second quarter 2013 results medellín, colombia august 1, … · total 9,392 9,491 1.1% 4,920...
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© All rights reserved Interconexión Eléctrica S.A. E.S.P.
SECOND QUARTER 2013 RESULTS
Medellín, Colombia
August 1, 2013
Luis Fernando Alarcón, CEO
Judith Cure, CFO(E)
2
Operating Highlights
Strategic update ISA 2020
Second Quarter 2013 Results
Q&A
© All rights reserved by Interconexión Eléctrica S.A. E.S.P.
AGENDA
3
3 HIGHLIGHTS - SECOND QUARTER 2013
Energy transmission line in Chile:
It belongs to the Interconnection of the Norte Grande System
(Sistema Interconectado del Norte Grande –SING-).
174 km of transmission lines in total.
Estimated entry into operation in 2017.
Estimated investment of USD 80 million.
Annual revenues of USD 5,849,000.
1
PROJECTS AWARDED TO ISA
Energy transmission line in Peru:
500- kV Mantaro–Marcona–Socabaya–Montalvo transmission line.
900 km of transmission lines in total.
Concession term: 30 years. 36 months for construction period.
Estimated investment of USD412 million.
Annual revenues of USD41.5 million.
4
4 HIGHLIGHTS - SECOND QUARTER 2013
ISA acquired 11,304,604 shares, corresponding to 17.07% of ISA Peru S.A., formerly
belonging to the Fund for Investment on Infrastructure.
ISA placed bonds for COP 220 billion in the local market.
ISA’s shareholders received a dividend payment of COP 188 per share, representing
5.03% increase compared to last year.
ISA approved the creation of the affiliate INTERCOLOMBIA, dedicated to energy
transmission, to represent the electricity assets belonging to ISA in Colombia and to
manage, operate and maintain them.
Risk ratings:
Fitch Ratings affirmed ISA’s AAA (col) rating for the Bond Program, and the
F1+(col) rating for the papers, with a stable outlook. It upgraded the foreign and
local currency Issuer Risk Rating of ISA to BBB, with a stable outlook.
Standard & Poor’s ratified ISA’s international BBB- rating with a stable outlook.
5 © All rights reserved by Interconexión Eléctrica S.A. E.S.P.
Operating Highlights
Strategic update ISA 2020
Second Quarter 2013 Results
Q&A
AGENDA
By 2020, ISA will have tripled its profits, by capturing the most profitable growth
opportunities in its businesses existing in Latin America, the boost of operational efficiency
and the optimization of its business portfolio.
6
6 STRATEGIC UPDATE ISA 2020
ISA will have a return higher than its equity cost, sustainable over time.
In the Energy Transmission business, ISA continues to be the operator with the largest presence
in Latin America, will strengthen its position in the region and will achieve operational efficiency levels
aligned with the world’s best practices.
In the Road Concessions business, ISA will capture opportunities in the region, focused on
Colombia.
In the Telecommunications Transport business, ISA will consolidate its leading position as an
independent carrier in Latin America and will have developed an IP ecosystem in the region.
ISA will extend its ability for the Smart Management of Real-Time Systems to new services,
accessing highly profitable opportunities in other businesses.
7
7 STRATEGIC UPDATE ISA 2020
Project Office
(PMO)
Implementation Scheme
Corporate Reorganization
Reorganization
Opex
Procurement
Capex
Align internally and externally the
main stakeholders
Implement the organizational
change in order to propel strategic
initiatives (structure, governance
and incentives)
Define and develop efficiency
initiatives, establish the bases for
their capturing and estimate their
potential
Develop capabilities for the next
strategic cycle (future)
2013
2013 -14
2013-17
2014-22
Implementation Plan
1
2
3
4 Road Efficiency
Communication and Alignment
TE
Asse
t M
an
ag
em
en
t
8
8 STRATEGIC UPDATE ISA 2020 - IMPLEMENTATION PLAN
Initiatives Advances 2013 2014
Communication
and Alignment
ISA 2020 launch at internal and external media.
ISA 2020 presentation to employees, government entities,
investors and shareholders, suppliers and risk rating agencies
Alignment workshops with executive officers and employees
Corporate
Separation
Board of Directors’ approval for creation of new affiliate
INTERCOLOMBIA
Definition of Managing scheme for TE (Energy Transmission)
assets’ investments
Employer’s substitution for mobilizing employees to
INTERCOLOMBIA
Reorganization
Organizational analyses to define ISA’s and INTERCOLOMBIA’s
structures
Analysis of governance model to manage the business group
1
2.1
2.2
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
9
9 STRATEGIC UPDATE ISA 2020 - IMPLEMENTATION PLAN
Initiatives Advances 2013 2014
Efficiencies in
Opex
Advance on analysis for the application of best international
practices on maintenance of substations, lines, protections and
inductive equipment
Efficiencies in
Capex
Advance on analysis for the application of best international
practices on design and implementation of projects according to
the Project Management Institute’s (PMI) methodologies
Supply
Identification and prioritization of key categories
First category negotiation closing
Second category negotiation advance
1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12
3.1
3.2
3.3
10
10 STRATEGIC UPDATE ISA 2020 – INVESTMENT OPPORTUNITIES
Business Projects
Energy
Transmission
UPME Projects: Suria 230-kV and Tuluní 230-kV Substations. Estimated date of bid: second
semester 2013.
