endesa chile 1H 2012 results - Enel Generación Chile Cash Flow 2,248 (305) (564) (308) 1,070 (394)...

endesa chile 1H 2012 results

26 | 07 | 2012

Endesa Chile consolidated results 1H 2012

2

Growth of 6% in electricity demand in the region

Growth of 1.9% in physical sales on a consolidated basis

Increase of 2.2% in operating costs, primarily as a consequence of higher fuel costs in Chile, Colombia and Peru, and higher transportation costs in

Chile

Non-recurring accounting effects in Colombia and Peru in the first half 2011

Highlights in 1H 2012

Growth of 3.1% in consolidated generation due to 13% more hydro generation in Colombia and Chile

Good results in Colombia, mainly related to higher hydro generation in the period.


3

Results affected by the drought in Chile and high fuel costs

Million Ch$ 1H 2012 1H 2011 ChangeMM US$ *

1H 2012

Revenues 1,155,422 1,176,178 (2%) 2,345

Gross margin 469,037 504,733 (7%) 952

EBITDA 363,981 387,597 (6%) 739

EBIT 270,825 302,621 (11%) 550

Net financial expense (65,700) (62,080) (6%) (133)

Net income 174,419 211,772 (18%) 354

Net attibutable income 101,443 161,726 (37%) 206

• Higher physical sales in Colombia, Chile and Peru.

• Costs increased as a consequence of higher fuel costs in Chile, Colombia and Peru, and higher transportation costs in Chile.

• Non-recurrence of a one-time effect of the equity tax reform in Colombia which implied booking a total amount of US$87 million* during the first half of 2011.

• Non-recurrence of a one-time effect on payroll expenses recorded in June 2011, which implied booking a one-time benefit on payroll expenses of US$27 million*.

• Related company results decreased by 6.8% due to lower results in Endesa Brasil mainly related to higher net financial expenses.

*Amounts are expressed in US$, using the average exchange rate for each period


Chile41%

Colombia21%

Peru12%

Argentina26%

Chile45%

Colombia37%

Peru15%

Argentina3%

Chile39%

Colombia24%

Peru17%

Argentina20%

4

EBITDA Generation

Total Installed Capacity: 13,845 MW

EBITDA 1H2012 TTM:

US$ 1.929 million

Total Generation (TTM): 53,564 GWh

Endesa Brasil

• Endesa Chile’s ownership: 40% (38.9%direct)

• Net Attributable Income (TTM): US$ 224million


67%

30%

3%

54%

19%

27%

65%29%

6%

17%

83%

5

Conservative Commercial Policy

Regulated SpotUnregulated

Physical Sales as of June 2011

Chile Colombia Peru

Regulated SpotUnregulated

Argentina

Physical Sales as of June 2012

Chile Colombia Peru Argentina

66%

33%

1%

50%

20%

30%

65%26%

9% 17%

83%


Correlation between Hydrology and Contribution Margin

Effective Commercial Policy in the long term

6

0

100

200

300

400

500

600

700

800

30% 40% 50% 60% 70% 80% 90% 100%

Co

ntr

ibu

tio

n M

arg

in (

MM

US

$)

Exceedance Probability

Contribution Margin (MMUSD) Endesa Chile; Consolidated Contribution Margin (MMUSD) Endesa Chile; Chile

Lineal (Contribution Margin (MMUSD) Endesa Chile; Consolidated) Lineal (Contribution Margin (MMUSD) Endesa Chile; Chile)

1Q10

2Q11

10% -13MMUS$

WET DRY

10% -3MMUS$

1Q10

4Q11

2Q11

3Q10

2Q12

2Q12


7

Debt by Type Debt by CurrencyDebt by Country

Amounts expressed in US$, using the exchange rate as of June 30, 2012.

