Slide 1: 1H15 Results
1H15 RESULTS
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Highlights
HIGHLIGHTS 1H15 EBITDA reached US$161 million, a 6% increase compared to 1H14, due to generally good operating performance and higher margins on electricity sales, which offset the impact of positive non-recurring effects in 1H14 and negative capacity payment adjustments in 1Q15. Net income amou
Slide 4: Highlights
HIGHLIGHTS TEN transmission project confirmed by the CNE (National Energy Commission) as a trunk system that will interconnect the SING and the SIC grids Construction of the IEM1 375MW coal-fired project and the TEN transmission project progressing according to schedule Execution of an enginee
Slide 5: Agenda: Industry and Company
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 1H15
Chilean electricity industry – 1H15 INDUSTRY Growth Generation GWh Main players Market Clients (2015-2024)¹ (1H15) (% installed capacity 1H15) Regulated Ren. 2% Diesel 8% 11% Endesa 25% capacity 5.5% Gas 12% 23% E.CL 51% SING 26% demand 9,189 GWh AES 4,127 MW Unregulated Gener Coal 76% 20% 89% Unreg
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Almost 100% of installed capacity based on coal, natural gas (LNG) and diesel No exposure to hydrologic risk Long-term contracts with unregulated clients (mining companies) account for 89% of demand Flexibility to negotiate prices and supply terms Maxim
Slide 8: Chile, a world-class copper producer
INDUSTRY Chile, a world-class copper producer SING Copper Production(1) & SING Electricity Demand vs. Copper Price Evolution US¢ / lb GWh 500 1,800 450 1,600 400 1,400 350 1,200 300 1,000 250 3,767 3,826 4,087 3,876 3,981 3,959 3,721 3,747 800 3,964 4,032 200 3,799 600 150 3,141 3,203 3,170 3,421 40
Slide 9: Ownership structure (as of June 30, 2015)
COMPANY Ownership structure (as of June 30, 2015) ENGIE (formerly Local Foreign Individuals Pension Funds GDF SUEZ) 52.76% Institutions Institutions 18.74% 21.42% 6.56% 0.51% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Transmisora Hornitos S.A. Termoeléctrica Noran
Slide 10: Installed capacity: SING & E.CL
COMPANY Installed capacity: SING & E.CL SING - Gross installed capacity – June 2015(MW) E.CL - Growth in installed capacity 2,500 3,000 2,488 MW 2,108 MW 18 12 2,500 2,108 MW 2,000 288 288 1,799 MW 12 2,000 13 288 688 1,500 688 317 1,500 688 962 MW 688 1,000 1,000 822 MW 24 1,494 500 1,119 500 1,119
Slide 11: E.CL's Assets
COMPANY Installed Capacity (June 2015) E.CL’s Assets Technology Coal Renewables Diesel/FO Chapiquiña (10MW) Natural gas 1% Renewables Diesel 14% El Aguila I (2MW) Coal 53% Diesel Arica (14MW) Diesel Iquique (43MW) TE Tocopilla (1,004MW) Collahuasi Tocopilla puerto El Abra Gas/diesel Chuquicamata 33%
Slide 12: SIC distribution companies auction
COMPANY SIC distribution companies auction In December 2014, E.CL secured 15-year sale contracts to supply electricity to distribution companies in the SIC: 2,016 GWh in 2018, equivalent to 230 MW-average 5,040 GWh per year between 2019-2032, equivalent to 575 MW-average Monomic price: US$ 1
Slide 13: Projected PPA portfolio balance
COMPANY Projected PPA portfolio balance (revised as of June 2015) Average realized monomic (MWh/h) sale price (US$/MWh) 1H14 1H15 2015 2016 2017 2018 2019 Coal & renewables (existing & new) 821 822 822 874 1,118 Gas contracts (existing & new) 196 196 196 284 328 A) “Contractable” efficient capacity
Slide 14: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable to electricity and capacity sales (as of June 2015) Other 2.4% U.S. CPI Coal U.S. PPI 34.5% Node Price 42.8% Gas 20.3% Indexation of electricity and capacity (“monomic”) prices as a percentage of effective demand …matched with an aligned