Projects for connection with private agents in Colombia.
Road
Concessions
Bidding processes for road infrastructure in Fourth Generation concessions, first quarter 2013.
Group : G1 – Central South
Corridor: Honda – Puerto Salgar – Girardot
Length: 221 km
Estimated Capex : COP 1,226 billion
Intervention:
Rehabilitation and improvement of existing roads
Construction of bridge over Magdalena river
There are no tolls
New tolls: 4
11 © All rights reserved by Interconexión Eléctrica S.A. E.S.P.
Operating Highlights
Strategic update ISA 2020
Second Quarter 2013 Results
Q&A
AGENDA
12
12 CONSIDERATIONS
Recognition as a financial asset (formerly an intangible asset) of Chilean and Brazilian
concessions. It became effective for the 2013 fiscal period, according to technical concept
issued by the General Accounting Office N° 20132000017991 of 05-28-2013.
Impact of early termination and further renewal of Concession Contract 059 of 2001 of
affiliate CTEEP.
Guaranteed revenues that enable the recovery
of the investment value?
Financial
Asset
Intangible
asset
YES NO Less risk Higher risk
Determination of concession services?
Construction Stage
AOM
Operation Stage
Investment return AOM Greater maintenance Financing
Construction ends, Operation
begins
OPERATION SERVICES
Barter
Construction
services Right
Exploit
concession
CONSTRUCTION SERVICES
Remuneration may be either an
intangible or financial asset
Devaluation of the
Colombian peso
compared to the US
Dollar, Brazilian Real
and Chilean Peso
Controlled
inflation
IPP below IPC
13
13
Macroeconomic
scenario June 2012 June 2013 Variation
COLOMBIA
IPP -2.17% 0.60% 2.76%
IPC 2.00% 1.73% -0.27%
Colombia devaluation -8.14% 9.09% 17.23%
COP/USD last 1,784.60 1,929.00 144.40
COP/BRL last 882.90 870.64 -12.25
COP/CLP last 3.56 3.80 0.25
COP/USD average 1,793.83 1,826.83 32.99
COP/BRL average 962.36 898.16 -64.19
COP/CLP average 3.64 3.82 0.18
BRAZIL
IGPM 3.19% 1.75% -1.44%
Brazil devaluation 7.76% 9.11% 1.36%
Peso vs Real devaluation -14.75% -0.02% 14.73%
BRL/USD last 2.02 2.22 0.19
BRL/USD average 1.86 2.03 0.17
CHILE
IPC 0.43% 0.47% 0.04%
Chile devaluation -3.34% 5.67% 9.01%
Peso vs CLP devaluation -4.96% 3.24% 8.20%
CLP/USD last 501.84 507.16 5.32
CLP/USD average 492.83 478.68 -14.14
MACROECONOMIC SCENARIO
Energy 68.5%
Roads 25.0%
Telecommunications
3.9%
SMRTS 2.6%
14
Total operating
revenues reached
USD467 million in
2Q13.
Breakdown by Business – 2Q13 Breakdown by Country – 2Q13
CO
P b
illio
ns
SMRTS: Smart Management of Real Time Systems
14 CONSOLIDATED FINANCIAL RESULTS
REVENUES
1,045 900
2,186 1,716
4,303
3,550
0
1,000
2,000
3,000
4,000
5,000
2Q12 2Q13 6M12 6M13 2012 2013P
-13.8%
-21.5%
-17.5%
COLOMBIA 38.2%
CHILE 25.1%
BRAZIL 24.4%
PERU 11.3% OTHERS
1.0%
542 477
1,075 1,009
2,300 2,562
0
500
1,000
1,500
2,000
2,500
3,000
2Q12 2Q13 6M12 6M13 2012 2013P
15
CO
P b
illio
ns
COP billions 1Q12 1Q13 Change
$
Change
%
AOM Costs and Expenses
(ex. Pensions) 342 433 91 26.8%
Provisions, Depreciation, Amortization and Pensions 200 43 (157) -78.3%
Total 542 477 (65) -12.0%
15 CONSOLIDATED FINANCIAL RESULTS
COSTS AND OPERATING EXPENSES
-12.0%
-6.2%
11.0%
Energy 59.0%
Roads 39.1%
Telecommunications
1.6%
SMRTS 0.3%
16
EBITDA reached USD242
million in 2Q13.
EBITDA margin was 51.9% in
2Q13.
