Grupo Energa de Bogot Results and Key Developments
Transcript of Grupo Energa de Bogot Results and Key Developments
1
Grupo Energía de Bogotá
Results and Key Developments
First Six Months of 2013
Investor Conference Call
September 3th 2013
Agenda
I. Strategy
II. Significant developments 1H 13
III. Investments
IV. Consolidated financial results and indicators EEB
V. Question and answer session
VI. Disclaimer
Annex 1. Panoramic view of Grupo Energía de Bogotá
Annex 2. Regulated natural monopoly
Annex 3. Leadership Market Position
2
I. Strategy
3
Guatemala
Colombia
Peru
Transportation and distribution of energy with involvement in other areas in the
energy sector.
Operations in countries with strong growth potential
– Colombia: regional leader in electricty and natural gas and a center for
energy exports
– Peru: regional leader in mining and energy-intensive industries
– Guatemala: a window for future investments in Central America
Exploration of opportunities in America medium and long term strategy
Focus on
natural
monopolies
Ample access
to capital
markets
Ambitious
projects in
execution
Growth in
controlled
subsidiaries
Sound
regulatory
framework
Experienced
management
and partners
Current Markets
Potential Markets
4
II. Significant developments
05.22.13. Payment to the minority shareholders of the total dividend declared by the
Assembly of shareholders, for a total value of COP 95,746 billion, corresponding to COP
43.96 per share. Also be paid COP 153,929 million to the shareholder, who shall be made
another installment the 27.11.13 by the same value.
04.16.13. EEB was awarded the UPME-03-2010 tender, an electric interconnection project
that is part of the National Transmission System. It includes the design, acquisition of
supplies, construction, operation and maintenance of Chivor II and Norte 230 V Substations
and the double circuit line with over 160 Km.This award, valued in USD101 million.
04.18.13. The Board of Directors authorized management to establish a company in Peru to
render engineering services in the natural gas transport and distribution sector and in the
electric power sector.
06.24.13.The Board of Directors of EEB, during its session, approved the following decisions:
(•) to modify the Company’s organizational and personnel structures to support Company’s
current realities and its future growth. (•) to explore and analyze a series of investment
alternatives in the natural gas and electric power transport sectors in Latin America.
07.03.13. EEB was authorized by the Finance and Public Credit Ministry to carry out
processes to undertake foreign public credit operations for up to USD 479 million or its
equivalent in other currencies, and said resources will be used to partially finance the energy
expansion plan in Colombia, Guatemala and Peru during the period comprising 2013-2017.
Likewise, to begin processes to grant guarantees to its affiliates in Guatemala, TRECSA and
EEBIS, for up to USD 230 million or its equivalent in other currencies.
5
07.18.13 Ecopetrol S.A. announced that will carry out processes tending to sell its
investment in Empresa de Energía de Bogotá S.A. E.S.P and thus contribute to
financing its investment plan.
15.08.13 The Board of Directors of Empresa de Energía de Bogotá, approved EEB’s
participation in the stake acquisition process of ISAGEN S.A. ESP
07.05.13 the international risk-rating agency, Standard & Poor´s raised the ranking of TGI’s
debt in foreign currency from “BB” to “BBB-” with stable perspective. The foregoing increase
took into account the stability of long term income, the natural coverage offered by regulations
in force, due in part to the binding effect of part of the tariff to the dollar, the coming on stream
of expansion projects and the recent tariff revision and the support of its main shareholder –
EEB.
• Shareholders Meeting agreed to a capital increase under the mode of capitalization of
retained earnings accrued as of December 2012, amounting to USD 62.2 MM (BBB-;BBB-
;Baa3)
• 01.04.13 it issued a bond amounting to USD 320 million (2023 / 4.375% / 8x) in the
international capital markets (144A/Reg S). The resources obtained in this operation will
allow financing expansion plans from 2013 and 2014, and improve Cálidda’s debt profile.(
BBB-; BBB;- Baa3)
• The construction of the main network expansion project was concluded, which increased
the distribution capacity of 255 mm to 420 mm pcd pcd warm. The technical report of
OSINERGIM to start the implementation of commercial operation is awaited..
• In June of 2013 Cálidda had 124,078 customers and 162,516 vehicles operate with
natural gas in its area of operations. The aim of the company is to reach 455,000 clients
connected to its network in 2016.
.
II. Significant developments
6
1H 13 the investment in the project amounts to USD 234 million.
