Conference Call Presentation 3 rd Quarter

Transcription

1 Conference Call Presentation 3 rd Quarter November 30, 2012

2 Disclaimer This presentation may include market outlooks and forward-looking statements, which are based on the beliefs and assumptions of Empresas Copec s management and on information currently available to the Company. They involve risks, uncertainties and assumptions because they relate to future events and therefore depend on circumstances that may or may not occur in the future. Investors should understand that general economic conditions, industry conditions and other operating factors could also affect the future results of Empresas Copec and could cause results to differ materially from those expressed in such forward-looking statements. This presentation contains certain performance measures that have been adjusted with respect to IFRS definitions, such as EBITDA. 2

3 Agenda Financial Review 4 Review by Business Division 10 Highlights of the Quarter 27 Q & A 32 3

4 Financial Review: Quarterly Performance Quarterly Net Income (Million US$) Q12 includes a non-recurring negative effect of US$168 million related to the increase in income tax rate in Chile 7 IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III Quarterly EBITDA (Million US$) IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III * Figures under IFRS since 1Q 08 4

5 Financial Review: Performance Net Income (Million US$) ,8% Y o Y net income changes by company 3Q 12 net income composition Lower results explained by the negative non-recurring effect of US$168 million related to a higher income tax rate in Chile Net income decreased in Arauco as a consequence of the effect of higher income tax rate and lower operating result Copec s net income increased 20.1% partly because of higher margins 5

6 Financial Review: Performance EBITDA (Million US$) % Y o Y EBITDA changes by company 3Q 12 EBITDA composition 3Q 12 EBITDA decreased mainly due to a weaker performance in Arauco, partly offset by a better perfomance in Copec and Abastible Abastible s EBITDA increased largely as a consequence of the consolidation of Colombian subsidiary IN In 3Q 12, Arauco and Copec accounted for 82% of consolidated EBITDA * Includes Can-Can, Empresas Copec parent company and other adjustments 6

7 Financial Review: Income Statement Income Statement M illion US$ 3Q 12 3Q 11 Change Net income (131) Operating income (68) Non operating income 36 (56) 91 Exchange Differences (2) (38) 36 Other expense (44) (39) (5) Other income Other (49) (34) (15) Taxes (206) (35) (171) EBITDA (45) Net income decreased due to a non-recurrent effect related to a higher income tax rate. Lower operating income: - lower operating income in Arauco, mainly due to lower sales in the pulp and panels businesses. - partly compensated by a higher operating income in Copec, as a consequence of higher margins, partly explained by the FIFO costing system Higher non operating income: - increase in other income by function because of a higher revaluation of biological assets and US$25 million insurance payment related to the destruction of the Nueva Aldea panel mill - higher income from exchange rate differences in Arauco and the parent company 7

8 Financial Review: Profitability and Leverage Profitability Key Financial Ratios 3Q 12 2Q 12 3Q 11 Operating margin 3,2% 2,5% 4,4% EBITDA margin 7,0% 6,2% 8,0% ROCE 4,3% 4,7% 8,9% Leverage Comments EBITDA margin increased to 7,0% Recovery in levels of Interest coverage and Net financial debt / EBITDA. EBITDA / interest expense 4,6x 4,3x 5,2x Net debt / EBITDA 3,5x 3,8x 1,8x LT Financial Debt Maturities (MMUS$) Comments , Important level of liquidity, above US$1.1 billion in cash. Well-balanced debt schedule for the next decade Cash Balance

9 Agenda Financial Review 4 Review by Business Division 10 Highlights of the Quarter 27 Q & A 32 9

10 Review by Business Division: Forestry 10

11 Review by Business Division: Forestry Arauco Arauco - Income Statement M illion US$ 3Q 12 3Q 11 Change Net income (58) 78 (136) Operating income (95) Non operating income 67 (22) 90 Other Income Financial costs (45) (47) 2 Exchange differnces (10) (30) 20 Other (8) (9) 1 Taxes (149) (16) (132) EBITDA (73) Negative effect of US$ 129 million, due to a higher income tax rate in Chile Lower operating income: - decreased sales in the pulp and panel businesses Higher non-operating income: - increased revaluation of biological assets - US$25 million insurance payment related to the destruction of the Nueva Aldea panel mill - less unfavorable exchange rate differences 11

12 Review by Business Division: Forestry Pulp 491 Pulp Sales (Million US$) Comments Q o Q: decrease in revenues due to lower prices Y o Y: lower revenues, explained by a decrease in average prices, offset by an increase in volumes 3Q 12 2Q 12 3Q 11 Pulp Production (Th. ton) Net Sales Price Volume Q o Q -3,2% -5,2% 2,8% Y o Y -6,0% -18,8% 11,9% 3Q 12 2Q 12 3Q 11 12

