Slide 1: 9M13 Results
ENERGIA ESENCAL SIE-CL
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Highlights
HIGHLIGHTS In 3Q13, E.CL had a good generation performance, widening its operating margins and reporting EBITDA of US$72.3 million. This represented an improvement compared to the first two quarters, when plant outages and the maintenance of the LNG terminal led to higher fuel and energy purchase
Slide 4: Good generation performance and EBITDA recovery in 3Q13
HIGHLIGHTS Financial Highlights (US$ million) 9M12 9M13 Var. % Operating Revenues (US$ million) 881.2 895,2 2% EBITDA (US$ million) 214.7 191.2 -11% EBITDA margin (%) 24% 21% -12% Net income (US$ million) 43.6 22.6 -48% Net debt (US$ million) 543.8 574.5 6% Energy sales (GWh) 7,099 7,267 2% Net gene
Slide 5: Agenda: Industry and Company
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 9M13
Chilean electricity industry – 9M13 INDUSTRY Growth Generation GWh Main players Market Clients (2013-2023)¹ (9M13) (% installed capacity) Regulated Diesel Gas 9% Endesa 12% 7% 25% capacity 6.7% 24% E.CL 54% 3,965MW SING 26% demand AES Gener Unregulated Coal 83% 21% 88% Diesel 4% Colbún 20% Regulated
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Nearly 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 almost 90% of demand Flexibility to negotiate prices and supply terms
Slide 8: 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) Antucoya $ 1,900 85 Th TPA 2015 Antofagasta PLC N/A Lomas Bayas III Súlfuros $1,60
Slide 9: Ownership structure (as of end-September 2013)
COMPANY Ownership structure (as of end-September 2013) GDF SUEZ Local Foreign Other Pension Funds Institutions Institutions 52.77% 13.37% 23.24% 10.09% 0.54% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Distrinor S.A. Hornitos S.A. Termoeléctrica Norandino S.A. Tran
Slide 10: Installed capacity – SING & E.CL
COMPANY Installed capacity – SING & E.CL SING - Gross installed capacity – September 2013 (MW) E.CL - Growth in installed capacity in recent years 2,137 MW 2,500 2,137 MW 2,500 10 10 12 12 1,665 MW 2,000 317 2,000 317 317 317 10 13 13 317 317 1,500 1,500 176 688 688 688 688 962 MW 688 688 688 1,000
Slide 11: E.CL's assets and installed capacity
COMPANY Installed Capacity (Sept. 13) E.CL’s Assets Technology Coal Renewables Diesel/FO Chapiquiña (10MW) Natural gas 1% El Aguila I (2MW) Renewable Diesel 15% Coal 52% Diesel Arica (14MW) Diesel Iquique (43MW) TE Tocopilla (1,004MW) Collahuasi Tocopilla puerto El Abra Chuquicamata Gas/diesel 32% C
Slide 12: Evolution of PPA portfolio balance
COMPANY Evolution of PPA portfolio balance (as of September 2013) Average realized monomic Average estimated consumption (MWh/h) tariff (USD/MWh) 9M12 9M13 4Q13 2014 2015 2016 2017 Coal and renewables (MW-net) 954 954 954 954 954 Gas (MW-net) 203 263 222 222 222 A) “Contractable” efficient capacity
Slide 13: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable for 4Q13 Other: CPI, PPI, node price 16.1% Diesel Marginal Cost 0.1% 2.3% Fuel Oil 0.1% Coal Gas 60.2% 21.1% As a percentage of effective demand …matched with an aligned cost structure, through indexation formulas in PPAs. 13
Slide 14: 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 15: E.CL's energy supply curve – 9M13
COMPANY US$/MWh E.CL’s energy supply curve – 9M13 200 180 160 Average realized monomic tariff: US$109/MWh FO-Di 140 120 100 Average fuel & electricity purchase cost per MWh sold: US$63/MWh 80 Spot purchases 60 CTM3 U-16 40 CTA CTM2 CTH CTM1 U-15 U-14 U-13 U-12 20 00 Renewables Coal 5,135 GWh LNG 1,1
Slide 16: Agenda: Projects
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 16
Slide 17: 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) New 170-km, 220kV, 350 MVA Transmission line IEM1 T.L
Slide 18: SIC-SING interconnection
PROJECTS SIC-SING interconnection E.CL is well positioned to supply power to the ongoing sizeable mining development in the northern area of the SIC (“Norte Chico”). GDF SUEZ and E.CL are leading a private initiative to build the transmission line required to connect both grids. It is currently
Slide 19: Eléctrica Monte Redondo (EMR)
PROJECTS Eléctrica Monte Redondo (EMR) 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 business in Chile. E.
