Calidda’s Q2 2019 Results August 20 th , 2019 1
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, investment or financial advice on any subject. This presentation does not purport to address any specific investment objectives, financial situation or particular needs of any recipient. It should not be regarded by recipients as a substitute for the exercise of their own judgment. This information does not constitute an offer of any sort and is subject to change without notice. Calidda is no obligation to update or keep current the information contained herein. Calidda expressly disclaims any responsibility for actions taken or not taken based on this information. Calidda does not accept any responsibility for losses that might result from the execution of the proposals or recommendations presented. Calidda is not responsible for any content that May originate with third parties. Calidda May have provided, or might provide in the future, information that is inconsistent with the information herein presented. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. 2
Table of Contents 01 Key Updates and Results 02 Commercial Performance 03 Operational Performance 04 Financial Performance 05 Conclusions 06 Q&A 3
01 Key Updates and Results 4
1 Calidda at a Glance Key Updates Calidda’s client base and invoiced volume both increased during the Q2 2019 by 30% and 1%, respectively, compared to Q2 ◼ 2018’s figures, achieving more than 850 thousand clients. Our network length was extended by 716 km, whereby the distribution system reached a total of 10,407 km of underground ◼ pipelines. Calidda’s Revenues, Adjusted Revenues and EBITDA increased by 12%, 16% and 13%, respectively, driven by a higher ◼ distribution tariff since May-18 (4-years tariff review), higher invoiced volume (+5 MMCFD) and larger number of connections and related services (+197k customers). Calidda’s corporate credit and senior unsecured international ratings as of Q2 2019 is BBB / Baa2 / BBB- (Fitch / Moody’s / S&P), ◼ outlook stable. Key Operational Results Q2 2019 Q2 2018 Var % Key Financial Results Q2 2019 Q2 2018 Var % Accumulated Clients 852,746 655,132 30% Revenues (USD MM) 337 302 12% Invoiced Volume (MMCFD) 1 778 773 1% Adj. Revenues 4 (USD MM) 143 123 16% Network Lenght (km) 10,407 8,925 17% EBITDA 5 (USD MM) 84 74 13% Potential Clients 2 1,020,706 886,049 15% Adjusted EBITDA Margin 6 58% 60% - Network Penetration 3 83% 74% - Net Income (USD MM) 40 37 7% Interest Coverage 7 (x) 8.7x 8.7x - 1) MMCFD = Million cubic feet per day. 2) Number of clients which are located in front of the existing distribution network of Calidda. 3) Network Penetration = Accumulated clients / Potential clients 4) Adjusted Revenues = Revenues less pass-through concepts, such as natural gas, transport of natural gas and IFRIC 12 (investments in the distribution network). 5) EBITDA without extraordinary expenses related to arbitration results. 6) Adjusted EBITDA Margin = EBITDA / Adjusted Revenues 7) Interest Coverage = EBITDA / Interests from debt 5
02 Commercial Performance 6
2 Solid Base of Clients with upward trend Segment Evolution (# of clients) Highlights 25 23 22 18 17 Power Generation 2015 2016 2017 2018 Q2 2019 2T 2019 642 626 577 535 507 Industrial 2015 2016 2017 2018 Q2 2019 2T 2019 275 276 257 240 NGV Stations 232 Active vehicles as of Jun-19: 188,827. 2015 2016 2017 2018 Q2 2019 2T 2019 852 760 During the last 4 years, the number of Residential and 576 438 clients from the Residential & 344 Commercial Commercial segment has increased at a (thousands) rate of 30% per year. 2015 2016 2017 2018 2T 2019 Q2 2019 7
2 Upward Trend of Invoiced Volume (Amounts expressed in MMCFD) 779 778 763 739 699 ◼ 80% of the invoiced volume 9% 9% 8% 8% comes from Take-or-Pay long 9% 16% 16% term contract’s with 16 clients. 16% 15% Residencial y 15% Comercial ◼ Contract’s average remaining life is 12 years, and amount 605 Estaciones GNV MMCFD. Industrial Power Generation 74% 73% 73% 75% 75% 563 MMCFD Generación Eléctrica Industrial 42 MMCFD 2015 2016 2017 2018 2T 2019 ◼ As of Q2 2019, invoiced volume has decreased 0.1% against 2018 mainly due to the lower demand from the Industrial segment (seasonal effect). 8
