ENGIE Energía Perú · ENGIE Energia Peru overview 13 Largest private electricity company in Peru...

ENGIE Energía Perú

Results as of September 2018

2018 Q3 HIGHLIGHTS

2

Total energy generation (SEIN) grew 3.0% in Q3 YTD 2018 compared to Q3 YTD 2017. As of

September, EEP maintained a leading position in the sector, accounting for 20% of the total capacity and

9% of the total energy generation of the system

Q3 2018 EBITDA reached 62.0MUSD, a 3.0% growth compared to Q3 2017, due to strong commercial

effort to re-contract available efficient capacity, lower COGS (6.6%) and lower SG&A (23.5%). However, Q3

YTD 2018 EBITDA decreased 25% compared to Q3 YTD 2017. The decrease is mainly explained by the

end of SPCC PPA and lower re-contracting prices given market conditions

Q3 2018 Net Result reached 21.5MUSD, a 14.0% increase compared to Q3 2017 (18.8MUSD) mainly

due to lower financial expenses

Because of its recognized standards of transparency and corporate governance, EEP entered the BVL

Good Corporate Governance Index in July 2018

In September 2018, EEP signed a 7-year PPA for 150MW with Anglo American Quellaveco in addition to

the 30-year PPA for 35MW signed earlier this year

In September 2018, EEP together with the Municipality of San Isidro, implemented the first 100%

electric bus which can be used free of charge by residents and visitors. This initiative is part of ENGIE´s

objective of promoting green mobility and contributing for reducing CO2 emissions

ENGIE Energía Perú - Quarterly Results Q3 2018

275

205

2017 Q3 2018 Q3

MAIN FINANCIAL RESULTS Q3 2018

3

EBITDA Q3 Net Result Q3 Total Debt

914.9776.7

2017 Q3 2018 Q3

-15%

55 55

19 130 30

22

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

MUSDMUSD MUSD

Net Debt / EBITDA (12m)

2.4 2.8

2017 Q3 2018 Q3

+15%


EBITDA Q3 YTD

-25%

MUSD

Net Result Q3 YTD

129

82

2017 Q3 2018 Q3

MUSD

-36%

+3%+14%108 106

6050

71 7162

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

GWh

∆

Q3 2018 vs

Q3 2017

YTD

∆

Q3 2018 vs

Q3 2017

Yuncán HPP 760 8% 889 11% 678 10% 651 10% 159 2% 152 7% -4% -4%

Quitaracsa HPP 484 5% 531 6% 430 7% 381 6% 70 1% 57 3% -11% -18%

Chilca1 CCGT 5,617 63% 5,303 63% 3,865 59% 2,196 34% 1,589 25% 1,528 73% -43% -4%

Chilca2 CCGT 220 2% 308 4% 153 2% 222 3% 131 2% 193 9% 45% 47%

Ilo21 (Coal) 773 9% 674 8% 651 10% 43 1% 280 4% 16 1% -93% -94%

Ilo1 (Diesel) 210 2% 86 1% 86 1% 0 0% 31 0% 0 0% -100% -100%

Ilo31 (Cold Reserve) 100 1% 7 0% 7 0% 3 0% 1 0% 1 0% -57% 22%

NEPI 18 0% 9 0% 8 0% 18 0% 4 0% 9 0% 120% 128%

Intipampa 0 0% 0 0% 0 0% 54 0% 0 0% 25 1% n.a. n.a.

Imports (Ecuador) 21 0% 0 0% 0 0% 0 0% 0 0% 0 0% n.a. n.a.

Auxiliaries -289 -3% -185 -2% -152 -2% -66 -1% -76 -1% -43 -2% -57% -43%

NET GENERATION 7,914 88% 7,624 91% 5,727 88% 3,502 55% 2,191 34% 1,938 92% -39% -12%

COES: NET 1,061 12% 734 9% 797 12% 2,873 45% -203 -3% 169 8% 261% -183%

CLIENTS DEMAND 8,976 100% 8,358 100% 6,524 100% 6,375 100% 1,988 31% 2,106 100% -2% 6%

Q3 2018Q3 2018

YTD2016 2017

Q3 2017

YTDQ3 2017

ENERGY PRODUCTION AND BALANCE Q3 2018Lower thermal generation in Q3 2018 and net buyer position in the spot market

4ENGIE Energía Perú - Quarterly Results Q3 2018

H

H

T

T

T

T

T

T

S

H Hydro T Thermal S Solar

MAIN RESULTS Q3 2018

5

Q3 2018 EBITDA 3.0% growth vs Q3 2017 consolidating the commercial efforts taken during 2018

Q3 2018 YTD EBITDA decreased 25% compared to Q3 2017 YTD to 205MUSD, mainly explained

by the end of SPCC PPA (April 2017) and early PPA termination Las Bambas (August 2017) which

was partially offset by new PPAs.

