2015 TGI RESULTS AND KEY DEVELOPMENTS. March 8th 2016

Transcription

1 2015 TGI RESULTS AND KEY DEVELOPMENTS March 8th

2 Disclaimer This presentation contains statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act ), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are only predictions and are not guarantees of future performance. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include, among other things, statements concerning the potential exposure of TGI, its consolidated subsidiaries and related companies to market risks and statements expressing management expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as anticipate, believe, could, estimate, expect, intend, may, plan, objectives, outlook, probably, project, will, seek, target, risks, goals, should and similar terms and phrases. Forward-looking statements are statements of future expectations that are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Although TGI believes that the expectations and assumptions reflected in such forward-looking statements are reasonable based on information currently available to TGI s management, such expectations and assumptions are necessarily speculative and subject to substantial uncertainty, and as a result, TGI cannot guarantee future results or events. TGI does not undertake any obligation to update any forward-looking statement or other information to reflect events or circumstances occurring after the date of this presentation or to reflect the occurrence of unanticipated events. 2

3 Table of contents 1. Overview 2. Key updates 3. Operational and Financial performance 4. Expansion Projects 3

4 1. Overview 4

5 Overview Stable and growing Colombian economy with sound investment environment Largest natural gas pipeline system in Colombia Strategically located pipeline network Natural monopoly in a regulated environment Constructive and stable regulatory framework Stable and predictable cash flow generation, strongly indexed to the US Dollar Strong and consistent financial performance Experienced management team with solid track record in the sector Expertise, financial strength and support of shareholders 5

6 Pacific Ocean VENEZUELA TGI history Highlights Owns ~60% of the national gas pipeline network (3,957 km) and transports 54% of the gas consumed in the country Serves ~70% of Colombia s population, reaching the most populated areas (Bogota, Cali, Medellin, the coffee region and LLanos, among others) Has access to the two main gas production basins, Guajira and Cusiana/Cupiagua Company history Pipeline network Caribbean Sea Lower and Middle Magdalena Valley 1.97 tcf Barrancabermeja Refinery Medellin Cali Northern Producer Chevron s: 1.89 tcf References Ecopetrol TGI Pipelines Cartagena Refinery Third Party Pipelines Bogota Bucaramanga Natural Gas Reserves City Field Refinery Eastern Producers: 3.15 tcf Ecopetrol Neiva Equion Source: Upper Magdalena Valley Mining and Energy Planning Unit. National Hydrocarbons Agency. 6

7 2. Key Updates 7

8 Key Updates New BoD and CEO On January 27 th 2016, a Shareholders General Meeting elected new board members for the company (1). On February 22 th 2016 TGI s BoD appointed Mr. Julian Garcia as company s CEO. He has 30 years experience in the oil and gas industry, holding executive positions in different companies, including President of three listed oil companies. Mr Garcia is a Civil Engineer from Universidad de los Andes (Bogota), M.Sc. in Civil Engineering (Colorado State University - USA), M.B.A. (University of Birmingham England) and M.A. in Economics (Universidad de Los Andes Bogota). Final steps of TGI s stake (31.92%) acquisition by parent company (EEB) EEB completed TGI s stake acquisition in 2H2014 through the acquisition of 100% of IELAH (SPV) domiciled in Spain. For this acquisition EEB obtained an international syndicated loan of USD 645 mm in September 11, This financing was obtained by IELAH on behalf of EEB. Current outstanding debt of IELAH is USD 394 mm, after two partial repayments done in March 2015 (USD 76 mm) and September 2015 (USD 175 mm). In the next interest payment date (March 2016) TGI will disbursed to IELAH USD 175 MM to make another prepayment of the syndicated loan. On January 29 th 2016, the Colombian Societies Superintendence (Supersociedades) approved the merger between TGI and IELAH. As a result the debt of that entity will be in TGI s BS. (1) For detailed information of the new members please review TGI s Investors Report

9 Key Updates Transition process to International Financial Reporting Standards - IFRS TGI completed the transition process from Col GAAP to IFRS Mandatory transition period began on Jan. 1, 2014 (Opening Balance and the first financial statements under IFRS were issued as of Dec. 31 st, 2015 TGI prepared interim financial statements under IFRS for the merging process with IELAH. TGI s credit ratings: Investment Grade On June 12 th, Moody s ratings affirmed TGI s corporate debt and issuer rating in Baa3, stable perspective On September 3 rd, Standard & Poor s affirmed the TGI corporate debt and issuer rating in BBB-, negative perspective, aligned with parent rating EEB. On October 28th, Fitch Ratings affirmed TGI s corporate debt and issuer rating in BBB, stable perspective. TGI s current ratings are as follows: BBB Stable Outlook Baa3 Stable Outlook BBB Negative Outlook 9

10 Key Updates Regulation perspectives Tariff Review Process Beginning of current tariff methodology period Dec New tariff methodology term sheet proposition for discussion Mar Definition of final tariff methodology Information request by CREG for the definition of charges Apr First tariff approval resolution for TGI Nov Approval and implementation of final charges for TGI Tariffs become effective for TGI Dec year regulatory period New tariff methodology proposition for discussion Definition of final regulatory WACC methodology End of public information audit stage by CREG and expressions of interest by third parties Dec Oct Appeal/ Request for reinstatement by TGI Nov The lastest tariff methodology was approved by CREG Resolution No. 126 in August 2010 and became effective for TGI in December 2012 (CREG Resolution No. 121). The tariff methodology review process takes place every 5 years, but the actual tariff application is usually delayed The previous tariff period was effective from December 2003 to December 2012, a total of 9 years The new regulation is expected to be approved in 2016, with the updated tariffs coming into effect in 2018 (the starting point for the 5 year-period is set by the CREG approval of the new tariff methodology) 10

