Analysts expect positive results for power companies in fifth dry consecutive year
In 2013, this sector was the engine of Ipsa. The trend will continue in 2014, but less pronounced. Projections point to growth in earnings and margin improvements
With a fifth consecutive year dry verge, stock analysts are optimistic about the results to be showing this 2014 by electric companies. In 2013, the electricity sector was the engine that drove up the results of the companies comprising the Ipsa, so from research departments of brokerage houses expect this year to continue the good run, although not as pronounced as in the previous period.
Marcelo Catalan from BCI, said the performance demonstrated in 2013 by power companies together was due to the down in generation costs and the mix more efficient by incorporating Bocamina II, Endesa; Campiche, AES Gener, and Santa María II, from Colbun: “The growth in EBITDA will not be as pronounced as it was in 2013, but will continue to show improvement this year.”
Their estimates indicate a shortfall of 12% in water generation in the Northern Interconnected System with respect to a normal year, together with a marginal cost of $ 120 per MWh.
Andres Ossa, from Credicorp Capital, believes that this year ought to be good for the industry in general: “There are new efficient capacity coming in and, despite projecting a hydrological year below normal, the amount of water available would be by over that seen in 2013. As for results, we see increasing profits for companies in the sector with better margins too. “
Nicholas Schild, from Santander GBM, is also optimistic about 2014: “The recent improvement in the level of the reservoirs should let the electricity sector better prepared to break year for 2013.”
According to Ossa, organic growth remains the main challenge for the sector: “This year, the industry as a whole should focus on achieving structural changes that allow a more stable development.” To do this, he added that the new government participation is essential, which could be implemented through a regulatory plan defining suitable for plant construction and citizen participation mechanisms with clear rules areas.-
Panorama by company
There is no consensus among analysts polled about which is the company with better prospects.
Andrés Ossa believes that the increased availability of water will meet for the first months only. In their estimates he considers the melting season has been better than expected. Therefore, “we see as positive more inclined to thermal generation companies,” he said. In this context, he said that once again the first half of this year may be positive for AES Gener, considering their possible status as a net seller in the spot market.
According to Nicholas Schild, Colbún will be the company that will show the most attractive growth in terms of the 2014 results. He explained that last year, the firm was strongly impaired by an imbalance between their supply contracts and efficient generation capacity following the entry of the contract with Codelco. “This would be solved with the entry of Angostura and the maturity of contracts not covered at low prices during the first half of the year,” he says.
Marcelo Catalan believes that Endesa took part of all tenders of power last year, this should result in benefits, regardless of the cessation of Bocamina I and II, after the Supreme Court suspended the operation of the resort on the Coronel Bay by conditioning that it does not generate damage to aquatic resources. Overall, he estimated increases of around 10% in EBITDA generation.-
Source: La Tercera
