QUARTERLY MANAGEMENT RESULTS. S e p t e m b e r 2017

Transcription

1 QUARTERLY MANAGEMENT RESULTS S e p t e m b e r 2017

2 CORPORATE ASPECTS

3 General Results Relevant data for GEN (figures as of September 2017) GEN Transmissio n * GEN Distribution 3 Gas pipeline: 3,089 kilometers Regasification capacity: 400 MCFD Transmission capacity: MCFD Transported volume: MCFD Users: 3.91 MM Δ7% (40% country) 200,385 connections Communities served: 728 Δ5% (64% country) Networks laid: 54,687 kms Δ5% Sale of gas: MMm3 Δ-7% Brilla Users: 2,33 MM Δ23% Portfolio: MM Δ17% Accumulated users: 362,339 Δ6% Energy Demand: 458 GWh Δ3% Losses: 15.92% Networks laid: 26,407 kms Δ3% 37% 53% 10% 67% 28% 5% CONSOLIDATED INCOME SEPTEMBER 2017: $ 2,675,004 MM Δ4% CONSOLIDATED ADJUSTED EBITDA SEPTEMBER 2017: $ 931,365 MM Δ15% NET PROFIT SEPTEMBER 2017: $ 487,333 MM Δ5% (18 companies, 2 countries, 3,030 employees **) * Incluye Gases del Caribe, Cálidda, Efigas and Gases de La Guajira / ** Does not include contractors

4 Promigas GEN Results Transmission 5

5 (*) Includes volumes for the sectors of Gibraltar Bucaramanga and Bucaramanga Payoa Barrancabermeja Promigas Natural Gas Transmission 6 Atlantic Coast Atlantic Coast At the end of the third quarter of the year, Promigas recorded: Length of gas pipelines: 2,556 Km Transport capacity: MCFD (89% Contracted) Compression capacity: 47.8 Khp Thermoelectric Sector: Consumption decreases due to greater hydrological contributions. Industrial Sector: Higher consumption due to the continuation of the Reficar consumption stabilization plan and the increase in the cement sector consumption due to the availability of natural gas at competitive prices. Volumen Transportado por Sectores (MPCD) Ene - Sep Ene - Sep Var % Termoeléctrico 153,7 135,1-12% Industrial 132,1 138,1 5% Doméstico 42,1 45,7 9% GNCV 12,9 11,8-9% TOTAL 340,8 330,7-3% Portfolio PROMIORIENTE Var % Ene - Sep Ene - Sep Volumen Tranportado (MPCD) 55,3 64,9 17% As of September 2017, Promioriente has a transmission volume 17% higher than that transported in the same period of 2016, due to higher Ecopetrol consumption in 2017, and because in June and July 2016 there were important transport restrictions due to public order issues (Uwas strike) TRANSMETANO Var % Ene - Sep Ene - Sep Volumen Tranportado (MPCD) 49,8 50,6 2% The increase is due to events that affected consumption for 2016, including maintenance by EPM; high gas pressures; temporary closure of EPM Tasajera; stops in Papelsa, Barbosa; and technical failures in Alcane Guarne.

6 Promigas GEN Transmission: Highlights 7 The following commercial agreements are under development at Promigas: Transmission contract for new gas from Canacol fields for 40 MCFD. Estimated start from December Contract for 100 MCFD with Canacol signed in November Transmission contract with Pacific for 5 MCFD, from January Promioriente achieved an average transported volume of 64.9 MCFD, 17% higher than transported at the end of September 2016, due to higher consumptions of the interruptible contract with Ecopetrol 2017 and despite the fact that in June and July 2016 there were important transmission restrictions due to the Uwas strike. The compressor projects of Promioriente (Los Pinos), to provide greater capacity to the system; and of Transmetano (Malena), to maintain reliability in the EPM dispatch, entered into operation in August Fitch Ratings maintains the BBB- (international scale) rating for IDR issues in local and foreign currency, highlighting a strong market position, geographic diversification, low risk profile for investors, and a structure of stable and predictable revenues. Likewise, it maintains the Promigas rating in AAA (national scale) with a stable outlook. For the first time, Promioriente was rated with the expectation of positioning itself in the capital market. Fitch assigned it national long and short-term ratings of 'AA + (col)' and 'F1 + (col)' respectively.

