AES CORPORATION. Electricidad de Caracas Business Review Julian Nebreda Chief Executive Officer

Size: px

Start display at page:

Download "AES CORPORATION. Electricidad de Caracas Business Review Julian Nebreda Chief Executive Officer"

Natalie O’Connor’
5 years ago
Views:

1 AES CORPORATION Electricidad de Caracas Business Review Julian Nebreda Chief Executive Officer City or location Month XX, 20XX June 28, 2006

2 Safe Harbor Disclosure Certain statements in the following presentation regarding AES s business operations may constitute forward looking statements. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES s current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to continued normal or better levels of operating performance and electricity demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth from investments at investment levels and rates of return consistent with prior experience. For additional assumptions see the Appendix to this presentation. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES s filings with the Securities and Exchange Commission including but not limited to the risks discussed under Item 1A Risk Factors in the Company s 2005 Annual Report on Form 10-K as well as our other SEC filings. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 1

3 Electricidad de Caracas Strategic Overview Contains Forward Looking Statements AES Goals AES 2008 Target EDC Role Financial Goals Revenue Growth -- Gross Margin Growth $3.5 Billion Earnings Per Share Growth 13-19% per Year ROIC Improvement (1) 11% Cash Flow Growth $ Billion Subsidiary Distributions (1) -- Restructuring Opportunities -- Growth Goals Platform Expansion -- Greenfield Investment -- Privatization/M&A -- (1) Non-GAAP financial measure. See Appendix. Below Average Above Average Below Average Above Average Above Average Increasing Largely Completed Limited Opportunities Not a Current Focus Not a Current Focus 2

4 Venezuela Highlights Venezuela at a Glance Currency Exchange Rate (12/1/05) US$1= Bs Per Capita GDP (2005E) US$ 4,774 Inflation Rate (2005) Economic Drivers Bolívar (Bs) 14.4% Oil Capital Caracas Largest City Caracas Population (2005E) 26.6 million 3

Venezuela Electricity Market Characteristics Generation IPP Distribution Transmission Eight generation companies (five stateowned, three private) Installed capacity of

company) generates 72% of National Interconnected System (SIN) electricity Four companies three private and one stateowned Installed capacity 1,480MW PDVSA 980MW

71% is served by stateowned companies, mainly CADAFE 29% by private companies, mainly EDC Regulated public service Exclusive geographic concessions for regulated

geographic concessions for regulated customers Over 22,500 km of lines Voltages: 765kV, 400kV, 230kV, 138kV and 115/kV Sources: Oficina de Operación de Sistemas

5 Venezuela Electricity Market Characteristics Generation IPP Distribution Transmission Eight generation companies (five stateowned, three private) Installed capacity of 22,462MW 66% hydroelectric 34% thermal State-owned companies own 88% of installed capacity, 10% by EDC,2% by local private companies EDELCA (state-owned hydroelectric company) generates 72% of National Interconnected System (SIN) electricity Four companies three private and one stateowned Installed capacity 1,480MW PDVSA 980MW GENEVAPCA (EDC) 300MW Turboven (PSEG) 120MW Termobarrancas (REPSOL) 80MW 94% of the national population (more than 24 million) is served by the distribution companies 71% is served by stateowned companies, mainly CADAFE 29% by private companies, mainly EDC Regulated public service Exclusive geographic concessions for regulated customers Tariffs set every four years based on a cost plus methodology Four companies three state-owned and one private (EDC) Regulated public service Exclusive geographic concessions for regulated customers Over 22,500 km of lines Voltages: 765kV, 400kV, 230kV, 138kV and 115/kV Sources: Oficina de Operación de Sistemas Interconectados (OPSIS, National Venezuelan Electrical Power Control Center) and Cámara Venezolana de la Industria Eléctrica (CAVEINAL, Venezuelan Electric Industry Chamber), as of December 31,

