EMPRESAS COPEC FOURTH QUARTER 2009 RESULTS

Transcription

1 EMPRESAS COPEC FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 International Risk Rating Standard and Poor s Fitch Ratings Domestic Risk Rating Feller Rate Fitch Ratings BBB+ BBB+ AA/1st Class Level 1 AA/1st Class Level 1 The fourth quarter 29 results are presented pursuant to the International Financial Reporting Standards (IFRS). The fourth quarter 28 results have been restated in accordance with this same standard. The balance sheet accounts are presented in comparison to the closing of the 28 period, which has also been restated. Net income was US$28 million up on than that in the fourth quarter of 28, increasing from a loss of US$89 million to a gain of US$191 million. Such increase was due to higher operating and nonoperating income. From an operating standpoint, there was higher income in the forestry sector on account of a large recovery of demand across the different markets, mainly in the pulp business, which in late 28 were sharply hit by the global financial crisis. The fuel sector also had better performance. Nonoperating income rose, mainly due to a more favorable exchange rate difference, higher earnings in related and joint businesses and an increase in other income. Net income was 21.% up on that in the third quarter of 29. This increase was due to better operating performance in the forestry sector where there were price increases, and particularly in the pulp business. Prices have risen steadily, driven by strong demand from Asian markets and particularly China. Nevertheless, there was lower income in the fuel sector, basically because of a drop in physical sales in the industrial channel. The EBITDA dipped 2.% and amounted to US$38 million. Net income accumulated up to December 29 was 2.4% down on the same period of the previous year and amounted to US$576 million. Consolidated earnings were US$9.942 billion, plunging 3.6% on those of the previous year. Income was also generated by the purchase of assets in Uruguay and the establishment of a company that will manage such assets jointly with Stora Enso. The consolidated accumulated EBITDA amounted to US$1.98 billion, which was 29.9% down on that in 28. The development highlights in the last few months were: the parent company Empresas Copec placing a bond amounting to UF 7 million; the startup of the Nueva Aldea pipeline; and the environmental authority giving Arauco approval to build an ocean outfall pipeline at the Valdivia mill. Moreover, Minera Isla Riesco secured approval of its environmental impact study to build a port and Guacolda continued to make progress with Unit 4. Lastly, the company released a detailed report of its operations after the earthquake and tsunami that hit the center and south of Chile on February 27. Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9 / 8 Revenues EBIT EBITDA* Total profit Profit attributable to controlers Profit attributable to minority interests 2, , , (88) (89) (3.1%) 981.3% 81.1% (317.4%) (315.9%) (38.%) 9, , , , (3.6%) (38.5%) (29.9%) (2.8%) (2.4%) (15.%) EBITDA margin EBITDA / interest expenses 11.9% % % % 51.9% 11.% % 7.8 (5.4%) (31.4%) For further information, please contact: Cristián Palacios Head of Investor Relations Telephone: (56 2) cristian.palacios@empresascopec.cl 1 * EBITDA = Operating income + Depreciation + Stumpage

2 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 Highlights of the Quarter Empresas Copec makes successful bond placement On December 22, 29, Empresas Copec placed a series of dematerialized bearer bonds in the Chilean market amounting to UF 7 million, equivalent to approximately US$29 million. This issue with a placement rate of 4.3% is a bullet series with 21year maturity. The bonds were given a domestic risk rating of AA by Feller Rate and Fitch Ratings. IM Trust was the underwriter. The spread on the government bond attained was 57 base points, the lowest in the history of the Chilean financial market for AA nonstateowned companies. The proceeds will be allocated to investment projects, to refinancing liabilities and for other corporate purposes. Startup of the Nueva Aldea pipeline The pipeline into the sea of the Nueva Aldea Industrial Forestry Complex, located in Region VIII of BíoBío, started up on December 3, 29. There will be ongoing monitoring of the treated waste during its operation. The 5.8kilometer long pipeline, plus a 2.3kilometer ocean outfall, discharges waste outside the coastal protection zone and beyond the limits of the benthic resource management and exploitation area in the Mela sector. The startup of this pipeline completes a stage, which started when Arauco submitted an environmental impact study (EIS) to the National Environmental Agency (CONAMA). After an extensive citizen participation process, this project was given environmental approval by all the members of the Regional Environmental Agency (COREMA). Regional Environmental Agency gives goahead to Valdivia mill ocean outfall The Regional Environmental Agency (COREMA) of the Los Ríos Region approved the project of conveying and discharging treated waste from the Valdivia mill into the sea, which Arauco submitted to the environmental qualification system on February 19, 29. The project investment amounts to approximately US$65 million. It is estimated that construction will take 24 months of actual work and the project will generate an average of 6 jobs with a peak of 1,. Guacolda makes progress with Unit 4 The company continued to make progress with the project to build Unit 4, which will have a gross power rating of 152 MW. This unit has progress of 98% to date and is expected to start up in April. Minera Isla Riesco secures environmental approval to build a port The project to build a port from where coal will be shipped to its final destination was given unanimous environmental approval on December 1. The project entails a 5meter long dock that will receive Cape Size vessels of up to 14, tons. Minera Isla Riesco is expected to start coal mining in the first half of

