FINANCIAL STATEMENTS EPM GROUP Quarter

Transcription

1 FINANCIAL STATEMENTS EPM GROUP Quarter

2 Disclaimer 2 EPM prepared this document to provide stakeholders with information on the company s financial status. This document may include discussions of strategy and statements about the likely development of EPM s business. They include information on the company s estimates or expectations for its future performance and operations. Potential investors and the market in general should be aware that the information contained herein is not a guarantee of performance or the risks and uncertainties that may occur or materialize. Actual results may vary and differ from those provided herein due to several factors beyond the company s control. Neither EPM nor its advisors, officers, employees, directors or agents, or representatives assume any responsibility for the company s performance of actual events if it differs from what is provided herein. In addition, EPM s advisors, officers, employees, directors or agents shall have no obligation to update, amend, modify or adjust this presentation with facts that may occur after this communication. This presentation is for discussion purposes only, and it should only be referenced considering the verbal information provided by EPM; otherwise it would be incomplete. Neither this presentation nor any of its contents may be used for any other purpose without EPM s prior written consent.

3 Agenda 3 Significant events during the quarter Financial results Hydroelectric Project Ituango

4 Significant events during the quarter 4

5 Significant events during the quarter 5 The Porce III hydroelectric plant entered commercial operations in September with all four turbines fully operational, contributing 660 new megawatts to Colombia s development. Porce III Porce III is the largest plant in EPM's generation system and required a US$1,596 investment. It is located 147 km. northeast of Medellin.

6 Significant events during the quarter 6 Risk Rating The rating firm Fitch Ratings raised EPM's investment grade from BBB- to BBB, for EPM's debt denominated in local and foreign currency. The rating, which is above that held by the Republic of Colombia, applies to current international bond issues totaling US$500 (maturity date 2019) and $1 trillion 250 billion pesos (maturity date in 2021). In addition, it confirmed the AAA rating assigned to EPM's payment capacity on a national level and its plan to issue $2 trillion in bonds. The outlook is stable for all of the ratings.

7 Significant events during the quarter 7 Hydroelectric Project Ituango EPM opened a national and international bidding for the main civil works relating to the Ituango project. The bidding process includes the construction of a dam (a 225 meter rockfill wall), the underground powerhouse (conformed by the main cavern and eight power generation turbines and electromechanical auxiliary equipment) and other associated works.

8 Financial Results 8

9 9

10 Macroeconomic Scenario 10 Colombia Sept. Sept. Sept. Sept. Panama Inflation 2,95% 2,40% Inflation 6,10% 4,20% PPI 4,06% 1,86% WPI 12,60% 2,30% Exchange rate ($/USD) Bunker (Average) 94,89 68,58 Devaluation 0,06% -11,95% Energy Demand (GWh) Energy Demand (GWh) WPI: Wholesale Price Index PPI: Producers Price Index Salvador Sept. Sept. Sept. Sept. Guatemala Inflation 5,20% 1,10% Inflation 5,80% 4,00% WPI 12,20% 1,90% Exchange rate (Qtz/USD) 7,86 8,10 WPI: Wholesale Price Index Energy Demand (GWh) Qtz: Quetzal

11 Income Statement Figures in millions of US dollars 11 3 Q Q 2011 % Prev. Year Concept a Sept a Sept % Prev. Year Revenues Costs and administrative expenses EBITDA (4) Provisions, deprec. & amortizations Operating Income (91) N.A Others non-operating, nets 77 (80) N.A Income tax provision (25) Net income Revenues 6,000 5,000 4,000 3,000 2,000 1,000 0 CAGR: 20% 1, , ,170 2,829 1,728 2, LTM Energy Water Telecommunications LTM: US$5,649

12 Revenues Figures in millions of US dollars Quarter growth: 48% 13 Concept Sept % Prev. Year Energy % 18% Water Telecommunications 818 (1) 76% Others 1 N.A Total

13 Revenues Figures in millions of US dollars 14 Revenues from the Energy Group were up 60% compared to the previous year: During the first quarter of 2011 the energy system is being affected by the La Niña phenomenon, which has increased the volume of water resources and has generated higher energy pool sales. Sales under long-term contracts for larger units increased, as did the price. Revenues were higher due to the incorporations of the Central American companies. Revenues from the Water business increased 7% compared to the previous year due to the increase in the number of users and a rate increase. Revenues from the Telecommunications business unit totaled US$818, a decline of 2% compared to the previous year, mainly due to declines in the revenues of Cinco Telecom, Orbitel Servicios Internacionales and EPM Bogotá.

14 Costs and Expenses Figures in millions of US dollars Quarter growth: 64% 15 Concept Sept % Prev. Year Energy % 20% Water Telecommunications % Others Total

15 Costs and Expenses Figures in millions of US dollars 16 Consolidated operating costs and expenses were 64% higher than in the same period of the previous year. This increase is explained mainly by the new acquisitions, since the rate-setting system for the energy transmission, distribution and marketing business in Central America is handled on a Pass Through basis, which has a lower gross margin than the margin obtained in Colombia. Accumulated costs and expenses totaled US$3.003, which is 47% more than last year, mainly due to the matters mentioned above. The GEN composition was: Energy 75%, Water 5% and Telecommunications 20%.

