ENERSIS. A unique and sound diversified portfolio in Distribution and Generation of electricity

Transcription

1 ENERSIS A unique and sound diversified portfolio in Distribution and Generation of electricity

2 Our main shareholders 60.6% Chilean pension funds 17.3% Other institutional shareholders 6.9% ADR s 10.3% ENERSIS Retail Shareholders 4.8% March, 2006 Pag. 2

3 We operate in the largest economies of Latam Colombia Var. GDP 2005: 4.7% Var. GDP 2006 (e): 4.3% Population: 46 million Electricity demand Increase in 2005: 4.5% Peru Var. GDP 2005: 6.1% Var. GDP 2006 (e): 4.9% Population: 28 million Electricity demand increase in 2005: 6.6% Chile Var. GDP 2005: 6.3% Var. GDP 2006 (e): 5.5% Population: 16 million Electricity demand increase in 2005: 4.7% Brazil Var. GDP 2005: 2.5% Var. GDP 2006 (e): 3.4% Population: 181 million Electricity demand increase in 2005: 7.2% Argentina Var. GDP 2005: 8.9% Var. GDP 2006 (e): 6.2% Population: 39 million Electricity demand Increase in 2005: 5.2% Sources: Consensus Forecast & Chilean Central Bank Pag. 3

4 US$ 10.5 billion in Distribution assets 2.1 million clients Bogota 61 Substations 196 Transformers 39,358 Km Medium and Low Voltage Lines 14,087 Kms2 concession area 0.9 million clients Lima 32 Substations 65 Transformers 19,977 Km Medium and Low Voltage Lines 2,440 Kms 2 concession area 1.4 million clients Santiago 53 Substations 137 Transformers 13,855 Km Medium and Low Voltage Lines 2,118 Kms 2 concession area 4.7 million clients Rio de Janeiro, Fortaleza 205 Substations 368 Transformers 133,790 Km Medium and Low Voltage Lines 181,013 Kms 2 concession area 2.1 million clients Buenos Aires 63 Substations 163 Transformers 22,155 Medium and Low Voltage Lines 3,309 Kms 2 concession area More than 202,000 Km2 coverage Pag. 4

5 Key drivers in Distribution Current average per capita electricity consumption equivalent to 1/5 of developed countries Annual demand growth in the range of 6% to 7% Operating income stability tied to full pass-through cost of electricity Guaranteed returns on investments High natural entry barriers Pag. 5

6 Key considerations in Distribution Tariff setting process risks Highly dense concession areas with stable growth Room for related commercial activities Experience in managing large scale business Government support for higher efficiency Pag. 6

7 Our specific goals in Distribution Bogotá Reduce energy losses Maintain liquidity Economic and political stability > Operating Margin Rio de Janeiro Fortaleza Reduce energy losses Increase in payments Control level of energy losses > Operating Margin Lima Stable Tariff Increase in demand Maintain low level of energy losses > Operating Income Santiago Maintain operational efficiency Increase services Satisfied increase of demand > Operating Income Buenos Aires Tariff Increase New Regulatory framework Reduce energy losses > Reduced uncertainty Pag. 7

8 US$ 9.5 billion in Generation assets 20% Installed Cap. Colombia 10 Hydro Plants 1 Thermo Plant 22% Installed Cap. Peru 67% of hydrocapacity 33% of thermocapacity 1% Installed Cap. Brazil 1 Hydro Plant 1 Thermo Plant 7 Hydro Plants 1 Thermo Plant 37% Installed Cap. Chile 14 Hydro Plants 8 Thermo Plants 16% Installed Cap. Argentina 2 Hydro Plants 3 Thermo Plants Pag. 8

9 Key drivers in Generation New, big industrial and mining projects under development New, long term signal for prices Higher commercial economic activity in the region New, more realistic prices, improved margins New investments in a better scenario Pag. 9