3 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 STATUS OF OPERATIONS DUE TO THE EARTHQUAKE AND TSUNAMI THAT HIT CHILE ON FEBRUARY 27, 21 The company informed the Superintendency of Securities and Insurance (SVS) on March 17 that the status of its main areas of activity was as follows: 1. FORESTRY SECTOR The affiliate Celulosa Arauco y Constitución S.A. has as of this week resumed production of some of its industrial facilities in Chile, as follows: The service station network is back to normal, except 1 of the 629 sales points which, despite minor damage, need more time to resume operations. Sawmill Area: Four of the seven sawmills operating in the country (located at Constitución, Nueva Aldea and Cholguán) and four of the six companyowned remanufacturing plants (at Constitución, Valdivia and Cholguán) have resumed operations. Panel Area: Two of the four panel mills have started up. The Trupán mill has started up a medium density fiberboard (MDF) line and the Nueva Aldea mill is operating two plywood lines. Furthermore, the biomassbased power generating plant located at the Nueva Aldea panel mill has resumed operations, once again injecting power into the Central Interconnected Grid (SIC). Pulp Area: The five pulp plants in the country continue to make progress with damage assessment and work to normalize their operations. The biomassbased power generating plant located at the Valdivia pulp mill has, however, resumed operations and is also injecting power into the SIC. The company has thereby managed to get a large number of contractors and collaborators back to work and their related activities. In regard to the rest of the company s facilities in Chile, specialized teams are appraising the damage and undertaking the work needed to normalize operations as soon as possible. This is notwithstanding the Valdivia sawmill, which has continued to operate throughout this period. 2. FUELS SECTOR Compañía de Petróleos de Chile COPEC S.A.: The company is providing a normal supply to customers based on the stocks the country had at the time of the earthquake and tsunami. In addition to such stocks, there are also volumes from the usual import program and those additional stocks requested subsequently to meet the fuel demand. The storage plants have no major damage significantly jeopardizing their correct operation. Abastecedora de Combustibles S.A. ABASTIBLE: Its physical plant and office facilities are operating with some minor damage. Liquefied and bulk gas is being distributed normally. In the case of bottled liquefied gas, most related distributors and carriers are working normally in the different areas. The San Vicente Terminal has minor damage, which will be repaired as soon as possible. Fuel unloading operations resumed today. 3. FISHERIES SECTOR All the activities of the affiliate SouthPacific Korp S.A. are still currently on hold. The necessary specialized technical studies and inspections are being undertaken to quantify more accurately the real damage and the timescales involved in getting productive operations back to normal. The inspections carried out have revealed major damage to some unloading points, processing plants, material supply warehouses, spare parts, raw materials and finished products. Once the results of the necessary technical studies and inspections are complete, SouthPacific Korp S.A. will define an asset and facility recovery plan to resume operations as soon as possible to as they were before the earthquake and tsunami hit the center and south of Chile. MOREOVER, WE REITERATE THAT THE COMPANIES HAVE INSURANCE THAT COVERS DOWN TIME LOSS AND DAMAGE. On March 22, the affiliate Arauco informed the SVS of the following: The Valdivia pulp mill, located at San José de la Mariquina in Region XIV of Los Ríos, resumed productive operations on Sunday, March 21. The Valdivia mill, which has an authorized production capacity of 55, tons of kraft pulp a year, started up again after complying with the operating and labor safety and environmental standards required of such industrial facility. 3

4 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9 / 8 EBITDA Forestry Fuels Fishing Other investments TOTAL (2) (1) (3) 6 (1) % (3,55.6%) (43.3%) 46.3% 81.1% (5) 1,98 1, (5) 1,565 (37.9%) (7.2%) 12.9% 8.1% (29.9%) CAPEX Forestry Fuels Fishing Other investments TOTAL % 479.1% (5.6%) (4.9%) 111.% % 43.2% 45.2% 87.7% 54.3% CONSOLIDATED INCOME Q49 versus Q48. Net income, net of minority participation, amounted to US$191 million and was US$28 million higher than that in the fourth quarter of 28. This was mainly due to operating income and nonoperating income increasing US$162 million and US$154 million, respectively. The company s gross margin soared 9.% amounting to US$465 million, which mainly came from the Arauco affiliates accounting for US$31 million; with Copec accounting for US$114 million; Abastible for US$38 million; Sonacol for US$9 million; and Igemar for US$5 million. The increase in the company s gross margin was basically due to the better performance of the forestry sector, which had strong recovery, especially in the second half of 29. This led to increased demand in the markets in which the company is present, specially Asia that is the main export market. There was also higher operating income (EBIT) as lower margins were generated in the 28 period, partly because of the first in first out (FIFO) costing system in a scenario of dropping fuel prices. Nonoperating income increased due to higher income from exchange rate differences that rose US$74 million. This was largely on account of the US dollar value of financial placements and the valuation of other assets stated in Reales, Euros and Chilean pesos. Other income also rose by US$67 million, mainly due to the net income generated by the purchase of forestry assets in Uruguay. 4