16 EBITDA Figures in millions of US dollars Quarter growth: 20% 17 Concept Sept % Prev. Year 8% 15% Energy Water 124 (2) Telecommunications 211 (8) Others 1 N.A. 77% Total

17 Net Income Figures in millions of US dollars 18 Concept Sept % Prev. Year 6% 4% Energy Water 35 (49) Telecommunications 27 (24) Others % Total 619 7

18 Balance Sheet Figures in millions of US dollars Concept Sept Part.% % Prev. Year Assets Current assets Non-current assets Liabilities Current Non-current Minority interest Equity CAGR Assets: 16%

19 Infrastructure Investments Figures in millions of US dollars 20 The total investments during the period were US$456, highlighting: EPM (Parent Company) invested US$184 in projects such as: Porce III, Transmission and Distribution Networks, Rural Electrification, Rehabilitation of the Medellín river, Manzana de la innovación [Innovation Block], among others. UNE Telecomunicaciones invested US$153 in applications, platforms and infrastructure, among others. US$40 was invested in Central American mainly in distribution networks, substations and lines, among others.

20 Financial obligations Figures in millions of US dollars 21 During the period the following was notable: International bond issue totaling US$680 for investments and infrastructure. IADB loan for US$13.8 for a Wastewater Treatment Plant. US$65 loan for DECA to acquire the Distribuidora DelSur Company in El Salvador. This loan was repaid in advance this quarter. US$1.8 in EDEQ for Infrastructure.

21 Composition of debt 22 Indicators Total indebtedness 27% 25% 30% 37% 38% Financial indebtedness 10% 11% 16% 20% 22% Debt/EBITDA 0,86 0,99 1,52 2,15 1,89

22 Indicators 23 Concept EPM Group Energy Water Telco. EBITDA margin 32% 33% 45% 26% Operating margin 22% 26% 28% 7% Net income margin 14% 16% 16% 3% Liquidity 1,76 1,65 4,53 1,17 Total indebtedness 38% 40% 35% 32% Financial indebtedness 22% 23% 21% 13% Equity profitability 8% 11% 4% 2% Asset profitability 5% 6% 2% 1% EBITDA/Financial expenses 7,13 7,55 4,72 7,14 Debt/EBITDA 1,89 1,89 2,98 1,25 Concept 1Q/10 2Q/10 3Q/10 4Q/10 1Q/11 2Q/11 3Q/11 Revenues EBITDA EBITDA margin 35% 35% 37% 31% 35% 32% 30%

23 Hydroelectric Project Ituango 24

24 Location 25 The project is located in the north of the Antioquia Department, 171 km from Medellin, between the municipality of Santafé de Antioquia to the south and the Ituango river to the north.

25 Main works 26 Substation Reservoir Weir Dam Access to machinery facility Stilling well Deviation exits Diagram of dam works Capacity: 2,400 MW, 8 generation units. Dam: 225 m high and a volume of 20 million m³. Weir: Capacity of 22,600 m³/sec, controlled by five radial gates. Reservoir: 79 km long, useful volume of 975 million m³ and a flood area of 3,800 Ha. Pipeline tunnels: 8 upper tunnels, 8 charge wells and 8 lower armored tunnels, for a total length of 340 m each tunnel.

26 Financial analysis of the project 27 Project Cost Cost without adjustments or unplanned expenses DEC 2009 Million US$ 3,049.3 Index Total Current Costs 3,811.1 Adjustments Unplanned expenses Total cost with adjustments and unplanned expenses 4,459.2 Financial costs 1,245.9 Other costs 5.9 Total cost with adjustments, unplanned expenses and financial costs 5,711.0 VAT DUTY 79.7 Total cost 5,508.0 Cost Financial Structure Contributions 40% Debt 60% Project cost 100% Million US$ Million Pesos 2,220 4,177,299 3,288 6,609,848 5,508 10,787,146

27 Advances - Roadway Infrastructure 28 The construction of the industrial roadway on the left side has been completed, including two metal bridges over the Cauca river upriver and downriver from the dam, to provide access to the river deviation tunnels. The construction of the replacement road continues, which will replace the existing road between San Andrés de Cuerquia and Ituango, wnhich will be flooded by the reservoir. The left side is 75% completed and 20% of the right side has been finished. Metal bridge downriver from the reservoir The 242 m bridge over the San Andrés river has been 90% completed. San Andrés Bridge - Panoramic view

28 Advances - Other contracts and bids 29 Deviation tunnels Camps Civil works 110KV line Valdivia - Project Equipment Supervision The tunnels to divert the Cauca river and the construction of the machinery facility have been started. Preliminary work is currently being carried out, including the construction of the contractor s camps. The main camps for the project have started to be built. Provisional works for the contract are being executed and the excavation work for the foundation has commenced. In October 2011 a national and international bid process opened. The sale of the technical specifications will end on February 21, The acquisition of equipment and materials for the 110kV line and substation continues. The contracting process for the acquisition of line structures and materials is underway. The Managing Director has been provided with an executive report for approval, together with the most relevant aspects of the bid conditions. In November 2011 a national and international bid process opened for the electromechanical equipment. The sale of the bidding specifications will end on December 12. The supervision contract for the main work and the assembly of the electromechanical equipment for MCOP117,296 has started and will be in force for 108 months

29 Thank You 30