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.
Moody’s rating agency has placed the company’s great dependence on natural gas as one of the main risks for its credit profile. 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 Moody’s downgraded CFE’s credit rating to ‘Baa2’ from ‘Baa1’, based mainly on the downgrade to the sovereign note that was 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.