Total debt decreased by 15% from Q3 2017, following the expected amortization schedule, and

totalized 777MUSD


* Restatement by application of IFRS

** Does not include commercial penalty fees and impairment of assets

(MUSD) Q3 2018 Q3 2017∆ Q3 2018

vs Q3 2017

Q3 2018

YTD

Q3 2017

YTD

∆ Q3 2018

vs Q3 2017

YTD

FY 2017 FY 2016 ∆ FY

Revenues* 129 144 -11% 388 464 -16% 683 748 -9%

EBITDA 62 60 3% 205 274 -25% 325 309 5%

Net Result 22 19 14% 82 129 -36% 130 132 -1%

Recurrent EBITDA** 62 60 3% 205 247 -17% 298 330 -10%

Net Recurrent Result** 22 19 14% 82 109 -25% 111 169 -35%

Total Debt 777 915 -15% 777 915 -15% 837 1,009 -17%

Net Debt 711 792 -10% 711 792 -10% 800 981 -18%

Net Generation GWh 1,938 2,191 -12% 3,502 5,727 -39% 7,624 7,914 -4%

Clients Demand GWh 2,106 1,988 6% 6,375 6,524 -2% 8,358 8,976 -7%

Net Debt / EBITDA 12m 2.8 2.4 15% 2.8 2.4 15% 2.5 3.2 -22%

+274.7 -28.0

-0.7 -57.9

+12.4 +4.2 +204.7

EBITDAQ3 2017

Non recurrent events ∆ CMg Commercial Contracts Other Income Intipampa EBITDAQ3 2018

EBITDA Q3 YTD: 2018 vs. 2017 -70.0 MUSD

6

- 25%


• SPCC PPA maturity

• End of Las Bambas by

the end of August 2017

• Jetty contract

(mainly one shot

initial payment)

• Services to SPCC

Impact of the end of PPA’s in Q3 2017 partially

offset by commercial effort driving Q3 2018

• Higher marginal cost

due to gas events in

2018 offset by

natural gas price

declarations

• 2017 effect

‐28.0MUSD

mainly due to

commercial

penalty fee Las

Bambas

+128.8+7.8 -70.0

-6.7 +6.1-2.3

+18.2 +81.8

Net ResultQ3 2017

Non recurrentevents

EBITDA D&A Net FinancialExpenses

FX Tax Net ResultQ3 2018

NET RESULT Q3 YTD: 2018 vs. 2017 -47.0 MUSD


• Ilo complex

depreciation review

• Lower outstanding debt

• Interest on tax adjustment

in 2017

- 36%

• Tax related to

Las Bambas

penalty

• Tax effect, mainly

explained by lower

EBITDA

+60.5 0.0 -3.9+0.1

+4.0 +1.4 +62.0

EBITDAQ3 2017

Non recurrent events ∆ CMg Commercial Contracts Other Income Intipampa EBITDAQ3 2018

EBITDA Q3: 2018 vs. 2017 +1.6 MUSD


• Provision

reversals

• Higher marginal

cost due to

Malvinas NG

plant

maintenance in

July/August

+3%

+18.9+1.6 -2.9 +2.1 +0.0

+1.8 +21.5

Net ResultQ3 2017

EBITDA D&A Net FinancialExpenses

FX Tax Net ResultQ3 2018

NET RESULT Q3: 2018 vs. 2017 +2.6 MUSD

9

+14%

• Ilo complex

depreciation review

• Lower outstanding

debt


STOCK PRICE PERFORMANCE

10

Financial Market Data – September 2018

Number of shares issued 601,307,011

Share price (PEN) – 30/09/2018 6.70

VWAP (3m) – (PEN) 6.69

52 week – high – (PEN) 8.05

52 week – low – (PEN) 6.43

Market Cap (MUSD) 1,222

Enterprise Value (EV) (MUSD) 1,932

EV / EBITDA 7.6x

Price to Book Value (P/B) 1.1x

Price / Earnings ratio (P/E) 14.8x

Daily avg. trading volume (Msh) 0.03

EV: Market Cap + Net Debt

P/B: Market Cap / Book Value of Equity

Source: SMV, Lima Stock Exchange

• Market Cap changes in USD is affected by share price movements and FX changes

• In Q3 2018, the share price increased from 6.55 to 6.70 S/./sh; (+2.3%); while the

exchange rate appreciated slightly against the USD (3.298 PEN/USD).