5 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 Simplified income statement Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9/ 8 Revenues Cost of sales administration, distribution & marketing expenses EBIT Other income Other costs & expenses Finance costs Share of profits of associates Foreign exchange differences Other results Income tax expense Total profit Profit attributable to controlers Profit attributable to minority interests 2,6 (2,136) (286) (13) (67) 1 (4) 6 6 (26) ,584 (2,121) (28) (19) (51) () (3) ,683 (2,446) (221) (8) (57) (16) (77) (1) 1 (88) (89) (3.1%) (12.7%) 29.8% 981.3% 6.9% 56.1% 19.2% (165.5%) (94.9%) (5,652.4%) (349.2%) (317.4%) (315.9%) (38.%) 9,942 (8,261) (1,72) (62) (26) (18) ,321 (12,24) (1,128) (46) (21) (8) (133) (6) (125) (3.6%) (32.3%) (4.9%) (38.5%) 53.2% 35.3% 2.2% (64.2%) (128.4%) (1,283.5%) (13.6%) (2.8%) (2.4%) (15.%) Quarterly Net Income expressed in millions of US$ Q4 8 Q3 8 Q1 9 Q2 9 Q3 9 Q4 9 Q49 versus Q39. Net income was up 21.%. Although operating income remained at similar levels to the previous quarter, nonoperating income soared 258.9% because of an increase in other income, mainly due to the net income generated from the purchase of forestry assets in Uruguay. There was higher operating income from the forestry sector where sales rose 6.1% due to price increases and particularly in the pulp business. Nevertheless, there was lower income in the fuel sector, essentially because of lower physical sales in the industrial channel related to a demand squeeze from electric power generating companies and lower unit margins. The fisheries sector also had lower income arising from a drop in physical sales of fishmeal, fish oil, and canned and frozen seafood products. 89 Quarterly EBITDA expressed in millions of US$ versus 28 (accumulated). Net income up to December 29, net of minority participation, was US$576 million, 2.4% down on that of the same period in 28. This decrease is explained by a 38.5% drop in operating income, mainly arising from lower operating income at Arauco, whose margin fell because of the lower sales of its main businesses. Although there was a strong recovery of pulp prices in the second half of 29, these were on average 28% higher in 28. There were also lower physical sales of the fuel sector affiliates due to a demand squeeze from electric power generating companies and industrial customers because of the current economic situation, greater hydroelectric power generation and increased supply of natural gas and liquefied natural gas (LNG). Q3 8 Q4 8 Q1 9 Q2 9 Q3 9 Q4 9 In regard to nonoperating income, there was a favorable effect due to exchange rate differences, mainly related to the US dollar value of financial placements and the valuation of other assets stated in Reales, Euros and Chilean pesos. There was also an increase in other income. The higher earnings of related companies with the participation method accounting were largely due to the increased income of the related companies Metrogas and Guacolda, partly offset by lower income from Corpesca. 5

6 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 ARAUCO Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9 / 8 Sales Pulp Sawn timber Panels Forestry Services EBITDA EBIT Non operating income Net income (8) (85) (47) 16.4% 28.8% (9.4%) 16.5% 3.4% (34.7%) 34.% 293.% (9.1%) (41.8%) 3,113 1, ,714 1, , (165) 4 (16.2%) (12.%) (31.6%) (11.9%) (17.2%) (44.1%) (37.9%) (52.%) (121.5%) (24.7%) Celulosa Arauco y Constitución (CONSOLIDATED) Q49 versus Q48. Celulosa Arauco y Constitución had net income of US$148 million in the fourth quarter of 29 that was up on the loss of US$47 million in the same quarter of 28. This is explained by operating income soaring 293.% because of higher pulp and panel sales. The nonoperating income loss was reduced by 9.1%, mainly because of more favorable exchange rate difference effects. The company s EBITDA rose 34.% and amounted to US$226 million, due to higher sales because of the recovery in global demand. Consolidated earnings were up 16.4%, partly because of a 28.9% increase in pulp sales, driven by higher average prices of 18.9% and a 11.1% increase in volume. Markets continued to recover in the fourth quarter of 29. Pulp prices surged 75% to 8% for short fiber and 5% to 6% for long fiber compared to the lowest price March through April 29. Although stock levels rose marginally at the end of the fourth quarter, they are generally still low on previous years. As of late December 29, global stocks amounted to 23 days for long fiber and 3 days for short fiber (4 and 52 days, respectively, in December 28). Asia was the first market to recover and this trend has continued quite soundly. China imported 44.4% more pulp in 29 than the previous year amounting to around 14 million tons, due to new paper production capacities and local pulp production closures in the last quarter of 28 and first quarter of 29. The sales increase in the quarter was also because of a positive 16.5% variation of panel earnings on account of a 36.5% increase in volume, partly offset by a 14.7% drop in prices. Despite the sharp global demand squeeze because of the financial crisis, and due to sales diversification to more than 4 countries and a wide product range, the company managed to sell all its panel production capacity without having to shut down plants. The outlook is positive for the panel division in 21, with further price rises forecasted and precrisis production levels are expected to be recovered. Sawn lumber sales were 9.4% down as a result of prices dropping 9.3% and volume remaining stable. The real estate and construction market in the United States had no major changes in the last quarter of , houses were built in December and the current construction levels are still the lowest in the last 5 years. 6