2 Historic Invoiced Volume per Client Segment (Amounts expressed in MMCFD) Residential & Commercial Industrial 128 124 16 121 112 14 108 12 10 8 2015 2016 2017 2018 Q2 2019 2015 2016 2017 2018 Q2 2019 NGV Stations Power Generation 568 569 569 555 68 68 521 62 63 62 2015 2016 2017 2018 Q2 2019 2015 2016 2017 2018 Q2 2019 9
03 Operational Performance 10
Large Distribution System with Improving 3 Penetration Index Distribution System (km) 10,407 ◼ As of Q2 2019, Calidda’s distribution system has 9,691 8,347 almost doubled in size when compared to 2015 ’s 7,425 9,814 figures, and consists of 10,407 km of under ground 5,988 9,104 7,807 pipelines. 6,928 km 5,531 ◼ During Q2 2019, Calidda built 716 km, out of which 588 593 458 496 540 711 km were low pressure polyethylene pipelines, while the remaining were steel high pressure network. 2015 2016 2017 2018 Q2 2019 Total Polyethylene Network Steel Network Clients progress and penetration ratio 1 ◼ The network penetration ratio has greatly increased by 83% 79% 2,000 90% mora than 20% during the past two years up to 83% by 70% 80% 59% the end of Q2 2019. This is explained by Calidda’s 57% 70% 1,500 Thousands 60% 1,021 960 customer focused energetic solution, which benefits 50% 853 828 1,000 747 761 40% 609 from the government subsidies, and secures the 577 30% 438 345 500 sustained savings from the use of natural gas against 20% 10% alternative fuels. 0 0% 2015 2016 2017 2018 Q2 2019 1) Penetration Rate = Total Clients / Potential Clients * Potential Clients* Total Clients Penetration rate (*) Clients who are adjacent to Calidda's distribution network. 11
Natural Gas Distribution and Transportation 3 Capacity Clients are divided in two groups: (i) Independent Clients, which consume more than 1 MMCFD and sign separated contracts of natural gas (NG) supply, transportation and distribution services, and (ii) Regulated Clients, which consume less than 1 MMCFD and only sign a contract with Calidda, who then provides NG distribution service and acts as an intermediary to supply NG and transportation services. Calidda’s capacity : 420MMCFD ◼ During Q2 2019, both Regulated and Independent clients consumed 288 MMCFD, equivalent to 69% of our natural gas distribution capacity (Lurín-Ventanilla). 420 450 Distributed (MMCFD): 300 MMCFD 158 [Reg] + 130 [Ind] = 288 Invoiced (MMCFD): 150 158 [Reg] + 181 [Ind] = 339 - Ene/2018 Abr/2018 Jul/2018 Oct/2018 Ene/2019 Abr/2019 Regulated Clients Independent Clients Cálidda's Capacity ◼ Over the same period, Regulated clients consumed around 158 MMCFD, equivalent to Calidda’s 67% of the total contracted supply volume and 69% of the transportation volume of City Gate natural gas 1 . Residential 235 250 228 Independent clients (Power Industrial 200 Generation): Distributed: 260 MMCFD MMCFD 150 Mainly network Invoiced: 439 MMCFD 100 Power Generator 50 - Ene/2018 Abr/2018 Jul/2018 Oct/2018 Ene/2019 Abr/2019 1/ Contracted volume takes into consideration fixed (Take-or-Pay) 12 and non-fixed (interruptible) contracted capacity. Regulated Clients Transportation - TgP Gas - Pluspetrol
04 Financial Performance 13
Diversified Revenues’ Source by Client 4 Segment Invoiced Volume Distribution Revenues Adjusted Revenues 1 2.0% 11.3% 15.2% 16.4% 28.8% 8.8% 22.7% 36.9% 27.6% 47.1% 13.9% 72.9% 9.3% 15.0% 9.1% 3 2 ◼ Even though the Residential and Commercial segment represents only 2.0% of the invoiced volume, it concentrates 15.2% of our distribution revenues. More over, if we take into consideration the revenues from installation services, this segment represents 36.9% of our Adjusted Revenues. ◼ On the other hand, the Power Generation segment represents 72.9% of the invoiced volume, 47.1% of the distribution revenues, and 28.8% of the Adjusted Revenues. 1) Adjusted Revenues = Revenues less pass-through concepts, such as natural gas, transport of natural gas and IFRIC 12 (investments in the distribution network). 2/ Installation Services Revenues include revenues from the client’s facilities, connection fees and financing. 3/ Others: mainly derived from network relocation and other non recurrent services. 14
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