Slide 1: 1Q15 Results
1Q15 RESULTS 1
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Highlights
HIGHLIGHTS 1Q15 EBITDA reached US$80 million, in line with the same period of 2014, due to generally good operating performance and higher margins on electricity sales, which offset the impact of non-recurring effects in 1Q14 and negative capacity payment adjustments in 1Q15. Net income amounted
Slide 4: Highlights: TEN and IEM1 project updates
HIGHLIGHTS On February 6, the Trunk Transmission Study carried out by an independent consultant hired by the regulator, concluded that E.CL’s TEN transmission project represents the best alternative to interconnect the SING and the SIC grids. On April 16, the Minister of Energy signed Decree #158
Slide 5: Agenda: Industry and Company
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 1Q15
Chilean electricity industry – 1Q15 INDUSTRY Growth Generation GWh Main players Market Clients (2015-2024)¹ (1Q15) (% installed capacity 1Q15) Regulated Ren. 2% Diesel 7% 12% Endesa 25% capacity 5.5% Gas 11% 23% E.CL 51% SING 26% demand 4,525 GWh AES 4,123 MW Unregulated Gener Coal 78% 20% 88% Unreg
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Almost 100% of installed capacity based on coal, natural gas (LNG) and diesel No exposure to hydrologic risk Long-term contracts with unregulated clients (mining companies) account for 88% of demand Flexibility to negotiate prices and supply terms Maxim
Slide 8: Chile, a world-class copper producer
INDUSTRY Chile, a world-class copper producer SING Copper Production(1) & SING Electricity Demand vs. Copper Price Evolution US¢ / lb GWh 500 1,800 450 1,600 400 1,400 350 1,200 300 1,000 250 3,767 3,826 4,087 3,876 3,981 3,959 3,721 3,747 800 3,964 4,032 200 3,799 600 150 3,141 3,203 3,170 3,421 40
Slide 9: Mining sector in Chile: Announced investments in new projects
INDUSTRY Mining sector in Chile: Announced investments in new projects Estimated Estimated Possible International investment copper production Rating Mining Project Sponsor (US$ mm) production start date (Moody’s/S&P) Lomas Bayas III Súlfuros 1,600 70 Th TPA 2021 Xstrata Baa2/BBB+ Freeport and El Ab
Slide 10: Ownership structure (as of March 31, 2015)
COMPANY Ownership structure (as of March 31, 2015) GDF SUEZ Local Foreign Individuals Pension Funds Institutions Institutions 52.76% 18.58% 21.39% 6.73% 0.53% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Transmisora Hornitos S.A. Termoeléctrica Norandino S.A. Transm
Slide 11: Installed capacity: SING & E.CL
COMPANY Installed capacity: SING & E.CL SING - Gross installed capacity – March 2015(MW) E.CL - Growth in installed capacity 2,500 3,000 2,488 MW 2,108 MW 18 12 2,500 2,107 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 1,11
Slide 12: Installed capacity and E.CL's assets
COMPANY Installed Capacity (March 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 13: 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 14: Projected PPA portfolio balance
COMPANY Projected PPA portfolio balance (revised as of March 2015) Average realized monomic (MWh/h) sale price (US$/MWh) 1Q14 1Q15 2015 2016 2017 2018 2019 Coal & renewables (existing & new) 834 835 835 886 1.131 Gas contracts (existing & new) 208 208 208 300 346 A) “Contractable” efficient capacity
Slide 15: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable (as of March 2015) Other: CPI, PPI, node price Marginal Cost 15.2% 3.2% Diesel 0.6% Fuel Oil 0.1% Coal Gas 59.6% 21.3% As a percentage of effective demand …matched with an aligned cost structure, through indexation formulas in PPAs. 15
Slide 16: Indexation of the EMEL PPA
COMPANY PPA portfolio indexation Indexation of the EMEL PPA Timetable of tariff adjustments: May and November of each year The tariff is determined in US dollars and converted to CLP at the average observed exchange rate of March and September of each year. Such exchange rate prevails for 6 mont
Slide 17: E.CL's energy supply curve – 1Q15