7 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 Q49 versus Q39. Net income in the quarter surged 58.1% because of an 18.5% increase in operating income, which was not offset by nonoperating income plunging 116.5%. The operating increase arose from higher earnings of 6.1%, highlighting sales increases in the pulp and panel businesses. Pulp earnings rose 4.6% due to a price increase of 17.2%, partly offset by volumes falling 1.3%. Prices have increased mainly because of greater dynamism in Asian markets, especially China. Other significant markets in Asia, like Taiwan, Korea, India and Indonesia, have also recovered following the trend in China. There has also been a large improvement in North America. The subsidy to kraft pulp producers by means of the definition of black liquor as a renewable alternative fuel ended on December 31, 29, despite lobbying by US pulp producers, who did not manage to renew it in the Senate or implement other similar subsidies. Panel revenues rose 8.6% due to volume and prices increasing 5.2% and 3.3%, respectively. In the case of plywood, the lack of greater demand from competitors and the drop in customer stocks have helped to boost sales with successive price increases to recover losses in the first half of 29. Medium density fiberboard (MDF) sales rose compared to the previous quarter, driven by a more dynamic board market, above all in Latin America and led by Brazil that is the large driver in the region. Sawn lumber revenues dipped 1.9% due to volumes falling 3.9% and prices increasing 2.2%. There was a recovery in sawn lumber demand across all markets in the fourth quarter, especially in Asia. There was higher demand for packaging lumber from the Middle East, especially Saudi Arabia. However, forestry product sales and prices are still below the levels attained before the financial crisis. 29 versus 28 (accumulated). Arauco had net income of US$31 million in 29 against the US$4 million the previous year. This difference is essentially explained by a US$345 million drop in operating income amounting to US$319 million, partly offset by a more favorable exchange rate difference effect and capital losses purchased immediately. In operating terms, lower income is essentially explained by a drop in earnings across all the business lines. The pulp line fell 12.% due to lower average prices of 21.9%, which was partially offset by a 14.7% sales volume increase. The volume increase was partly due to the higher mill output. The price drop was because of market performance as of September 28, when there was a sharp drop in pulp demand worldwide as a result of the global slowdown, which however showed signs of change in the second half of 29. Panel revenues tumbled 11.9% due to prices falling 2.8%, partly offset by a 11.2% increase in volume. Sawn lumber revenues plunged 31.6% on account of volume and prices falling 22.3% and 12.%, respectively. The latter two businesses were hit by the slowdown of the real estate and construction sector in different markets. Production Q4 8 Q3 9 Q Pulp (th. of tons) Panels (th. of m 3 ) Sawn Timber (th. of m 3 ) 7

8 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 Copec Q49 versus Q48. The affiliate Compañía de Petróleos de Chile (Copec) had net income of Ch$1.85 billion in the fourth quarter of 29 against a loss of Ch$5.91 billion in the same period in 28. This is basically explained by higher operating income (EBIT) as lower margins were generated in the 28 period, partly due to the first in, first out (FIFO) costing system in a scenario of falling fuel prices. Physical fuel sales fell 9.5% because of the demand squeeze from electric power generating companies, which was partly offset by higher sales in the service station channel. Nonoperating income rose Ch$269 million. All this reduced the company s market share from 62.5% to 6.4%. EBITDA soared 571.1% amounting to Ch$2.951 billion. Q49 versus Q39. Net income in the quarter was Ch$1.824 billion down on the previous quarter. This difference is mainly explained by a lower operating income of Ch$9.729 billion due to lower demand in the industrial channel arising from a decline in economic activity and reduced supply to electric power generating companies, and lower unit margins. However, this was partially offset by higher sales in the dealer channel. There was also lower nonoperating income of Ch$2.157 billion because of reduced income from exchange rate differences. 29 versus 28 (accumulated). The affiliate Compañía de Petróleos de Chile (Copec) had net income of Ch$ billion against the Ch$ billion in 28. This is mainly explained by lower operating income (EBIT), which was partially offset by other nonoperating income increasing due to higher other earnings and lower financial expenses because of decreased debt. Operating income fell 14.3%, partly because of the accumulated effect of the costing of stocks in a period of fuel price decreases during part of 29. There were also lower physical fuel sales that dropped 9.8%. This was due to lower demand in the industrial channel, mainly from electric power generating companies, and a decline in economic activity because of the financial crisis. This was partly offset by the growth in the dealer channel, especially gasoline. All this led to market share dropping from 64.8% to 63.6%. COPEC Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9 / 8 Sales EBITDA EBIT Non operating income Net income 846,426 2, ,161 (734) 1,85 89, , ,889 1, ,628 1,24,826 3,122 (6,928) (1,3) (5,91) (29.7%) 571.1% (34.4%) (26.8%) (312.2%) 3,577,53 118, ,988 8, ,614 5,193,512 14, ,229 (6,117) 9 8,783 (31.1%) (15.4%) (14.3%) (242.7%) (1.3%) Fuel physical sales (thousand of m 3 ) Market share 2, % 2, % 2, % (9.5%) (2.1%) 9, % 1, % (9.8%) (1.2%) 8

