GEB Results Presentation 2Q 2019 August 22, 2019 1
Disclaimer The information provided herein is for informational and illustrative This presentation may contain statements that are forward-looking purposes only and is not, and does not seek to be, a source of legal, within the meaning of Section 27A of the Securities Act and Section investment or financial advice on any subject. This presentation does 21E of the U.S. Securities Exchange Act of 1934. Such forward- not purport to address any specific investment objectives, financial looking statements are based on current expectations, projections and assumptions about future events and trends that may affect situation or particular needs of any recipient. It should not be regarded by recipients as a substitute for the exercise of their own GEB and are not guarantees of future performance. judgment. This information does not constitute an offer of any sort The shares have not been and will not be registered under the U.S. and is subject to change without notice. GEB is no obligation to Securities Act of 1933, as amended (the “Securities Act”) or any U.S. update or keep current the information contained herein. State securities laws. Accordingly, the shares are being offered and sold in the United States only to qualified institutional buyers as GEB expressly disclaims any responsibility for actions taken or not taken based on this information. GEB does not accept any defined under Rule 144A under the Securities Act, and outside the responsibility for losses that might result from the execution of the United States in accordance with Regulation S of the Securities Act. proposals or recommendations presented. GEB is not responsible for We converted some amounts from Colombian pesos into U.S. dollars any content that may originate with third parties. GEB may have solely for the convenience of the reader at the TRM published by the provided, or might provide in the future, information that is SFC as of each period. These convenience translations are not in inconsistent with the information herein presented. No accordance with U.S. GAAP and have not been audited. These representation or warranty, either express or implied, is provided in translations should not be construed as a representation that the relation to the accuracy, completeness or reliability of the Colombian peso amounts were, have been or could be converted information contained herein. into U.S. dollars at those or any other rates. 2
1. GEB at a Glance 2. Key Updates 3. Financial Performance 4. Investment Projects 5. Q & A 3
1 GEB at a Glance 4
1.1. Generalities GEB is a leading energy holding in LatAm with a diversified portfolio of Power and Natural Gas utilities, classified in three strategic business groups: Distribution Transportation and Transmission Generation Power Power Natural Gas Natural Gas Power Distribution Transmission Distribution Transportation Generation 3.500 MW in Installed Capacity 3,8 mm of clients in Power Distribution 13.928 km of Transmission Lines 7.215 GWh in Power Generation (YTD) 3,2 mm customers in Natural Gas Distribution 4.288 km of Gas pipelines Net Income (1) CAPEX Dividends Approved on 2018 Revenue Operating Income EBITDA Net Income COP$1.193.533 mm 2Q 2019 2Q 2019 2Q 2019 2Q 2019 2Q 2019 USD$76,5 mm COP$130 per share (+13%) COP$1.178.642 mm COP$410.423 mm COP$536.251 mm COP$582.871 mm 6,2% 26,4% YoY 14,6% YoY 2,6% YoY 21,8% YoY Dividend Yield (2) Jun-2019 Stock Market Capitalization USD$146,5 mm Jun-2019 Jun-2019 Jun-2019 Jun-2019 COP$19.372.284 mm COP$2.230.522 mm COP$850.562 mm COP$1.947.172 mm COP$1.103.760 mm USD$6,0 bn 23,0% YoY 32,7% YoY 16,8% YoY 34,5% YoY June 30 2019 5 (1) Net Income: Controlling Interest + Non Controlling Interest (2) Calculated based on the closing price of the share at June 30 2019
2 Key Updates 6
2.1. Relevant Facts 2Q 2019 April 26: GEB received the Bonds and Loans award, in the Best Andean Syndicated Loan category for 2018, for accomplishing favorable refinancing conditions, including an important reduction in financing costs June 28: 1st payment of dividends, corresponding to COP$65 per share and totaling COP$596.767 mm Our auditor expanded on the comment on the opinion from December 2018, about the determination of the final rates for the valuation of Gebbras financial asset. The June 2019 expert opinion was issued without comment about the opinion Subsequent events to the quarter: July 8: The ANLA authorized GEB to construct the Alférez - San Marcos transmission line (37,3 km), which will reduce the risk of failures and suspensions generated by overloads of the electric power system and will