Slide 1: 2014 Results
2014 RESULTS 1
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Highlights
HIGHLIGHTS 2014 EBITDA reached US$306.4 million, a 22% 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 to US$88.9 million, 197% h
Slide 4: Highlights
HIGHLIGHTS Award of significant new 15-year power supply contracts for the sale of electricity to distribution companies operating in the Chilean central interconnected power grid (“SIC”), triggering the construction of a new US$1.1 billion coal plant (IEM1) and associated port. Successful issue
Slide 5: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 2014
Chilean electricity industry – 2014 INDUSTRY Growth Generation GWh Main players Market Clients (2014-2024)¹ (12M14) (% installed capacity 12M14) Regulated Ren. 2% Diesel 7% 12% 25% capacity 5.5% Gas 11% SING 26% demand 17,682 GWh Unregulated Coal 79% 88% Diesel 9% Unregulated NCRE 3% Colbún 20% 39%
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Almost 100% of installed capacity based on coal, natural gas (LNG) and diesel No exposure to hydrologic risk Long-term contracts with unregulated clients (mining companies) account for 88% of demand Flexibility to negotiate prices and supply terms Maxim
Slide 8: Chile, a World-class copper producer
INDUSTRY Chile, a World-class copper producer SING Copper Production(1) & SING Electricity Demand vs. Copper Price Evolution US¢ / lb GWh 500 1,800 450 1,600 400 1,400 350 1,200 300 1,000 250 3,767 3,826 4,087 3,876 3,981 3,959 3,721 3,747 800 3,964 200 3,799 3,639 600 150 11 mos 3,141 3,203 3,170 3
Slide 9: Mining sector in Chile: Announced investments in new projects
INDUSTRY Mining sector in Chile: Announced investments in new projects Estimated Estimated Possible International investment copper production Rating Mining Project Sponsor (US$ 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 year-end 2014)
COMPANY Ownership structure (as of year-end 2014) GDF SUEZ Local Foreign Other Pension Funds Institutions Institutions 52.76% 18.89% 21.05% 6.77% 0.53% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Transmisora Hornitos S.A. Termoeléctrica Norandino S.A. Transmisión S
Slide 11: Installed capacity – SING & E.CL
COMPANY Installed capacity – SING & E.CL SING - Gross installed capacity – December 2014 (MW) E.CL - Growth in installed capacity in recent years 2,108 MW 2,500 2,108 MW 10 10 12 12 1,665 MW 2,000 317 317 288 288 10 13 13 317 317 1,500 176 688 688 688 688 688 688 688 1,000 822 MW 500 1,119 1,119 1,1
Slide 12: E.CL operates cost-efficient coal and gas generation plants
COMPANY Installed Capacity (December 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 3
Slide 13: SIC distribution companies auction: larger, balanced commercial portfolio
COMPANY SIC distribution companies auction: A larger and more balanced commercial portfolio In December 2014, E.CL was awarded 15-year power supply 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
Slide 14: Projected PPA portfolio balance
COMPANY Projected PPA portfolio balance (revised as of January 2015) Average realized monomic (MWh/h) sale price (US$/MWh) 2013 2014 2015 2016 2017 2018 2019 Coal & renewables (existing & new) 852 853 853 905 1.153 Gas contracts (existing & new) 213 213 213 302 347 A) “Contractable” efficient capaci
Slide 15: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable (as of December 2014) Other: CPI, PPI, node price Marginal Cost 15.9% Diesel 1.9% 0.0% Fuel Oil 0.1% Coal Gas 59.0% 23.0% As a percentage of effective demand …matched with an aligned cost structure, through indexation formulas in PPAs. 1
Slide 16: Indexation of the EMEL PPA
COMPANY PPA portfolio indexation Indexation of the EMEL PPA Timetable of tariff adjustments: May and November of each year The tariff is determined in US dollars and converted to CLP at the average observed exchange rate of March and September of each year. Such exchange rate prevails for 6 mont
Slide 17: E.CL's energy supply curve – 2014
COMPANY E.CL’s energy supply curve – 2014 US$/MWh 200 180 Average realized monomic price: US$ 117/MWh 160 140 120 Average fuel & electricity purchase cost per 100 MWh sold: US$64/MWh FO-DI 80 60 CTM3 40 Spot purchases U16 CTM1 U15 CTM2 U14 CTH CTA U13 U12 20 0 System overcosts Renewables Coal 6,557
Slide 18: Generation overcosts in the SING
Generation overcosts in the SING INDUSTRY The so-called “overcosts” (“sobrecostos”) are regulated by 2013 2014 2014 vs 2013 Resolution 39/2000 (RM39) and by Supreme Decree 130/2012 E.CL E.CL E.CL TOTAL TOTAL TOTAL (DS130) to cope with the costs stemming from the SING’s Prorata Prorata Prorata oper