7 Promigas GEN Transmission: Highlights 8 PROMISOL: The construction works of the Hocol gas treatment plants were completed in January. Operational availability of 100% in the Canacol and Hocol plants (dehydration and compression). The construction works of the compressors of Promioriente (Los Pinos) and Transmetano (Malena), which began their operation in the month of August, were completed. ZONAGEN: In the commercial management the sale of 100% of the generation capacity of the 4 engines installed in the Barranquilla free zone stands out, and 70% of the capacity of the engine installed in La Cayena free zone. SPEC: From its beginning of operations in December 2016, it complies with the challenge of operational stability at 100%. In March controls and procedures were carried out to achieve the reduction of the average generation of Boil Off Gas (losses by evaporation), with positive results. Signing of the LNG purchase and sale agreement between CALAMARI and SPEC on March 23, 2017 (surplus gas purchased by SPEC for plant tests).

8 Promigas GEN Transmission: Projects in progress 9 Company Project Timetable CAPEX Promigas Canacol gas pipeline (100 MCFD) Entry into operation in December 2018 US$ 250 MM Transmetano Malena Compressor Implementation 100% Started operation in August $34,440 MM Promioriente Los Pinos Compressor Implementation 100% Started operation in August $38,000 MM

9 Promigas GEN Transmission: Regulatory Aspects 11 Tariff Methodology Promigas has presented proposals for the tariff methodology set forth in Resolution 090 of 2016, through meetings with the CREG on key issues: WACC, valuation of assets, system stamp, useful life, infrastructure development, among others, in order to guarantee a better transport of natural gas. The final resolution is expected in the first quarter of Wholesale Market In September 2017, the CREG issued the final Resolution 114 of 2017, for which aspects of the natural gas wholesale market were adjusted and CREG Resolution 089 of 2013 was compiled with its respective amendments. This focuses on promoting competition in the supply market, through mechanisms that seek greater transparency and liquidity in order to create new products that meet demand. It is expected that these modifications will generate improvements in the formation of the price of natural gas and energize the domestic market.

10 Promigas GEN Transmission: Regulatory Aspects 11 Supply Plan (UPME) - Supply and Reliability of the gas service In November 2016, UPME published the final version of the Gas Natural Transitional Plan and in January the Ministry of Mines and Energy accepted the proposed projects. In September 2017 CREG issued Resolution 107 of 2017, which aims to establish mechanisms for the execution of priority projects within the natural gas supply plan accepted by the Ministry of Mines and Energy.

11 Promigas GEN Distribution Results 12

12 Promigas GEN Distribution: Highlights 13 Colombia As of September 2017, the related distribution companies of Promigas, connected 104,747 new users, reaching a cumulative total of 3.3 million. The volume of gas sold in the third quarter of 2017 was 2,440 MM3. 31 new communities were provided with the natural gas service for a total of 708 communities served. Peru Cálidda In the third quarter of the year, 95,638 new users were connected, reaching 534,000 homes served in Lima and El Callao, distributing 3,964 MM3 of natural gas as of September Through the application of the FISE program the mass use of natural gas in Peru is sought thanks to the internal connection subsidy. It began with the process of updating the distribution charge which will become effective as of May 2018.Gases del Pacífico: 21-year concession to distribute gas in northern Peru FIS (service start date) was given on November 24 due to the delay in the construction of the Peru LNG loading dock. POC (put into commercial operation) December 5, 2017.

13 Promigas GEN Distribution: Regulatory Aspects 14 Gas distribution methodology The Regulation Commission published Resolution CREG 066 of 2017 for comments, which complements the distribution methodology established in Resolution CREG 202 of In parallel, the CREG issued Circular 034 of 2017, whereby distribution companies may be asked for transitory charges in accordance with this new methodology. The distribution companies have already applied to the CREG for their new transitory charges and are waiting for the publication of the new rates. Gas marketing methodology On August 14, 2017 Resolution 114 of 2017 was published, which establishes some new relevant aspects of the wholesale market and compiles the adjustments and modifications to Resolution CREG 089. Among the most relevant aspects is the designing of a new auction system which will impact the commercial strategies of the companies for the future. Additionally, companies are allowed to contract gas from the following year.