13 Review by Business Division: Forestry Pulp 1150 Pulp Prices (US$ / ton) 60 Inventories (days of supply) US$800/ton ~US$30/ton US$770ton Series1 Series2 10-Month World Demand Changes Destino Var. 12/11 Norteamérica (4,4%) Europa Oeste (3,7%) Europa Este (1,4%) Latinoamérica 4,1% Japon (9,7%) China 16,2% Otros en Asia/Africa 5,3% Total 1,6% Softwood Outlook Hardwood World demand increased 1.6% as of October 2012 Oversupply coming from European producers fading away because of increasing transportation costs Price increases for softwood and hardwood in November Price stability expected for the upcoming months Gap between fibers increasing, though still bellow historical levels. Today at US$30/ton Weak demand for all grades of paper in Europe Inventories below normal levels for softwood and above historical average for hardwood Latin America and Middle East with good demand levels, but prices follow international trends 13

14 Review by Business Division: Forestry Panels Panels Sales (Million US$) Q 12 2Q 12 3Q 11 Comments Q o Q: stable prices and higher volumes Y o Y: drop in volumes due to the destruction of the plywood mill at Nueva Aldea and the closure of Curitiba s PBO mill Outlook MDF: strong demand in Latin American markets. Increased MDF moldings shipments to the US and Europe, specially Russia and Holland 804 Panels Production (Th. m 3 ) PBO: additional volumes coming from the new Teno mill Plywood: lower volumes due to the destruction of the Nueva Aldea mill, currently under reconstruction HB: higher sales to Mexico Net Sales Price Volume 3Q 12 2Q 12 3Q 11 Q o Q 1,3% 0,9% 2,1% Y o Y -12,2% -5,3% -6,1% 14

15 Review by Business Division: Forestry Sawn Timber Sawn Timber Sales (Million US$) Comments Q o Q: higher sales due to increased prices and volumes Y o Y: higher volumes Outlook North America shows signs of recovery in the real-state market US housing starts at 894,000 units 3Q 12 2Q 12 3Q 11 Sawn Timber Production (Th. m 3 ) Higher demand for plywood and remanufactured products in the US Good demand levels in sawn wood for furniture and construction industries in China Net Sales Price Volume 3Q 12 2Q 12 3Q 11 Q o Q 9,6% 5,8% 4,8% Y o Y 0,7% -0,5% 2,4% 15

16 Review by Business Division: Fuels 16

17 Review by Business Division: Fuels - COPEC Copec - Income Statement M illions of Chilean pesos 3Q 12 3Q 11 Change Net income Operating income Non operating income (20.823) (17.106) (3.718) Financial costs (15.537) (15.516) (21) Other expense (8.230) (6.199) (2.030) Exchange difference (5.049) Other (866) Taxes (13.197) (6.237) (6.961) EBITDA Higher net income mainly due to an increase in operating income Higher operating income: - increased unit margins, partly due to the positive effect of the revaluation of inventories and FIFO costing system - higher physical sales in Colombia Lower non-operating income due to: - less favorable exchange rate difference - higher other expenses 17

18 Review by Business Division: Fuels - COPEC Fuel Volumes* Y o Y (Th. m 3 ) -0.9% Comments Industrial Channel: 3.7% decrease in volumes Gas Stations: 2.6% volume increase 3Q 11 3Q 12 Product Sales* Y o Y (Th. m 3 ) Outlook Total market volumes (Th. m3) 3Q 12 Market change Gasoline ,9% Kerosene 132 (11,0%) Diesel ,3% Turbo 830 9,8% Fuel oils (19,2%) Total ,9% Copec change 2,9% (13,5%) 5,3% 6,5% (37,9%) (0,9%) Volatility in margins due to the fluctuation in fuel prices Sustained leadership in gas stations due to a strong network positioning * Figures include only Copec s operations in Chile 18

19 Review by Business Division: Fuels - COPEC 2Q 12 Market Share Fuels (%) Fuels Market Share Evolution (%) Terpel 10,0% Others 5,8% Shell 13,1% Petrobras 12,4% Copec 58,7% Sep-02 Sep-03 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Sep-12 Market share stable at 58% - 60% levels. 19

20 Review by Business Division: Fuels - COPEC Proenergía key figures M illions of Colombian pesos 3Q 12 3Q 11 Change Revenues EBITDA Net income Profit attributable to controlers (481) Profit attributable to minority Colombia* Panama* Ecuador* +6,5% +5,7% a a a +2,1% Q 11 3Q 12 3Q 11 3Q 12 3Q 11 3Q 12 * Physical sales of liquid fuels (thousand of m3) 20

