October 30, 2024
ENGIE ENERGÍA CHILE REPORTED EBITDA OF US$130 MILLION AND NET RESULTS OF US$51 MILLION IN THE THIRD QUARTER OF 2024.
EBITDA REACHED US$129.3 MILLION IN THE THIRD QUARTER OF 2024, A RECOVERY COMPARED TO THE THIRD QUARTER OF 2023. THE THIRD QUARTER REFLECTED BETTER AVAILABILITY OF OUR POWER GENERATION UNITS AND LOWER MARGINAL COSTS, ACCOMPANIED BY REDUCED GENERATION COSTS DUE TO LOWER FUEL PRICES, WHICH RESULTED IN IMPROVED OPERATING RESULTS. THIS ALSO CONTRIBUTED TO A RECOVERY IN LEVERAGE AND LIQUIDITY RATIOS THAT WILL IN TURN ALLOW THE COMPANY TO CONTINUE WITH ITS AMBITIOUS INVESTMENT PLANS AND DECARBONIZATION PROCESS.
- Operating revenues amounted to US$447.6 million in the third quarter of 2024, a 13% decrease compared to the third quarter of 2023 due to lower average monomic prices for both regulated and non-regulated customers.
- EBITDA for the third quarter of 2024 amounted to US$129.5 million. The main reasons behind the EBITDA recovery include the increase in physical energy sales, lower average supply costs, adequate availability of generation plants and lower generation costs explained by the decrease in global fuel prices.
- Net Results amounted to US$50.5 million in the third quarter of 2024, an 18% increase compared to the same quarter of 2023, mainly due to improved operational results, explained by lower marginal energy costs attributed to better hydrologic conditions and lower fuel prices.
Financial Highlights (in US$ millions) | ||||||
3Q23 | 3Q24 | Var % | 9M23 | 9M24 | Var% | |
Total operating revenues | 512.0 | 447.6 | -13% | 1,715.9 | 1,381.1 | -20% |
Operating income | 77.6 | 92.6 | 19% | 175.5 | 314.6 | 79% |
EBITDA | 123.0 | 129.5 | 5% | 312.0 | 424.0 | 36% |
EBITDA margin | 24.0% | 28.9% | 20% | 18.2% | 30.7% | (9.8pp) |
Total non-operating results | (19.9) | (22.7) | n.a | (93.9) | (35.0) | -63% |
Net income attributed to controlling shareholders | 42.7 | 50.5 | 18% | 69.5 | 201.0 | 189% |
Earnings per share (US$/share) | 0.01 | 0.10 | 0.025 | 0.191 | ||
Total energy sales (GWh) | 3,005 | 3,143 | 5% | 5,943 | 6,285 | 6% |
Total net generation (GWh) | 1,641 | 1,343 | -18% | 3,196 | 2,583 | -19% |
Energy purchases on the spot market (GWh) | 697 | 1,049 | 51% | 1,249 | 1,984 | 59% |
Energy purchases - back up (GWh) | 724 | 799 | 10% | 1,523 | 1,785 | 17% |
ENGIE ENERGÍA CHILE S.A. ("ECL") is engaged in the generation, transmission and supply of electricity and the transportation of natural gas in Chile. ECL is the fourth largest electricity generation company in Chile and one of the largest electricity generation companies in the northern segment of the SEN national grid (formerly known as SING). As of September 30, 2024, ECL accounted for 7% of the SEN's installed capacity. ECL primarily supplies electricity to large mining and industrial customers, and it also supplies electricity to distribution companies throughout Chile. ECL is currently 59.99% indirectly owned by the French company, ENGIE LATAM. The remaining 40.01% of ECL's shares are publicly traded on the Santiago stock exchange. For more information, please refer to www.engie-energia.cl.