1H 13, Contugas has more than 2711 enabled clients (with over 12,600 residential sales and
10.629 built internal installations pending to be enabled). The contractual obligation is to
reach 50,000 residential 6 years after the Declaration of commerciality that is expected to be
given in 1Q 14.
Contugas is in the process of closing a new 6 year bullet-type financing for USD 310MM.
This is a syndicate loan in which Regional and multilateral Banking are participating. Currently
Contugas has a bridge loan for up to USD 215 million. This syndicate loan includes resources
from Banco de Bogotá, Davivienda and BCP, for a term of up to 18 months with a wide range
of rates.
25.07.13 Contugas completed the works of the Chincha Operations Center and it began its
partial operation. President of Peru, Mr. Ollanta Humala and CEO of Grupo Energía de
Bogotá attended the event. The new operational center, among the most modern in Latin
America and operated by Contugas, will allow to render natural gas services to residential,
commercial and industrial customers in the Province of Chincha, south of Lima.
• After one year of negotiations, EMGESA closed the contract with Ecopetrol, whereby it will
supply during the next six years, the power required for the production of its wells and
production centers located to the east and south of the country. The power in question
represents consumption of approximately 5,614 GWh as of this year and until 2018.
II. Significant developments
• During the first six months of the year, Codensa achieved the lowest physical loss index in
the past ten years, reaching 7.14%.
• During the first half of 2013, Codensa invested around COP 93.500 billion, aimed at
improving service quality and focused on strengthening infrastructure, maintenance and
network expansions.
• Servicing New Demand: (•) In Nueva Esperanza all processes have been performed with
ICANH to define management of archeological remains found during excavations
7
04.30.13. the Company made an international security placement offer under Rule 144ª and
Regulation S of the U.S. Securities Act of 1933. On May 7th 2013, it proceeded with the
liquidation and issuance of the bonds, known as “Senior Notes”. The issuance of Bonds
amounted to USD 450 MM an issuance price of 99.002%. It has a 10-year Bullet
amortization and six months coupons paying interest at an annual interest rate of 4.375%.
These resources will be used to prepay outstanding debt and to finance expansion projects
27.08.13 Meeting of shareholders accepted the assignment for the execution of the design,
financing, construction, operation and maintenance of transmission line 500 kV of 900 km
long, and its associated substations, project awarded by Proinversion ISA S.A on July 18th,
2013. Reference investment is USD 413 million and generate estimated annual revenues of
$ 41.5 million. The award is for 30 years from its entry into operation. The management of
the project will be headed by REP
II. Significant developments
III. Investments in Controlled Companies
8
Distribution of natural gas in Perú
Investment: USD 464mm
By the end of 2006 it is expected
to have 455,000 customers
Transmisión Electricidad Guatemala
Investment : USD 373mm
Start of Operation: 2013 (partially)
Full Operation: 2015
Transportation and distribution of
Natural Gas in Perú
Investment USD 345mm
Progress of 81% by 1H 13
Construction in 1Q 14
Transportation of natural gas in
Colombia
Investment : USD 337mm
Under construction: Sabana.Station
Contract signed:
Eng. y constr. : SNC – Lavalin
Equipment: Man Diesel & Turbo
Connection Project Ingenios
Investment : USD 43mm
Progress: connection 5 ingenios, 90
km TL y 7 S/E
Progress: (1) Recruitment EIA for
LT design
(2) substations design
Armenia Substation 230 kV and
Associated Transmission Lines
Investment USD 20 mm
In construction: Dec.2013
Alférez Substation 230 kV and
Associated Transmission Lines
Investment USD 12 mm
In construction: Dec 2013
Tesalia Substation 230 kV
and Associated Transmission
Lines
Investment USD 124 mm
In construction: 2015
9
Armenia Alférez Tesalia
Chivor II - Norte
Chivor II y Norte 230 kV
Substations and Asociated
Transmission Lines
Investment USD 101 mm
In construction October 2015
SVC Tunal 230 kV
Installation of SVC +240/-60
MVAR Substation Tunal
Investment USD 52 mm
In construction 2014
Progress
Progress Progress
Progress Progress
The project shows a progress
of 53.53% by 2Q 13
• Manufacture of auxiliary services
equipment shows an advance of 84%
• right of way 55.4% of the total
tower sites for the project.are ready
for notarial recording of deeds and
legal inspection
The Project shows a
progress of 64.12% by
2Q 2013.