Slide 20: 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 was inaugurated in July 2013. El Águila II (40MW) is under development: • Expected total inves
Slide 21: 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. The estimated CAPEX will amount to approximately US$170 mill
Slide 22: Innovation and sustainability
E.CL S.A. PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement. 22
Slide 23: Approved CAPEX program
E.CL S.A. PROJECTS Approved CAPEX program CAPEX (US$ million) 9M13 4Q13e 2014e 2015e 2016e Generation: Maintenance 22 22 37 88 40 Generation: Environmental project 58 1 19 - - Transmission 6 13 16 32 13 Development (1) 6 3 16 6 4 Other (2) 9 9 18 4 7 TOTAL 101 48 106 129 64 Notes: 1. “Development” i
Slide 24: Agenda: Financial Results
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 24
Slide 25: Electricity sales, generation and average monomic prices
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 7,252 Total 7,097 8,000 Total 7,099 Total 7,267 8,000 166 267 287 182 6,000 1,257 1,357 6,000 1,294 1,182 4,000 4,000 5,555 5,728 5,754 5,615 2,000 2,000 0 0 9M12 9M13 9M12 9M13 Unregulated Regulated Spot Coal LNG Die
Slide 26: Income Statement
FINANCIAL RESULTS Income Statement (US$ millions) 9M12 9M13 Var. % Operating revenues 881.2 895.2 2% Operating income (EBIT) 107.0 78.3 -27% EBITDA 214.7 191.2 -11% Non-recurring items 1.1 6.4 481% EBITDA w/o non-recurring items 213.6 184.8 -14% Net income 43.6 22.6 -48% Average realized monomic tar
Slide 27: EBITDA Comparison - 9M13 vs. 9M12
FINANCIAL RESULTS In millions of US$ EBITDA Comparison - 9M13 vs. 9M12 260 240 +12 -1 -31 Effect of CTA / CTH outage +9 220 -5 200 -7 16 180 160 215 140 191 120 100 EBITDA 9M12 Volume effect Insurance Other net Higher cost of fuel Effect of LNG Repair costs - CTH EBITDA 9M13 compensations operating
Slide 28: Net Income comparison 9M13 vs. 9M12
FINANCIAL RESULTS In millions of US$ Net Income comparison 9M13 vs. 9M12 80 +12 -26 70 Minority +8 60 Interest +6 50 -9 3 Minority 40 -5 Interest -4 30 7 20 44 10 23 0 Net income Volume effect Insurance Other incl. Margin effect FX difference Repair costs Depreciation Net income 9M12 compensations e
Slide 29: Financial ratios remain strong
FINANCIAL RESULTS Available Cash (millions of US$) Gross Debt / LTM1 EBITDA 250 4.0 200 3.0 150 2.0 192.1 198.2 3.1 3.3 100 1.0 50 0.0 12/31/2012 09/30/2013 12/31/2012 09/30/2013 Available cash Gross Debt / LTM EBITDA Net Debt / LTM1 EBITDA LTM1 EBITDA / LTM1 Gross interest Expense 3.0 6.0 2.5 5.0 2
Slide 30: Debt breakdown as of September 30, 2013
FINANCIAL RESULTS E.CL’s Debt breakdown as of September 30, 2013 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 5.625%, 144-A/Reg-S bond for US$400 million maturin
Slide 31: Net debt evolution during 9-month period ended 09/30/13
FINANCIAL RESULTS In millions of US$ Net debt evolution during 9-month period ended 09/30/13 850 +1 800 +56 -17 -30 750 -162 +22 +101 700 650 600 550 500 603 574 450 400 Net debt as of CAPEX Income taxes Dividends Accrued interest Swap MTM Proceeds from Cash from Net debt as of 12/31/12 & amort. oth
Slide 32: 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: 2009 payout: 30% 2010 payout: 50
Slide 33: Confirmed investment grade category
FINANCIAL RESULTS International ratings Solvency Perspective Date Standard & Poors BBB- Stable July 2013 50% 50% 100% Fitch Ratings BBB- Positive August 2013 National ratings Solvency Perspective Shares Date Feller Rate A+ Stable 1st Class Level 2 December 2012 Fitch Ratings A Positive August 2013 I
Slide 34: 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