Despite its liquidity, CFE increased its indebtedness and decreased its profitability and its “financial results are not optimal to be considered a company with financial solidity.”
“In general, the costs of CFE’s subsidiary public companies are not competitive with the costs of external energy producers.” ASF concluded.
Mexico, November 2 (EFE) .- The Mexican state company Federal electricity commission (CFE) is neither profitable ni competitive, according to the recent study that Superior Audit of the Federation conducted on the company’s activity in 2019.
The Report of the Result of the Superior Audit of the Public Account 2019 ensures that the subsidies given by the CFE to lower the cost of electricity in the domestic and agricultural sectors, together with its uncompetitive rates, the aging of its structure and the bad governance, caused the company to “not be profitable or generate economic value for the State ”in 2019.
The comprehensive losses in 2019 from the CFEAccording to the audit, they were 40 thousand 382 million pesos.
“It should be noted that, even though the CFE presented some indicators above the average of its market peers (such as liquidity), the profitability and efficiency of its assets are not optimal when compared to the market, as a result of inefficiencies ”, reflected the document in possession of Eph.
Despite its good level of liquidity, the state-owned company increased its indebtedness and decreased its profitability, at the same time that it showed poor behavior in the tests to determine its bankruptcy possibilities, because its “financial results are not optimal to be considered a company with financial solidity ”.
The President of Mexico, Andrés Manuel López Obrador, has insistently repeated from the beginning of his administration that private actors in the energy sector signed “leonine” contracts with the Government to harm the CFE.
The Superior Auditor of the Federation, which is a specialized technical body of the Chamber of Deputies endowed with technical and managerial autonomy, denied this by stating that “legacy contracts are intended to minimize basic supply costs.”
Thus, the document assures that “in general the costs of CFE’s public subsidiary companies are not competitive with respect to the costs of external energy producers.”
The lowest cost in kWh was achieved by the CFE Generación V subsidiary, which included energy from the 32 plants of private producers, with a weighted average cost of 0.82 pesos per kWh.
The audit also included the renegotiation of five gas pipeline rental contracts with private companies, which, according to the Government, should involve the CFE in savings of 4.5 billion dollars until 2025.
The savings that the review was able to document until 2025 is 4 thousand 342 million dollars, but these were achieved by increasing the validity of the contracts ten years, which will cause the CFE to end up paying 6 thousand 836 million additional dollars to the stipulated before the renegotiation of the gas pipelines.