Slide 15: PPA portfolio indexation: EMEL PPA
COMPANY PPA portfolio indexation Indexation of the EMEL PPA Timetable of tariff adjustments: May and November of each year The tariff is determined in US dollars and converted to CLP at the average observed exchange rate of March and September of each year. Such exchange rate prevails for 6 mont
Slide 16: E.CL's energy supply curve – 1H15
COMPANY E.CL’s energy supply curve – 1H15 US$/MWh 160 140 Average realized monomic price: US$ 105/MWh 120 100 Average variable fuel & electricity purchase 80 cost per MWh sold (including overcosts & firm capacity payments): US$47/MWh FO-DI 60 40 Spot purchases CTH CTM2 CTM1 CTA U14 U15 U12 U13 U16 C
Slide 17: Generation overcosts in the SING
Generation overcosts in the SING INDUSTRY The so-called “overcosts” (“sobrecostos”) are regulated by 2014 2015 2015 vs 2014 Resolution 39/2000 (RM39) and by Supreme Decree E.CL E.CL E.CL TOTAL TOTAL TOTAL 130/2012 (DS130) to cope with the costs stemming from the Prorata Prorata Prorata SING’s oper
Slide 18: Agenda: Projects
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 18
Slide 19: Infraestructura Energética Mejillones (IEM) (1 of 2)
PROJECTS Infraestructura Energética Mejillones (IEM) (1 of 2) Characteristics Gross capacity (IEM1 & IEM2) Up to 2 x 375 MW Net capacity Up to 2 x 320 MW Availability (plant factor) 90% Location Mejillones Mechanized port Associated infrastructure (Capesize carriers) Connection to SIC-SING Transmiss
Slide 20: Infraestructura Energética Mejillones (IEM) (2 of 2)
PROJECTS Infraestructura Energética Mejillones (IEM) (2 of 2) Status as of June 30, 2015 EPC – IEM1 Under execution by S.K. Engineering & Construction (Korea) EPC – New port Under execution by Belfi (Chile) Site leveling completed; purchase orders Project status for main equipment placed; geotechnic
Slide 21: The TEN Project (1 of 2)
PROJECTS The TEN Project (1 of 2) Characteristics & status Type Double circuit, 500 kV, alternate current (HVAC) Capacity 1,500 MW Length 600 km connecting Mejillones (SING) to Copiapó (SIC) T.E.N. (Transmisora Eléctrica del Norte), currently wholly Sponsor owned by E.CL Transmission line confirmed
Slide 22: SIC-SING transmission line (2 of 2)
PROJECTS SIC-SING transmission line (2 of 2) Status as of June 30, 2015 • July 31: the CNE will issue the Trunk Transmission Study (“ETT”) setting the annual valuation and expansion plan for trunk transmission systems for the 2016-2019 period. • A period to resolve discrepancies on the ETT with the
Slide 23: Eléctrica Monte Redondo (EMR) potential acquisition
PROJECTS Eléctrica Monte Redondo (EMR) potential acquisition EMR operates in the SIC, is owned by ENGIE (GDF SUEZ), and comprises a 48MW wind farm in operations and the 34MW Laja Hydro plant, which began commercial operations in May 2015. ENGIE (GDF SUEZ) has stated that E.CL will be its sole in
Slide 24: Renewable Energy Projects Portfolio
PROJECTS Renewable Energy Projects Portfolio Pampa Camarones I (6MW 1st stage) is under construction: • Expected PV Plant investment: US$16 million • COD of 1st stage: connection to SING in November 2015 • The environmental permit application for up to 300MW and total expected investment of up to
Slide 25: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement 25
Slide 26: CAPEX program for the ongoing business and new projects
PROJECTS CAPEX program for the ongoing business and new projects Rest of CAPEX (US$ million) 1H15 2015e 2016e 2017e 2018e E.CL – Current business 76 50 145 56 30 IEM (including port) 45 90 237 539 184 TEN (100%) 78 220 371 165 TEN (15%) 12 33 56 25 TOTAL w/TEN @ 100% 199 360 753 760 214 TOTAL w/TEN
