Slide 1: 9M15 Results
9M15 RESULTS
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Financial performance in the 9M15 period
Financial performance in the 9M15 period HIGHLIGHTS EBITDA reached US$249 million, a 2% increase compared to the first 9 months of 2014, due to generally good operating performance and positive foreign exchange-related effects on operating costs. EBITDA margin expanded to 28.6% in 9M15. Net inco
Slide 4: Highlights of the last quarter
Highlights of the last quarter HIGHLIGHTS The Panel of Experts issued its verdict on the “ETT” (Trunk Transmission Study) published by the CNE (National Energy Commission) and confirmed a US$ 738.3 million (@ Oct. 2013 FX rates) investment value for TEN’s trunk transmission assets, resulting in an
Slide 5: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 9M15
Chilean electricity industry – 9M15 INDUSTRY Growth Generation GWh Main players Market Clients (2015-2024)¹ (9M15) (% installed capacity 9M15) Regulated Ren. 4% Diesel 8% 11% Endesa 25% capacity 5.5% Gas 13% 23% E.CL 51% SING 26% demand 13,900 GWh AES 4,142 MW Unregulated Gener Coal 75% 89% 20% Unre
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 September 30, 2015)
COMPANY Ownership structure (as of September 30, 2015) ENGIE (formerly Local Foreign Individuals Pension Funds GDF SUEZ) 52.76% Institutions Institutions 20.67% 21.75% 5.06% 0.51% Inv. Punta de E.CL S.A. Rieles Ltda. 40% Inversiones Central Gasoducto Edelnor Transmisora Hornitos S.A. Termoeléctrica
Slide 10: Installed capacity: SING & E.CL
COMPANY Installed capacity: SING & E.CL SING - Gross installed capacity – September 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
Slide 11: E.CL's Assets
COMPANY Installed Capacity (Sept. 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: Contractable efficient capacity
COMPANY Contractable efficient capacity December 2015 December 2018 2,445 MW 2500 2500 18 2,108 MW 12 288 2000 288 2000 688 1,587 MW 1500 1,342 MW 6 688 1500 5 521 1000 521 1000 1,451 500 1,119 500 1,060 816 0 0 Gross Installed Contractable efficient Gross Installed Contractable efficient capacity c
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: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable to electricity and capacity sales (as of September 2015) Other 2.3% Coal U.S. CPI 34.4% U.S. PPI Node Price 44.8% Gas 18.6% Indexation of electricity and capacity (“monomic”) prices as a percentage of effective demand …matched with an al
Slide 15: Long-term contracts with creditworthy customers
Long-term contracts with creditworthy customers COMPANY Average demand¹ (MW) and remaining life (years) of current contracts Highlights 600 Clients’ strong international credit ratings: Codelco: A+ 500 Freeport-MM (El Abra ): ● Unregulated contrats CODELCO BBB ● Regulated contracts Barrick (
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 – 9M15
COMPANY E.CL’s energy supply curve – 9M15 US$/MWh 180 160 Average realized monomic price: 140 US$ 104/MWh 120 100 Average fuel & electricity purchase cost per MWh sold: US$54/MWh 80 FO-DI 60 40 U13 U12 Spot purchases CTH CTA CTM2 CTM1 U15 U14 U16 CTM3 20 Firm capacity payments 0 System overcosts Ren
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
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 September 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 for Project status main equipment placed; geote
Slide 22: The TEN Project (1 of 4)
PROJECTS The TEN Project (1 of 4) 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 23: The TEN Project (2 of 4)
PROJECTS The TEN Project (2 of 4) TEN additional transmission line project S/S Nueva Crucero Encuentro TEN trunk transmission line project ISA transmission project S/S Kapatur Existing lines ANG 1 To S/S Laberinto New projects to be tendered by the CNE ANG 2 during 2015 - 2016 To S/S O’Higgins Kel a
Slide 24: The TEN Project (3 of 4)