COMPANY E.CL’s energy supply curve – 1Q15 US$/MWh 160 140 Average realized monomic price: US$ 104/MWh 120 100 Average fuel & electricity purchase cost per 80 MWh sold: US$54/MWh FO-DI 60 40 CTM3 U16 CTH CTA CTM2 CTM1 U15 U14 U13 Spot purchases U12 20 Firm capacity payments 0 System overcosts Renewab
Slide 18: 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 19: Agenda: Projects
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 19
Slide 20: 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 21: Infraestructura Energética Mejillones (IEM) (2 of 2)
PROJECTS Infraestructura Energética Mejillones (IEM) (2 of 2) Status as of March 31, 2015 EPC – IEM1 NTP given on Jan. 20 to S.K. Engineering & Construction (Korea) Site leveling @ 68%; purchase orders for main equipment placed; geotechnical Project status survey and engineering review ongoing Sched
Slide 22: The TEN Project (1 of 2)
PROJECTS The TEN Project (1 of 2) Characteristics 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 selected by the Min
Slide 23: SIC-SING transmission line (2 of 2)
PROJECTS SIC-SING transmission line (2 of 2) Status as of March 31, 2015 • Trunk Transmission Study (“ETT”) published in February 2015 recommended TEN as the SIC- SING interconnection; • Decree #158 – Annual Trunk System Expansion Plan signed in April refers to TEN as the line that will facilitate t
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$20 million • The environmental permit application for up to 300MW and total investme
Slide 26: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement 26
Slide 27: CAPEX program for the ongoing business and new projects
PROJECTS CAPEX program for the ongoing business and new projects Rest of CAPEX (US$ million) 1Q15 2015e 2016e 2017e 2018e E.CL – Current business 35 99 145 56 30 IEM (including port) 26 110 237 539 184 TEN (100%) 20 284 371 165 TEN (15%) 3 43 56 25 TOTAL w/TEN @ 100% 81 493 753 760 214 TOTAL w/TEN @
Slide 28: 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 29: Agenda: Financial Results
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 29
Slide 30: Electricity sales and gross generation
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 2,271 Total 2,337 Total 2,204 Total 2,267 2,500 2,500 23 75 149 77 2,000 451 463 2,000 381 404 1,500 1,500 1,000 1,000 1,826 1,745 1,726 1,731 500 500 0 0 1Q14 1Q15 1Q14 1Q15 Unregulated Regulated Spot Coal LNG Diesel
Slide 31: Income Statement (US$ millions)
FINANCIAL RESULTS Income Statement (US$ millions) 1Q14 1Q15 Var. % Operating revenues 308.4 287.6 -7% Operating income (EBIT) 47.0 48.2 3% EBITDA 79.9 80.1 0% Net income 24.8 27.3 10% Average realized monomic sale price (US$/MWh) 115.4 104.2 -10% Total operating revenues decreased 7% mainly due to
Slide 32: EBITDA comparison 1Q15 vs 1Q14
FINANCIAL RESULTS EBITDA comparison 1Q15 vs 1Q14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 100 +7 -6 90 +6 -6 -1 80 70 60 50 40 80 80 30 20 1
Slide 33: Net Income comparison 1Q15 vs 1Q14
FINANCIAL RESULTS Net Income comparison 1Q15 vs 1Q14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 35 Minority Interest Minority 30 Interest +1.6
Slide 34: Strong liquidity and low leverage
FINANCIAL RESULTS Available Cash (millions of US$) Gross Debt / LTM1 EBITDA 300 4.0 250 3.0 200 2.0 150 269 261 1.0 2.5 2.4 100 50 0.0 31/12/14 31/03/15 31/12/14 31/03/15 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
Slide 35: E.CL's debt breakdown (as of March 31, 2015)
FINANCIAL RESULTS E.CL’s debt breakdown (as of March 31, 2015) 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 March 31, 2015 = 3.53%. 2. 4.500%, 144-A/Reg-S bond for US$3
Slide 36: Net Debt evolution
FINANCIAL RESULTS Net Debt evolution 2014 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 600 +10 -114 +25 550 +81 +2 500 450 400 467 471 350 300
Slide 37: 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 38: Evolution of E.CL share price
FINANCIAL RESULTS Evolution of E.CL share price since Jan. 2014 and Jan. 2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 115 1,040 IPSA ECL 110 940 840 105 740
Slide 39: 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 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