Contents | |
HIGHLIGHTS | 3 |
SUBSEQUENT EVENTS | 3 |
THIRD QUARTER OF 2024 | 3 |
SECOND QUARTER OF 2024 | 3 |
FIRST QUARTER OF 2024 | 5 |
INDUSTRY OVERVIEW | 5 |
Marginal Costs | 5 |
Fuel prices | 6 |
Generation | 6 |
Management's Discussion and Analysis of Financial Results | 8 |
Second quarter of 2024 compared to second quarter of 2023 and first quarter of 2024 | 8 |
Operating Revenues | 8 |
Operating Costs | 9 |
Electricity Margin | 10 |
Operating Results | 10 |
Financial Results | 11 |
9M2024 compared to 9M2023 | 12 |
Operating Revenues | 12 |
Operating Costs | 13 |
Operating results | 14 |
Financial Results | 14 |
Liquidity and Capital Resources | 15 |
Cash Flow from Operating Activities | 16 |
Cash Flow Used in Investing Activities | 16 |
Cash Flow from Financing Activities | 17 |
Contractual Obligations | 17 |
Dividend Policy | 20 |
Risk management policy | 21 |
OWNERSHIP STRUCTURE AS OF SEPTEMBER 30, 2024 | 22 |
Number of shareholders: 1,746 | 22 |
APPENDIX 1 | 23 |
PHYSICAL DATA AND SUMMARIZED QUARTERLY FINANCIAL STATEMENTS | 23 |
Physical Sales | 23 |
Quarterly Income Statement | 24 |
Quarterly Balance Sheet | 25 |
Main Balance Sheet Variations | 25 |
APPENDIX 2 | 28 |
Financial information | 28 |
Financial Ratios | 28 |
CONFERENCE CALL 3Q24 | 30 |
2
HIGHLIGHTS
SUBSEQUENT EVENTS
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Monetization of PEC-3documents: On October 24, 2024, pursuant to the agreement reached with IDB Invest described in the Essential Fact dated October 8, 2024 and in the following paragraph, ENGIE Energía Chile and its subsidiary Eólica Monte Redondo sold to IDB Invest documents of payment ("DDPs") issued by the Chilean Treasury for a total amount of US$356 million including interests of US$8.5 million. These DDPs arose as a result of the difference between the billing that would have resulted from applying the energy and power tariffs defined in the supply contracts signed between the company and the distribution concessionaires and the effective billing of the tariffs resulting from the application of the PEC-3 Law.
On October 7, 2024, the Company signed an agreement with Inter-American Investment Corporation ("IDB Invest") pursuant to which, subject to certain conditions, the Company will sell to IDB Invest documents of payment ("DDPs") resulting from the application of the price stabilization mechanism pursuant to Law 21,472, as amended by Law 21,677, that "Creates a Tariff Stabilization Fund and establishes a New Transitory Electricity Price Stabilization Mechanism for Customers Subject to Price Regulation" (Law 21,472, as amended, the "PEC-3 Law"), Exempt Resolution number 86 of 2023, as amended by Exempt Resolution number 334 of 2023 and by Exempt Resolution number 379 of 2024, all from the National Energy Commission. The PEC-3 Law created a tariff stabilization fund and established a new transitional mechanism for stabilizing electricity prices for customers subject to tariff regulation for up to US$5,500 million, which will be in force until the balances originated by the application of the law are extinguished, which should not occur after December 31, 2035. - BESS Tamaya energization: The BESS Tamaya energy storage project is already 100% energized and as of October 1, 2024 has injected more than 4,000 MWh of green energy into the National Electric System (SEN). This site has an installed capacity of 68 MW/418MWh, which allows for energy storage for more than 5 hours a day. Its 152 battery containers are charged with the energy generated by the Tamaya Solar Plant (114 MWac).
THIRD QUARTER OF 2024
- Swiss Bond: On September 26, 2024, as reported by an Essential Fact dated August 30, 2024, the Company placed bonds in the Swiss market for a total amount of CHF 190,000,000 (one hundred and ninety million Swiss francs), in accordance with the rules of Article 51(2) of the Swiss Financial Services Act dated June 15, 2018 "FinSA". The bonds contemplate a term of 5 years, with a single principal payment at maturity on September 26, 2029, and annual interest payments at an annual interest rate of 2.1275%. The proceeds from the placement will be used, in whole or in part, to finance or refinance eligible projects as defined in the Green Financing Framework of Engie S.A. To mitigate exposure to foreign exchange rates and interest rates, the company entered into a cross-currency swap contract whereby the principal amount of the bond was set at US$ 225,118,483.41 at a fixed annual interest rate in dollars of 5.4272%.
- Monetization of PEC-2documents: On August 9, 2024, the Company monetized documents of payment issued by the Chilean Treasury pursuant to the second price stabilization law for regulated customers (MPC law or "PEC-2"), under the mechanisms agreed with the Inter-American Development Bank, for a value of US$9.3 million. On September 30, the Company made a final sale of short-term payment documents to the Treasury for a value of US$55,000, thus ending the sale of payment documents under the PEC-2 program that reached a total of US$290 million between August 2023 and September 2024.
