Endesa Chile. Investor Relations Presentation. November 2007

Transcription

1 Endesa Chile Investor Relations Presentation November

2 Agenda 1. Who we are 2. Company s Environment 3. Financial Aspects 4. Strategic Aspects and Projects 5. Social Commitment 2

3 Our Business and Shareholders Endesa Chile is one of the largest electricity generators in Latin America, and operates in four other countries: Colombia, Peru, Argentina and Brazil*. Other Inst. Investors; 11.1% Retail; 4.3% ADRs; 4.3% Market Cap at Oct. 22, 2007 US$ 12.6 billion Pension Funds; 20.3% Enersis; 60.0% As of Sept * Equity investment, responsible for operations. 3

4 Simplified Ownership Structure ENDESA GENERATION Other Businesses CHILE ARGENTINA COLOMBIA PERÚ Ingendesa 100% Pehuenche 92,65% Pangue Costanera 69,76% El Chocón Emgesa 28,91% 1 Edegel 33,06% Enigesa 99,96% 94,99% Celta 100,00% 64,67% Affiliates Túnel El Melón 99,99% San Isidro 100,00% HidroAysen Electrogas Gas Atacama CEMSA ENDESA BRASIL Endesa Eco 51,0% 42,50% 50,00% 45,00% 33,6% 2 100,00% (1) During September 2007, Betania and Emgesa merged. (2) Considers the exercise of convertible bonds of Ampla estimated by year

5 Endesa Brasil 28.5% 22.1% 9.0% 33.6% 2.7% Endesa Brasil 100% 100% 99.6% 91.9% 58.9% 5

6 Installed Capacity per Country COLOMBIA 2,829 MW 21% Installed Cap. 11 Plants TOTAL CONSOLIDATED: 12,624 MW 48 Plants Thermo 37% Hydro 63% PERU 1,431 MW 30% Installed Cap. 9 Plants (33.6%) Endesa Brasil Equity Affiliate Gx: 980 MW (2 plants) Dx: 5.0 m Clients Tx: 2,100 MW CHILE 4,725 MW 37% Installed Cap. 23 Plants ARGENTINA 3,639 MW 15% Installed Cap. 5 Plants Figures as of September

7 Agenda 1. Who we are 2. Company s Environment 3. Financial Aspects 4. Strategic Aspects and Projects 5. Social Commitment 7

8 Energy Demand in the Region Base 1993 = 100% jun-07 sep-07 PERU CHILE ARGENTINA BRAZIL COLOMBIA Demand growth during 3Q7 vs. 3Q06: Chile 5.1% Argentina 6.0% Brazil 4.7% Peru 10.5% Colombia 4.3% Increasing demand in all five countries in which we operate Lack of investments necessary to face the increase in demand Regional scenario of pressure for an increase in energy prices 8

9 Commercial Policy 100% 90% 28% 35% 35% 80% 70% 16% 60% 50% 25% 29% Spot Un-regulated 40% Regulated 30% 20% 56% 40% 36% 10% 0% Key strategic instrument for adding value to our portfolio Optimizes our commercial portfolio Reduces risks associated with overexposing our capacity 9

10 Agenda 1. Who we are 2. Company s Environment 3. Financial Aspects 4. Strategic Aspects and Projects 5. Social Commitment 10

11 Endesa Chile Consolidated results (US$ million) Dec 2006 Sept 2006 Revenues 2,746 2,039 Operating Costs 1,629 1,214 Operating Result 1, Sept 2007 % 2, % 1, % 744 (3.1%) Mostly explained by higher thermal generation in Chile, using diesel instead of natural gas. Fuel costs increased US$305 m and represented 91% of total increase of operating costs in Chile. EBITDA Non-operating Result Net income Physical Sales (GWh) 1,398 (255) 389 1,038 (145) 293 1,029 (279) 241 (0.9%) 93.0% (17.7%) 56,942 42,294 41,163 (2.7%) Total Assets 10,854 10,425 10, % Mainly affected by Technical Bulletin N 64, rule required by Chilean GAAP. As of Sep07, this jump was due to the 9.6% appreciation of the Colombian Peso against the USD, negatively affecting non-operating result in approx. US$ 82 under this concept. Figures expressed in real terms as of September

