3q earnings presentation geb vf1
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GRUPO ENERGÍA DE
BOGOTA Third Quarter 2014
Results and Key Developments
November 6th, 2014
Disclaimer
The information provided herein is for informational and illustrative purposes only and is
not, and does not seek to be, a source of legal or financial advice on any subject. This
information does not constitute an offer of any sort and is subject to change without
notice.
EEB expressly disclaims any responsibility for actions taken or not taken based on this
information. EEB does not accept any responsibility for losses that might result from the
execution of the proposals or recommendations presented. EEB is not responsible for
any content that may originate with third parties. EEB may have provided, or might
provide in the future, information that is inconsistent with the information herein
presented.
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Agenda
I. EEB Overview and Key Updates – 3Q 2014
II. Expansion Projects Review
III. Financial Review – 3Q 2014
IV. Questions and Answers
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Agenda
I. EEB Overview and Key Updates – 3Q 2014
EEB Overview
Key Updates Third Quarter
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EEB Overview Transportation and distribution of energy with involvement in other
areas in the energy sector.
Focus on natural monopolies
Growth in controlled subsidiaries
Sound regulatory framework
Ample access to capital markets
100%*
100%*
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Key Updates
Acquisition of 31.92% of TGI
On July 2nd 2014 EEB closed the acquisition of 31.92% of Transportadora de Gas Internacional (TGI) shares by means of
acquiring a special purpose vehicle Inversiones en Energia Latino America Holdings, S.L.U. (IELAH), incorporated in Spain, at the
head of which, The Rohatyn Group (former CVCI) maintained its investment in TGI.
Currently, TGI is working on the merger with IELAH, this merger is expected to take place the 2Q 2015, which is the Phase 3 of the
acquisition plan
This transaction, which is part of EEB’s USD 7.5 billion 2013-2017 investment plan will generate positive value for EEB´s
shareholders.
Upme Projects (1/2)
Armenia Project (UPME 02-2009): As of June 17, 2014 the ANLA (National Association of Environmental Licensing) notified EEB
S.A. ESP of Resolution 0582 dated June 5, 2014 whereby an environmental license was granted for this project. With respect to
easements, 75 tower sites have been released by means of registration and legal inspection, accounting for 90% of all the tower
sites of the project.
With ANLA’s authorization, EEB defined that the towers are installed at the limit of the Conservation district Barbas Bremen and
are located in areas already involved which today develops agricultural economic activities and not in areas of forest or preservation.
The project shows 64.32% progress.
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Upme Projects (2/2)
The Energy Mining Planning Unit (UPME) awarded to Empresa Energía de Bogotá (EEB), UPME – 06 – 2014 Rio Cordoba
Substation project with an estimated investment of a NPV of revenues amounting USD 14.7 Million.
The project includes the design, acquisition of equipment, construction, operation and maintenance of the 220 kV Rio Cordoba.
This project is part of the Expansion Plan, UPME 2013-2027.
On August 22th, Moody’s affirmed the EEB’s corporate debt and issuer rating in ‘Baa3‘, upgraded outlook from stable to positive
On August 28th, Standard & Poor’s upgraded EEB’s corporate debt rating from ‘BB+’ to ‘BBB-’, and affirmed issuer rating ‘BBB-’
with stable Outlook.
On October 28th, Fitch Ratings upgraded EEB’s corporate debt and issuer rating from ‘BBB-‘ to ‘BBB’, stable outlook.
Also affirmed EEB’s local rating at ‘AAA(col)’, the highest possible within the national scale.
EEB’s current ratings are as follows:
Baa3 Positive Outlook
BBB Stable Outlook
BBB- Stable Outlook
Fitch upgraded EEB’s credit rating to ‘BBB’ on Oct 28, 2014
Key Updates
Calidda
OSINERGMIN published the resolution that sets Cálidda´s tariff scheme for the next 4 years (from May 8th, 2014 to May 7th, 2018). The
approved average distribution tariff was increased by 6.37% when compared to the 2010 – 2014 average distribution tariff.