SECOND QUARTER OF 2024
- Annual Ordinary Shareholders' Meeting: On Tuesday, April 30, 2024, the Company's shareholders agreed on the following:
3
- Dividend Policy: No final dividends will be distributed on account of 2023's net results given the reported losses in the period.
- Board of Directors: The appointment of the following persons as members of the Board of Directors:
Primary Board Member | Deputy Board Member | Type |
Frédéric Halkin | Guilherme Ferrari | |
Mireille van Staeyen | Matías Niebuhr | |
Pascal Renaud | Bernard Esselinckx | |
Felisa Ros | César Cornejo | |
María Carolina Schmidt Zaldívar | Juan Enrique Allard Serrano | Independent |
Cristián Eyzaguirre Johnston | Ricardo Fisher Abeliuk | Independent |
Joanna Davidovich Gleiser | Daniel Vercelli Baladrón | Independent |
- Auditors: The appointment of EY Servicios Profesionales de Auditoría y Asesorías SpA as the Company's external audit firm.
The new Board of Directors, in its April 30 session, agreed to appoint (a) Pascal Renaud as Chairman of the Board, and (b) the independent board members, María Carolina Schmidt Zaldívar, Cristián Eyzaguirre Johnston and Joanna Davidovich Gleiser, as members of the Directors Committee according to Article 50- bis of Law 18,046.
- Financing: On April 17th, EECL completed a bond issuance in the international markets for a total amount of USD 500.000.000. This issuance was carried out in accordance with the rules 144-A and Regulation S (Reg S) of the United States Securities Act of 1933. The bonds have a 10-year maturity and a 6.375% p.a. coupon interest rate. Interest payments will be made semi-annually, starting on October 17th, 2024 and the principal will be amortized in one single final payment ("bullet") on April 17th, 2034. The obligations arising from these bonds are not secured by any guarantees. Additionally, in compliance with applicable regulations, the bonds will not be registered with the Securities and Exchange Commission of the United States or with the CMF (Chilean Market Commission), and therefore, they will not be subject to public offering in either the United States or the Republic of Chile. This is ENGIE Chile´s first green bond issuance in the international markets, to finance renewable energy and storage projects.
- Early redemption of 144-A/RegSbond: On April 8, 2024, EECL launched an Any-and-All tender offer for the 4.5%, US$350 million senior notes due January 2025. The offer was accepted by 61.28% of the bondholders; therefore, with proceeds of the new issue the company prepaid US$214,471,000 plus accrued interest, leaving a balance of US$135,529,000 to be repaid at maturity on January 29, 2025.
- Monetization of PEC-2documents: In May 2024, the Company monetized payment documents issued by the Treasury of the Republic under the second law of price stabilization for regulated customers (MPC law or "PEC-2"), following mechanisms agreed upon with the Inter-American Development Bank, for a value of USD 38.4 million.
- New energy storage project: In April, Engie Energía Chile announced its fifth storage project called
"BESS Tocopilla". This project will have an installed capacity of 116 MW/660 MWh. The initiative will be located where former coal and fuel oil units operated, giving new life to the site, while contributing to the flexibility and security of supply of both the National Electric System (SEN) and ENGIE's portfolio. - Environmental approval: In June 2024, Engie Energía Chile received environmental approval for its first transmission project in the community of Rengo in the O'Higgins region, south of Santiago. The project consists of a sectioning substation called Totihue, which includes the construction of a new sectioning substation and sectioning of the 2x220 kV Candelaria - Puente Negro transmission line. It also considers the installation of a new 66 kV double-circuit transmission line connecting the CGE-owned Rosario substation and the new Totihue sectioning substation.
4
FIRST QUARTER OF 2024
- BESS Coya commercial operation: The BESS Coya storage project received authorization from the National Electric Coordinator to begin operations during the first quarter. This battery storage system has a 139 MW/638 MWh installed capacity and allows for the storage of energy generated by the Coya Solar Plant, located in María Elena, Antofagasta region. It is currently the largest energy storage battery park in Latin America. BESS Coya consists of 232 containers, evenly distributed across the 58 inverters of the solar plant. It can supply energy for up to 5 hours, equivalent to an average annual delivery of 200 GWh. Additionally, it plays a crucial role in the environment by providing green energy to approximately 100,000 households, avoiding the emission of 65,642 tons of CO2, annually.