12 EBITDA Distributed by Country EBITDA September 2007 EBITDA per Country (US$ million) Peru 12% Chile 52% Sept 2006 Sept 2007 % Colombia 27% Chile (7.3%) Argentina (10.4%) Colombia % Peru (0.8%) Total 1,038 1,029 (0.9%) Argentina 9% The increase of the EBITDA coming from Colombia is explained by the higher physical sales, the new reliability charge and the appreciation of the Colombian Peso, favoring operating result in US Dollar terms. Figures expressed in real terms 12

13 Consolidated Financial Debt US$ Million Financial Debt Evolution 5,950 4,920 4, ,087 4,124 3,859 3,904 4,117 Financial Debt by Currency US$ 64% UF - Ch$ 14% Local Currencies 22% Sep-2007 Figures as of Sept 30, 2007 and in Historical Dollars 13

14 Financial Ratios US$ Millions ,67 4,25 4,0 3,5 3,6 3,1 3,1 3,1 2, ,0 2, Times Figures expressed in historical US$. Figures as of Sept-07 are TTM sep-07 EBITDA Financial Expenses 0 Financial Debt/EBITDA Coverage Consolidated debt decreased by US$ 470 million since The merger between Edegel and Etevensa in June 2006 implied recognizing debt of US$ 147 million. Average life of our debt has increased by 1.4 years, from 5.1 to 6.5 years (Dic-02 / Jun-07). On July 3 rd of this year, S&P upgraded Endesa Chile s international rating from BBB- to BBB. On July 6 th, Feller Rate improved our risk classification of Local Bonds from A+ to AA-. On July 19 th, Fitch Ratings upgraded our local rating of Local Bonds from A+ to AA-. 14

15 Endesa Chile Consolidated Debt Maturity Chile Total Financial Debt: US$ 2,609 million Argentina Total Financial Debt: US$ 314 million Peru Total Financial Debt: US$ 463 million Colombia Total Financial Debt: US$ 733 million * Balance *It considers Put Option of Yankee Bond (US$ 220 million) that matures in Balance Figures as of September 28th,

16 Consolidated Highlights Increasing operating performance throughout the years Highly competitive generation assets (63% hydro) Stable growth (rising energy consumption) Investment opportunities 41% 26% 33% Physical Sales Mix As of September 2007 Regulated Un-regulated Spot 63% Hydro 65% 37% 35% Capacity mix Thermal Generation mix Financial Info Energy Sales & Average Sale Price Gigawatt Hours , , , , ,942 55, (US$/MWh) 55.7 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Sept-07 September 07 figures in this graph are expressed in TTM. (US$ million) Sept-2006 Sept-2007 % Var. Operating Revenues 2,039 2,451 20% Operating Income % Financial Debt 3,996 4,117 3% EBITDA 1,038 1,029-1% Figures expressed in real terms, except Financial Debt figures (historical terms)

17 Chile Growing electricity demand (5.1% in SIC and 7.2% in SING as of September 2007 vs. September 2006) Increasing prices reflect real costs of the system Increasing costs due to poor hydrological conditions during 2007 and lack of natural gas from Argentina use of fuel oil in thermal units Assure the supply in the medium and long-term Hydro energy Chile s potential source Other fossil energy under development Strengthen renewable energy (wind and mini-hydro) 17

18 Chile Highlights 88% of total energy sold is contracted (88% SIC, 95% SING) Average spot price increased by 127% as of September 2007 vs. September 2006 Short Law II Energy Auctions for Endesa: 6,400 GWh per annum Average price of US$ / MWh from 2010 through 2022 Second auction took place in October % 28% 12% As of September 2007 Regulated Un-regulated Spot 72% Hydro 69% Thermal 28% 31% Financial Info Energy Sales & Average Sale Price Gigawatt Hours ,344 18, , , , (US$/MWh) 19, Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Sept-07 September 07 figures in this graph are expressed in TTM. (US$ million) Sept-2006 Sept-2007 % Var. Operating Revenues 1,007 1,287 28% Operating Income % Financial Debt 2,501 2,609 4% EBITDA % Physical Sales Mix Capacity mix Generation mix Figures expressed in real terms, except Financial Debt figures (historical terms) 18