The project shows a
progress of 29,05% by
2Q 2013
The project shows a
progress of 1% as
scheduled by 2Q 2013
EPC Contract Signed
III. Investments in Controlled Companies
10
Electricity Transmission
Perú
Investment:USD 542 mm
Extensions and new
concessions
Beginnig of operation:
2013/2014
Electricity Transmission
Perú
Investment: USD 127 mm
Extensions , Concessions
Beginning of operation
2013/2014
Generation of Electricity
Colombia
Investment USD 837 mm
Progress of 44% by 1H
15
Beginning of operation
2014
I
Electricity Distribution
Colombia
Investment USD 50 mm
Under construction 2013
Transportation and
Distribution of Natural
Gas in Colombia
Investment USD 130 mm
2014
III. Investments in Non Controlled Companies
COP MILLION VARIACIÓN
2Q 13 2Q 12 Absolut %
Operating revenue 943,195 747,311 195,884 26,2
Cost of sales -492,788 -380,844 -111,944 29,4
Gross income 450,407 366,467 83,94 22,9
Operating expenses -109,509 -97,969 -11,54 11,8
Operating income 340,898 268,498 72,4 27,0
Operating margin 35,9% 36,1%
Consolidated adjusted
EBITDA 1.621,82 1.478,07 143,743 9,7
IV.Consolidated Financial Results -
Indicators EEB
11
Operating Revenue: Grow mainly due to the increase of revenue for transport and distribution of Natural Gas in Colombia and
Peru.
Cost of Sales: Grows 29.4% due to expenses for natural gas distribution companies in phase of initial expansion and connection
of new customers (Contugas/Calidda).
Operating Income: Grows 27% as a result of an increase of operating revenues and a reduction of operational costs of the tnatural
gas transport and electricity distribution
Operational Performance
5%
15,0%
44,7%
34,7%
Operating Revenue -Contribution by Business 2Q 13
Electricity Transmission
Electricity Distribution
Natural Gas Transportation
Natural Gas Distribution
7% 5%
79%
9%
Net Income - Contribution by Business 2Q 13
Electricity Transmission
Electricity Distribution
Natural Gas Transportation
Natural Gas Distribution
12
IV.Consolidated Financial Results -
Indicators EEB
Non Operational Performance
Dividends:Grows 52.8% due to higher dividends received from non controlled companies (Emgesa COP405 billion;
Codensa COP 265 billion and Natural Gas COP 62 billion).
Non Operating Renevue Result: (*) It hit the foreign exchange account in a negative way due to the devaluation of
the Colombian peso during 1H 13, going from a revenue of COP 197 billion in 1H 2012 to an expense of COP 218
billion 2013 1H, as a result of the updating of financial obligations from the Group denominated in dollars, record that
simply accounting purposes and does not correspond to a delivery of cash. Lower financial costs result from the debt
management operations carried out by TGI and EEB in 2011 and 2012
Net Income:Grows COP 113 billion (+ 18.7%)
23%
4%
24% 24%
23%
2%
Participation Renevues + Dividends 1H 2013
Generation ofElectricityElectricityTransmissionElectricityDistributionNatural GasTransportation
COP Million Variation
2Q 13 2Q12 Absolut %
Operating income 340,898 268,498 72,400 27,0
Dividends 799,800 523,278 276,522 52,8
Non Operating Renevue Result -376,729 -94,990 -281,739 296,6
Net income before taxes and minority interest 763,969 696,786 67,183 9,6
Minority interest -7,596 -59,464 51,868 -87,2
Provision for income tax -37,473 -31,894 -5,579 17,5
Net income 718,900 605,428 113,472 18,7
Consolidated adjusted EBITDA LTM 1.621,817 1.478,074 143,743 9,7
13
• 2010 excludes dividends declared based on an early close of Gas Natural’s, Emgesa’s and
Codensa’s financial statements. These figures are included in 2011, when such dividends
would normally have been declared.
In 2013 the operational management of controlled companies participates with 50% of
the total of adjusted EBITDA, compared to 15% of participation in 2006. The dividends
of non-controlled companies participates with the remaining 50%
IV.Consolidated Financial Results –
Evolution EBITDA
14
.
The increase in consolidated
EBITDA LTM is explained by the
best operational results of
controlled business and higher
dividends declared by non- controlled companies
Quarterly adjusted consolidated
EBITDA decreases from the 1Q 13
to the 2Q 13 since during the first
quarter non-controlled companies
announced dividend.
IV.Consolidated Financial Results -
Indicators EEB
15
• Net Leverage indicator increased
marginally by one increase more
than proportional growth
moderate in EBITDA net indebtedness.