PROJECTS The TEN Project (3 of 4) Status as of September 30, 2015 • The Panel of Experts issued its final ruling, and TEN’s trunk revenues were defined. • The two new trunk lines that will complete the SIC-SING interconnection (Changos-Kapatur and Changos-Nueva Crucero/Encuentro) are already under a
Slide 25: The TEN Project (4 of 4)
PROJECTS The TEN Project (4 of 4) Revenue scheme VI Indexation AVI COMA VATT AVI COMA VATT In MUSD @ Oct- In CLP to In USD (In MUSD @ Oct-13 FX Rates) (In MUSD @ Sept-15 FX Rates) 13 FX Rates Chile CPI to US CPI 738.3 41% 59% 74.0 9.7 83.7 68.4 7.6 76.0 IPC 0 100.90 IPC k 110.44 CPI 0 233.55 CPI k 2
Slide 26: Renewable Energy Projects Portfolio
PROJECTS Renewable Energy Projects Portfolio Pampa Camarones I (6MW 1st stage) is under construction: • Expected PV Plant investment: US$16 million • COD of 1st stage: connection to SING in December 2015 • The environmental permit application for up to 300MW and total expected investment of up to
Slide 27: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement 27
Slide 28: CAPEX program for the ongoing business and new projects
PROJECTS CAPEX program for the ongoing business and new projects Rest of CAPEX (US$ million) 9M15 2015e 2016e 2017e 2018e TOTAL E.CL – Current business 85 59 102 68 63 378 IEM (including port) 66 51 340 449 160 1,066 TEN (100%) 117 126 328 196 767 TEN (10%) 12 13 33 20 77 TOTAL w/TEN @ 100% 268 236
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 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 30: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 30
Slide 31: Electricity sales, generation and monomic prices
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 6,820 Total 6,967 Total 6,659 Total 6,736 8,000 8,000 177 300 189 61 6,000 1,355 1,407 6,000 1,219 1,197 4,000 4,000 5,288 5,260 5,212 5,442 2,000 2,000 0 0 9M14 9M15 9M14 9M15 Unregulated Regulated Spot Coal LNG Dies
Slide 32: Income Statement (US$ millions)
FINANCIAL RESULTS Income Statement (US$ millions) 9M14 9M15 Var. % Operating revenues 946.2 869.2 -8% Operating income (EBIT) 144.5 145.5 1% EBITDA 243.8 248.8 2% Net income 85.1 72.4 -15% Average realized monomic sale price (US$/MWh) 119.1 104.2 -13% Total operating revenues decreased 8% mainly d
Slide 33: EBITDA comparison 9M15 vs 9M14
FINANCIAL RESULTS EBITDA comparison 9M15 vs 9M14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 270 +11 -6 260 -3 -4 250 +6 +1 240 230 220 249 210
Slide 34: Net Income comparison 9M15 vs 9M14
FINANCIAL RESULTS Net Income comparison 9M15 vs 9M14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 110 Minority 100 Interest +5 -3 +4 -9 Minority
Slide 35: Strong liquidity and low leverage to support the committed CAPEX program
FINANCIAL RESULTS Available Cash (US$ million) Gross Debt / LTM1 EBITDA 300 4.0 250 3.0 200 150 2.0 269 100 189 1.0 2.5 2.4 50 0 0.0 31/12/14 30/9/15 31/12/14 30/9/15 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 36: E.CL's debt breakdown (as of September 30, 2015)
FINANCIAL RESULTS E.CL’s debt breakdown (as of September 30, 2015) Simple debt structure, solely at E.CL corporate level: 1. 5.625%, 144-A/Reg-S bond for US$400 million maturing January 2021: Bullet, unsecured, no financial covenants. YTM as of September 30, 2015 = 3.93% 2. 4.500%, 144-A/Reg-S bon
Slide 37: Net Debt evolution 9M-2015
FINANCIAL RESULTS Net Debt evolution 9M-2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 900 +29 +17 -265 800 +26 +23 +268 700 600 500 400 565
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: 2010
Slide 39: Evolution of E.CL share price between Jan. 2014 and Sept. 2015
FINANCIAL RESULTS Evolution of E.CL share price between Jan. 2014 and Sept. 2015 -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Index Sep.30, 2015: Jan. 2, 2014 = 1
Slide 40: Strong investment-grade ratings
FINANCIAL RESULTS International ratings Solvency Perspective Date last review Standard & Poors BBB Stable October 2014 Fitch Ratings BBB Stable August 2015 National ratings Solvency Perspective Shares Date last review Feller Rate A+ Stable 1st Class Level 2 January 2015 Fitch Ratings A+ Stable Augus
Slide 41: 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