14 Promigas GEN Distribution: Highlights FNB - Brilla 15 Brilla reached 2.3 million credits granted to Colombian families due to their good natural gas payment record service. With awards from the World Bank, the G-20, Financial Times and IFC, BRILLA is a successful example of inclusive business helping the base of the pyramid in Colombia. Placement of $ 354,846 million as of October 2017, for an accumulated historical total of $ 2.3 billion and a consolidated portfolio of $ 607,563 million. 238,661 users benefited from January to October 2017, and 2,344,526 from the beginning of the program, distributed as follows: Housing Level 1: 54%, Housing Level 2: 54%, Housing Level 3: 24%, Others: 8%, reflecting the important social benefit of this program. The portfolio continues to exhibit an adequate behavior, which ensures the sustainability of the program in the long term.

15 Promigas GEN Distribution: Electrical Energy 16 Regulatory Aspects The definitive distribution methodology has still not been published, which is expected to be published in the last quarter of The CREG has 4 resolutions in consultation. Notable events As of September 2017, CEO has connected 14,258 new users, reaching a cumulative total of 362,339. For the third quarter of the year, the company's energy sales reached 458 GWh. The company continues to make great efforts to reduce energy losses, with an indicator of commercial losses to September of 15.92% being achieved.

16 Notable Events Profit Distribution H In the meeting of September 21, 2017 dividends were decreed for $ 246,262 million, distributed as follows: Dividends in cash at a rate of $ pesos per share on outstanding shares, as follows: Ordinary: $ pesos per share ($ MM) (payable in 6 monthly installments of $ pesos per share as of October 2017). Extraordinary: $ pesos per share ($ 130,508 MM) (payable in one installment in October 2017). With this amount, a Payout Ratio of 100% was reached after IFRS adjustments.

17 Corporate Milestones Achievements and Recognitions 18 WATTA KA <II was awarded the 2017 Latin American Transformers Prize in the category of Private Social Investment and Sustainable Communities, awarded by RedEAmérica. COMUNIDADES QUE EDUCAN ("COMMUNITIES THAT EDUCATE") in the La Candelaria neighborhood of Cartagena was recognized by the ICBF as a significant experience in responding to its Family, Networks and Community strategy. The initiative has contributed to the integral development of children under the age of six who live in conflict zones. Promigas, PromiOriente and GDO completed the COLCIENCIAS "Innovation Systems" program this year and our companies were certified as "Innovation Management - Level 1: Proficient" by the Global Innovation Management Institute of the United States. Additionally, 5 Promigas and 4 GDO employees received the Level 1 - Innovation Associate certification. Promigas, with the support of its Center for Research and Innovation in Energy and Gas (CIIEG), launched its first R + D + i project in the field of renewable energies called "Obtaining performance prediction models and degradation rates of photovoltaic solar systems with the purpose of reducing the uncertainty in the calculation of electrical energy generated in long-term business models. The NOVO Research Group of the Promigas Foundation was once again recognized and classified in the last group measurement carried out by Colciencias.

18 FINANCIAL STATEMENTS

19 Balance General Promigas 20 Assets Cash and investments: The increase is due to the disbursement of the syndicated loan in dollars for USD 200 million and the dividends received from Cálidda and other related companies. PP & E: Construction in progress decreases due to the withdrawal of the current assets of Hocol, which enters into a lease to Promisol. Financial Assets: The variation corresponds to the recognition of the purchase option, due to the registration of concessions under IFRS. Other Assets: Increase due to the loan given to Promisol and the registration from January of the leasing of compression equipment to service the contract with Hocol. Liabilities Cifras en Millones de Pesos Dic -16 Sept-17 Var % Caja e Inversiones % Otros Activos Corrientes % PP&E % Activos Concesionados % Activo Financiero % Otros Activos % Total Activos % Pasivos Corrientes % Pasivo Largo Plazo % Total Pasivos % Patrimonio % Total Pasivos + Patrimonio % % Current Liabilities: Increase due to dividends decreed in the assembly held in September Long Term Liabilities: Disbursement of the syndicated loan for USD 125 MM % 2% Activos Pasivos Patrimonio Dic-16 Sept-17