19 Argentina Increasing energy demand (6.0% as of September 2007 vs. September 2006) Increasing costs due to poor hydrological conditions during 2007 and lack of natural gas use of fuel oil in thermal units No studies for new investments tight electricity market 1,600 MW FONINVEMEM under construction (Endesa Chile with 21% equity) 19

20 Argentina Highlights Over 25% increase in average spot prices and 48% in average monomic price as of September 2007 vs. September 2006 recognition of higher natural gas prices for industrial users Costanera and El Chocón sell nearly 88% and 69% of its energy to the spot market, respectively We consider our operations in Argentina to be low leveraged 19% 81% Physical Sales Mix As of September 2007 Un-re gulated Spot 36% 34% 64% 66% Capacity mix Hydro Thermal Generation mix Financial Info Energy Sales & Average Sale Price Gigawatt Hours ,897 9, ,603 12, , (US$/MWh) 12, Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Sept-07 September 07 figures in this graph are expressed in TTM. (US$ million) Sept-2006 Sept-2007 % Var. Operating Revenues % Operating Income % Financial Debt % EBITDA % Figures expressed in real terms, except Financial Debt figures (historical terms)

21 Colombia Energy demand growth (4.3% as of September 2007 vs. September 2006) Merger between Emgesa and Betania Synergies Transparent and efficient cash flows to Endesa Leading player in the market Stable electricity framework (free electricity trade) 21

22 Colombia Highlights 66% of total energy sold is contracted, 34% sold to the spot market Chilean Peso appreciation as of September 2007 mitigated Colombian Peso appreciation effect especially in non-operational result Average spot prices increased by 42% as of September 2007 vs. September 2006 Reliability charge: positive for Emgesa 50% 16% 34% Physical Sales Mix As of September 2007 Regulated Un-regulated Spot 87% 13% Capacity mix Hydro Thermal 96% 4% Generation mix Financial Info Gigawatt Hours Energy Sales & Average Sale Price ,639 14,481 15,148 15, ,327 15, (US$/MWh) Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Sept-07 September 07 figures in this graph are expressed in TTM. (US$ million) Sept-2006 Sept-2007 % Var. Operating Revenues % Operating Income % Financial Debt % EBITDA % Figures expressed in real terms, except Financial Debt figures (historical terms)

23 Peru Perú High increase in energy demand (10.5% as of September 2007 vs. September 2006) Low prices of natural gas from CAMISEA Improved capacity mix due to merger between Edegel and Etevensa (thermal plant) Cost savings thanks to conversion of Santa Rosa plant to natural gas (since July 2006) 23

24 Peru Highlights 93% of energy sold is contracted Average spot prices at US$40.47/MWh as of September 2007, dropping 13% compared to September 2006 Bidding Process (Law 28,832) Edegel obtained 48% of total energy bidded Average price at US$ /MWh from 2007 (119 Gwh /annum) through 2011 (3,488 Gwh /annum ) 41% 52% 7% Physical Sales Mix As of September 2007 Regulated Un-regulated Spot 52% Hydro 59% 48% 41% Capacity mix Thermal Generation mix Financial Info 24 Energy Sales & Average Sale Price Gigawatt Hours ,328 4,158 4,443 4, ,776 (US$/MWh) 7, Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Sept-07 September 07 figures in this graph are expressed in TTM. (US$ million) Sept-2006 Sept-2007 % Var. Operating Revenues % Operating Income % Financial Debt % EBITDA % Figures expressed in real terms, except Financial Debt figures (historical terms)

25 Agenda 1. Who we are 2. Company s Environment 3. Financial Aspects 4. Strategic Aspects and Projects 5. Social Commitment 25

26 Strategic Aspects of the Company Assure the supply of electricity to operating markets Maintain market share in Chile and evaluate opportunities in the countries in which we participate Take advantage of profitable business opportunities Neutralize high-risk scenarios Strategies to optimize existing assets Collaborate with regulators Participation in renewable energy market and CO2 bonds Permanent search for value added 26

27 Endesa Chile Strengths & Opportunities Region Growing Economic stability Growing demand Signs in changing regulation Endesa in good shape Investment Opportunities Attractive portfolio: assets strategically located in areas with diversified hydrological conditions highly efficient generation assets Diversified energy resources (water, gas, LNG, coal, diesel) Flexible commercial policy Financial results improving Know-how and vast experience 27