Million Ch$ 1H 2012 1H 2011 Chg. Chg %MM US$ 1H2012

Gross Debt 1,974,825 2,142,355 (167,530) (8%) 3,935

Cash & Equivalents 165,200 229,581 (64,381) (28%) 329

Net Debt 1,809,625 1,912,774 (103,149) (5%) 3,606

Leverage 0.93 0.92 (0.01) (1%) 0.93

Financial Expenses Coverage 4.5 5.5 (1.63) (30%) 4.5

Strong Financial Position

Chile, 53%

Argentina, 7%

Colombia, 30%

Peru, 9%

Local Currency,

35%

US$, 52%

UF, 13%Others,

17%

Bank Debt, 16%

Bonds, 68%


8

1

Amounts are expressed in US$, using the average exchange rate for each period.1 Over Twelve Trail Months

Free Cash Flow

2,248

(305)

(564)

(308)

1,070

(394)

2,098

(235)

(499)(353)

1,012

(523)

2,014

(251)

(549)(435)

779

(462)

1,929

(260)

(477) (416)

775

EBITDA Net Financial Result CAPEX Income Tax FCF Dividends

2009 2010 2011 1H2012 TTM


9

Guavio: 1,213 MW

Betania: 541 MW

Río Bogotá: 716 MW

85% Hydro

2,471 MW

15% Thermal

444 MW

Cartagena: 208 MW

Termozipa: 236 MW

Installed Capacity: 2,914 MW

Market Share: 20%

Total Generation: 6,396 Gwh

EMGESA

Cartagena

Bogotá

Colombia

Million US$ 1H 2012 1H 2011 Change

Revenues 552 471 17%

EBITDA 360 235 53%

EBITDA Margin 65.3% 50.0% 31%

Physical Sales (Gwh) 7,719 7,224 7%


10


Market Share: 32%


ENDESA CHILE

D. Almagro–Taltal

Bocamina Laja

Maule

Bio Bio

Tarapaca

Huasco

San Isidro

Los Molles

Cachapoal

Santiago

Los Molles: 18 MW

Rapel-Sauzal: 466 MW

Maule: 884 MW

Laja: 940 MW

Ralco-Pangue: 1,157 MW

62% Hydro

3,465 MW

37% Thermal

2,068 MW

Tarapaca-G.Atacama: 572 MW

D. Almagro–Taltal: 269 MW

Huasco: 64 MW

San Isidro 1 and 2: 778 MW

Bocamina: 128 MW

TG Quintero: 257 MW

1% Wind

78 MW

Canela: 18 MW

Canela II: 60 MW

Chile


Revenues 1,136 1,269 (10%)

EBITDA 206 346 (40%)

EBITDA Margin 18.1% 27.3% (33%)



11

Lima:

• Edegel (Gx)

Ventanilla: 493 MW

Santa Rosa: 429 MW

55% Thermal

922 MW

Cuenca Río Rímac: 552 MW

Yanango: 43 MW

Chimay: 151 MW

45% Hydro

747 MW


Market Share: 26%


EDEGEL

Peru



EBITDA 146 152 (4%)

EBITDA Margin 50.7% 65.0% (22%)



12

Argentina

Costanera: 2,324 MW

El Chocon: 1,328 MWHydro

1,328 MW


Market Share: 12%


EL CHOCON

COSTANERA

Thermal

2,324 MW

El Chocon

Costanera

CIEN Line

(2x1.050 MW)

Interconnection

with Brazil


Revenues 50 47 6%

EBITDA 28 25 15%




Revenues 321 367 (13%)

EBITDA (2) 29 (105%)

EBITDA Margin (0%) 7.9% (106%)

Physical Sales (Gwh) 4,537 4,919 (8%)


13

Fortaleza: 322 MWThermal

322 MW

Cachoeira: 665 MW Hydro

665 MW

Installed Capacity: 987 MW

Market Share: 1%


CACHOEIRA

FORTALEZA

Fortaleza

Rio de Janeiro

Two 500 Km lines

Total interconnection capacity: 2,100 MW

CIEN1: Transmission

Brazil-Argentina Interconnection

Brazil

Cachoeira



EBITDA 102 89 15%

EBITDA Margin 69.4% 73.7% (6%)


Million $ 1H 2012 1H 2011 Change

Revenues 76 35 121%

EBITDA 53 22 138%


1Includes CIEN, CTM and TESA


Revenues 133 124 7%

EBITDA 56 57 (1%)

EBITDA Margin 41.9% 46% (8%)



14

Projects Under Construction

• Location: Next to the existing coal-fired

plant Bocamina, in Bío-Bío region.