- Monetization of PEC-2documents: In January 2024, the Company monetized payment documents issued by the Treasury of the Republic under the second law of price stabilization for regulated customers (MPC law or "PEC-2"), following mechanisms agreed upon with the Inter-American Development Bank, for a value of USD 9.6 million.
INDUSTRY OVERVIEW
The SING and SIC power grids operated independently until November 24, 2017, when the interconnection of both grids was perfected through EECL's 50%-owned TEN project, giving birth to the SEN ("Sistema Eléctrico Nacional"). Currently, the company's generation assets are predominantly located in the northern segment of the SEN, in the area that used to be covered by the so-called SING Grid ("Sistema Interconectado del Norte Grande"), which serves a major portion of the country's mining industry. Given local conditions, the northern segment of the SEN is predominantly a thermoelectric system, with generation based on coal and LNG, with growing penetration of renewable sources, including wind, solar, geothermal, and storage systems, which allow to cope with the renewable energy generation intermittence, decoupling and curtailment. In 2018, EECL began its geographical diversification with the acquisition of renewable generation assets in other regions of the country and with the start of supply under PPAs awarded with distribution companies in the center-south region. The interconnection of the grids and the entry into operations of the Cardones-Polpaico Interconnection Project of InterChile, on May 30, 2019, allowed for the coupling of transmission bars in the different substations of the system, reducing the curtailment of renewable energy supply due to the insufficiency of the transmission infrastructure. However, the accelerated installation of renewable energy projects in recent years has exceeded the capacity of the transmission infrastructure, making it necessary to expand it to prevent renewable energy losses.
Marginal Costs
2023 Mes Ene Feb Mar Abr May Jun Jul Ago Sep Oct Nov Dec YTD
Real (Monthly Average per Node) | 2024 | ||||
Crucero 22 | Polpaico 220 | Charrúa 220 | Pto. Montt 22Temuco 220 Mes | ||
96 | 94 | 91 | 197 | 89 | Jan |
114 | 114 | 110 | 215 | 107 | Feb |
106 | 133 | 132 | 207 | 128 | Mar |
109 | 133 | 132 | 160 | 130 | Abr |
106 | 123 | 123 | 138 | 118 | May |
93 | 104 | 102 | 90 | 88 | Jun |
60 | 59 | 56 | 48 | 47 | Jul |
54 | 52 | 48 | 36 | 36 | Aug |
53 | 50 | 46 | 32 | 33 | Sep |
44 | 41 | 33 | 35 | 27 | Oct |
41 | 33 | 25 | 20 | 20 | Nov |
47 | 41 | 34 | 49 | 28 | Dec |
77 | 81 | 78 | 102 | 71 | YTD |
Real (Monthly Average per Node) | ||||
Crucero | PAN DE AZU Polpaico | Charrua | P. Montt | |
42 | 40 | 41 | 37 | 79 |
54 | 51 | 53 | 50 | 108 |
51 | 49 | 49 | 47 | 60 |
55 | 53 | 55 | 61 | 73 |
79 | 81 | 93 | 94 | 95 |
54 | 52 | 54 | 48 | 36 |
46 | 45 | 49 | 43 | 42 |
44 | 43 | 47 | 44 | 66 |
48 | 41 | 42 | 38 | 49 |
53 | 51 | 54 | 51 | 68 |
Source: Coordinador Eléctrico Nacional
In the first quarter of 2024, the average marginal cost of the system was 54 USD/MWh. In the northern zone, it was 49 USD/MWh, 47 USD/MWh in the center, and 84 USD/MWh in the southern region.
In the second quarter, the system marginal cost averaged 66 USD/MWh, with 63 USD/MWh in the north, 65 USD/MWh in the center and 68 USD/MWh in the south of the country.
5
In the third quarter, the system marginal cost fell to an average of 46 USD/MWh, with 46 USD/MWh in the north, 44 USD/MWh in the center and 53 USD/MWh in the south of the country.
In the first nine months of 2024, system marginal costs averaged 55 USD/MWh, a significant decrease compared to the same period of 2023, when marginal costs averaged 98 USD/MWh. The drop in marginal costs reflects lower fuel prices, an increase in generation explained by the entrance of new renewable assets into the system and the increased contribution of hydraulic generation in the first nine months of 2024.