Besides, OSINERGMIN resolution establishes an investment plan of USD 428 MM for the period 2014 – 2017.
At the end of September, Cálidda has a client base of 235,000 customers, 67% more than in Q3 2013. Nonetheless, Calidda connected its
costumer number 250,000 last Mmmm DD, 2014.
Contugas
Contugas is in the negotiation process of an addendum with the Camisea Consortium (Gas producer) to adjust the curve of gas supply
contract. The subscription have an estimated date at the end of this year.
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TRECSA
The project shows a execution progression of 76%. At the end of this quarter the following substations coming on stream:
Pacific substation 230 KV via the connection of the LT Escuintla II - San Jose 230 KV.
Substation San Agustín 230 KV through the connection LT Guatemala Norte - Panaluya connection 230Kv
Further substations are coming on stream, which is subject to change by the administrator of the wholesale market.
Agenda
II. Expansion Projects Review
Controlled Subsidiaries
Non Controlled Subsidiaries
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Consolidating the Strategy Controlled Subsidiaries
EEB Transmission
• Armenia – 64%,
• Tesalia – 77%
• Chivor II Norte – 37%
• SVC Tunal – 83%.
• Bolívar-TermoCartagena – 2.1%
• Sogamoso-Norte-Nueva Esperanza: 5%
• UPME awarded projects: Rio Cordoba
Projects Update
TGI
• La Sabana Compression Station – 91%
• In operation since July 2014
TRECSA
• Guatemala’s interconnection System – 76%
Source: Company information.
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Consolidating the Strategy
Non-Controlled Subsidiaries
EMGESA
• Quimbo Project (400 MW)
• Total investment: USD 1,093 mm
• Execution 3Q-14: 80%
• Full operation: 1H 15
Projects Update
Source: Company information.
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CODENSA
• On-going projects: Nueva Esperanza, Norte, Bacatá Substations
• New and existing demand
• Quality service and continuity
• Control operational risk
Agenda
III. Financial Review
Operational Results
Non – Operational Results
EBITDA
Debt Metrics
Share Performance
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Consistent Financial Performance Consolidated Results - Operational
Operating Revenues (+17.7%): Growth is
explained mainly by an increase of revenues in
natural gas business:
Calidda: new connections (Residential and
Commercial) and higher volume distributed
TGI increased transported volume and new
tariff: dehydration charges
Operating Profit (+14%): Operational costs and expenses showed a
moderate increase due to:
Contugas and Cálidda show increases mainly in costs related to
maintenance activities in the gas network and the cost of internal
installations by third parties.
EEC shows increases in personnel costs and third parties
operations.
3Q 14 3Q 13 $ % 3Q 14 3Q 13 $ %
Operating revenue 1,708,003 1,451,107 256,896 17.7% 844.7 760.4 84.3 11.1%
Cost of sales (910,338) (749,282) (161,056) 21.5% (450.2) (392.6) (57.6) 14.7%
Gross profit 797,665 701,825 95,840 13.7% 394.5 367.8 26.7 7.3%
Operating expenses (187,016) (166,078) (20,938) 12.6% (92.5) (87.0) (5.5) 6.3%
Operating profit 610,649 535,747 74,902 14.0% 302.0 280.7 21.3 7.6%
Operating margin 35.8% 36.9% 35.8% 36.9%
COP Million Variance USD Million Variance
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Consistent Financial Performance Consolidated Results – Non Operational
* EMSA, ISA, ISAGEN, REP-CTM, Others
Non Operating revenues:
Dividends (+11.6%): Increase of COP 92,464 million in terms of dividends
declared to EEB, particularly those coming from Emgesa, Codensa and Gas
Natural.