*Market Cap variation in 2015 is mainly explained by portfolio rebalance of an institutional investor and subsequent potential reclassification of Peru from Emerging Markets (“EM”) to Frontier market due to its low

liquidity


467663

1,020

793 839

1,602

1,187

1,759

2,0052,075

1,427

1,611

1,3511,222

0

50

100

150

200

250

0

500

1,000

1,500

2,000

2,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018YTD

MU

SD M

US

D

Net Result Dividends Market Cap

EQUITY ANALYST VIEW

11

PE

N /

Sh

are

6.5

7.5

8.0

8.5

6.0

Credicorp Larrain Kallpa Inteligo Seminario Consensus

Target price 7.8 8.2 8.9 8.5 8.4 8.4

Recommendation Mantain Buy Buy Buy Buy

Date September 2018 July 2018 July 2018 July 2018 September 2018

2018 Sep

Consensus

Price as of September 30th

6.70

25%

Upside

7.0

BuySell Mantain

9.0

ENGIE Energía Perú - Quarterly Results Q3 2018 11

DIVIDEND PAYMENTS: 680 MUSD since 2004

12

Dividend Policy: Minimum payout ratio of 30%

Payout ratio

of 38% in

2017


32

42

28

13 12.4 1520 20 24 31 33

24

43

31

11 13 16

1822

30

9 6

34 3642

41

15

10 10

34

77

42

71

85

59

24 25.4

31

38

42

54

49 49

86%

193%

100%

113%

90%89%

30% 30%31%

30% 31% 30%

38% 38%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

0

10

20

30

40

50

60

70

80

90

100

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Extraordinary Annual

2nd Half 1rst Half

Payout ratio

Chilca Complex

• ChilcaUno - 852MW - Natural Gas

• ChilcaDos - 111MW- Natural Gas

Ilo Complex

Nodo - 610MW - Dual Fuel

Ilo31 (Cold Reserve) - 500MW - Dual Fuel

Ilo21 - 135MW - Coal

Intipampa

Solar 41MW

Yuncan

Hydro 136MW

Quitaracsa

Hydro 112MW

* www.engie.com

APPENDIXENGIE Energia Peru overview

13

Largest private electricity company in Peru in terms of

capacity

2,497 MW of installed capacity & ~7,600 GWh of

annual generation

Low Co2 generation base

Diversified & decentralized portfolio of

generation sources

21 years operating in the country & listed since 2005

499 employees

Financial discipline to support future growth ambitions,

AAA local rating

Sponsored by a global leader, ENGIE S.A.*


777 MUSD

By Currency By Source

Solid financial disciplineoptimizing costs, diversifying financial sources & limiting risks

Net debt / EBITDA

2.8x 2.8x 2.8x3.2x

2.8x2.6x 2.4x 2.5x 2.6x

2.9x 2.8x

919 926 898 981 904 872 792 800 763 729 711

330 332 326 309 323 341 327 325 288 253 255

0

0

0

0

0

0

0

0

0

0

-

1

2

3

4

5

6

Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18

Net Debt/EBITDA Net Debt EBITDA LTM

Debt Breakdown - As of September 2018

60%40%

43%

38%

19%

Credit Rating – May 2018

AAA.pe

Stable25/05/2018

AAA.pe

Stable28/05/2018

Local capital market as an important partner

• First program for up to 400MUSD started in 2007 with total

issuances of ~150MUSD (outstanding ~75MUSD)

• Third program for up to 500MUSD started in 2015 :

• 2016 → 1st issuance of 250MPEN @ 7.125% (10 yr)

• 2017 → 2nd issuance of 79MPEN @ 6.0% (7 yr)

• 2017 → 3rd issuance of 250MPEN @ 6.53% (10 yr)

• 2016-2017 issuances ~2x times over subscripted

ENGIE Energía Perú - Quarterly Results Q3 2018 14

THANKS

15

This presentation may contain certain forward-looking statements and information relating to ENGIE Energía Perú S.A. (“Engie Energía Perú” or the

“Company”) that reflect the current views and/or expectations of the Company and its management with respect to its business plan. Forward-looking

statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may

contain words like “believe”, “anticipate”, “expect”, “envisage”, “will likely result”, or any other words or phrases of similar meaning. Such statements are

subject to a number of significant risks, uncertainties and assumptions. We caution that a number of important factors could cause actual results to differ

materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In any event, neither the Company nor any of its

affiliates, directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business decision made or

action taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. The Company

does not intend to provide eventual holders of shares with any revised forward-looking statements of analysis of the differences between any forward-looking

statements and actual results. There can be no assurance that the estimates or the underlying assumptions will be realized and that actual results of

operations or future events will not be materially different from such estimates.

This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without ENGIE

Energía Perú prior written consent.

FOR MORE INFORMATION ABOUT ENGIE ENERGIA PERU

Ticker: ENGIEC1

+51 1 616 79 79 New: [email protected]

Adriana Burneo, Head of Corporate Finance & Investor Relations – [email protected]

Marcelo Soares, Chief Financial Officer – [email protected]

Av. República de Panamá 3490, Lima 27, Peru www.engie.pe


ENGIE Energía Perú · ENGIE Energia Peru overview 13 Largest private electricity company in Peru...

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