28 Projects under Development San Isidro II April 2007: 250 MW OC; diesel Dec-2007: 350 MW CC diesel Jul-2009: 377 MW CC LNG US$ 229 m Palmucho 32 MW hydro plant US$ 45 m Start-up: Oct Ojos de Agua 9 MW mini-hydro US$ 20 m Start-up: March 2008 Taltal Conversion of U1-120 MW for diesel/gas US$ 6 m Start up: March 2008 LNG Plant 9 million m3 of capacity US$ 940 m Start-up: mid 2009 Bocamina II 350 MW Coal plant US$ 620 m Start-up: Jul-2010 Canela 18 MW wind farm US$ 31m Start-up: November 2007 Quintero 240 MW OC diesel US$ 128 m Start up: Q Santa Rosa Open Cycle - Peru 190 MW Natural Gas plant US$ 100 m Start-up: 1Q

29 Projects under Study Canela III - Chile 59.4 MW wind farm US$ 128 m (SIC link incl) Start-up: 2009 Aysen Project - Chile 2,750 MW hydro plant Investment under study. Start-up: Quimbo - Colombia 400 MW hydro plant US$ 598 m Start up: 2014 Cartagena - Colombia 202 MW coal/gas plant US$ 67 m Start up: 2009 (with coal) Piruquina - Chile 8 MW mini-hydro plant US$ 22 m Start-up: 2010 Los Cóndores - Chile 150 MW hydro plant US$ 181 m Start-up: early 2012 Neltume - Chile 403 MW hydro plant US$ 390 m Start-up: mid 2012 Termozipa - Colombia 150 MW coal plant US$ 286 m Start-up: between 2014 and 2015 El Portón - Chile 320 MW hydro plant Investment under study Start-up: after 2016 La Naveta - Colombia 3.6 MW hydro plant US$ 6 m Start up: 2010 Choshuenco - Chile 134 MW hydro plant US$ 190 m (SIC link incl) Start-up: 2012 Steffen - Chile 365 MW hydro plant Investment under study Start-up: after

30 FONINVEMEM Project (Argentina) Authority s response to high energy demand in the country Two new combined cycles: 1,600 MW Costanera is managing the construction of both plants; it will also manage the operation and maintenance of one of the plants for a 10-year period. Costanera and El Chocon s participation in the property of these two power plants would be 15.35% and 5.51%, respectively. Approximately US$ 130 million has been invested by Costanera and El Chocon. Financed by MEM account receivables Expected date of completion: Open cycle: Early 2008 Combined cycle: 1Q

31 Agenda 1. Who we are 2. Company s Environment 3. Financial Aspects 4. Strategic Aspects and Projects 5. Social Commitment 31

32 Environment and Corporate Social Responsibility As of December 2006, 95.3% of our installed capacity has been certified under ISO standards. As of the same date, 96% of our installed capacity has been certified under OHSAS standards. For the fourth consecutive year, Endesa Chile has been evaluated and selected to form part of the Dow Jones Sustainability Indexes. 32

33 Conclusions Multinational private electricity generator with leading market positions in most countries where we operate. Efficient assets distributed within South America Portfolio of projects add value to Endesa Chile Company s excellent reputation within the electricity industry high level of technical standards. Through its vast experience, the company has gained the confidence of investors and authorities. Commitment with regulatory authorities Commitment with the environment Corporate governance best practices Solid balance sheet and stable cash flow to face upcoming challenges 33

34 Endesa Chile s Investor Relations Team Jaime Montero Investor Relations Director Endesa Chile (56-2) jfmv@endesa.cl Irene Aguiló Investor Relations Executive (56-2) iaguilo@endesa.cl Juan Pablo Reitze Head of Investor Relations (56-2) jprv@endesa.cl Jacqueline Michael Investor Relations Executive (56-2) jmc@endesa.cl Contact us at: ir@endesa.cl This presentation may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These statements may appear in a number of places in this announcement and include statements regarding the intent, belief or current expectations of Endesa Chile and management with respect to, among other issues: (1)Endesa Chile business and cost-reduction plans; (2) trends affecting Endesa Chile financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (3) supervision and regulation of the electricity sector in Chile or elsewhere; and (4) the future effects of any changes in the laws and regulations applicable to Endesa Chile and 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. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their dates. Endesa Chile undertakes no obligation to release the results of any revisions to these forward-looking statements. 34