Foreign Exchange Account (-45.8%): Net effect of the foreign exchange
account, as a result of updating consolidated financial obligations
denominated in USD, which is only for accounting purposes and does not
correspond to cash expenditures. Moving from expenses amounting to COP
200.9 billion during the same period of the previous year to revenues
amounting to COP 109.0 billion as of September 2014
Net Income (+19.4%): reached COP 956.7 billion, growing in COP 237.8
billion vis-à-vis the same period in 2013.
Non Operating Expenses:
Financial Expenses (+26.7%): Increase due to higher amount of contracted
debt as a result of IELAH’s Acquisition
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3Q 14 3Q 13 $ % 3Q 14 3Q 13 $ %
Operating profit 610,649 535,747 74,902 14.0% 302.0 280.7 21.3 7.6%
Non-operating revenues 880,535 662,330 218,205 32.9% 434.1 345.9 88.2 25.5%
Non-operating expenses 382,508 294,221 88,287 30.0% 188.6 153.7 34.9 22.7%
Consolidated Adjusted EBITDA YTD 1,692,660 1,491,682 200,978 13.5% 834.4 779.1 55.4 7.1%
Net income before taxes and minority interest 1,108,676 903,856 204,820 22.7% 548.3 473.6 74.7 15.8%
Minority interest (36,363) (52,280) 15,917 -30.4% (18.0) (27.4) 9.4 -34.3%
Provision for income tax (135,623) (67,279) (68,344) 101.6% (67.1) (35.3) (31.8) 90.1%
Net income 936,690 784,297 152,393 19.4% 463.2 410.9 52.3 12.7%
Consolidated Adjusted EBITDA LTM 1,976,886 1,668,543 308,343 18.5% 974.6 874.4 100.2 11.5%
COP Million Variance USD Million Variance
Consistent Financial Performance EBITDA Evolution
Normalized Dividends: *2010 excludes dividends declared based on an early close of Gas Natural’s, Emgesa’s and
Codensa’s financial statements. These figures are included in 2011, when such dividends would normally have been
declared.** Anticipated dividends declared by Codensa on first half 2011, were included in 2012.
At the end of 3Q 2014 operational Profits from controlled subsidiaries participate with 53% of the total adjusted EBITDA,
compared to 19% of participation in 2006. Dividends from non-controlled companies participate with the remaining 47%
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Consistent Financial Performance Debt Metrics
Indebtedness in USD increased as a result of IELAH’s Acquisition.
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Ticker EEB:CB
As at Sept 30th, 2014 EEB’ market capitalization was USD 7.3 Billion
Trading volume tripled after the Equity Offering Nov 2011.
The stock is part of COLCAP, COLEQTY and COLIR
Average Target Price: COP 1,943 (USD 0.96)
Dividend Payout Ratio 2013: 70% Avg 2008 - 2013: 68%
Dividend Yield 2013: 3.5% Avg 2008 - 2013: 3.3%
EEB Share Performance 3Q 2014
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Agenda
I. EEB Overview and Key Updates – 3Q 2014
II. Expansion Projects Review
III. Financial Review – 3Q 2014
IV. Questions and Answers
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Webcast Link
Participant Toll-Free Dial-In Number: +1 (877) 359-9508
Participant International Dial-In Number: +1 (224) 357-2393
Conference ID: 26824336
Investor Relations
For more information about Grupo Energía de Bogotá, please contact our Investor Relations team:
http://www.eeb.com.co
http://www.grupoenergiadebogota.com/en/investors
Fabian Sánchez Aldana
Investor Relations Advisor GEB
+57 (1) 326 8000 – Ext 1827
fsanchez@eeb.com.co
Nicolas Mancini Suarez
Investor Relations Officer GEB
+57 (1) 326 8000 - Ext 1536
nmancini@eeb.com.co
Rafael Andres Salamanca
Investor Relations Advisor GEB
+57 (1) 326 8000 – Ext 1675
rsalamanca@eeb.com.co
Felipe Castilla Canales
Chief Financial Officer – GEB
+57 (1) 326 8000 - Ext 1501
ir@eeb.com.co
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