Distribution segment losses hurt Chile's Enersis

Thursday, October 30, 2014

Net generation increased 3.9% year-on-year in the first nine months of 2014 to 45.1TWh for Chilean power holding company Enersis, which operates in Chile, Colombia, Brazil, Peru and Argentina.

Output was led by hydro (25.0TWh), followed by oil and gas (18.2TWh), coal (1.75TWh) and renewables (143GWh), according to an earnings presentation.

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Hydro and oil and gas-fired power plants accounted for 52.6% and 41.7% of the company's 16.7GW total installed capacity in the region at the end of the period, respectively. Next was coal (5.21%), followed by renewables (0.5%).

The company's generation and distribution segments accounted for 60.9% and 39.1% of total Ebitda, which dropped 6.9% year-on-year to US$2.7bn.

Ebitda from generation grew 14.4% to 938bn pesos (US$1.62bn), while corresponding earnings from distribution dropped 27.5%.

Argentine power distributor and Enersis subsidiary Edesur posted a loss of 209bn Chilean pesos, according to the latest Enersis MD&A, which attributed the loss to government price-freezing measures.

Ebitda from generation increased in Colombia, Peru and Argentina, but dropped in Brazil and Chile. Ebitda from distribution increased in Chile, Colombia and Peru, dropping in Brazil and Argentina.

Average spot prices in in Brazil and Colombia jumped 128% and 34.1%, respectively, while prices in Argentina, Chile and Peru fell 34.5%, 16.9% and 1.7%.

The period included a restructuring of the Enersis family of companies, under which subsidiary Endesa sold its shares in Endesa Latinoamérica and Enersis to the group's parent company Enel. As a result, Enersis became a direct subsidiary of Enel.

Enersis noted in its regulations update sweeping tax reforms passed by Chile, which include a US$5/t CO2 emissions tax and a gradual increase of the corporate tax rate to 27% from 20%.

Legislators also approved a net-metering law under which residents and businesses who install approved renewable energy projects up to 100kW can inject excess output into the grid in exchange for reduced electricity bills.

In Brazil, power regulator Aneel proposed reforms narrowing the range of allowed upper and lower spot price limits.

Enersis shareholders also approved a measure to buy debt held by subsidiary Central Dock Sud, which operates the namesake thermo plant in Argentina along with national oil company YPF and Pan American Energy (PAE).

Net income attributable to Enersis shareholders dropped 41.8% to US$485mn for the period.

BNamericas will host its 11th Southern Cone Energy Summit in Lima, Peru, on November 12-13. Click here to download the agenda.