Major power companies have reduced their margins to 43% in the last four years
From the analysis of the balance sheets of Endesa, Colbún and AES Gener it was determined how much they have left for each unit of energy (MWh) sold in Chile.
The electric generators and “strong cash flows” that have accumulated in recent years, have been present in the speech of the authority a couple of weeks ago and have fueled the discussion on the reasons for this very good performance.
However, when reviewing the balance sheets of the three main players in the sector, Endesa Chile, AES Gener (considering only these two operations in Chile) and Colbún it is observed that even though their incomes have risen in the past four years, their financial indicators such as EBITDA and income of the holding, did not follow the same trend, according to an analysis from CorpResearch.-
One factor that showed this calculation is that while sales of Colbún and AES Gener rose 46% and 45% between 2009 and 2013, their EBITDA rose just 5% and 8% respectively for the same period.
According to Sergio Zapata, an analyst at the brokerage, this reflects that although the price of energy has risen during this period, this responds only to rising fuel costs that these firms use. Same with both utilities, he adds.
“The first thesis to explain that ultimately higher incomes do not translate into better results at the operational level and utility is actually the counterpart of higher revenues are the higher costs and not that companies have profits or Ebitda over the normal ” said Zapata.
In the case of Enersis’s subsidiary, revenue declined 22% between 2009 and 2013, following the same trend as its ebitda and profit, which scored 48% falls in this period. This is because the prices at which Endesa sells its energy, decreased in the period under review from U.S. $ 113 per MWh to $ 96 per MWh, as a result of the passage of schema node price (set by the authority) to procurement scheme in the first phase this company offered the lowest prices compared to the other two generators.
Whereas income and physical sales reported by companies in their financial reports, notes that Colbun increased its average selling prices by 32% (U.S. $ 100 to U.S. $ 132 per MWh), while the AES Gener decreased slightly from U.S. $ 93 to U.S. $ 89 per MWh.
By taking this range and compared with the reported EBITDA operating margin is obtained, that is, how much left the company for each MWh sold.
In case of Endesa this factor fell 43%, while in 2009 as per MWh selling its gross operating profit was U.S. $ 63 per MWh, in 2013 it dropped to $ 36. For Colbún the Fall is 6 % falling margin from U.S. $ 29 to U.S. $ 27 per MWh. In the case of AES Gener low is 29%-of U.S. $ 26 per MWh in 2009 to $ 18 in 2013 -.
“The profitability per unit sold is less than four years ago and that makes it very clear that today’s performance is much lower,” says Zapata.
Source: Diario Financiero