Fuel prices
International Fuel Prices Index | ||||||||||||
WTI | Brent | Henry Hub | European coal (API 2) | |||||||||
(US$/Barrel) | (US$/Barrel) | (US$/MMBtu) | (US$/Ton) | |||||||||
2023 | 2024 % Variation | 2023 | 2024 % Variation | 2023 | 2024 % Variation | 2023 | 2024 % Variation | |||||
YoY | YoY | YoY | YoY | |||||||||
Jan | 78.1 | 74.1 | -5% | 82.2 | 80.2 | -2% | 3.18 | 3.17 | 0% | 167.5 | 106.1 | -37% |
Feb | 77.3 | 77.8 | 1% | 83.2 | 83.8 | 1% | 2.39 | 1.67 | -30% | 138.3 | 95.8 | -31% |
March | 72.5 | 81.3 | 12% | 77.5 | 85.4 | 10% | 2.26 | 1.49 | -34% | 138.3 | 114.4 | -17% |
April | 79.6 | 85.7 | 8% | 83.9 | 90.1 | 7% | 2.16 | 1.51 | -30% | 140.3 | 118.8 | -15% |
May | 71.7 | 80.0 | 11% | 79.7 | 81.4 | 2% | 2.15 | 2.19 | 2% | 119.0 | 106.0 | -11% |
June | 70.4 | 79.8 | 13% | 79.5 | 82.2 | 3% | 2.12 | 2.54 | 20% | 115.6 | 109.7 | -5% |
July | 75.8 | 81.2 | 7% | 79.9 | 83.9 | 5% | 2.55 | 2.06 | -19% | 110.5 | 106.4 | -4% |
August | 81.6 | 76.7 | -6% | 86.3 | 80.4 | -7% | 2.61 | 2.00 | -23% | 117.7 | 121.7 | 3% |
September | 89.6 | 70.3 | -22% | 93.9 | 74.1 | -21% | 2.63 | 2.26 | -14% | 123.3 | 114.8 | -7% |
October | 86.0 | 90.8 | 2.95 | 136.1 | ||||||||
November | 77.9 | 83.2 | 2.75 | 123.6 | ||||||||
December | 71.8 | 77.6 | 2.52 | 117.6 | ||||||||
As shown in the table above, when comparing 2024 to 2023, we can observe declining coal and gas prices and some increases in oil prices.
Generation
The following graphs provide a breakdown of generation in the SEN by fuel type and by company for the first nine months of 2023 and 2024:
9M23: Generation by source | 9M24: Generation by source | |||
Others | Others | Coal | ||
Coal | 4% | |||
4% | Gas | |||
16% | ||||
18% | ||||
Gas | 17% | |||
22% | ||||
62.701 GWh | 64.401 GWh | |||
Hydro | Renewable | |||
34% | ||||
Hydro | Renewable | 29% | ||
25% | 31% |
Source: Coordinador Eléctrico Nacional
6
During the first nine months of 2024, demand reached a maximum of 12,190.5 MWh/h on January 31st, 5.6% above the peak demand of 2023. Accumulated sales as of September 30, 2024, reached 59.834.4 GWh, with a 3% increase in unregulated customer sales and a 3.2% increase in the regulated client segment as compared to the same period of 2023.
Regarding renewable energy, solar generation increased by 17.5%, while wind generation rose by 13% as compared to 2023. As of September 30, 2024, the National Electricity System (SEN) reported total gross installed capacity of 35,791 MW, including 17,352 MW, or 48.4%, qualifying as non-conventional renewable energy capacity, as defined by Law #20,257.
In terms of hydraulic generation for the SEN, as of the end of September, the estimated probability of exceedance for the April 2024-March 2025 hydrological year was 60.9% (dry year).
Electricity production in the SEN grid, broken down by company, was as follows:
9M23: Generation by company | 9M24: Generation by company | |||
ENGIE | ENGIE | |||
5% | ||||
6% | ||||
Colbún | ||||
Colbún | ||||
16% | ||||
14% | ||||
Others | ||||
41% | AES | Others | ||
AES | 62.701 GWh | 44% | ||
7% | 64.401 GWh | |||
10% | ||||
Enel | Enel | |||
29% | ||||
28% | ||||
Source: Coordinador Eléctrico Nacional
7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS
The following discussion is based on our unaudited consolidated financial statements for the nine-month periods ended September 30, 2024, and September 30, 2023. These financial statements have been prepared in U.S. dollars in accordance with IFRS and should be read in conjunction with the financial statements and the notes thereto published by the Comisión para el Mercado Financiero (www.cmfchile.cl).