20 Statement of Profit and Loss Promigas 21 3Q vs. 2Q Operating income: Higher revenues from higher transported volumes and by adjusting the contract value of BackOffice of Promioriente. Active Financial Income: Adjustment due to the recalculation of Financial Assets. Equity Accounting method: Increase due to the fact that Promisol recorded additional costs associated with construction during the second quarter; and Transmetano due to the negative effect of the financial asset registered during the same period. Costs and Expenses: Decrease in labor expenses due to the payment of semi-annual legal and extralegal benefits; Sales Tax decreases due to the renewal of insurance. Cifras en Millones de Pesos Abr- Jun/17 Jul- Sep/17 Var % Sept- 16 Sept- 17 Var % Ingresos Operacionales % % Ingresos Activo Financiero % % Método de Participación % % Costos y Gastos % % Utilidad Operacional % % EBITDA Ajustado* % % Ingresos Financieros % % Gastos Financieros % % Otros, Neto % (1.640) % Utilidad Antes de Impuesto % % Impuesto de Renta % % Utilidad Neta % % % % % Ingresos EBITDA Ajustado Utilidad Neta Sept-16 vs. Sept-17 Operating Income: Affected by lower volumes in the thermal sector and lower average Exchange Rate during Equity Accounting Method: Increase in the operation of the SPEC plant that was under construction in mid Promioriente presented growth in 2017 generated by the consumption of Ecopetrol. Costs and expenses: Higher maintenance costs due to fuel consumption in Palomino and Sahagún and the compression service in the stations; higher labor expenses and general expenses. Financial Income: Higher yield on interest on loans made to companies in January 2016 and in the first months of 2017; * No incluye Activo Financiero Sept-16 Sept-17 Financial expenses: Increase due to the issuance of bonds for $ 500,000 MM was made in September 2016 and the syndicated loan disbursed in the course of the year 2017.

21 Consolidated Statement of Profit and Loss 22 3Q Vs. 2Q Income: The decrease is due to higher revenues recorded during the second quarter, associated with the sale of LNG inventory, acquired for the commissioning tests of SPEC. Lower income from Financial Assets due to the recalculation performed at Promigas, Surtigas and GDO in June 2017, which affected the third quarter. Costs and Expenses: Higher costs were recorded during the second quarter due to the cost associated with the sale of SPEC's LNG and for the registration of construction costs of Promisol. Sep-17 vs. Sep-16 Income: Increase due to start-up of SPEC (Dec-16) and due to the start of the contracts of Promisol with Hocol and Canacol. Higher participation method due to the increase in Gases del Caribe's profit. Costs and Expenses: Decrease due to a reduction in the gas commercialization business in GDO and Surtigas. Financial Expenses: Increase in the issuance of bonds by Promigas ($ 500,000 MM) in September 2016 and disbursement of the syndicated loan in the first half of Increased financial expenses due to financial leasing associated with the lease of the FSRU of the SPEC terminal. Cifras en Millones de Pesos abr- jun/17 jul- sep/17 Var % sep- 16 sep- 17 Var % Ingresos Operacionales % % Método de Participación % % Activo Financiero % % Ingresos Const. Concesiones % % Costos y Gastos % % Costos Const. Concesiones % % Utilidad Operacional % % EBITDA Ajustado* % % Ingresos Financieros % % Gastos Financieros % % Otros, Neto (4.087) % % Utilidad Antes de Impuesto % % Impuesto de Renta % % Interés Minoritario % % Utilidad Neta % % % ** % % Ingresos EBITDA Ajustado Utilidad Neta * No Others, incluye Activo Net: Decrease Financiero / ** in No other incluye income ingresos / expenses por construcción compared de concesiones to sep-16 sep-17

22 ANNEXES

23 Statement of Cash Flow Promigas 24 Cifras en Millones de Pesos Septiembre 2017 Utilidad Neta Depreciaciones, Amortizaciones y Provisiones Método de Participacion Dividendos Recibidos Cambios en Activos/Pasivos Flujo Operacional Inversión en Bienes de Capital Flujo de Caja Libre Desembolsos de Créditos Amortizaciones Inversiones Permanentes - Flujo de Caja Accionistas Dividendos Pagados Flujo de Caja Neto Saldo Inicial Saldo Final

24 Consolidated Balance Sheet 25 Cifras en Millones de Pesos dic-16 sep-17 Var % Caja e Inversiones % Otros Activos Corrientes % PP&E % Activos Concesionados % Activo Financiero % Otros Activos Largo Plazo % Total Activos % Pasivo Corriente % Pasivo Largo Plazo % Total Pasivos % Patrimonio % Total Pasivos + Patrimonio % % % % Activos Pasivos Patrimonio dic-16 sep-17

25 THANK YOU