9 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 ABASTIBLE Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9 / 8 Sales EBITDA EBIT Non operating income Net income 4 9,19 9,277 7, , ,82 1 4,47 1 1,969 1, ,92 5 6,981 4,777 3,313 1,44 4,55 (14.%) 94.2% 117.7% (45.%) 27.4% 29,41 4 8,37 3 8,214 4, , ,99 3 8, ,845 4, ,722 (2.4%) 26.7% 32.5% (6.2%) 27.7% LPG physical sales (thousand of m 3 ) Market share % % % (5.5%) (1.5%) % % (1.6%) (1.3%) Abastible (CONSOLIDATED) Q49 versus Q48. Abastible s net income surged 27.4% in the fourth quarter of 29 amounting to Ch$5.796 billion. This is explained by higher operating income that rose Ch$3.898 billion, due to higher unit margins. The company s EBITDA soared 94.2% amounting to Ch$9.277 billion. The company had sales of 84, tons of liquefied gas in the period, which was 5.5% down on sales in the fourth quarter of 28 and giving it a market share of 33.3%. Although deliveries increased in the bottled channel, bulk liquefied gas sales dropped due to lower demand from industrial customers. 29 versus 28 (accumulated). Abastible s net income rose 27.7% in 29 amounting to Ch$ billion, mainly explained by higher operating income (EBIT) of Ch$9.369 billion due to greater margins and a physical sales increase in the bottled channel. The company had sales of 392, tons of liquefied gas in the period, which was 1.6% down on the same period in 28 and giving it a market share of 33.6%. Although physical sales in the bottled channel increased, there was lower demand for bulk volume from industrial customers. Q49 versus Q39. Abastible s net income plunged 55.1% due to lower operating income of Ch$4.758 billion and nonoperating income dropping Ch$868 million. Operating income was largely driven by a 29.7% decrease in physical sales because of the seasonal factor of the winter months when household consumption rises. The EBITDA was 34.% down on that of the third quarter of 29. 9

10 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 PESQUERA IQUIQUEGUANAYE (IGEMAR CONSOLIDATED) Q49 versus Q48. Igemar had a net income loss of US$3.4 million in the fourth quarter of 29 against a loss of US$7.7 million in the same period in 28. The main difference was due to operating income increasing US$3.9 million because of higher fishmeal prices and greater physical sales of canned and frozen seafood. Nonoperating income rose US$1.8 million. Physical fishmeal sales amounted to 7,7 tons, which was a 4.1% drop on the previous year. Physical fish oil sales were 26.2% down on last year amounting to 2,6 tons and 233, boxes of canned seafood were sold, increasing 24.5% on 28. Production of frozen seafood started up at the new complex of Coronel in 28 with sales of 2,4 tons in the fourth quarter of 29. Catches were up 26.6% amounting to 19,8 tons. Q49 versus Q39. Net income in the quarter fell US$1.3 million from a loss of US$2. million in the previous quarter. This was driven by lower operating income, which dropped US$3.6 million because of lower physical sales of fishmeal, fish oil, canned and frozen seafood, and there were also lower catches in the south of Chile. Nonoperating income was up US$1.6 million. 29 versus 28 (accumulated). Igemar had a net income loss of US$2.9 million in 29 against a net income gain of US$.2 million in 28. Operating income (EBIT) increased but the related company Corpesca gave way to a lower nonoperating income. Operating earnings amounted to US$7.8 million against the US$1.8 million in 28. This increase was due to a higher gross margin because of increased sales of fishmeal, fish oil, and canned and frozen seafood. Lower costs, related to the drop in oil prices and higher catches, also had a bearing. Physical fishmeal sales were 13.8% up on the previous year amounting to 45,8 tons. Physical fish oil sales were 11,5 tons, a 19.5% increase on last year million boxes of canned seafood were sold, 29.% more than the previous year, and frozen product sales amounted to 12,4 tons. Catches reached 255, tons, which was a 5.5% increase. Fish landings in the center and south of Chile in 29 were 4.9% up on 28 amounting to 2.1 million tons. Landings in the north of Chile were 21.9% down on 28 and amounted to.7 million tons. The fishmeal market in 29 had steady sales price increases, which was exacerbated in the fourth quarter. The business volume was lower than that of the previous year. This situation was due to lower production than historical levels, which led to a drop in physical sales. The fishmeal market was generally very active, especially in the second quarter, with solid demand, especially from Asia and Northern Europe, which has logically put pressure on price increases because of a restrictive and uncertain global supply. Fishmeal prices are expected to rise in the next few months due to low physical stocks available for sale in the global market, related to large demand despite the record high trading prices for this product. There was a price recovery in the fish oil market compared to the first half of 29 but still with low levels in comparison to the prices of the previous year. In regard to fish oil with a high EPA and DHA content, prices remained stable in the year, with a large positive price difference on comparing them with fish oils that do not have this feature. IGEMAR CONSOLIDATED Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Acum 8 Var 9/ 8 Sales EBITDA EBIT Non operating income Net income (3.9) (3.4) (5.5) (2.) (3.9) (5.6) (7.7) 15.7% (43.3%) (1.3%) (31.3%) (56.1%) (1.3) (2.9) (2.3) % 12.9% 341.8% 355.5% (1.34.5%) Physical sales Fishmeal (tons) Fish oil (tons) Canned fish (cases) Frozen fish (tons) Catches (tons) 7,719 2, ,671 2,45 1 9, ,817 3, ,621 3, ,495 8,52 3, , ,7 (4.1%) (26.2%) 24.5% 827.5% (26.6%) 4 5, ,582 1,62, , ,697 4,32 9, ,777 3, , % 19.5% 29.% 22.2% 5.5% 1