Second quarter of 2024 compared to second quarter of 2023 and first quarter of 2024
Operating Revenues
Quarterly Information (In US$ millions) | ||||||||
3Q23 | 2Q24 | 3Q24 | % Variation | |||||
Operating Revenues | Amount | % of total | Amount | % of total | Amount | % of total | QoQ | YoY |
Unregulated customers sales………………….. | 223.2 | 48% | 203.3 | 48% | 192.5 | 47% | -5% | -14% |
Regulated customers sales……………………. | 183.9 | 39% | 211.7 | 47% | 185.4 | 46% | -12% | 1% |
Spot market sales……………………………….. | 62.4 | 13% | 19.7 | 4% | 28.5 | 7% | 45% | -54% |
Total revenues from energy and capacity sales | 469.5 | 92% | 434.8 | 91% | 406.4 | 91% | -7% | -13% |
Gas sales………………………….. | 12.7 | 2% | 6.9 | 2% | 13.4 | 3% | 96% | 6% |
Other operating revenue………………………. | 29.7 | 6% | 49.2 | 8% | 27.8 | 6% | -44% | -7% |
Total operating revenues…………………. | 512.0 | 100% | 490.8 | 100% | 447.6 | 100% | -9% | -13% |
Physical Data (in GWh) | ||||||||
Sales of energy to unregulated customers (1)…… | 1,739 | 58% | 1,744 | 56% | 1,773 | 56% | 2% | 2% |
Sales of energy regulated customers…… | 1,249 | 42% | 1,399 | 44% | 1,366 | 44% | -2% | 9% |
Sales of energy to the spot market……………. | 17 | 1% | - | 1% | - | 0% | - | -100% |
Total energy sales…………………………. | 3,005 | 100% | 3,143 | 100% | 3,139 | 100% | 0% | 4% |
Average monomic price unregulated | ||||||||
customers(U.S.$/MWh)(2) | 128.3 | 116.6 | 108.5 | -7% | -15% | |||
Average monomic price regulated customers | ||||||||
(U.S.$/MWh)(3) | 147.2 | 151.3 | 135.7 | -10% | -8% |
Energy and capacity sales reached US$406.4 million in the third quarter of 2024, representing a 13% decrease (US$63.1 million), compared to the same quarter of the previous year. This decline can be attributed to lower average monomic prices for both regulated and unregulated customers.
The drop in tariffs is a result of decreases in the fuel prices used in the indexation formulas of the contracts.
When compared to the immediately preceding quarter, energy and capacity sales dropped by 7% (US$28.4 million) due to lower average monomic prices on sales to both unregulated and regulated customers. Average realized prices in the regulated segment in the second quarter had been affected by the recognition of a one-time US$18 million inflation adjustment on the balances owed by distribution companies pursuant to tariff stabilization laws, as stipulated by the Average Node Price Decree January 2024 published in the Official Gazette on July 5, 2024. The decrease in physical sales to regulated customers is explained by a lower number of business days due to extended holidays in 2024 and the rain and wind storms in August.
In 2023 energy sales in the spot market included energy injections from the Kelar Power Plant operated by BHP under a tolling agreement with fuel provided by EECL. This explained the increase in this category for that period. In the first three quarters of 2024, however, there was no tolling agreement, which explains the reduction in physical sales to the spot market in 2024.
In the third quarter of 2024 gas sales increased due to gas exports to Argentina. The most relevant items in the 'Other operating revenue' account are sub-transmission tolls and regulatory transmission revenues, which starting 2018 include a single charge called "cargo único", as well as port and maintenance services. A US$17.8 million insurance recovery from a past loss at the CTA plant also explained the increase in this account in the second quarter of 2024.
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Operating Costs
Quarterly Information (In US$ millions)
Operating Costs Fuel and lubricants………………………………
Energy and capacity purchases on the spot market……………………………
Depreciation and amortization attributable to cost of goods sold…………………………….