• Installed capacity: 350 MW, coal fired.

• Estimated investment: US$ 841 million

• 1H 2012, Test on boiler burners and

blowing steam pipe finished.

• Commercial start-up in 2H 2012.

BOCAMINA II

• Location: Huila Department, upstream of

Emgesa’s Betania plant.

• Installed capacity: 400 MW, hydro.

• Estimated investment: US$ 837 million

• In 2009 the environmental license and

building permissions were granted

• River detour completed in March 2012

• Estimated start-up: December 2014

Vertedero

Presa

h = 151 m

Río

Mag

dale

na

Casa de

máquinas

400 MW

Túnel de

desviación

Bocatoma

Dique

Conducción

Embalse

720 msnm

Vertedero

Presa

h = 151 m

Río

Mag

dale

na

Casa de

máquinas

400 MW

Túnel de

desviación

Bocatoma

Dique

Conducción

Embalse

720 msnm

EL QUIMBO


15

Projects Under Study

Neltume, hydro

run-of-the-river plant

Installed capacity:

490 MW

Los Cóndores, hydro

power plant

Installed capacity:

150 MW

Punta Alcalde, coal-steam

power plant

Installed capacity:

740 MW

Curibamba, hydro

power plant

Installed capacity:

188 MW

Hydroaysen, hydro

power plant

Installed capacity:

2,750 MW

1

1EIA rejected. On appeal to the Ministers Committee.


16

312

144 134

81 81 75 69 65 54 54 53 45 4129 23 12 12 7

0

50

100

150

200

250

300

350

GW

h /

ye

ar-k

m2

Energy / Flooded Surface

• One of the most efficient hydroelectric

projects in the world.

• Renewable resources

• Average load factor: 77%

• Installed capacity: 2,750 MW.

• Endesa Chile owns 51% and Colbún 49%.

• CO2 emissions: Reduction of 16.2 million

tons/year

HidroAysén

• May 9, 2011: EIA was approved for the

Generation Plants.

• June 2011: Pto Montt Court of Appeals issued

an injunction, leaving the resolution in state of

abeyance.

• April 2012: The Supreme Court of Justice

rescinded seven protection requirements

presented to stop the construction of the project.

• The Chilean Government should present the

“Electric Highway project” on 2H 2012.


1Amounts expressed in US$, using the average exchange rate for each period.2 Amounts expressed in US$, using the last exchange rate for each period.3As of June 30 , 2012

13.8

21.3

26.8

32.5

27.2

2007 2008 2009 2010 2011

17

Dividends

(Ch$ per Share)EBITDA

(US$ Millions)

Market Value

(US$ Millions)

Dividend Yield: 3.2%

Market Value and Dividends

1

1.503 1.671

2.033 2.248

2.098 2.014 1.929

2006 2007 2008 2009 2010 2011 1H 2012 TTM

Source: Intern using Bloomberg

2

3

10.072 10.393 9.428

13.963 15.364

12.102 13.878

2006 2007 2008 2009 2010 2011 1H 2012


18

USA Stock Market Spain Stock Market

NYSE (US$)

Price 1H 2012 TTM (Avg) 49.3

Max 1H 2012 TTM 57.6

Min 1H 2012 TTM40.6

Daily Avg Trans Vol (million ADR) 0.14Avg Daily Trans (US$ millions

traded) 6.65

LATIBEX (€)

Price 1H 2012 TTM (Avg) 1.2

Max 1H 2012 TTM 1.4

Min 1H 2012 TTM1.0

Daily Avg Trans Vol (million shares) 0.01

Avg Daily Trans (€ millions traded) 0.02

Chilean Stock Market

BOLSA DE SANTIAGO (CLP)

