Slide 1: 9M14 Results
9M14 RESULTS 1
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Highlights
HIGHLIGHTS EBITDA reached US$243.8 million in the first 9 months of 2014, a 29% improvement compared to the same period of 2013, due to generally better operating performance, higher margins on electricity sales, stronger take-or-pay capacity payments, and higher gas sales. Net income amounted t
Slide 4: Highlights: bond issue and tax reform
HIGHLIGHTS On October 24 2014, E.CL successfully issued a new 144-A/Reg S bond for US$350 million maturing in January 2025 with a yield of 4.568% and coupon of 4.5% p.a., fully for the repayment of outstanding project finance loans and related swaps, effectively lowering its financing costs and ex
Slide 5: Agenda: Industry and Company
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – first 9 months of 2014
Chilean electricity industry – 1st 9 months of 2014 INDUSTRY Growth Generation GWh Main players Market Clients (2014-2024)¹ (9M14) (% installed capacity 9M14) Regulated Diesel 12% Ren. 2% 7% Endesa 25% capacity 5.5% Gas 11% 24% E.CL 52% SING 26% demand 13,065 GWh AES 4,077 MW Gener Unregulated Coal
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Almost 100% of installed capacity based on coal, natural gas (LNG) and diesel No exposure to hydrologic risk Long-term contracts with unregulated clients (mining companies) account for 88% of demand Flexibility to negotiate prices and supply terms Maxim
Slide 8: Chile, a world-class copper producer
INDUSTRY Chile, a World-class copper producer SING Copper Production(1) & SING Electricity Demand vs. Copper Price Evolution US¢ / lb GWh 500 1,800 450 1,600 400 1,400 350 1,200 300 1,000 250 4,341 4,411 4,632 4,443 4,504 4,569 4,364 4,350 4,622 4,436 800 200 3,033 3,735 3,879 3,778 4,051 8 mos 600
Slide 9: Mining sector in Chile: announced investments in new projects
INDUSTRY Mining sector in Chile: Announced investments in new projects Estimated Estimated Possible International investment copper production Rating Mining Project Sponsor (US$ mm) production start date (Moody’s/S&P) Lomas Bayas III Súlfuros $1,600 70 Th TPA 2021 Xstrata Baa2/BBB+ Esperanza Sur (ex
Slide 10: Ownership structure (as of end-September 2014)
COMPANY Ownership structure (as of end-September 2014) GDF SUEZ Local Foreign Other Pension Funds Institutions Institutions 52.77% 18.65% 20.66% 7.40% 0.52% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Transmisora Hornitos S.A. Termoeléctrica Norandino S.A. Transmis
Slide 11: Installed capacity – SING & E.CL
COMPANY Installed capacity – SING & E.CL SING - Gross installed capacity – September 2014 (MW) E.CL - Growth in installed capacity in recent years 2,108 MW 2,500 2,500 2,108 MW 10 10 12 12 1,665 MW 2,000 2,000 317 317 288 288 10 13 13 317 317 1,500 176 1,500 688 688 688 688 688 688 688 962 MW 1,000
Slide 12: E.CL's assets and installed capacity
COMPANY Installed Capacity (September 14) 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
Slide 13: Evolution of PPA portfolio balance
COMPANY Evolution of PPA portfolio balance (as of September 2014) Average realized monomic Average estimated consumption (MWh/h) sale price (USD/MWh) 9M13 9M14 2014 2015 2016 2017 Coal and renewables (MW-net) 895 895 895 895 Gas (MW-net) 256 215 215 215 A) “Contractable” efficient capacity 1,151 1,1
Slide 14: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable (as of September 2014) Other: CPI, PPI, node price Marginal Cost 16.5% Diesel 2.3% 0.4% Fuel Oil 0.1% Coal Gas 59.1% 21.6% As a percentage of effective demand …matched with an aligned cost structure, through indexation formulas in PPAs.