10 Key considerations in Generation Latam needs important additional capacity to support its long term growth Market rules to set prices Operating efficiencies Balanced mix of generation assets Prudent and flexible commercial policies Pag. 10

11 Our opportunities in Generation Colombia Increase interconnection with Ecuador Flexible commercial policy Stable prices Brazil Growing demand Energy auctions L/T Investments in Endesa Brasil Peru Merger Edegel - Etevensa Good hydrological conditions Better use of the plants Chile New investments in the SIC Increase in demand Good market prices Argentina Stabilization of natural gas sector FONINVEMEM Project Pag. 11

12 Our finances Positive and stable cash flow Responsible financial management Investment grade by S&P and Fitch, and recent improvement by Moody's Pag. 12

13 Our investments results Increase 24%* 1Q02 1Q06 Increase 75%* 1Q02 1Q06 US$Million US$Million (**) - 1Q02 1Q03 1Q04 1Q05 1Q Q02 1Q03 1Q04 1Q05 1Q06 Operating Income Net Income (*) CAGR: compounded average growth rate (**) Includes US$ 204 million one time effect due to the merger of Chilectra and Elesur Pag. 13

14 Operating results (US$ million)* Op. Revenues Op. Costs (416) (598) Op. Margin 1Q02 1Q03 1Q04 1Q ,097 1,361 (769) (945) (%) 34% 30% 30% 31% 1Q06 1,760 (1,151) % Op. Income US$ Million CAGR 22,7% (2002 1Q06) CAGR 24,7% (2002 1Q06) - 1Q02 1Q03 1Q04 1Q05 1Q06 (*) According to consolidated financial statements, in nominal US$ as of each period Pag. 14

15 Important growth in our cash position US$ million * 1Q 05 1Q 06 80% Increase in FCF** (146) (111) (113) (98) (212) EBITDA Net Int. Expense Maintenance Capex Taxes Free Cash Flow (*) Exchange rate as of March 2006; (**) Free Cash Flow Pag. 15

16 Debt structure, ENI and EOC (Third Parties) Other Dx Co s Other Gx Co s EOC * ENI * EOC Parent Company Debt Banks 312 Yankee Bonds 1,866 Local Bonds 548 Total (US$ Million) 2,726 ENI Parent Company Debt Banks 65 Yankee Bonds 1,083 Local Bonds 67 Total (US$ Million) 1,215 * Parent Company, and all figures as of March 31, 2006 Pag. 16

17 Debt, by currency and maturity (Third Parties) Financial debt by currency Mar % 48% 23% US$ UF - Ch$ Other Financial debt maturity, US$ 6,894 million (consolidated) US$ Millions 3,000 2,000 1,000 1, , , Balance All figures as of March 2006 Pag. 16

18 Solid financial management US$ 3 billion debt decrease Low interest rate risk * US$ billion US$ billion ,049 6,867 5, % 3% 78% 7% 7% 86% Forecast Enersis Endesa Chile Fixed Covered Variable * March 2006 Pag. 17

19 Improved financial ratios (*) Times Million. of Ch$ 7,000 6,500 6, Q06 5,500 5,000 4,500 4,000 3,500 3,000 Fin. Debt/EBITDA EBITDA/Interest Expenses Fin. Debt (*) Figures calculated on a TTM basis Pag. 18

20 Sound and responsible use of our FCF Free Cash Flow Available Resources New Investments Debt Reduction Dividends Pag. 19

21 Forecasted maintenance capex ( ) US$ million Generation Distribution Others Total Chile Peru Argentina Brazil 80 1, ,396 Colombia Total 510 2, ,274 Pag. 20

22 New investments CHILE San Isidro II Plant : 377 MW of installed capacity (LNG). Total investment: US$200 million. Palmucho: 32 MW of installed capacity (Run of the river plant). Total investment: US$32 million. Aysén: 2,355 MW of installed capacity (4 Hydro plants). Total: US$2,400 million. Energy auctions in Chilectra for long term contracts BRAZIL Endesa Brasil: Energy auctions, IPO, new investments. COLOMBIA Termocartagena: 203 MW of installed capacity (Natural Gas). Total investment: US$17 million Pag. 21