6 Market Position in Venezuela Installed Generation Capacity 22,462 MW Electricity Generation 104,091 GWh Edelca 64% EDC 10% Net Generation Others 2% Enelven 7% Cadafe 17% Edelca 72% EDC 9% Others 4% Enelven 6% Cadafe 9% Gross Thermal Generation 27,127 MWh Venezuela EDC GENEVAPCA 104,091 GWh 9,846 GWh 1,491 GWh Cadafe 29% EDC 37% Sources: OPSIS and CAVEINEL, as of December 31, Enelven 23% Others 11% 5

7 Venezuela Electricity Demand Growth 20% 15% 10% 5% 0% (5%) (10%) (15%) GDP Growth Energy Demand Growth (Year over Year) Sources: CAVEINEL and Banco Central de Venezuela (BCV). 6

8 EDC History C.A. La Electricidad de Caracas (EDC), created 1897 EDC commissioned its first power plant, El Encantado, 420 kw on the banks of the Guaire river 1931 Started operations of its first thermal power plant, Ricardo Zuloaga 1995 First IPP in Venezuela - GENEVAPCA 1998 ADRs registered in the New York OTC market 2000 AES acquired 86% of EDC 2004 EDC received ISO accreditation for its customer care services and commercial offices 2004 US$260 MM 10.25% 10- year bonds issued 2005 Construction started on new 200MW La Raisa plant 1947 EDC lists on Caracas Stock Exchange 7

9 EDC Service Area San Felipe Service Area Greater Caracas Service Area EDC Service Area 5,176 km2 service territory Approximately one million customers serving population of approximately 5 million 10,807 km transmission lines 10,525 GWh of power sold in 2005 EDC serves the Greater Caracas region, and Vargas State Venezuela s largest population center, and the smaller San Felipe area 8

Expansion OAM GENEVAPCA CRZ 11-14 CRZ 1-6 CRZ

MW Turbines Steam Steam Steam Combustion

2 x 40 MW 2 x 60 MW 2 x 68 MW 3 x 470 MW 5 x

1956-1966 1978-1981 1994-1995 1999-2000 1995

10 EDC Generation Plants 2,616MW installed capacity - 20 turbines Arrecifes Tacoa Tacoa Expansion OAM GENEVAPCA CRZ CRZ 1-6 CRZ IPP 120 MW 336 MW 1,410 MW 450 MW 300 MW Turbines Steam Steam Steam Combustion Combustion Installed rated capacity 3 x 40 MW 2 x 40 MW 2 x 60 MW 2 x 68 MW 3 x 470 MW 5 x 90 MW 3 x 100 MW Commissioned Type of fuel Gas Gas Gas/Fuel Oil #6 Gas/Fuel Oil #2 Gas/Fuel Oil #2 9

11 EDC Performance KPIs Net Capacity Factor (NCF) Equivalent Availability Factor (EAF) Without Hydro Purchases 61.9% 65.8% 85.3% 84.9% 81.9% 61.3% 54.7% 53.0% Values correspond to a 12-month moving average 10

EDC Customer Base 2005 Revenues (US$) Electricity Sales Trend (GWh) Government 9% Residential 37% 10,496 9,908 10,525 Commercial 39% 3,520 3,607 3,891 Industrial 15% 2005 Energy Sales (KWh) 1,892

12 EDC Customer Base 2005 Revenues (US$) Electricity Sales Trend (GWh) Government 9% Residential 37% 10,496 9,908 10,525 Commercial 39% 3,520 3,607 3,891 Industrial 15% 2005 Energy Sales (KWh) 1,892 1,695 1, , Government 10% Residential 35% 3,389 3,536 3, Commercial 36% Residential Industrial Government Commercial Note: Government includes public lighting. Industrial 19% 11

13 Total Losses Getting Better 17.9% 17.7% 17.5% 17.1% 17.1% 10.5% 10.3% 10.2% 9.8% 9.6% Maximum Loss Recognized (12%) 2.6% 2.3% 2.3% 2.3% 2.2% 4.8% 5.1% 5.0% 5.0% 5.3% Jan 2006 Feb 2006 Mar Distribution Transmission Non Technical 12

