ANDEAN CONFERENCE Larraín Vial · I. Company Profile Gasco S.A. is one of the eldest companies in Chile, with over 154 years of experience in the Gas industry, operating: LPG: distribution

ANDEAN CONFERENCELarraín VialMarch 2011March 2011

I. Company Profile

II. Snapshot: Chile´s Gas Industry

III Company OperationIII. Company Operation

IV. Financial Profile

V. Perspectives

2

I. Company Profile

Gasco S.A. is one of the eldestcompanies in Chile, with over 154 years ofexperience in the Gas industry, operating:

LPG: distribution in Chile and Colombia

NG: distribution in Chile and NW of Argentina

A t G di t ib ti i Chil

3,5%

M í F il

Almería Group

Ownership Structure Auto Gasco: distribution in Chile

Through subsidiaries operates:

56 6%

12,7%

3,8%

CGE

Pérez Cruz Family

Marín FamilyCGE Holders 76%

Through subsidiaries operates:

LPG loading marine terminal LNG marine terminal

18,0%

5,5%56,6%

0% 20% 40% 60%

Others

Ch Pension Funds LNG marine terminal Transnational NG Pipes (Chile/Argentina)

3

0% 20% 40% 60%

I. Company Profile

CGE is a main player in the electrical distribution business with over 3 million customers

ElectricityDistribution customersIn Chile

ElectricityDistribution Gas

43%

Electricity & Others57%In Argentina

ElectricityT i i

619 US$ millionEBITDA

43%57%

Transmission

Electricity GasElectricityGeneration

Services &

TOTALASSETS

32%Electricity & Others68%

Other Investments

G

8.038 US$ million

4

GasApproximate Figures as of December 2010

G M i B i U it

I. Company ProfileG RA

LS ER

Gasco - Main Business Units

LP

NAT

UR

GA

S

OTH

E

Gasco GLP: 100% Campanario:20%Metrogas: 52%Gasmar: 51% Inv. GLP (Colombia): 70% Gasco Magallanes (B.U.)

Campanario:20%El Raulí:10% Polpaico:41%

gGas Sur: 70%AutoGasco: 100%Gasnor (Arg.): 50% Innergy: 30%Gasoducto Pacífico: 30%

Divestiture:Dec 2010Gasoducto Pacífico: 30%

Gasco Magallanes (B.U.) US$116mm

5

II. Chilean Gas Industry

LPG

• Chile is the 6th largest LPG market in S.America:1,2Mtons aprox.

• Per capita consumption is around 70kg, above region average of 50kg*

• Demand: 80% from res comm

Purvin & Gertz

• Demand: 80% from res-comm

• Imports account for aprox. 70% total consumed

8.700

7.700 8.000

9.000

10.000 Ths Tonnes per Year• Mature and very competitive market

• Distribution Format: 70% cylinders

3.200 3.000

4.000

5.000

6.000

7.000 • Distribution Format: 70% cylinders (14 million) and 30% tanks (95 ths)

6

1.900 1.400 1.200 1.100 1.000

650 390

1.350

‐

1.000

2.000

3.000

Mexico Brazil Venezuela Caribean Argentina Chile Peru Ecuador Colombia Bolivia Others

* Source:Purvin & Gertz


NG

• 1995: Chile signs NG Integration Protocol with Argentina

GNL Mejillones5,5 MMm3/day

• 1999: first transnational pipes (4) start delivering NG GNL Quintero

10 MMm3/day

• 2004: supply problems from Argentina start arising; get worse by 2006

Argentinean Imports

500Mm3/day

19,3MMm3/day

• 2009: 2 GNL plants start operating

• Chile NG industry autonomous and marginally dependant from Argentinean NG

Domestic Production

3,3MMm3/day

7


Chilean Energy Matrix

Y 1998

43%11%

15%

Year 1998 Year 2009

Year 2006 47%14%

15%

14%17%

Consumption: 264.754 Teracal. Consumption: 345.048 Teracal.

34%30%

12%12%

47%

9%15%

Consumption: 264.754 Teracal. Consumption: 345.048 Teracal.

Consumption: 338.278 Teracal.

12%

Energy consumption increases 30% in the latest 11 years• Energy consumption increases 30% in the latest 11 years

• Petroleum der. & NG gain relevance by 2006

• NG supply problems dramatically reduce share in Energy Matrix following years

• With supply reestablished in 2009, from Nov 2010 to Jan 2011 NG accounts 23% of power generated in SIC ( i t i t t d t l)

8

power generated in SIC (sistema interconectado central)

Source: Comisión Nacional de Energía (CNE), Bice Inversiones

III. Company Operation

LPG Business in Chile

• GASCO GLP:GASCO GLP:• Distribution of LPG in 13 of 15 regions of Chile• 5 Plants and 20 Distribution Centers• Formats: Cylinders (5 11 15 & 45kg) and TanksFormats: Cylinders (5,11,15 & 45kg) and Tanks• #1 Market Share in Metropolitan Region• 293.000 tons commercialized in 2010• 2010: EBITDA US$64mm Net Profit US$31mm• 2010: EBITDA US$64mm, Net Profit US$31mm

Metropolitan Region National

Abastible37%

Gasco40% Abastible

36%

Gasco28%

Metropolitan Region (50% of National Market)

National ( Market Share)

Lipigas23%

Lipigas36%

9

All approximate figures as of Dec 2010


LPG Business in Chile• GASMAR:

• Ownership: 51% Gasco, 29% Abastible, 20% Navieras Ultragas• Largest private LPG marine terminal in Chile