Price 1H2012 TTM (Avg) 806.6

Max 1H2012 894.0

Min 1H2012700.5

Daily Avg Trans Vol (million shares) 5.15Avg Daily Trans (CLP millions

traded) 4,142.3

Relevant Stock Presence

Source: Intern, using Bloomberg


19

Conclusions

Diversified portfolio

Revenues and Margin stability

Non-recurrent accounting effect

Difficult electric situation in Chile


20

Contact us at:

[email protected]

Juan Pablo Vicuña

Investor Relations Executive

(56-2) 630 9585

[email protected]

Susana Rey

Investor Relations Director

(56-2) 630 96 06

[email protected]

Catalina Gonzalez

Head of Investor Relations

(56-2) 630 96 03

[email protected]

Guillermo Berguecio

Investor Relations Executive

(56-2) 630 9506

[email protected]

Endesa Chile’s Investor Relations Team


21

EXHIBITS


22

•COSTANERA, 70%

•EL CHOCON, 65%•EDEGEL, 62%•EMGESA, 27%

•ENDESA BRASIL, 39%

AMPLA

COELCE

FORTALEZA

CDSA

CIEN

61%

92%

60%

PEHUENCHE, 93%

CELTA, 100%

SAN ISIDRO, 96%

ENDESA ECO, 100%

CANELA, 75%

60%15%

4%

17%

4%

ENERSIS Chilean Pension Funds

ADR Holders Other Inst Shareholders

Minority Shareholders

Ownership Structure


23

A unique portfolio in LATAM’s Generation business

Colombia

2,914 MW inst. capacity

20% market share

No. 2


32% market share

Peru


26% market share

Chile

Brazil

987 MW inst. capacity

1% market share in

generation

Market shares based on installed capacity

Figures as of June 2012

Consolidated installed capacity: 13,845 MW

Capacity including Brazil: 14,832 MW

Consolidated energy sales 2011: 58,012 GWh

Consolidated energy sales 1H2012: 28,541 GWh


12% market share

Argentina

No. 1

No. 1

No. 1


24

Customers Installed Capacity, Output

Installed

Capacity

Output

MW as of 1H 2012

Chile Brazil Peru Colombia Argentina Total

Total 5,611 987 1,668 2,914 3,652 14,832

Hydro 3,456 665 746 2,471 1,328 8,666

Nuclear - - - - - -

Coal 286 - - 236 - 522

Oil-Gas 1,783 322 922 208 2,324 5,559

CHP / Renewables 87 - - - - 87

GWh as of 1H 2012

chg. Vs. 1H 2011

Chile Brazil Peru Colombia Argentina Total

Total 9,554 4.0% 2,371 75.3% 4,463 -4.2% 6,396 16.1% 5,758 -4.3% 28,541 6.8%

Hydro 5,181 16.0% 1,880 65.3% 2,513 -1.3% 6,189 16.9% 1,295 14.4% 17,058 17.0%

Nuclear - - - - - - - - - - - -

Coal 880 -5.5% - - - - 111 -7.1% - - 991 -5.6%

Oil-Gas 3,392 -8.5% 491 128.1% 1,949 -7.6% 97 2.5% 4,462 -8.7% 10,391 -5.6%

CHP / Renewables 101 18.9% - - - - - - - - 101 18.9%


25

Feb. 2010Jan. 2010 Apr. 2011

BBB+ Baa2 BBB+

Since:

Affirmed: Jan 2012 May 2012

Credit Risk RatingsCredit Risk Ratings

Financial DebtFinancial Debt

US$ Million 2012 2013 2014 2015 2016 Balance TOTAL

Chile 366 419 165 219 15 909 2,094

Argentina 89 69 59 35 34 - 287

Perú 40 52 50 34 57 129 363

Colombia - - 79 163 23 927 1,192

TOTAL 496 541 354 451 129 1,965 3,935

Jun 2012

Healthy Debt Profile

http://www2.standardandpoors.com/portal/site/sp/en/us/page.siteselection/home.jsp

http://www.fitchratings.com/corporate/index.cfm


26

Net debt/EBITDA1 EBITDA/Net financial expenses1

1 EBITDA“ and “Net Financial Expenses” are over Twelve Trail Months”2 EBITDA / (Financial expenses + Income (Loss) for indexed assets and liabilities + Foreign currency exchange differences, net)