14 Venezuela Tariff Regime C O S T + R E T U R N Generation Energy Purchased Transmission HV Distribution MV Distribution LV Distribution Street Lighting Retail Annual depreciation charge (revalued) O&M and other expenses Labor expenses Fuel costs Income taxes Return on Rate Base Direct pass-through Annual depreciation charge (revalued) O&M and other expenses Labor expenses Income taxes Return on Rate Base Annual depreciation charge (revalued) O&M and other expenses Labor expenses Income taxes Return on Rate Base COST OF SERVICE 13

15 EDC s Tariff Composition Bs / KW (1) Annual Change in Added Value April % 0% 0% 7.4% Variable Cost : Fuel + Energy purchases Added Value Gen, T&D : Fixed Cost + Tariff return (1) As of December 31, unless otherwise indicated. 14

16 EDC Safety Performance 73 EDC People Lost Time Accidents Contractors General Public Lost Time Accidents Accidents

17 Total Debt In US$ millions, as of March 31, 2006 Local + Foreign Long-Term $317 Short-Term $78 Debt $75 + $320 $395 Cash & Equivalents $113 + $115 $228 Net Debt (1) $(38) (1) Non-GAAP financial measure equal to debt less cash & equivalents. + $205 Net Exposure $167 Net Debt 16

18 Strengthening EDC s Financial Profile Contains Forward Looking Statements 27% Tenor 20% 300 Amortization Schedule 73% Long-Term Currency 80% Short-Term US$ Millions % 19% % US Dollars 26% Rate 81% Bolivars 31% Dividends Declared (US$ Millions) 2003 $ $ $ YTD $117 74% Fixed 69% Floating Note: Dividends are declared in bolivars; US$ equivalent at exchange rate at declaration date. 17

19 Deleveraging and Extending Maturities $800 8 Total Debt (USD Millions) $600 $400 $200 $664 $780 $ Average Life (Years) $ USD Debt Bolivar Debt Average Life 0 18

20 EDC Credit Rating Improvement Fitch Ratings Long Term Notes Short Term Notes AA+ (Ven) F1+ (Ven) Foreign Debt B B- B+ BB- Local Debt BB- BB- B BB- Standard & Poors CCC+ B- B B 19

21 EDC Financial Overview (US$ Million) Revenue $608 $619 $613 Gross Margin $251 $234 $218 Income Before Tax & Minority Interest $126 $126 $214 Distributions to AES Corporation -- $77 $107 Note: Information is presented on an AES basis and is unaudited. Certain intercompany transactions may not be eliminated. Distributions to AES Corporation reflect when dividends were actually received by AES Corp., not when they were declared by EDC or paid by AES to shareholders in Bolivars. 20

22 EDC Strategy Customers Develop marketing capabilities Develop new products & services Operations Learning organization Reinvent operations and administrative activities Business Environment Develop a social brand Influence the regulatory framework based on the company s strategic objectives Increase and broaden shareholder base Implement non-regulated business initiatives 21

23 EDC in the Capital Markets Registration on Caracas Stock Exchange First issuance of Notes First issuance of Commercial Papers Registration of ADRs on NY OTC market Issuance of US$260 MM 10.25% Bonds Participation in new capital markets (LATIBEX ) 22

AES CORPORATION. City or location Month XX, 20XX. AES Gener Business Review. Felipe Ceron Chief Executive Officer, AES Gener S.A.

AES CORPORATION. City or location Month XX, 20XX. AES Gener Business Review. Felipe Ceron Chief Executive Officer, AES Gener S.A. AES CORPORATION AES CORPORATION AES Gener Business Review Felipe Ceron Chief Executive Officer, AES Gener S.A. City or location Month XX, 20XX March 22, 2006 AES Gener Strategic Overview Contains Forward