• Coverage indicator fell slightly
by one increase of more than
proportional net interest
expense to moderate in
EBITDA growth.
IV.Consolidated Financial Results -
Indicators EEB
Indicators EEB
16
Increased in the Financial debt
denominated in dollars due to :
() Disbursements of syndicated
credit for short-term Contugas
(USD 46 million during the quarter).
() Issuance of bonds in Cálidda
(USD 320 million), less repayment
of debt by close to USD197
million; and
( ) Higher value of EEB and TGI
debt due to exchange rate effect.
17
EEB Share Price Performance 2012 -2013
Ticker EEB:CB
On June 30th, 2013 the EEB market capitalization
reached USD 6,520 MM
Trading volume tripled after the Equity Offering - nov
2011-
The stock makes part of IGBC, COL20 and
COLEQTY and the tradable index ETF-COLCAP.
* Values for years prior to the 2011 dividend were adjusted to split 100:1 which enforced the
20.06.11 stocks. Shares outstanding from Nov. 11: 9,181,177,017
* In 4Q 10 there was an advance cut of financial statements, reason why during 1Q 11 EEB
decreed no dividends. 1Q 12 normalizes this effect
34,85 36,01 33,95
82,02
34,85 43,96
1Q 08 1Q 09 1Q 10 4Q 10 1Q 11 1Q 12 1Q 13
Dividend per share
Evolution Decree Dividend per Share
Indicators EEB
Agenda
I. Strategy
II. Significant developments 1H 13
III. Investments
IV. Consolidated financial results and indicators EEB
V. Question and answer session
VI. Disclaimer
Annex 1. Panoramic view of Grupo Energía de Bogotá
Annex 2. Regulated natural monopoly
Annex 3. Leadership Market Position
18
Thank you
Additional information
─ WEB page / Investor relations
http://www.eeb.com.co/?idcategoria=3247
─ Página WEB / Relación inversionistas
http://www.eeb.com.co/?idcategoria=628
─ Antonio Angarita
+571 326 8000 ext 1546
─ Rafael Andrés Salamanca
+571 326 8000 ext 1675
19
Disclaimer
The information provided herein is for informational and illustrative purposes
only and is not, and does not seek to be, a source of legal or financial advice
on any subject. This information does not constitute an offer of any sort and is
subject to change without notice.
EEB expressly disclaims any responsibility for actions taken or not taken based
on this information. EEB does not accept any responsibility for losses that
might result from the execution of the proposals or recommendations
presented. EEB is not responsible for any content that may originate with third
parties. EEB may have provided, or might provide in the future, information that
is inconsistent with the information herein presented.
20
A.Overview of Grupo Energía de Bogotá
21
Key facts
More than 100 years’ experience in the sector; founded in 1896.
Regional leader in the energy sector; major player in the entire electricity and natural gas value chains (except E&P);
operations in Colombia, Peru, and Guatemala.
Largest stockholder is the District of Bogota - 76.2%.
Stock listed on the Colombia stock exchange; EEB adheres to global standards of corporate governance.
The EEB Group is one of the largest issuers of equity and debt in Colombia.
68.1%
25%
15.6%
Electricity
Transmission
40% 40%
1.8%
98.4%
Generation
51.5% *
2.5%
Distribution
51.5% *
16.2%
51%
82%
Distribution Transportation
Natural Gas
75%
60%
100%
99.94%
*EEB is not the controlling
shareholder and is a party to
signed shareholder
agreements.
40%
25%
B. Regulated Natural Monopoly
22
Electricity
Transmission Generation Distribution Distribution Transport
Natural Gas
* ENFICC is a reliability charge which is regulated.
Regulated 81%
Un-regulated
16.5%
ENFICC * 2.5%
C. Leadership Market Position
23
Electricity transmission
Market share (%)
(Km of 220-138 kV lines ) 60.0%
# 1 Peru
Electricity transmission
Market share (%)
(Km of lines) 8.0%
# 2 Colombia
Electricity distribution
Market share (%)
(Kwh) 26.6%
# 1 Colombia
Electricity generation
Market share (%)
(Generation)
# 2 Colombia
20.6%
23
Gas distribution
Market share (%)
(No. clients) 59.0%
# 1 Colombia
Gas transportation
Market share (%)
(Average volume transported)
# 1 Colombia
88.4%
Gas distribution
Market share (%)
(No. clients)
# 1 Peru
100.0%