Endesa Chile 1H 2012 1H 2011

Financial Expense Coverage2 4.5 5.5

ROE (%) 15.7% 21%

ROA (%) 8.6% 10%

5,6

7,4

8,9

8,0 7,4

2008 2009 2010 2011 1H 2012

Principal Financial Ratios

2,0

1,5 1,5 1,5

1,9

2008 2009 2010 2011 1H 2012

Net Debt/ EBITDA


27

100%• Rainfall

• Growth in demand

• Fuel prices

• Exchange rates

• Inflation

Risk variables affecting marginsRisk variables affecting margins

Our goal is to ensure a 95% reliability with a

margin of at least 90% of budget even in the

following scenarios:

• Lower rainfall than historical levels

• Increases in fuel prices

• Higher growth in demand

Risk limit

Real margin ≥ 0.9x expected margin

Risk limit

Real margin ≥ 0.9x expected margin

Spot

Extreme

hydro

volatility

Thermal

Target

outputTarget sales

Output and sales targets

for future years

Hydro

Regulated

and

unregulated

contracts

75%

Rela

tive

Fre

qu

en

cy Results

MMUS$5%

MaR 95%

Integrated risk management capability


28

Electricity demand Evolution in LATAM

146%

118%

162%

133%

161%

90%

100%

110%

120%

130%

140%

150%

160%

170%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

To

tal S

ale

s in

GW

h (

%)

Year

Historic electricity demand growth

CHILE COLOMBIA PERU BRAZIL ARGENTINA

*: Estimated growth using 3Q2011 data


29

-

200

400

600

800

1,000

1,200

1,400

Apr-10 may jun jul ago sep oct nov dec Jan-11 feb mar

Timeline

Wate

r F

low

[m

³/s]

-

200

400

600

800

1,000

1,200

1,400

MAIPO RIVER IN CABIMBAO BIOBIO RIVER IN RUCALHUE MAULE IN ARMERILLO (R.N.)

CENTRAL BAKER 2 CENTRAL PASCUA 2.2

Seasonal Streaming from Hidroaysen and SIC rivers

SIC : 23% SIC : 21%

SIC + Hidroaysen : 9% SIC + Hidroaysen : 12%

Seasonal Variability Annual Variability


30

Corporate Governance Excellence

LATIN AMERICA´S INVESTOR RELATIONS AWARDS – LIRA 2011

•Best Communication of Corporate Governance:

1st Place

•Best Communication of Financial Results:

1st Place

•Best Investor Relations Officer:

3rd Place

•Best Investor Relations Department:

3rd Place


This presentation contains statements that could constitute forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this

announcement and include statements regarding the intent, belief or current expectations of Endesa Chile and its

management with respect to, among other things: (1) Endesa Chile’ business plans; (2) Endesa Chile’ cost-

reduction plans; (3) trends affecting Endesa Chile’ financial condition or results of operations, including market

trends in the electricity sector in Chile or elsewhere; (4) supervision and regulation of the electricity sector in Chile

or elsewhere; and (5) the future effect of any changes in the laws and regulations applicable to Endesa Chile’ or

its subsidiaries. Such forward-looking statements are not guarantees of future performance and involve risks and

uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of

various factors. These factors include a decline in the equity capital markets of the United States or Chile, an

increase in the market rates of interest in the United States or elsewhere, adverse decisions by government

regulators in Chile or elsewhere and other factors described in Endesa Chile’ Annual Report on Form 20-F.

Readers are cautioned not to place undue reliance on those forward-looking statements, which state only as of

their dates. Endesa while undertakes no obligation to release publicly the result of any revisions to these forward-

looking statements.

31

Disclaimer


32

endesa chile 1H 2012 results - Enel Generación Chile Cash Flow 2,248 (305) (564) (308) 1,070 (394)...

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Transcript of endesa chile 1H 2012 results - Enel Generación Chile Cash Flow 2,248 (305) (564) (308) 1,070 (394)...