11 3. Operational and Financial Performance 11

12 Solid operational performance Network length Capacity Firm Contracted Capacity (1) (km) 3,529 3,774 3,774 3,957 3,957 3,957 3,957 (MMscfd) (MMscfd) % 90% 92% 85% 88% 91% 94% Transported Volume Gas Losses Load factor (MMscfd) (%) (%) 69% 71% 58% 59% 61% 64% 67% % 0.59% % 0.52% 0.41% 0.20% 0.00% (1)The trend line refers to the ratio: Firm contracted capacity/available capacity. The Available capacity differs from the Total Capacity as TGI requires a percentage of it for its own use. 12

13 Share Share Stable and predictable cash flow generation TGI s revenues are highly predictable as a result of regulated tariffs and stable consumption TGI s revenues are highly predictable, with approximately 99% coming from regulated tariffs that are reviewed at least every 5 years, ensuring cash flow stability and attractive rates of return Main sectors served by the Company (75% (1) of revenues) present stable consumption patterns (no seasonality) The Company enjoys excellent contract quality: 100% of TGI s contracts are firm contracts with an average life of 9.5 years 89% of regulated revenues are fixed tariffs, not dependent on transported volume Extremely low sensitivity of EBITDA to changes in exchange rate Revenues breakdown as of December % 59% 12% 13% By Industry 16% 18% 3% 3% 3% 3% 2% 4% 13% 15% 24% 21% By Client 18% 16% 11% 12% 7% 7% 30% 27% Distributor Refinery Thermal Commercial Vehicular Others* (1) Includes Distributors, Ecopetrol s refinery and Natural gas for Vehicles Ecopetrol Gas Natural Gases de Occidente EPM Isagen Others* 13

14 TGI Financial Performance Revenues (3) Gross profit and Gross margin (3) (US$ million EOM exchange rate for each period) (US$ in millions EOM exchange rate for each period) % 66.7% 66.8% 64.1% 69.4% 69.2% 68.5% EBITDA and EBITDA Margin (3) (US$ million EOM exchange rate for each period) % 75% 76% 74% 77% 80% 82% Funds from operations (1) (2) (3) (US$ million average exchange rate for each period) (1) FFO for the years is presented under ColGaap standards as net income plus depreciation, amortization and provisions, adjusted for effect from exchange rate and hedges and 2015 is presented under IFRS as net income plus depreciation, amortization and provisions, adjusted for effect from exchange rate, hedges, and the impact of deferred taxes. (2) On 2012 FFO includes the LM transaction premium~ USD 69 million (one time event) (3) Figures for the years are presented under ColGaap standards and 2015 are presented under IFRS. IFRS figures are preliminary subject to changes, independent auditor s revision and General Shareholders Assembly 14

15 TGI Financial Performance Total Assets (1) Cash and Equivalents (1) (US$ billion end-of-year exchange rate for each period) (US$ million end-of-year exchange rate for each period) PPE (1) (US$ billion end-of-year exchange rate for each period) Liabilities (1) (US$ billion end-of-year exchange rate for each period) LIABILITIES EQUITY 15 (1) Figures for the years are presented under ColGaap standards and 2015 are presented under IFRS. IFRS figures are preliminary subject to changes, independent auditor s revision and General Shareholders Assembly

16 TGI Financial Performance (x) Total Debt / EBITDA (1) (x) Total Net debt / EBITDA (1) (x) Senior Net Debt / EBITDA (1) (x) (x) Interest coverage (1)(2) Note: Total debt includes senior debt, subordinated debt and mark-to-market. (1) Figures for the years are presented under ColGaap standards. For 2014 and 2015 are presented under IFRS. IFRS figures are preliminary, subject to changes, independent auditor s revision and General Shareholders Assembly (2) Interest coverage ratio calculated as EBITDA / net interest 16

17 4. Growth Projects 17

18 Growth Projects Pipeline Project Description Cost Status Cusiana Phase III Increase capacity 20 mmcf/d by upgrading Vasconia, Miraflores, Puente Guillermo compression stations ~$ 31 mm Project is under execution (47.6%) with TGI having already signed firm transportation contracts Expected Completion: 2Q 2016 Cusiana Phase 3.5 Increase capacity 17 mmcf/d by upgrading Puente Guillermo compression station, enhancing capacity compression to 412 mmcfd ~$ 7.1 mm Project is under execution with TGI having already interested clients to sign firm transportation contracts Does not require environmental licensing Expected Completion: 1H 2017 Cusiana - Apiay Villavicencio - Ocoa Increase capacity 32 Mcfd of the Cusiana Apiay line and a 7.7 Mcfd of the Apiay Ocoa line through the construction of 2 new compression stations (Paratebueno and Apiay) ~$ 48 mm Project under execution (7.15%) TGI has already signed firm transportation contracts Environmental licensing and procurement in process Expected Completion: 1Q 2017 Armenia Loop Increase capacity 2.2 Mcfd of Armenia Zarzal line through the construction of a 37.5 km 8 loop parallel to exiting 6 pipeline ~$ 18 mm Project is under execution (24.6%) with TGI having already signed firm transportation contracts Financial and engineering studies in progress Environmental licensing in progress Expected Completion: 2Q

19 5. Questions and Answers 19

20 Investor Relations For more information about TGI please contact to: Antonio José Angarita Vega CFO +57 (1) ext 2110 antonio.angarita@tgi.com.co Sergio Andrés Hernández Acosta Finance Manager +57 (1) ext sergio.hernandez@tgi.com.co Fabián Sánchez Aldana IR Advisor - EEB +57 (1) ext fsanchez@eeb.com.co 20