11 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 Net income from other related companies Q4 9 Q3 9 Q4 8 Var Q4 9 / Q4 8 Accum 9 Accum 8 Var 9 / 8 Metrogas* Sonacol* Corpesca Guacolda Can Can Isla Riesco 3,388 3,497 (2.8) (.5).7 4,167 4,99 (6.8) (.7) (24,128) 3,172 (.8) (3.) 1.3 (1.4) (114.%) 1.2% 226.6% (674.6%) (138.5%) (151.1%) 1 5, ,866 (9.7) (1.1) (4,647) 1 5, (1.1) (138.3%) 9.2% (153.4%) 243.1% (52.9%) 2.1% *Figures in million of Chilean pesos OTHER AFFILIATES Sonacol Sonacol had net income of Ch$3.497 billion in the quarter, which was a 1.2% increase on the same quarter of the previous year. This was mainly due to higher operating and nonoperating income, and the latter was related to more favorable exchange rate differences and lower financial costs. OTHER RELATED COMPANIES Metrogas Metrogas had net income of Ch$3.388 billion in the fourth quarter of 29 compared with a loss of Ch$ billion in 28. Operating income rose Ch$19.57 billion due to a higher gross margin. The nonoperating income loss decreased on account of increased income because of readjustment units, related to the effect of a drop in the value of the UF on liabilities expressed in this unit and exchange rate differences. Metrogas has had supply from the liquefied natural gas (LNG) terminal at Quintero since September, which has enabled it to step up its gas supply to industrial customers and to reduce its supply costs. Corpesca The company posted a net income loss of US$$2.8 million in the fourth quarter of 29, which was down on the loss of US$.8 million in the same quarter of 28. Operating income fell US$3.7 million due to a drop in the volume and prices of fish oil and fishmeal. Guacolda Guacolda had net income of US$17.3 million in the fourth quarter of 29, which was up on the US$3. million in 28. Operating income amounted to US$26.8 million, which was a 51.7% increase on that in the fourth quarter of 28, driven in part by the additional energy sales related to the startup of unit 3. Nonoperating income rose because of better exchange rate differences and lower other losses. 11

12 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 CONSOLIDATED BALANCE SHEET ANALYSIS Consolidated current assets rose 25.3% for the period ended December 31, 29, compared with those for the period ended December 31, 28. The increase in cash and cash equivalents related to the cash generation of the company s own operation and securing loans mainly accounted for such increase, which mainly led to an increase in time deposits and mutual funds. This was partially offset by lower trade receivables and other receivables, related to lower sales levels and accounts receivable for current taxes. Noncurrent assets rose 13.6% for the period ended December 3, 29, against those at the 28 yearend. This increase was partly due to higher property, plant and equipment because of the investments made, and to the lower exchange rate effect on the figures of the fuels sector. There was also an increase in the valuation of biological assets, higher investments in related companies and other investments recorded in the accounts using the participation method, due to establishing a 12/31/9 12/31/8 Var 9/8 Current assets Noncurrent assets TOTAL ASSETS 3, ,639 15,58 3,145 1,249 13, % 13.6% 16.3% Short term financial debt Other current liabilities Long term financial debt Other noncurrent liabilities TOTAL LIABILITIES MINORITY INTEREST SHAREHOLDERS EQUITY ,167 1,621 6, , ,341 1,31 5, ,16 9.3% 6.1% 35.3% 23.7% 24.3% 4.5% 11.6% Leverage* Net financial debt ROCE**,28 2,48 4.8%,31 2,455 9.% (9.5%) 1.% (4.2%) * Leverage = Net financial debt / Shareholders Equity ** ROCE = Anualized EBIT / (Equity + Financial debt) 12

13 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 CASH FLOW STATEMENT ANALYSIS company in Uruguay jointly with Stora Enso to carry out the Montes del Plata project. There were also greater intangibles on account of the affiliate Arauco acquiring the Brazilian company Tafisa. Current liabilities rose 7.4%, mainly because of an increase in interestaccruing loans, in trade receivables and other liabilities and other trade accounts payable. Noncurrent liabilities were up 31.1%, mainly due to the higher longterm debt level because of the bond placement made by the parent company Empresas Copec S.A. and the affiliate Arauco in 29. The company s shareholders equity was 11.6% up on that in the period up to December 28, due to net income in the period amounting to US$576 million. There was an increase in other reserves of US$511 million, mainly because of the effect of the drop in the value of the US dollar on the book value of the shareholders equity of affiliates and related companies expressed in Chilean pesos in 29. The operating cash flow in 29 was 9.6% down on the previous year, basically due to the drop in sales and margins, partly offset by lower tax. Regarding the investment cash flow, the current period had a 53.2% increase in disbursements compared with the period up to December 28. This difference is essentially explained by the payment to purchase Tafisa in Brazil and the assets of the Ence group in Uruguay. The financing cash flow amounted to US$496 million against a disbursement of US$732 million in 28. This difference is explained by a higher net securing of loans and other financial assets this year, basically related to the affiliate Arauco and the parent company Empresas Copec. There was also a lower dividend payment disbursement. Debt maturities in US$ million 1, balance Cash flow statements 9dic 8dic Var 9/8 Cash flow from operations Cash flow from investment activities Cash flow from financing activities 1,188,296 (925,995) 495,716 1,314,672 (64,268) (732,334) (126,376) (321,727) 1,228,5 Net increase (decrease) in cash and cash equivalents 758,17 (21,93) 779,947 13

