Chile profits up for Engie despite 27% generation decline

Profits for Engie Energía Chile (EECL) rose by 46% year-on-year to US$31.5mn during the second quarter, despite a 27% decline in gross power generation.

EECL attributed the drop in generation to the entrance in operation of new, more economically efficient generating capacity on the northern power grid (SING).

EECL is the largest generator on the SING, with over 2GW of coal, natural gas and diesel-fired capacity installed. The highest hourly demand recorded on the SING during June 2017 was 2,439MW/h, down 5% from the highest recorded in June 2016, according to a report from Chile's national electric system coordinator.

EBITDA rose by 4% to US$74.4mn, which EECL attributed to increased revenue from the regulated market segment, as well as increased spot energy sales, the company said Wednesday.

Operational income swelled by 13% to US$272mn on higher average monomic prices in the free market segment as a result of higher fuel prices.

CFO Carlos Freitas said in October 2016 that Chile's power sector had become a buyer's market in which it was cheaper for EECL to meet its supply commitments by purchasing energy from the spot market than by burning coal at its own plants.

EECL scheduled an earnings conference call for Thursday, July 27.