The Company recorded EBITDA of US$237 million in the third quarter of 2019, 2% above the US$232 million achieved in the same period in 2018 due to better operational performance in Colombia and Argentina partially offset by the deconsolidation of assets sold in Chile during 2018.

• EBITDA in the Chilean market reached US$136 million, down 3% from the third quarter of 2018. The lack of contributions from Compañía Transmisora del Norte Grande (CTNG) sold last year, lower Contract sales volume and lower coal-fired generation due to scheduled maintenance at Ventanas Complex, were the main negative drivers. Operational efficiencies and lower spot purchase prices helped offset the decline.
• EBITDA in Colombia reached US$85 million in the third quarter of 2019, representing an 8% increase over the same period in 2018. The higher spot prices in the third quarter due to drier hydrology boosted spot revenues was the main driver for the increase in Colombia. This positive driver was partially offset by the negative effect of the depreciation of the Colombian Peso against the US Dollar, lower contract prices, and the decrease in generation due to lower inflows.
• EBITDA in Argentina reached US$16 million during the third quarter of 2019, representing a 16% increase. Higher contract sales margins and the positive impact of the depreciation of the Argentine Peso against the US Dollar on ARS denominated fixed costs were the main reason for the increase. Lower spot sales prices associated to Res 1/2019 which took effect March 1, 2019, partially offset the positive drivers.

Net Income Attributable to Parent (“Net Income”) reached US$97 million in the third quarter of 2019, up 59% from the third quarter of 2018 driven by a decrease in other losses and better operating results in Colombia and Argentina.

HIGHLIGHTS AND RECENT EVENTS

Greentegra Strategy Execution

AES Gener S.A. (hereinafter referred to as AES Gener, Gener, or the Company) continues to expand its portfolio, incorporating new customers, increasing the supply of new energy contracts through its Greentegra strategy.

The company has signed 6.5TWh/year in Greentegra contracts to date in Chile and Colombia.

AES Gener continues advancing with the development of its +4,700MW pipeline of renewables and energy storage project pipeline.

 

Chile

• The company signed a 440GWh/year long-term supply contract with Google in the third quarter. The PPA started supplying Google’s Latin America data center in 2019 and up until 2035. New wind and solar assets will provide renewable energy to Google’s operations in Santiago.
• On September 17, AES Gener subscribed an agreement with Empresas Públicas de Medellín (EPM), for the acquisition of the 110MW Los Cururos wind farm, located in the Coquimbo Region in Chile, in operation since July 2014. The transaction also includes the acquisition of the La Cebada substation, which is part of the National Transmission System. The total price for both assets amounts to US$138 million. The transaction is subject to compliance with a series of preceding conditions, expected to be closed during the fourth quarter of 2019.
• Construction of the 531MW Alto Maipo Hydroelectric Project is moving ahead. The total project completion to date is 82%, with 59 kilometers of tunnels excavated.
• Construction has begun on the 80MW expansion of the Andes Solar plant in Chile’s Antofagasta Region, and at the Mesamávida (62 MW) and Los Olmos (101 MW) wind projects in southern Chile’s Biobio region.
• The Campo Lindo (72 MW) wind project is on track to reach Ready to Build status by the end of 2019 in close to the town of Mulchén in southern Chile.
• The company broke ground on its Virtual Reservoir Energy Storage pilot project in Chile, on April 26, 2019. The company is installing the proof of concept next to the existing Alfalfal I run-of-river hydro plant close to Santiago. The storage system will be able to supply 10MW over 5 hours and will provide the run of river hydro plant with the ability to store energy and later inject it into the grid during times of high demand. After its installation and entrance into operation, the company will evaluate the expansion of the energy storage system up to 250MW at the Cordillera hydro complex. AES Gener is a pioneer and leader in Latin America in energy storage with 52MW in operation in northern Chile.
• On June 4, 2019, AES Gener signed a voluntary bilateral agreement with Chile’s Ministry of Energy of Chile for the Disconnection and Cease of Operations of the company’s oldest coal-fired units, Ventanas 1 and 2. The units will enter into the new Strategic Backup Operational State called “ERE,” once the authorities incorporate this new operational state into the current regulation. Ventanas 1 is expected to go into ERE in November 2022, while Ventanas 2 will do the same in May 2024. Both units are expected to remain in “ERE” for up to five years, collecting 60% of capacity payments, before ultimately being disconnected from the system.

