Slide 1: 1H14 Results
1H14 RESULTS 1
Slide 2: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 2
Slide 3: Highlights
HIGHLIGHTS In 1H14 E.CL reported a US$152 million EBITDA, a 29% improvement compared to 1H13 due to generally better operating performance, higher margins on electricity sales, stronger take-or-pay capacity payments, and higher gas sales. Net income reached US$44.5 million, 449% higher than in 1
Slide 4: Highlights
HIGHLIGHTS In May the government announced its 2014-2018 Energy Agenda to promote investments in the energy sector. The agenda considers a new role for the State, territorial ordering and citizenship participation, as well as focus on increased competition, lower prices, energy efficiency, develop
Slide 5: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 5
Slide 6: Chilean electricity industry – 1H14
Chilean electricity industry – 1H14 INDUSTRY Growth Generation GWh Main players Market Clients (2013-2023)¹ (1H14) (% installed capacity 1H14) Regulated Diesel Ren. 2% Endesa 12% 7% 25% capacity 6.0% Gas 11% 24% E.CL 52% SING 26% demand 8,635 GWh AES 4,055 MW Gener Unregulated Coal 80% 20% 88% Regul
Slide 7: Characteristics of the SING
Characteristics of the SING INDUSTRY Nearly 100% of installed capacity based on coal, natural gas (LNG) and diesel No exposure to hydrologic risk Long-term contracts with unregulated clients (mining companies) account for 88% of demand Flexibility to negotiate prices and supply terms Maxim
Slide 8: Mining sector in Chile: Announced investments in new projects
INDUSTRY Mining sector in Chile: Announced investments in new projects Estimated Estimated Possible International investment copper production Rating Mining Project Sponsor (US$ mm) production start date (Moody’s/S&P) Lomas Bayas III Súlfuros $1,600 70 Th TPA 2021 Xstrata Baa2/BBB+ Esperanza Sur (ex
Slide 9: Ownership structure (as of end-June 2014)
COMPANY Ownership structure (as of end-June 2014) GDF SUEZ Local Foreign Other Pension Funds Institutions Institutions 52.77% 19.21% 20.20% 7.30% 0.52% 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 10: Installed capacity – SING & E.CL
COMPANY Installed capacity – SING & E.CL SING - Gross installed capacity – December 2013 (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 1
Slide 11: E.CL operates cost-efficient coal and gas generation plants
COMPANY Installed Capacity (June 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 33% C
Slide 12: Evolution of PPA portfolio balance (as of June 2014)
COMPANY Evolution of PPA portfolio balance (as of June 2014) Average realized monomic Average estimated consumption (MWh/h) sale price (USD/MWh) 1H13 1H14 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 1,110 1,
Slide 13: PPA portfolio indexation
COMPANY PPA portfolio indexation Overall indexation applicable (as of June 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. 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 – 1H2014
COMPANY E.CL’s energy supply curve – 1H2014 US$/MWh 180 Average realized monomic price: 160 US$ 119/MWh 140 120 FO-Di 100 Average fuel & electricity purchase cost per Spot purchases MWh sold: US$68/MWh 80 60 U16-CTM3 40 20 U15 CTA CTH U14 CTM2 CTM1 U13 U12 00 Renewables Coal 3,098 GWh LNG 750 GWh Sp
Slide 16: Generation overcosts in the SING
Generation overcosts in the SING INDUSTRY The so-called “overcosts” (“sobrecostos”) are regulated by OVERCOSTS IN THE SING IN US$ 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 17: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 17
Slide 18: 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 19: 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 20: 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 21: 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 22: 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 23: 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$170 million over the 2
Slide 24: Innovation and sustainability
PROJECTS Innovation and sustainability Cobia Solar Microalgae Wind Biomass Steam-solar E.CL is committed to continuous social and environmental improvement. 24
Slide 25: Approved CAPEX program
PROJECTS Approved CAPEX program CAPEX (US$ million) 1H14 2H14e 2015e 2016e Generation: Maintenance & Life ext. 21 16 88 40 Generation: Environmental project 12 8 - - Transmission 4 12 32 13 Development (1) 20 30 6 4 Other (2) 3 9 4 7 TOTAL 60 75 130 64 Notes: 1. “Development” includes only the initi
Slide 26: Agenda
AGENDA • HIGHLIGHTS • INDUSTRY AND COMPANY • PROJECTS • FINANCIAL RESULTS 26
Slide 27: Electricity sales, generation and average monomic prices
FINANCIAL RESULTS Electricity sales (GWh) Gross electricity generation (GWh) Total 4,805 Total 4,522 Total 4,582 Total 4,386 5,000 112 5,000 192 94 147 4,000 898 898 4,000 774 821 3,000 3,000 2,000 3,795 3,530 2,000 3,594 3,391 1,000 1,000 0 0 1H13 1H14 1H13 1H14 Unregulated Regulated Spot Coal LNG
Slide 28: Income Statement
FINANCIAL RESULTS Income Statement (US$ millions) 1H13 1H14 Var. % Operating revenues 592.4 626.5 6% Operating income (EBIT) 45.8 84.9 85% EBITDA 117.9 151.8 29% Net income 8.1 44.5 449% Average realized monomic sale price (US$/MWh) 110.8 119.2 7% Total operating revenues increased 6% due to a com
Slide 29: EBITDA comparison 1H14 vs 1H13
FINANCIAL RESULTS EBITDA comparison 1H14 vs 1H13 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 180 +5 -13 +7 160 +14 -8 +2 +6 140 +21 120 100 80
Slide 30: Net Income comparison 1H14 vs 1H13
FINANCIAL RESULTS Net Income comparison 1H14 vs 1H13 Minority ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Interest In millions of US$ 50.0 +2 +2 45.0 +4 2 40.0 +2
Slide 31: Strong liquidity and low leverage
FINANCIAL RESULTS Available Cash (millions of US$) Gross Debt / LTM1 EBITDA 250 04 200 03 150 242 02 213 3.0 2.7 100 01 50 00 12/31/2013 6/30/2014 12/31/2013 6/30/2014 Available cash Gross Debt / LTM EBITDA Net Debt / LTM1 EBITDA LTM1 EBITDA / LTM1 Gross interest Expense 03 06 02 04 02 2.2 5.4 6.1 1
Slide 32: E.CL’s Debt breakdown (as of June 30, 2014)
FINANCIAL RESULTS E.CL’s Debt breakdown (as of June 30, 2014) ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- E.CL has only two debts, with a current average intere
Slide 33: Net Debt evolution 1H14
FINANCIAL RESULTS Net Debt evolution 1H14 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- In millions of US$ 750 +9 -21 +22 +14 -11 -9 700 +31 -165 +60 650 600 +45 55
Slide 34: 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 35: International and national ratings
FINANCIAL RESULTS International ratings Solvency Perspective Date Standard & Poors BBB Stable December 2013 Fitch Ratings BBB- Positive August 2013 National ratings Solvency Perspective Shares Date Feller Rate A+ Stable 1st Class Level 2 January 2014 Fitch Ratings A Positive August 2013 ICR A Stable
Slide 36: Superior performance
FINANCIAL RESULTS Several recent initiatives to boost performance ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Superior performance Clear strategic Commercial and
Slide 37: 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