Slide 19: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 19
Slide 20: The new PPA will be supplied from a mix of existing and new generation
PROJECTS The new PPA will be supplied from a mix of existing and new generation units LNG Supply $ Renewable sources $ 450 GWh/y (51 MW-avg) $ CTM 3 1,115 GWh/y (127 MW-avg) $ Existing SIC Distribution coal units 933 GWh/y 4,590 GWh/y Companies (107 MW-avg) (524 MW-avg) 5,040 GWh/y (575 MW-avg) IEM1
Slide 21: 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) Connection to SIC-SING Transmission line IEM1 transmi
Slide 22: 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 23: SIC-SING transmission line (2 of 2)
PROJECTS SIC-SING transmission line (2 of 2) Characteristics Type Double circuit, 500 kV, alternate current Capacity Up to 1,500 MVA per circuit Length 600 km connecting Mejillones (SING) to Copiapó (SIC) T.E.N. (Transmisora Eléctrica del Norte), wholly Sponsor owned (so far) by E.CL Private initiat
Slide 24: 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 25: Renewable Energy Projects Portfolio
PROJECTS Renewable Energy Projects Portfolio El Águila I (2MW): developed as a pilot project and inaugurated in July 2013. Pampa Camarones I (6MW 1st stage) is under construction: • Expected total investment: US$20 million • The environmental permit application for up to 300MW and total investme
Slide 26: 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$170 million, most of w
Slide 27: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement. 27
Slide 28: CAPEX program for the ongoing business and new projects
PROJECTS CAPEX program for the ongoing business and new projects CAPEX (US$ million) 2015e 2016e 2017e 2018e E.CL – Current business 143 106 54 30 IEM (including port) 179 289 476 174 TEN (100%) 387 268 133 TEN (15%) 58 40 20 TOTAL w/TEN @ 100% 709 663 663 204 TOTAL w/TEN @ 15% 380 435 550 204 Notes
Slide 29: 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 might be reduced in next years to cope with the required investments IEM and new port: financed within E.CL’s balance sheet, with a mix of funding so
Slide 30: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 30
Slide 31: Electricity sales and generation 4Q14
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 9,705 Total 9,210 Total 9,480 Total 9,008 10,000 240 10,000 356 211 211 8,000 1,822 1,912 1,605 8,000 1,638 6,000 6,000 4,000 7,643 7,087 4,000 7,473 7,106 2,000 2,000 0 0 12M13 12M14 12M13 12M14 Unregulated Regulated
Slide 32: Income Statement (US$ millions)
FINANCIAL RESULTS Income Statement (US$ millions) 12M13 12M14 Var. % Operating revenues 1207.1 1241.2 3% Operating income (EBIT) 116.8 172.3 47% EBITDA 250.3 306.4 22% Net income 29.9 88.9 198% Average realized monomic sale price (US$/MWh) 109.1 116.9 7% Total operating revenues increased 3% due t
Slide 33: EBITDA comparison 2014 vs 2013
FINANCIAL RESULTS EBITDA comparison 2014 vs 2013 In millions of US$ ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 370 +6 -8 +25 -13 320 -14 +2 +6 +52 270 220 306 25
Slide 34: Net Income comparison 2014 vs 2013
FINANCIAL RESULTS Net Income comparison 2014 vs 2013 In millions of US$ ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 120 +3 -1 -7 Minority +24 Interest -11 100 +47
Slide 35: Strong liquidity and low leverage to support the CAPEX program
FINANCIAL RESULTS Available Cash (millions of US$) Gross Debt / LTM1 EBITDA 300 4.0 250 3.0 200 2.0 150 269 3.1 213 1.0 2.5 100 50 0.0 31/12/13 31/12/14 31/12/13 31/12/14 Available cash Gross Debt / LTM EBITDA Net Debt / LTM1 EBITDA LTM1 EBITDA / LTM1 Gross interest Expense 2.5 7.0 2.0 5.5 2.3 4.0 1
Slide 36: E.CL's debt breakdown (as of December 31, 2014)
FINANCIAL RESULTS E.CL’s debt breakdown (as of December 31, 2014) Simple debt structure, all at E.CL corporate level: 1. 5.625%, 144-A/Reg-S bond for US$400 million maturing January 2021: Bullet, unsecured, no financial covenants. YTM as of Dec. 31, 2014 = 4,12%. 2. 4.500%, 144-A/Reg-S bond for US
Slide 37: Net Debt evolution 2014
FINANCIAL RESULTS Net Debt evolution 2014 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 900 In millions of US$ +35 +6 -21 -11 -9 -314 800 +72 +14 700 +67 +80 600 5
Slide 38: 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 39: 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 2015 Fitch Ratings A+ Stable Se
Slide 40: 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