 

Colombia

• On October 18, 2019, with the presence of the President of the Republic of Colombia, the 21 MW Castilla solar plant in Colombia was inaugurated the first solar park for Ecopetrol in the municipality of Castilla. The plant will deliver energy over 15 years to the operations of Ecopetrol at the Castilla oil field. This agreement is one of the new contracts signed under the «GenerFlex» business solution, which offers a broad spectrum of energy services to new and existing clients.
• In February 2019 the company completed the acquisition of five wind generation projects in Colombia totaling 648 MW in the Jemeiwaa-Kai Portfolio. Located in an area of abundant wind in the Guajira peninsula, the projects have a world-class capacity factor of approximately 54%. Most of these projects have guaranteed transmission capacity. Jemeiwaa-Kai is vital to support the transformation of the Company’s Colombian operations into a renewable energy growth platform while providing a strong complement to its existing hydro assets, bolstering long-term contracting efforts.
  • The largest project, 180MW Casa Eléctrica, was awarded a 20-year Reliability Charge for 324 GWh/year in late-February 2019.
  • In October 23, AES Chivor was awarded a total of 1.3 GWh/year associated to Jemeiwaa-Kai projects, Casa Eléctrica (180 MW) and Apotolorru (75 MW) in the Colombia’s Regulated Renewable Energy Auction. The auction assigned a total of 4.4 GWh/year in contracts at average awarded price was COP97 / kWh. Jemeiwaa-Kai’s project were awarded contracts at an average price of COP100/kWh.
• AES Chivor signed a PPA with Gensa for 876 GWh/year starting in 2023 for 15 years. This contract is also under the “GenerFlex” strategy.
• In total the company has signed 2.4TWh in long term contracts in Colombia with regulated and unregulated customers, with tenors ranging from 10 to 15 years. These longer tenor contracts provide certainty that allows us to move ahead with the development of renewable projects in Colombia.

 

Financial Highlights

• The Shareholders voted to distribute approximately US$287 million in dividends during 2019, equal to 100% of Net Income in 2018. US$86 million was paid on May 24, 2019. The remaining $201 million will be paid on December 4, 2019.
• Fitch and S&P Ratings reaffirmed AES Gener’s BBB- rating on August 6, and September 4, 2019 respectively.
  Moody’s reaffirmed AES Gener’s investment-grade rating on May 13, 2019.
  S&P
• In March, AES Gener issued a 2079 hybrid bond for US$550 million at 7.125%, achieving a significant reduction interest rate compared to the 2073 hybrids bonds issued in 2013 at 8.375%. The proceed from the 2079 bond issuance were used to tender the US$450 million in outstanding 2073 notes as well as other general corporate uses.
• In October, AES Gener issued a 2079 hybrid green bond for US$450 million at 6.35% The proceed from the 2079 bond issuance will be refinance Gener 2021 and 2025 bonds and to fund the acquisition of the Los Cururos wind farm as well as other to finance green projects. This is the first hybrid green bond issued in Latin America.
• At the end of October, AES Gener’s subsidiary Empresa Eléctrica Cochrane issued US$915 million in a mix of local and international bonds at a blended rate of 5.9%, expiring in 2034. These two facilities will be used to prepay Cochrane’s existing Project Finance Facility, allowing the company to access a corporate-style, more flexible financing structure, releasing US$70 million of inefficient cash sitting in restricted accounts.

CONSOLIDATED FINANCIAL SUMMARY

The numbers presented in the report are rounded to millions; therefore, differences may arise with the financial statements.

 

Financial Summary (ThUS$)	YTD	YTD	Var.	3Q	3Q	Var.
	2019	2018	%	2019	2018	%
Revenue	1,848,670	1,967,131	-6%	626,876	681,538	-8%
Gross Profit	488,764	526,919	-7%	194,073	184,415	5%
EBITDA (1)	619,180	654,520	-5%	236,800	231,882	2%
Net Income (attributable to AES Gener)	215,271	278,698	-23%	97,066	61,044	59%
Net Cash from Operations	275,439	230,637	19%
Earnings per share (US$)	0.026	0.033		0.012	0.007

(1) EBITDA is calculated as the sum of gross profit plus administrative expenses, depreciation, and other minor adjustments.

 

 Below you will find the Earnings Report for the third quarter of 2019.

For historical info, please check out the Finacial section of our Investor Relations website

A conference call will be held tomorrow, Wednesday, November 6, 2019 at 12:30 PM Chile (10:30 AM ET).

To access the live webcast, log on at  https://edge.media-server.com/mmc/p/7jjk942q 

A recording of this webcast will also be available for approximately one year after the call.