Slide 27: CAPEX financing program
PROJECTS CAPEX financing program E.CL is committed to maintaining a strong investment grade rating E.CL has a flexible dividends policy: pay-out is being reduced to cope with the required investments IEM and new port: financed within E.CL’s balance sheet, with a mix of funding sources, in the
Slide 28: Agenda: Financial Results
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 28
Slide 29: Electricity sales and generation
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 4,522 Total 4,594 Total 4,386 Total 4,541 5,000 5,000 55 94 191 147 4,000 898 929 4,000 811 821 3,000 3,000 2,000 3,530 2,000 3,651 3,475 3,391 1,000 1,000 0 0 1H14 1H15 1H14 1H15 Unregulated Regulated Spot Coal LNG D
Slide 30: Income Statement
FINANCIAL RESULTS Income Statement (US$ millions) 1H14 1H15 Var. % Operating revenues 626.5 569.6 -9% Operating income (EBIT) 84.9 95.3 12% EBITDA 151.8 160.7 6% Net income 44.5 45.0 1% Average realized monomic sale price (US$/MWh) 119.2 104.8 -10% Total operating revenues decreased 9% mainly due
Slide 31: EBITDA comparison 1H15 vs 1H14
FINANCIAL RESULTS EBITDA comparison 1H15 vs 1H14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 190 180 +7 -6 +9 -6 170 -2 -2 +9 160 150 140 130 1
Slide 32: Net Income comparison 1H15 vs 1H14
FINANCIAL RESULTS Net Income comparison 1H15 vs 1H14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 60 Minority +2 -7 Interest 55 Minority +6 +1 I
Slide 33: Strong liquidity and low leverage
FINANCIAL RESULTS Available Cash (US$ million) Gross Debt / LTM1 EBITDA 300 4.0 250 3.0 200 150 2.0 269 235 100 1.0 2.5 2.4 50 0 0.0 31/12/14 30/6/15 31/12/14 30/6/15 Available cash Gross Debt / LTM EBITDA Net Debt / LTM1 EBITDA LTM1 EBITDA / LTM1 Gross interest Expense 1.8 7.0 1.6 5.5 1.4 4.0 1.6 1
Slide 34: E.CL's debt breakdown (as of June 30, 2015)
FINANCIAL RESULTS E.CL’s debt breakdown (as of June 30, 2015) Simple debt structure, solely at E.CL corporate level: 1. 5.625%, 144-A/Reg-S bond for US$400 million maturing January 2021: Bullet, unsecured, no financial covenants. YTM as of June 30, 2015 = 4.14% 2. 4.500%, 144-A/Reg-S bond for US$3
Slide 35: Net Debt evolution 1H-2015
FINANCIAL RESULTS Net Debt evolution 1H-2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 800 +19 +2 -253 +47 700 +26 +199 600 500 400 507 467
Slide 36: Dividends
FINANCIAL RESULTS Dividends E.CL has a flexible dividend policy, which consists of paying the minimum legal required amount (30% of annual net income), although higher payout ratios may be approved in function of (among others) anticipated capital expenditures: Payout ratio in recent years: 2010
Slide 37: Evolution of E.CL share price between Jan. 2014 and Jun. 2015
FINANCIAL RESULTS Evolution of E.CL share price between Jan. 2014 and Jun. 2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Index Jan. 2, 2014 = 100 160 ECL 150
Slide 38: Strong investment-grade ratings
FINANCIAL RESULTS International ratings Solvency Perspective Date last review Standard & Poors BBB Stable October 2014 Fitch Ratings BBB Stable September 2014 National ratings Solvency Perspective Shares Date last review Feller Rate A+ Stable 1st Class Level 2 January 2015 Fitch Ratings A+ Stable Se
Slide 39: Forward-looking statements disclaimer
This presentation may contain certain forward-looking statements and information relating to E.CL S.A. (“E.CL” or the “Company”) that reflect the current views and/or expectations of the Company and its management with respect to its business plan. Forward-looking statements include, without limitat