Other costs of goods sold…………………….
Total cost of goods sold………………..
Selling, general and administrative expenses… Depreciation and amortization in selling, general and administrative expenses…………
Other operating revenue/costs……………………….
Total operating costs….……………….
Physical Data (in GWh) Gross electricity generation Coal………………………………………….
Gas…………………………………………..
Diesel Oil and Fuel Oil…………………….
Hydro/Solar/Wind……………………………….
Bess
Total gross generation………………….
Minus Own consumption………………..
Total net generation…………………….
Energy purchases on the spot market………..
Energy purchases- bridge………..
Total energy available for sale before transmission losses………………………
3Q23 | 2Q24 | 3Q24 | % Variation | ||||
Amount | % of total | Amount | % of total | Amount | % of total | QoQ | YoY |
(120.7) | 28% | (83.2) | 24% | (71.8) | 20% | -14% | -40% |
(189.2) | 44% | (173.3) | 46% | (162.9) | 46% | -6% | -14% |
(44.2) | 10% | (36.7) | 10% | (36.0) | 10% | -2% | -19% |
(74.4) | 17% | (69.2) | 18% | (77.6) | 22% | 12% | 4% |
(428.5) | 99% | (362.3) | 98% | (348.3) | 98% | -4% | -19% |
(9.6) | 2% | (12.9) | 3% | (12.7) | 4% | -1% | 32% |
(1.2) | 0% | (0.9) | 0% | (0.9) | 0% | -2% | -24% |
5.0 | -1% | 3.9 | -2% | 7.0 | -2% | ||
(434.3) | 100% | (372.1) | 100% | (354.9) | 100% | -5% | -18% |
379 | 22% | 527 | 38% | 432 | 31% | -18% | 14% |
910 | 53% | 492 | 32% | 500 | 36% | 2% | -45% |
3 | 0% | - | 0% | 0 | 0% | 0% | -97% |
412 | 24% | 339 | 26% | 403 | 29% | 19% | -2% |
- | - | 51 | 4% | 55 | 4% | 8% | 0% |
1,705 | 100% | 1,409 | 100% | 1,391 | 100% | -1% | -18% |
(64) | -4% | (66) | -5% | (55) | -4% | -15% | -13% |
1,641 | 54% | 1,343 | 39% | 1,335 | 41% | -1% | -19% |
697 | 23% | 1,049 | 30% | 1,026 | 32% | -2% | 47% |
724 | 24% | 799 | 31% | 859 | 27% | 8% | 19% |
3,062 | 100% | 3,192 | 100% | 3,220 | 100% | 1% | 5% |
Gross electricity generation decreased by 18%, compared to the same quarter of 2023, and by 1% compared to the previous quarter. The decrease in coal-based generation compared to the second quarter is explained primarily by lower dispatch priority. Gas generation increased by 2% compared to the previous quarter, but decreased by 45% compared to the third quarter of 2023, given greater gas availability at that time, which was used for generation at the Kelar plant. Generation with renewables increased compared to the previous quarter, although it decreased compared to the third quarter of 2023 due to climatic conditions and generation curtailment related to transmission restrictions. Generation associated with our BESS projects, including the contribution of the new BESS Tamaya, accounted for 4% of our gross generation during the third quarter.
The 19% increase in renewable generation compared to the second quarter was explained by an increase in solar, wind and hydraulic generation. ENGIE Chile's renewable portfolio includes the following additions in the past three years: (i) Calama wind farm (151.2 MW) at the end of 2021, (ii) the Tamaya solar PV plant (114 MWac) which started its commercial operations in January 2022, (iii) the first injections of the Capricornio solar PV plant (88 MWac) starting April 2022, (iv) the Coya PV plant (180 MWac), operational since August 2022, although it obtained its COD as of March 2023, and (v) the incorporation of the San Pedro wind farms in mid-December 2022.
In the first quarter of 2024, BESS Coya obtained the authorization by the CEN to start its commercial operation. This battery energy storage system has a 139 MW/638 MWh installed capacity and allows for the storage of energy generated by the Coya photovoltaic plant located in María Elena in the Antofagasta region. During the third quarter of 2024, BESS Tamaya, which is fully energized, began injecting power to the grid in test mode, while waiting for the official declaration of its COD.
The fuel cost item showed a 40% decrease compared to the same quarter of the previous year as a result of lower fuel prices and lower own generation. Compared to the second quarter of 2024, fuel costs decreased by 14%.
