Colbún back in black with US$102mn H1 profit

Friday, July 28, 2006

Chilean power generator Colbún posted net profits of 54.7bn pesos (US$102mn) in first half of 2006, turning around a 6.34bn-peso net loss in the same period the previous year thanks to higher operating profits, the company told securities regulator SVS.

Colbún's operating profits rose to 71.4bn pesos in 1H06 compared to 2.25bn pesos in 1H05 due to an increase in physical energy sales and a decrease in operating costs, the statement said.

Operating costs, excluding depreciation, decreased 5% to 111bn pesos in 1H06 from 116bn pesos in the same period 2005 as a result of lower fuel consumption, reduced gas supply restrictions imposed by Argentine authorities as well as increased water availability for hydro generation.

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Total revenues increased 53% to 186bn pesos in the first half of this year from 122bn pesos in the same period 2005, mainly due to overall energy sales rising 65% to 146bn pesos.

Sales to regulated clients rose 56%, or 30.2bn pesos due to Colbún's fusion with hydroelectric firm Hidroeléctrica Cenelca, a tariff increase and an increase in physical consumption, the statement said.

Sales to non-regulated clients climbed 57%, or 17.0bn pesos, primarily due to an increase in consumption as a result of new supply contracts with state copper mining company Codelco's Andina division and other mines.

Colbún's total physical sales rose 40% to 6,250GWh in the first half of 2006 from the previous year.

In addition to higher sales, Colbún's merger with Hidroeléctrica Cenelca, controlled by local investor group Grupo Matte through holding company Minera Valparaíso, increased revenues 30.4bn pesos.

Grupo Matte and Belgium's Suez Energy, Colbún's controllers, struck a deal to merge Grupo Matte's other electricity assets including Cenelca with Colbún in August 2005. The merger was finalized in October.

In the first half of this year, hydro constituted 66% of Colbún's generation capacity while thermo comprised the remaining 34%. Hydro and thermo generation accounted for roughly half Colbún's generation each in the first six months of 2005.

Gas-fired generation in 1H06 made up 93% of Colbún's thermo generation in the period with the remainder stemming from diesel-fired generation. In the year-ago period, gas-fired generation accounted for only 66% of thermo generation.

Non-operating losses increased 18% to 9.08bn pesos from a non-operating loss of 7.67bn pesos, largely due to exchange rate differences.

The company's net equity rose 66% to 1.17tn pesos at the end of 1H06, up from 703bn pesos year-on-year, principally due to the merger with Cenelca, Colbún told SVS.