Profits of large generators Companies fell 14.7%, the biggest drop since 2010
Sales declined 5.71%. For the rest of the year, the estimates are more positive due to the contribution of new coal plants and it is expected an improvement in hydrological conditions
Drought, delays, or projects cancellations, and high energy prices in the spot market have beaten tough to higher country’s electricity generators (Endesa, Colbún, AES Gener and E-CL). According to the results of the first quarter, the sum of its profits fell by 14.72%, the biggest drop since same period in 2010, when earnings fell 23.86%.
The only one among the four companies that saw an increase in profits was Colbún, which operates in the Central Interconnected System (SIC), earning $ 24.41 million in the period. This represents an increase of 165.25% over the first three months of 2012.
According to the firm, increasing profits, “explained beyond a low comparison base last year, mainly by improving our operating income”. Thus, in this field lists the operation of the coal plant Santa Maria I and its two natural gas combined cycle, thanks to agreements with Metrogas and Enap. “Both factors almost completely displaced thermal generation with diesel, and thus we supply our commercial commitments with a more efficient cost structure,” they explained.
In any case, company sources say that, despite being good numbers left behind 2011 and 2008 losses, they are not happy with the results and these are away from their targets.
Setbacks
The biggest decline in earnings was in E-CL, the main generator company in Northern Interconnected System (SING), where profits fell 58.52%. As explained by the company, “the fall in net (…) is mainly due to lower operating income associated with lower average rates charged to both free customers and distributors and foreign exchange effects in non-operating income”.
Behind them, AES Gener had a 33.59% low in profits, totaling U.S. $ 61.6 million, lower-profit-in amounts since 2010 (U.S. $ 57.85 million).
The firm explained that its rationale, which recorded lower gross profit was due to lower sales made in the spot market due to lower dispatch from its central Nueva Renca-from 632 GWh in the first quarter 2012 to 374 265 GWh in same period in 2013. because of failing to renew contracts of LNG. To this he added, that there was an imbalance in the level of contracts and energy efficient that was added to this.
In the case of Endesa Chile, its profits fell 1.08%, much less than the fall of 32.65% which had in the same quarter of 2012. In any case, according to the generator company, looking only business in the country, excluding operations in Argentina, Peru and Colombia-operating income in Chile grew by 4.0% and amounted to $ 33,833 million.
Sales fall
Sales also suffered, with a decline of 5.17% in the first three months of the year, the biggest drop since March 2009, when it fell by 12.3%. Looking at the amounts in the first quarter, AES Gener, Colbun, Endesa and E-CL sales totaled U.S. $ 2,248 billion.
Again Colbún was the only one among the four to record increase in sales compared to the same period last year. According to Andrew McCarthy, Banchile analyst, there has been a decline in contract prices of the generators companies, which impacted in sales. “Now there is less involvement of the spot price contracts, in the case of some contracts.”
Other electric industry analyst explained that the decline in sales also reflects different realities like Colbún which increased its income from this through increased generation from LNG, the opposite effect occurred in AES Gener. Meanwhile, E-CL was affected by a drop in copper production is generally given in this period, reducing energy demand.
The rest of the year
According to McCarthy, numbers should improve in the quarters that follow thanks to “the eventual factor recovery of the hydroelectric plant, so we should see more efficient production, improving margins in passing, but in a gradual manner,” explains.
A senior industry executive adds that another factor that will help, if the rains do not come, as some ones believe, will be the efficient generation that has been joined in recent months: Santa Maria I (342 MW, Colbún) Bocamina 2 (350 MW, Endesa) and Ventanas IV (270 MW, AES Gener).
Thus, firms can meet their requirements with more efficient generation than diesel and reduce their purchases on the spot market.
Source: Diario Financiero
