The shortage of new projects for the construction of renewable plants has taken its toll on the CFE. Although sales rose 22.6% to 158,770 million pesos, compared to the second quarter of 2021, the state company reported losses of 8,707 million pesos in the period.
The rise in natural gas, one of the main inputs used by the CFE for power generation, raised its operating costs compared to the same period in 2021.
The losses reported in the period are compared to the profit of 23,464 million pesos reported in the third quarter of 2021.
Analysts had anticipated an increase in the costs reported by the state company regarding electricity generation. The CFE bases more than 50% of its energy matrix on natural gas, one of the fuels whose international price has increased significantly in recent months.
Natural gas prices range between seven and 10 dollars per gigajoules (US/GJ), however, at the beginning of the year they were at 2.5 USD/GJ.
Prospects also pointed to the company reporting negative operating cash flow for the rest of the year and weak financial performance in the next 18-24 months as a result of high fuel costs.
The rating agency Moody’s The CFE has avoided diversifying its energy matrix and continuing to operate its old plants, which run on fossil fuels, such as diesel or fuel oil, which in general have registered a significant increase in their prices. The latter has made the company more prone to the effects resulting from price fluctuations in the international market.
Just a few weeks ago, the agency based mainly on the downgrade to the sovereign note that it also modified at the beginning of the month.
The rating agency also lowered the company’s credit evaluation from ‘ba2’ to ‘ba3’, arguing the weak credit position that the state company has registered in the midst of the environment of high energy prices.