14 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 FINANCIAL STATEMENTS INCOME STATEMENT 9dic 8dic Var 9/8 Profit (loss of operations) Revenue Cost of sales Gross profit Other operating income Marketing costs Distribution costs Research & develpment Administrative expenses Other operating expenses Interest expenses Income on investments in related companies Income on investments in joint businesses Foreign exchange diferences Gain (Loss) for writeoff in noncurrent assets not held for sale Negative goodwill Other non operating income Income before taxes Income taxes Profit (loss) from continuing operations Profit (loss) from discontinued operations Net profit (loss) 9,941,513 (8,261,132) 1,68, ,437 (5,286) (478,436) (3,915) (539,816) (61,742) (25,635) 3 5,81 2,84 3 7,682 (9,298) 4 5,425 3,9 72,325 19, ,371 2,28 594,651 14,321,159 (12,24,323) 2,116,836 14,622 (56,96) (55,284) (3,827) (516,893) (45,617) (21,143) (9,676) 2,16 (132,712) (7,233) (993) 736, , , ,942 (3.6%) (32.3%) (2.6%) 53.2% (11.7%) (13.1%) 2.3% 4.4% 35.3% 2.2% (47.1%) (3.5%) (128.4%) 28.5% (3,211.8%) (4.6%) (11.7%) (3.2%) (2.8%) Attributable to: Equity holders of the company Minority interests net profit (loss) 576, , ,651 59, , ,942 (2.4%) (15.%) (2.8%) Earnings per share Common shares Basic profit (loss) per share Basic profit (loss) per share from discontinued operations Basic profit (loss) per share from continuing operations (2.4%) (2.4%) Diluted common shares Diluted profit (loss) per share Diluted profit (loss) per share from discontinued operations Diluted profit (loss) per share from continuing operations (2.4%) (2.4%) 14

15 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 FINANCIAL STATEMENTS INCOME STATEMENT (continuation) 9dic 8dic Var 9/8 Integral Income Statement Net Profit (loss) 594, ,942 (2.8%) Other income and expense recognized in equity Surplus (deficit) on revaluation of properties Gain (loss) on fair value changes of available for sale investments (1,334) 2 73 (588.6%) Gain on cash flow hedges 3,84 (15,322) (12.1%) Variation on fair value of Other Assets Convertion adjustments 56,717 (579,69) (196.7%) Associates adjustments Actuarial gains (losses) on defined benefit plans Other adjustments to equity (19,997) 2,73 (199.6%) Income tax related to other income and expense recognized in equity Other income and expense recognized in equity, Total 542,47 (574,585) (194.4%) Net income from integral income and expenses, Total 1,137,121 37,357 2,944.% Attributable to: Equity holders of the company Minority interests 1,117, ,623 6,625.1% Net income from integral income and expenses, Total 1 9,232 2,734 (7.2%) 1,137,121 37,357 2,944.% 15

16 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 FINANCIAL STATEMENTS BALANCE SHEET ASSETS 9dic 8dic Var 9/8 Current assets Current assets in operation Cash and cash equivalents Financial assets at fair value Financial assets available for trading Other current financial assets Accounts receivable Accounts receivable with related parties Inventories Biological assets Hedge assets Pledge assets Payments in advance Tax recoverable Other assets Current assets in operation, Total Noncurrent assets for sale Current assets, Total 1,267, , ,92,593 8,42 879,142 31,832 7,5 168,24 1 9,756 3,94,63 3,94,63 419, , ,142,41 8 7, ,553 35,73 8 3,56 193, ,327 3,145,377 3,145, % 13.% 31.5% (4.4%) (8.4%) 2.8% 1.7% (16.2%) (13.2%) 74.4% 25.3% 25.3% Noncurrent assets Noncurrent financial assets available for trading Other noncurrent financial assets Noncurrent accounts receivable Noncurrent accounts receivable with related parties Interest in associates Other interest Intangible assets Property, plant and equipment Noncurrent biological assets Investment properties Deferred tax assets Noncurrent pledged assets Noncurrent hedge assets Noncurrent payments in advance Pledged cash Other noncurrent assets Noncurrent assets, Total 1, , ,763 48, ,521 6,688,334 3,446, ,869 15,39 2 1,659 3,633 9,893 11,639, , , , ,717 5,95,137 3,346,73 6 9,773 12,581 7, , ,787 1,249, % (15.3%) 6.9% 25.5% 11.5% 668.7% 85.8% 12.4% 3.% 23.1% 24.4% 183.9% 22.7% (16.1%) 13.6% ASSETS, Total 15,579,621 13,394, % 16

