Celsia looking to buy generation assets outside Colombia

Wednesday, July 23, 2014

Colombian electricity firm Celsia is eyeing a potential purchase of power generating assets outside its home market, management said Wednesday during Celsia's 2Q14 conference call.

Specifically, Celsia is looking at conventional and unconventional generating assets in Chile, Panama, Guatemala and Mexico. The firm expects to make an announcement regarding a potential acquisition by the end of this year, the firm's management added.

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Celsia's net income rose 47.4% to 120bn pesos (US$64.9mn) in the second quarter from 81.4bn pesos in 2Q13, according to the firm's latest financial report.

Total operating revenue grew 37% to 804bn pesos in the second quarter from 589bn pesos in the year-ago quarter, while sales costs increased 28% to 467bn pesos from 364bn.

Celsia benefitted from its diverse mix of generation assets during the quarter, management said. Hydroelectric-reliant Colombia is currently experiencing lower-than-average rainfall and Celsia saw increased generation at all of its thermoelectric plants during the second quarter.

The firm also upped revenue by taking advantage of high spot market prices, management said. Second quarter spot market electricity prices rose 106% to 363 pesos/kWh from 176 pesos/kWh, according to Celsia's 2Q14 financial report.

Including its affiliates, Celsia generated 1,693GWh in 2Q14, up from 1,504GWh in 2Q13. Second quarter generation included 971GWh of hydro generation and 722GWh of thermo generation, compared to 887GWh and 617GWh respectively in 2Q13.

Celsia's affiliates include Zona Franca Celsia, EPSA and CETSA.

Looking to the future, Celsia's management said they expect the 352MW Porvenir II hydro project to begin generating at 50% capacity by December 2018. The project is currently seeking environmental permitting which Celsia expects to receive in the next three to six months.

Additionally, the firm expressed concern over Colombia's mid-term natural gas supplies. The nation's current wells are declining faster than anticipated. Although Colombia has bountiful gas reserves it will be six to seven years before they can be brought on stream, management said.

In the meantime, the company is closely following government backed efforts to build LNG import facilities and is also stockpiling diesel as a backup.

BNamericas will host its fourth LatAm Power Generation Summit in Santiago, Chile, on August 13-14. Click here to download the agenda.