21 Review by Business Division: Fuels - Abastible Abastible - Income Statement M illions of Chilean pesos 3Q 12 3Q 11 Change Net income (725) Operating income Non operating income Other income 200 (167) 367 Financial income Other Taxes (7.356) (2.101) (5.255) EBITDA Decrease in net income due to a higher income tax rate in Chile Increase in operating income because of the consolidation of IN Higher non-operating income explained by an increase in other income and financial income 21

22 Review by Business Division: Fuels - Abastible Volumes* Y o Y (Th. m 3 ) -1.0% Q 11 3Q 12 * Figures include only Abastible s operations in Chile Comments Industrial/bulk channel: 0.7% increase in physical sales Bottled channel: 1.6% decrease in physical sales Outlook Recovery of industries in which Abastible has important exposure benefits the bulk channel Bottled channel sales are expected to grow in line with Chilean economic activity Lower gas availability from Argentina Operations in northern Chile started in September 22

23 Review by Business Division: Fuels - Sonacol Sonacol - Income Statement M illion of Chilean pesos 3Q 12 3Q 11 Change Net income (4.445) Operating income (644) Non operating income (989) (598) (391) Financial costs (1.059) (904) (155) Financial income (26) Other expense (16) (23) 6 Others (217) Taxes (4.820) (1.410) (3.410) EBITDA (420) Net income decrease, mainly due to the effect of higher income tax rate Decrease of operating income derived from lower volumes pipelined Stable non-operating income 23

24 Review by Business Division: Others 24

25 Review by Business Division: Other investments Other Investments Quarterly Net Income Million US$ 3Q 12 3Q 11 Change Affiliated Companies Igemar -6,6 4,5-11,1 Can-Can -0,5 1,0-1,5 Related Companies Corpesca -0,2 11,3-11,5 Guacolda 12,2 11,6 0,6 Metrogas 28,4 39,9-11,5 Igemar: net income decreased due to the effect of a higher income tax rate and lower results from related company Corpesca Can-Can: lower operating income Corpesca: lower operating income as a result of lower prices and catches, and also the effect of a higher income tax rate Guacolda: increase in net income due to a higher operating and non operating income. Results were also affected by the effect of higher income tax rate Metrogas: lower net income, as a consequence of the effect of a higher income tax rate. Compensated by higher operational income 25

26 Agenda Financial Review 4 Review by Business Division 10 Highlights of the Quarter 27 Q & A 32 26

27 Highlights of the Quarter Flakeboard transaction closed OPA After fulfilling a series of conditions, Arauco acquired Flakeboard With this acquisition, Arauco s installed capacity in North America reaches 2.9 million m 3 Financial conditions significantly improved through debt refinancing 27

28 Highlights of the Quarter Arauco makes progress with the Nueva Aldea panel mill reconstruction The new Nueva Aldea plywood mill, which will replace the one destroyed by a fire in January 2012, is being built at an investment of over US$165 million The mill will have a production capacity of 350,000 m 3 of plywood panels per year Estimated start up: late

29 Highlights of the Quarter Can-Can submits mining project to the environmental impact assessment system Can-Can submitted the Diego de Almagro mining project to the environmental impact assessment system (SEIA) The project has copper and gold reserves and will entail an investment of about US$475 million The deposit will have a life of 13 years and construction should take two years. 29

30 Highlights of the Quarter Guacolda secures a loan for Unit 5 On October 25, Guacolda signed a credit contract for financing the construction of the Unit 5 The credit line is for up to US$318 million and has a 15-year maturity The operation was suscribed with Banco Itaú Chile and Banco del Estado de Chile The company also gave the Final Notice to Proceed to Mitsubishi for starting construction 30

31 Highlights of the Quarter Empresas Copec is distinguished in the Institutional Investor ranking The Institutional Investor magazine released the results of The 2012 Latin America Executive Team ranking, with Empresas Copec awarded in all categories. 360 sell-side analysts from over 40 financial institutions participated in the voting Empresas Copec was ranked as follows in the sell-side analyst voting for the pulp and paper sector, making it the leading Chilean company in this ranking, considering all sectors: - Best investor relations company: 3rd place - Best CEO: 3rd place - Best CFO: 2nd place - Best IR professional: 3rd place 31

32 Agenda Financial Review 4 Review by Business Division 10 Highlights of the Quarter 27 Q & A 32 32

33 Q & A 33

34 Conference Call Presentation 3 rd Quarter 2012 A conference call replay will be available until December 07 th, 2012 Replay number for USA: (855) Replay number for other countries: 1 (404) Conference ID:

35 IR Contact Information Rodrigo Huidobro Chief Financial Officer Phone: (56-22) Cristián Palacios Director of IR and Investments Phone: (56-22) Rodrigo Perera Finance Analyst Phone: (56-22)