The 'Cost of energy and capacity purchases in the spot market' decreased compared to both the third quarter of 2023 and the second quarter of 2024, mainly due to lower average spot prices, despite increased volumes of energy purchased in the spot market as well as through back-up contracts with other generators. Purchases under back-up supply contracts reached 859 GWh in the third quarter compared to 724 GWh in the same quarter of the previous year.
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Other direct operating costs included, among others, transmission tolls, plant personnel salaries, operating and maintenance costs, insurance premiums and cost of fuels sold. These costs increased from the previous quarter, mainly due to maintenance costs as well as severance payments and bonuses.
SG&A expenses (excluding their depreciation) remained at similar levels as those of the second quarter of 2024, although they reported a 32% increase as compared to the third quarter of 2023 due to higher advisory and third party services.
The Other operating revenue/cost item includes water sales as well as recoveries, single transmission charges ("cargo único") and provisions and other miscellaneous income. EECL's share in TEN's net income, which amounted to US$2.0 million in the third quarter of 2024, is also included in this item.
Electricity Margin
Quarterly Information (In US$ millions) | ||||||||
2023 | 2024 | |||||||
1Q23 | 2Q23 | 3Q23 | 4Q23 | 2023 | 1Q24 | 2Q24 | 3Q24 | |
Electricity Margin | ||||||||
Total revenues from energy and capacity sales……… | 531.8 | 552.3 | 469.5 | 432.4 | 1,986.0 | 402.2 | 434.8 | 406.4 |
Fuel and lubricants………………….. | (177.3) | (194.2) | (120.7) | (99.1) | (591.3) | (81.6) | (83.2) | (71.8) |
Energy and capacity purchases on the spot market…… | (219.4) | (224.3) | (189.2) | (182.7) | (815.6) | (157.6) | (173.3) | (162.9) |
Gross Electricity Profit | 135.1 | 133.8 | 159.6 | 150.6 | 579.1 | 163.0 | 178.4 | 171.6 |
Electricity Margin | 25% | 24% | 34% | 35% | 29% | 41% | 41% | 42% |
In the third quarter of 2024, the electricity margin, or gross profit from the electricity generation business, increased by US$12 million as compared to the third quarter of 2023, with gross profit representing 42% of energy and capacity revenues, up from 34%. This was due to lower fuel costs and lower electricity purchase costs, which together reported a 23% decrease, while there was also a 13% decrease in revenues from energy and capacity sales.
Meanwhile, compared to the second quarter of 2024, there was a US$6.8 million decrease in gross profit, although the gross margin increased to 42% since revenues from energy and capacity sales decreased by US$28.4 million. This was due to lower average prices of energy sold to unregulated clients, as a result of a decrease in the main tariff indexers (CPI and coal prices) and lower average prices to regulated clients, which reflect the one-time inflation adjustment on accounts receivable related to price stabilization laws reported in the second quarter. Additionally, there was a decrease in costs, both for fuels (amounting to US$11.4 million), and for energy and capacity purchases in the spot market (US$10.4 million), primarily due to lower prices.
Operating Results
Quarterly Information (in US$ millions)
EBITDA
Total operating revenues………………………
Total cost of goods sold……………………
Gross income………………………….
Total selling, general and administrative expenses and other operating income/(costs).
Operating income….……………….
Depreciation and amortization……...…………
EBITDA…………….….……………….
3Q23 | 2Q24 | 3Q24 | % Variation | ||||||
Amount | % of total | Amount | % of total | Amount | % of total | QoQ | YoY | ||
512.0 | 100% | 490.8 | 100% | 447.6 | 100% | -9% | -13% | ||
(428.5) | -84% | (362.3) | -75% | (348.3) | -78% | -4% | -19% | ||
83.4 | 16% | 128.5 | 25% | 99.2 | 22% | -23% | 19% | ||
(5.8) | -1% | (9.8) | -1% | (6.6) | -1% | -33% | 14% | ||
77.6 | 15% | 118.7 | 23% | 92.6 | 21% | -22% | 19% | ||
45.3 | 9% | 37.6 | 8% | 36.8 | 8% | -2% | -19% | ||
123.0 | 24.0% | 156.3 | 31.2% | 129.5 | 28.9% | -17% | 5% | ||
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