Empresas Publicas de Medellin E.S.P: Tariff adjustment will weaken financial performance and reflects exposure to social risks, credit negative

Empresas Publicas de Medellin E.S.P: Update to credit analysis - Credit Opinion – 2023/04/28 – US$ 250.00 – ...Empresas Publicas de Medellin, E.S.P.'s (EPM, Baa3 stable) credit profile takes into consideration the application of our Joint Default Analysis (JDA), with the City of Medellin (Baa2 stable) as the support provider. This results in a one-notch uplift from the company's ba1 Baseline Credit Assessment (BCA) which reflects its large scale, presence in several countries and diversified operations. EPM's ba1 BCA considers the progress around the development of the Ituango hydro plant, whose first two units started operations in 2022. The BCA also takes into consideration the growing uncertainties around the government's attempts to decrease electricity tariffs in Colombia. We expect credit metrics to deteriorate in 2023-24 because of high interest rates, currency depreciation, tax reform and regulatory changes to lower electricity tariffs. However, EPM's credit metrics will continue to support its rating and BCA....

Empresas Publicas de Medellin E.S.P: Ransomware attack highlights very high cyber risk for electric utilities - Issuer Comment – 2022/12/20 – US$ 200.00 – ...A ransomware attack at Empresas Publicas de Medellin, E.S.P (EPM, Baa3 stable) threatens operational disruptions to the Colombian utility's website, mobile application, payment gateway and intranet, posing a risk for its credit quality. EMP is struggling to resolve the attack, which it first reported on December 13. While EPM has not commented on the severity of the attack, ransomware attacks can cause operational disruptions, often resulting in costlier and slower manual workarounds for the normal automated processes--a detriment to credit quality. Since December 13th, EPM's customers have been using alternatives to the utility's usual automated systems to process payments and access customer support. The company on that date instructed employees to work from home because of the cybersecurity breach. EPM also said it believes its core business of supplying energy, water and gas services remained stable and unaffected by the cyberattack. EPM has implemented actions to guarantee supply continuity...

Empresas Publicas de Medellin E.S.P: Update following rating affirmation, outlook changed to stable - Credit Opinion – 2022/03/14 – US$ 250.00 – ...Empresas Publicas de Medellin, E.S.P.'s (EPM, Baa3 stable) credit profile takes into consideration our Joint Default Analysis (JDA), with the City of Medellin (Baa2 negative) as the support provider. This results in a one-notch uplift from the company's ba1 Baseline Credit Assessment (BCA). EPM's ba1 BCA reflects its large scale, presence in several countries and diversified operations. The company's electricity distribution business makes the most significant contribution to its EBITDA, with a 43% share as of September 2021 followed by electricity generation with 33%, water and solid waste management 17%, transmission 4% and gas 3%. On the other hand, more than 80% of EPM's EBITDA is concentrated in Colombia, and we expect this concentration to increase once the Ituango hydroelectric project starts operations in 2022. The large share of hydro power generation exposes EPM business to seasonal rainfall and prolonged droughts that impact energy spot price and operating margins. Nonetheless,...

Moody's changes EPM's outlook to stable, affirms Baa3 ratings - Rating Action – 2022/03/07 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Empresas Publicas de Medellin E.S.P: EPM announces cost overruns for Ituango, a credit negative - Issuer Comment – 2021/07/15 – US$ 200.00 – ...On 14 July, Empresas P·blicas de Medellin E.S.P. (EPM, Baa3 negative) announced an updated budget for the Hidroituango dam and hydroelectric project (Ituango) in Colombia (Baa2 negative) following the completion of studies in areas that were previously inaccessible because of flooding and collapsed tunnels, including the project's intake gates, water conduction tunnels and powerhouse. EPM said additional costs for Ituango amount to COP2.148 billion ($562 million), or 33% of the company's 2021 EBITDA, a credit negative. The extra costs will be spread over 2021-25, with 2022 accounting for the highest amount of around COP 1 billion, to install the turbines required to initiate operations as planned in July 2022. EPM expects to fund the additional costs by adjusting its investment plan over 2021-23, with internal cash and the proceeds from selling its stakes in UNE EPM Telecomunicaciones S.A. and Inversiones Telco S.A.S., expected in 2022....