potentiate the connection of new users July 22: : In the development of the MHCP authorization, GEB entered into an external public debt management operation to refinance USD$749 mm August 9: GEB acquired 100% of the shares of Dunas Energía, PPC Perú Holdings S.R.L. and Cantalloc Perú Holdings S.R.L., an investment that will consolidate the Company's position in the Peruvian energy sector Revenue increase in 2Q 2019 vs. 2Q 2018 equal to 9,0% EBITDA margin 2Q 2019 grew 6,3pp to 78,4% Confirmation of Moody's Baa3 bond rating, with a stable outlook Subscription of contract for the first project of Works for Taxes for COP$8.500 mm for the construction and optimization of the aqueduct’s networks system in the urban area of La Paz, Cesar 7
2.2. Relevant Facts 2Q 2019 During the quarter, a total of 50.086 customers were connected and 372 km of polyethylene networks were built As of June 2019, the Company had 852.746 connected customers in Lima and Callao and 1.448 km of polyethylene networks and 34 km of steel networks built, raising the Company's underground networks to 10.407 km Subsequent events to the quarter: In July Osinergmin approved an extension to the current five-year investment plan (May 2018 to May 2022), recognizing additional investments of more than USD$180 mm, reaching a total of approx. USD$500 mm, and incorporating more than 120.000 additional customers, surpassing the 500.000 new users for this period In August, Moody's, Fitch and S&P Global reaffirmed Cálidda's credit ratings at Baa2, BBB and BBB-, all with a stable outlook Filing before the MHCP the request for approval for GEB and TGI to grant their guarantee for the subscription of a new syndicated loan for USD$355 mm Disbursement of short-term debt of USD$2,25 mm to finance temporary liquidity needs Early fulfillment of the BOOT contract obligation consisting of the connection of more than 50,000 customers by year 5, which by the end of June were reported in a total of 50.801 8
3 Financial Performance (Consolidated) 9
3.1. Operational Performance 3 months figures / Millions COP$ Revenue from Operational Activities 2Q 2019 Vs. 2Q 2018 +26,4% +26,4% YoY $1.178.642 Natural Gas Distribution +28,6%; +COP$144.586 mm: $932.451 • Cálidda: Expansion of the network; increase in distribution of natural gas; and higher placement of financing loans for residential natural gas installations Natural Gas Transportation +24,1%; +COP$74.776 mm: • The delta stamp fee rate for works in the Armenia Loop is 2Q 2018 2Q 2019 included in all contracts Revenue by Business Lines | 2Q 2019 • Variable charges +45% between 2Q 2018 and 2Q 2019 due COP$1.178.642 mm to higher volumes transported, corresponding to take-and- pay contracts • Approximately 91,2% of the revenues derived from fixed 385.127 32,7% charges of "firm" transportation contracts Power Transmission +23,1%; +COP$26.829 mm: • GEB: UPME-04-2014 Refuerzo Suroccidental Heliconia 142.946 650.569 (Antioquia), Pereira (Risaralda), Cali (Valle), Yumbo (Valle) 12,1% 55,2% Natural Gas Distribution Natural Gas Transportation Power Transmission 10
3.2. Operational Performance 3 months figures / Millions COP$ Costs of Operational Activities +30,0% 2Q 2019 Vs. 2Q 2018 +30,0% YoY Natural Gas Distribution +41,7%; +COP$162.002 mm: $759.591 • Cálidda: Expansion of the network, amortization and $584.080 depreciation of new investments; increase in facilities and volumes distributed and transported • Contugas: Higher amortization expense of concession assets due to the change of method to the straight line method 2Q 2018 2Q 2019 Costs by Business Lines| 2Q 2019 Natural Gas Transportation -4,2% -COP$5.869 mm: • TGI: Environmental impact studies of the Armenia Loop and COP$759.591 mm execution of the Integrity Management Plan for the gas pipelines in 2Q 2018, which are not presented in 2Q 2019 Power Transmission +34,8%; +COP$19.378 mm: 133.695 17,6% • GEB: Professional fees and services. In addition, since 2019, 550.804 72,5% a more specific allocation of costs is being made to the transmission branch 75.092 9,9% Natural Gas Distribution Natural Gas Transportation Power Transmission 11
3.3. Consolidated Financial Results 3 months figures / Millions COP$ EBITDA EBITDA by Business Lines | 2Q 2019 COP$536.251 mm +2,6% YoY Natural Gas Other Distribution 0,7% 29,9% Power $536.251 Transmission $522.570 10,9% Natural Gas Transportation 2Q 2018 2Q 2019 58,4% Operating Income Net Income +14,6% YoY +21,8% YoY $410.423 $358.095 $24.776 $28.175 $558.095 $450.412 2Q 2018 2Q 2019 2Q 2018 2Q 2019 Controlling Net Income Non Controlling Net Income 12
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