment of price increments made on combustibles for the month of February and “the revaluation of liabilities in dollars due to the appreciation of the peso against the dollar at the end of June 2021” are responsible for its augmentation.
Nevertheless, it is an 85.5 percent decrease in incurred losses in comparison to June 2020 when the company ran up almost MX$97 million in net losses. In fact, the company has also revealed to have closed this trimester with a 15.5 percent increase in revenue year-to-year, equivalent to more than MX$38 million.
Manuel Bartlett, Director of CFE, assured that this growth is the outcome of fuel sales to third parties and renewed fuel and energy demand that had dropped dramatically in 2020.
In closing, despite successfully reverting the losses that were incurred by the totality of last year, due to high natural gas prices and inflation the state-owned company was still unable to prevent an estimated equity loss of 1.9 percent. Given that climate disruptions are bound to become increasingly common, if CFE intends to lower its costs it must look either to increase efficiency or consider other sourcing options.