17 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 FINANCIAL STATEMENTS BALANCE SHEET LIABILITIES 9dic 8dic Var 9/8 Current Liabilities Current liabilities in operation Short term financial debt Loans that do not generate interest Other financial assets Commercial creditors and other accounts payable Accounts payable to related parties Current provisions Tax liabilities Other current assets Current deferred income Retirement benefit obligations Hedge liabilities Accumulated liabilities Current liabilities in operation, Total Liabilities for sale Current liabilities, Total 632, , ,653 7,539 9, , ,73 2,218 6,188 9,22 1,584,17 1,584,17 578, , ,865 8,561 6, , ,965 3,24 3,882 6,89 1,475,445 1,475, % (2.8%) 3.4% (11.9%) 52.4% 121.2% 11.4% (31.5%) 59.4% 35.4% 7.4% 7.4% Noncurrent liabilities Long term financial debt Loans that do not generate interest Other noncurrent financial liabilities Noncurrent commercial creditors and other accounts payable Noncurrent accounts payable to related parties Noncurrent provisions Deferred tax liabilities Other noncurrent liabilities Deferred income Retirement benefit obligations Hedge liabilities Noncurrent liabilities, Total 3,166, ,521 1,417, , ,852 4,787,21 2,341, ,967 1,216, , ,639 3,651, % 1.% 32.6% 16.6% 239.5% 23.3% 32.5% 31.1% Net equity Equity attributable to equity holders of the company Share capital Treasury shares Other reserves Accumulated earnings (losses) Equity attributable to equity holders of the company Minority interest Total net equity 686, ,87 7,621,923 8,944, ,46 9,28,25 686, ,16 7,234,475 8,15, ,33 8,267,728.% 569.6% 5.4% 11.6% 4.5% 11.4% NET EQUITY AND LIABILITIES, TOTAL 15,579,621 13,394, % 17

18 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 FINANCIAL STATEMENTS CASH FLOW STATEMENT DIRECT 9dic 8dic Var 9/8 CASH FLOW STATEMENT Net cash flow from operating activities, direct method Cash flow from operating activities, direct method Receipts from customers Disbursements in research and development Payment to suppliers Salaries paid Disbursement for restructuring Payments Received and disbursed on VAT Other charges Cash flow from operating activities, total Cash flow from other operating activities Dividends received Dividends paid Interest received Interest paid Recovered taxes Taxes paid Other inflows from other operating activities Cash flow from other operating activities, Total Net cash flow from operating activities Net Cash flow from investment activities Proceeds on disposal of property, plant and equipment Proceeds on disposal of intangible assets Proceeds on disposal of investment properties Proceeds on disposal of biological assets Proceeds on disposal of subsidiaries Proceeds on disposal of associates Proceeds on disposal of consolidated joint businesses Proceeds on disposal of nonconsolidated joint businesses Proceeds on disposal of other financial assets Proceeds on disposal of noncurrent assets for sale and discontinued operations Proceeds on disposal of other assets Reimbursement of loans paid in advance Other cash flow from investment activities Proceeds from dividends Proceeds from interest received Incorporation of property, plant and equipment Payments in the acquisition of investment properties Payments in the acquisition of intangible assets Payments in the acquisition of biological assets Payments in the acquisition of subsidiaries Payments in the acquisition of associates Payments in the acquisition of joint businesses Loans granted to associates Loans granted to not related entities Payments in the acquisition of other financial assets Payments in the acquisition of noncurrent assets, assets for sale and discontinued operations 11,965,777 (3,915) (1,485,129) (315,289) 9 9, ,665 1,277, ,88 2 6,822 (159,4) 12,378 (85,13) 2 5 (89,641) 1,188,296 5,64 2, , ,774 (431,814) (1,378) (92,2) (174,111) (5,75) (145,724) (66,735) 16,439,997 (3,827) (14,612,244) (268,178) 5 7,59 (26,74) 1,586, ,43 3,876 (167,42) 4 3,228 (26,968) (18) (271,962) 1,314,672 5,878 2, ,68 (424,9) (1,279) (146,359) (17,542) (4,56) (27.2%) 2.3% (28.2%) 17.6% 73.3% (162.4%) (19.5%) (11.8%) (13.1%) (5.%) 136.8% (58.9%) (289.8%) (67.%) (9.6%) (4.7%) (2.5%) (73.7%) 15.9% 1.6% 7.7% (37.1%) (67.2%) 1,363.5% 18

19 FOURTH QUARTER 29 RESULTS PRESS RELEASE, MARCH 25, 21 FINANCIAL STATEMENTS CASH FLOW STATEMENT DIRECT (continuation) 9dic 8dic Var 9/8 ESTADO DE FLUJO DE EFECTIVO Other investment disbursements Net cash flow from investment activities Net cash flow from financing activities Proceeds from issuance of ordinary shares Proceeds from treasury shares Proceeds from borrowings Proceeds from issuance of other financial liabilities Proceeds from leasing Loans from related parties Proceeds from other sources of financing Acquisition of treasury shares Loans payments Reimbursements from other financial liabilities Reimbursements from liabilities from financial lease Loans payments to related parties Interest payments Dividends paid to minority interests Dividends paid to shareholders Other cash flow from financing activities Net cash flow from financing activities Net Increase (Decrease) in cash and cash equivalents Effects of variations in the exchange rate over cash and cash equivalents Effects of changes in consolidation over cash and cash equivalents Cash and cash equivalents, cash flow, initial balance Cash and cash equivalents, cash flow, final balance (39,53) (925,995) 5 1,152,65 926,886 (1,349,97) (2,843) (2,981) (189,368) (21,176) 495, ,17 9 6,262 (5,812) 419,23 1,267,697 (26,446) (64,268) 9 1,73,79 22, (2,243,769) (1,194) (1,591) (19,639) (425,61) 2 6,29 (732,334) (21,93) (62,74) (21,456) 525,32 419, % 53.2% 5,455.6% (33.4%) 357.6% (1.%) (39.8%) (1.%) 78.7% 6.8% (55.4%) (18.8%) (167.7%) (3,556.5%) (253.5%) (72.9%) (2.2%) 22.4% 19