Breakdown by Country – 2Q13
CO
P b
illio
ns
Breakdown by Business – 2Q13
16 CONSOLIDATED FINANCIAL RESULTS
EBITDA
COLOMBIA 40.9%
CHILE 39.0%
BRAZIL 4.1%
PERU 14.9%
OTHERS 1.1%
703 467
1,518
938
2,903
1,915
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2Q12 2Q13 6M12 6M13 2012 2013P
-33.6%
-38.2%
-34.0%
-200 -168
-406
-245
-371
-508
-800
-700
-600
-500
-400
-300
-200
-100
0
2Q12 2Q13 6M12 6M13 2012 2013P
17
Non-operating results
was –USD87 million in
2Q13
COP billions 2Q12 2Q13 Var. $ Var. %
Financial (199) (167) 32 -16.2%
Others (1) (2) (1) 62.6%
TOTAL (200) (168) 32 -15.8%
© Todos los derechos reservados por Interconexión Eléctrica S.A. E.S.P.
CO
P b
illio
ns
17 CONSOLIDATED FINANCIAL RESULTS
NON-OPERATING RESULTS
-15.8%
-39.6%
37.0%
Net Income for 2Q13
amounted USD76 million
Net margin before minority
interest was 22.6% for 2Q13
18
Billions 2Q12 2Q13 Var. $ Var. %
Income before taxes 303 255 (48) -15.8%
Income tax provisions 115 52 (64) -55.3%
Income before minority interest 187 203 16 8.6%
Minority interest 141 56 (85) -60.2%
NET INCOME 46 147 101 218.7%
CO
P b
illio
ns
18 CONSOLIDATED FINANCIAL RESULTS
NET INCOME
46
147 146
218
273
428
0
100
200
300
400
500
2Q12 2Q13 6M12 6M13 2012 2013P
218.7%
49.3%
57.0%
Assets 25,771 27,127
19
Assets by Country – 2Q13
As of June 2013, assets totaled
USD14,063 million.
CO
P b
illio
ns
Assets by Business – 2Q13
19 CONSOLIDATED FINANCIAL RESULTS
BALANCE SHEET
-0.8%
23.5%
1.2%
5.3%
6,111 7,546
4,173 4,222
15,487 15,359
0
5,000
10,000
15,000
20,000
25,000
30,000
2012 2Q13
Liabilities Minority interest Equity
Energy 63.9% Roads
33.5%
Telecommunications
1.8%
SMRTS 0.8%
COLOMBIA 27.6%
CHILE 33.6%
BRAZIL 27.5%
PERU 10.8%
OTHERS 0.4%
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1Q13 2Q13 2013E
Colombia Brazil Peru Chile Other
Colombia 32.9%
Brazil 32.0%
Peru 29.0%
Chile 6.1%
Other 0.0%
20
CAPEX and permanent
investments reached
USD154 million 2Q13
Billions 6M13 % 2013E
Energy Transmission 454 87 1,401
Road Concessions 27 5 2
Telecommunications Transport 33 6 101
SMRTS 10 2 32
Breakdown by Country – 6M13 Breakdown by Business
CO
P b
illio
ns
20
Average exchange rate 2Q13 = 1,863.19
CAPEX AND INVESTMENTS
240
1,536
286
21
Net Debt / EBITDA: 2.9x
EBITDA / Interest: 3.9x
COP in billions 2012 2Q13 Var. % 2Q13
USD
CHILE 4,330 4,401 1.7% 2,282
COLOMBIA 1,777 1,902 7.1% 986
BRAZIL 2,165 1,660 -23.3% 861
PERU 1,057 1,465 38.5% 759
BOLIVIA 55 56 0.7% 29
ARGENTINA 8 7 -10.6% 4
TOTAL 9,392 9,491 1.1% 4,920
Breakdown by Currency Breakdown by Rate Breakdown by Source
Exchange rate US$ 1.00 = COP 1,929.00
USD in millions
21 CONSOLIDATED FINANCIAL - DEBT
Fixed 57.7%
CDI 9.4%
ICP 15.2%
TJLP 4.4%
TAB 4.2%
Libor 3.1%
DTF 3.7%
vc 1.7% Other
0.6%
Capital Market 74.7%
Banks 24.4%
Other 0.9%
BRL 15.1%
COP 18.9%
USD 30.4%
UF + CLP 34.4%
Others 1.2%
22 © All rights reserved by Interconexión Eléctrica S.A. E.S.P.
Operating Highlights
Strategic update ISA 2020
Second Quarter 2013 Results
Q&A
AGENDA
23
23 CONTACT – INVESTOR RELATIONS
Email [email protected]
Website www.isa.com.co
Twitter @ISA_Avanza
24
24 DISCLAIMER
Certain statements contained in this report constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements reflect our current views with respect to future events and
are based on assumptions and subject to risks and uncertainties. Also, these forward-looking
statements present our estimates and assumptions only as of the date of this report. Except
for our ongoing obligation to disclose material information as required by federal securities
laws, we do not intend to update you concerning any future revisions to any forward-looking
statements to reflect events or circumstances occurring after the date of this report.
Amounts expressed in US dollars are for information purposes only, and do not reflect
accounting conversion techniques usually applied. As of June 30, 2013, the exchange
rate was of USD 1.00 = COP 1,929.00 (Source: Banco de la República de Colombia).