23 Improved risk rating classification Standard & Poor s Fitch Moody s Increase the outlook from stable to positive Increase the classification from BB+ to BBB- Classification upgraded from BBB- to BBB with outlook stable Increase the outlook from stable to positive Increase the classification from Ba2 to Ba1 Pag. 22

24 Equity market response Market Cap increased more than 10 times in the last 4 years 2006 (July) US$ 7,379 million 2004 US$ 5,557 million 2002 US$ 678 million 2003 US$ 4,475 million CAGR*: 122% *CAGR: compounded average growth rate Pag. 23

25 We are one of the most liquid stocks in Latam Million Ch$ 2,000,000 1,600,000 1,200, Transactions in Chile [BCS] 800, ,000 0 Enersis Cencosud D&S Endesa Copec Cervezas LAN Colbún SQM Million US$ 3,000 2, Transactions in USA [NYSE] 2,000 1,500 1, Madeco Andina CCU Endesa LAN SQM Santander Enersis Pag. 24

26 Quarterly debt spreads evolution Basis Points Lowest level in the last 3 years Jun-03 Sep-03 Dic- 03 Mar- 04 Jun- 04 Sep- 04 Dic-04 Mar- 05 Jun- 05 Sep-05 Dic- 05 Mar-06 ENI Bonds due 2016 vs. US Treasury 10 Year Notes Source: Bloomberg Pag. 25

27 Our investments Strategically located in the five largest economies of the region, and serving the best concession areas Carried out only in our core businesses, that is distribution and generation of electricity Permanently expected to improve their margins, results, while diminishing their risks Must contribute to the overall corporate goal of maximizing value for our shareholders Pag. 27

28 Market P/EBITDA ratio Times (x) INDICE PRECIOS SELECTIVO ACCIONES (IPSA) DOW JONES INDUSTRIAL AVERAGE (INDU) FTSE UTILITIES INDEX (FTUTIL) BLOOMBERG WORLD UTILITIES (BWUTIL) AMEX UTILITIES SELECTED INDEX (IXU) DOW JONES UTILITIES AVERAGE (UTIL) ENERSIS SA Under current scenario, EBITDA should continue growing Source: Bloomberg Pag. 28

29 Our commitment as a leader is to maintain The quality of service and safety standards An outperforming stock The best and timely information to the market Social and environmental responsibility Pag. 29

30 So, why Enersis? Our investment Real, productive and well located essential assets Benefiting from a continuous growth Our finances Solid, due to a responsible and efficient financial management Our expectations Based on a proven expertise Medium term business plan based upon reasonable assumptions Future investments expected to increase ROA and ROE Pag. 30

31 Investor Relations Team of Enersis Susana Rey Head of Investor Relations 56 (2) Cristian Palacios Investor Relations Representative 56 (2) Marcela Muñoz Investor Relations Representative 56 (2) Ignacio Gonzalez Investor Relations Representative 56 (2) Carmen Poblete Investor Relations Representative 56 (2) Mariluz Muñoz Investor Relations Assistant 56 (2) This presentation contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements appear in a number of places in this announcement and include statements regarding the intent, belief or current expectations of Enersis and its management with respect to, among other things: (1) Enersis business plans; (2) Enersis cost-reduction plans; (3) trends affecting Enersis financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (4) supervision and regulation of the electricity sector in Chile or elsewhere; and (5) the future effect of any changes in the laws and regulations applicable to Enersis or its affiliates. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets of the United States or Chile, an increase in the market rates of interest in the United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Enersis Annual Report on Form 20-F. Readers are cautioned not to place undue reliance on those forward-looking statements, which state only as of their dates. Enersis undertakes no obligation to release publicly the result of any revisions to these forward-looking statements.