Slide 15: Indexation of the 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 – first 9 months of 2014
COMPANY E.CL’s energy supply curve – 1st 9 months of 2014 US$/MWh 200 180 Average realized monomic price: US$ 119/MWh 160 140 120 Average fuel & electricity purchase cost per FO-Di 100 MWh sold: US$66/MWh 80 60 40 Spot purchases U16-CTM3 U15 CTM1 CTM2 U14 CTA CTH U13 U12 20 0 System overcosts Renewa
Slide 17: Generation overcosts in the SING
Generation overcosts in the SING INDUSTRY The so-called “overcosts” (“sobrecostos”) are regulated by OVERCOSTS IN THE SING IN US$ MILLION Resolution 39/2000 (RM39) and by Supreme Decree 130/2012 2013 2014 2014 vs 2013 (DS130) to cope with the costs stemming from the SING’s TOTAL E.CL TOTAL E.CL TO
Slide 18: Agenda: Projects
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 18
Slide 19: Infraestructura Energética Mejillones (IEM)
PROJECTS Infraestructura Energética Mejillones (IEM) Characteristics Gross capacity (IEM1 & IEM2) 2 x 375 MW Net capacity 2 x 320 MW Availability (plant factor) 90% Location Mejillones Mechanized port Associated infrastructure (Capesize carriers) Transmission line IEM1 New 170-km, 220kV, 350 MVA Exp
Slide 20: SIC-SING transmission line (1 of 2)
PROJECTS SIC-SING transmission line (1 of 2) E.CL acquired Transmisora Eléctrica del Norte (“TEN”) from E.CL’s main shareholder, GDF Suez Energy Andino (“GSEA”), for the purpose of developing a transmission line connecting Mejillones (SING) to Copiapó (SIC). In 1H14 E.CL paid US$13.7 million to
Slide 21: SIC-SING transmission line (2 of 2)
PROJECTS SIC-SING transmission line (2 of 2) Characteristics Type Double circuit, 500 kV, alternate current Capacity 1,500 MVA per circuit Length 580 km connecting Mejillones (SING) to Copiapó (SIC) T.E.N. (Transmisora Eléctrica del Norte), wholly Sponsor owned by E.CL Private initiative meeting all
Slide 22: Eléctrica Monte Redondo (EMR) potential acquisition
PROJECTS Eléctrica Monte Redondo (EMR) potential acquisition EMR operates in the SIC, is owned by GDF SUEZ, and comprises a 48MW wind farm in operations and the 34MW Laja Hydro plant under construction. GDF SUEZ has stated that E.CL will be its investment vehicle for the electricity generation b
Slide 23: Solar Projects
PROJECTS Solar Projects E.CL has the operational and commercial skills to be a leading player in solar-based electricity generation in the SING. El Águila I (2MW) was developed as a pilot project and inaugurated in July 2013. Pampa Camarones I (6MW 1st stage) is under construction: • Expected
Slide 24: Environmental CAPEX
PROJECTS Environmental CAPEX Stricter particle-matter and gas (NOx and SOx) emission requirements were approved by Chilean authorities in 2011. E.CL is investing to comply with the new emission requirements well before the due dates. CAPEX will amount to approximately US$170 million over the 2
Slide 25: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement. 25
Slide 26: Approved CAPEX program
PROJECTS Approved CAPEX program CAPEX (US$ million) 9M14 4Q14e 2015e 2016e Generation: Maintenance & Life ext. 32 11 68 45 Generation: Environmental project 13 7 5 - Transmission 7 9 29 26 Development (1) 21 15 8 10 Other (2) 4 2 10 10 TOTAL 77 44 120 91 Notes: 1. “Development” includes only the ini
Slide 27: Agenda: Financial Results
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 27
Slide 28: Electricity sales, generation and average prices
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 7,267 Total 6,834 Total 7,097 Total 6,659 8,000 8,000 182 267 189 177 6,000 1,357 1,346 1,182 6,000 1,219 4,000 4,000 5,728 5,311 5,615 5,212 2,000 2,000 0 0 9M13 9M14 9M13 9M14 Unregulated Regulated Spot Coal LNG Die
Slide 29: Income Statement
FINANCIAL RESULTS Income Statement (US$ millions) 9M13 9M14 Var. % Operating revenues 895.2 946.2 6% Operating income (EBIT) 76.7 144.5 88% EBITDA 189.6 243.8 29% Net income 22.6 85.1 277% Average realized monomic sale price (US$/MWh) 109.3 118.8 8% Total operating revenues increased 6% due to a c
Slide 30: EBITDA comparison 9M14 vs 9M13
FINANCIAL RESULTS EBITDA comparison 9M14 vs 9M13 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 280 +5 -13 +5 260 +21 -13 240 +3 +6 +40 220 200 18
Slide 31: Net Income comparison 9M14 vs 9M13
FINANCIAL RESULTS Net Income comparison 9M14 vs 9M13 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ Minority 100 Interest 90 +2 +1 +11 2 80 +45 70
Slide 32: Strong liquidity and low leverage
FINANCIAL RESULTS Available Cash (millions of US$) Gross Debt / LTM1 EBITDA 300 4.0 250 3.0 200 2.0 150 275 3.0 213 1.0 2.5 100 50 0.0 12/31/2013 9/30/2014 12/31/2013 9/30/2014 Available cash Gross Debt / LTM EBITDA Net Debt / LTM1 EBITDA LTM1 EBITDA / LTM1 Gross interest Expense 2.5 7.0 2.0 5.5 4.0
Slide 33: E.CL's debt breakdown (as of September 30, 2014)
FINANCIAL RESULTS E.CL’s Debt breakdown (as of September 30, 2014) ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- As of Sept. 30, E.CL had only two debts, with an
Slide 34: Net debt evolution first 9 months 2014
FINANCIAL RESULTS Net Debt evolution 1st 9 months 2014 In------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- millions of US$ 800 -21 +30 +8 +14 -11 -9 750 +46 -246 700 +6
Slide 35: 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: 2009
Slide 36: International and national 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 2014 Fitch Ratings A+ Stable Se
Slide 37: Superior performance
FINANCIAL RESULTS Several recent initiatives to boost performance ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Superior performance Clear strategic Commercial and
Slide 38: 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