4 storage tanks with 85 000m3 capacity (propane and butane)• 4 storage tanks with 85.000m3 capacity (propane and butane)• Proven security in LPG supply from around the globe• Operated 55% of total Chile LPG demand in 2010• 2010: EBITDA US$30mm, Net Profit US$23mm

10


LPG Business in Colombia• Industry:

• LPG industry size: 600.000 tons aprox. G dust y s e 600 000 to s ap o• Many small players, atomized market share• 2009 Regulatory Changes: new Safety and Service standards• Investments and consolidation ahead: alliances appear as optionInvestments and consolidation ahead: alliances appear as option

• Gasco: first international player to seize opportunityA i iti f 3 di t ib ti i (70%) i F b 2010 US$17• Acquisition of 3 distribution companies (70%) in Feb 2010: US$17mm

• Geographic Coverage: 15 of 32 departments throughout the country• VIDAGAS brand launched: consolidate all operations• US$20mm investment: cylinders and 81 distribution trucks

• 2010: 79.000 tons commercialized, 11% market share • 2011: acquisition (70%) of UNIGAS for US$18mm, adding 6% market shareq ( ) , g

11


Natural Gas customers Natural Gas sales

Natural Gas0 4 21 52 48

7

520

537

544

634 661 696 729 765 807 857 909 941 964

57%

Chil 997

038

063

127

031

1.01

6

776

651

774 .036

2.618 2.594 2.577 2.638 2.631 2.809 2.561 2.444 2.497 2.792

37%

(thousands)(million m3)

01 02 03 04 05 06 07 08 09 0

318

321

326

335

344

355

371

390

403

420

316

340

370

394

42 45 4 5

43%

Chile

1 2 3 4 5 6 7 8 9 0

1.62

1

1.55

6

1.51

4

1.51

1

1.60

0

1.79

3

1.78

5

1793

1.72

3

1.75

6

9 1.0

1.0

1.1

1.0 1 7 6 7 1 37%

63%Argentina

200

200

200

200

200

200

200

200

200

201

200

200 2

2003

2004

2005

2006

2007

2008

2009

2010

• GASNOR: • 1992 acquisition of 50% of NG distribution company in NW of Argentina• Operation in Argentina allows Gasco to learn about NG market, experience

that would be used in the second half of the ’90s to establish NG companies in Chile

• 2010: 420.000 customers, 1.700MMm3 volumeNG i f i 2001 li ibl h fl di id d t G

12

• NG prices frozen since 2001, negligible cash flow: no dividends to Gasco


Natural Gas• GASCO MAGALLANES:GASCO MAGALLANES:

• Regulated distribution business in XII region• 2010: 1.300km pipe network, 50.000 customers, 360 MMm3 volume• Movigas incorporated in 2010: 61 NG buses for public transport• Movigas incorporated in 2010: 61 NG buses for public transport

• GAS SUR:O hi 70% G 30% S k E (C d )• Ownership: 70% Gasco, 30% Sask Energy (Canada)

• Distribution to res-comm customers in VIII region• Operation affected by Feb 2010 earthquake. Mid-2010 operation reestablished

2010 38 000 t 25MM 3 l EBITDA US$7• 2010: 38.000 customers, 25MMm3 volume, EBITDA: US$7mm

• INNERGY:• Distribution to industrial customers in VIII region• Operation affected by Argentinean NG supply• 2010: 132MMm3 volume, EBITDA: US$5mm

13


Natural Gas• METROGAS:

O hi 51 84% G 39 83% C 8 33% T i• Ownership: 51,84% Gasco, 39,83% Copec, 8,33% Trigas• Distribution to res-comm & industrial customers in RM and VI region• 2005-2009: faced shortage of NG from Argentina• 2009: part of consortium to build LNG terminal in Quintero• 2010: LNG terminal positively impacts operation: 66% volume growth• 2010: 5.000 km pipe network, 456.000 customers, 648MMm3 volume

900

Total Volume (MMm3)

• EBITDA: US$155mm, Net Profit: US$76mm

80.000

EBITDA (MM$CLP)

400

500

600

700

800

40.000

50.000

60.000

70.000

‐

100

200

300

400

‐

10.000

20.000

30.000

14

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


Shareholders

LNG Quintero Terminal

BG Group (40%) Metrogas (20%) ENAP (20%)

Endesa (20%) Endesa (20%)

Total Investment: US$1.300 million Total Investment: US$1.300 million

Start of Operation: July 2009

Storage Capacity: 3 tanks, 335.000m3

Current Regasification Capacity: 10MMm3/dayg p y y

Potential Regasification Capacity: 20MMm3/day

15

BG supplies LNG


AutoGasco

• Distribution of NG and LPG for vehiclesDistribution of NG and LPG for vehicles• Re-launched in 2009 after Argentinean NG supply shortage• Clean and Efficient fuel at a convenient cost (versus gasoline)

C tl f d i bli t t ti t i d b• Currently focused in public transportation: taxis and buses• Chile´s Taxi Fleet: aprox. 100.000 cars => potential customers• 5 Stations, 25 corners throughout Chileg

16


Supply Demand• Chile• #1 supplier Gasmar, mainly through imports• Geographic diversification: Argentina, UK, Norway, Saudi Arabia, etc.

• Hedge Program in place to mitigate price fluctuations LPG

• Chile & Colombia• Basic Need Product: very stable consumption

Diversified and atomized customer basefluctuations

• Colombia• # 1 supplier Ecopetrol (national oil company)• 100% domestic production

LPG • Diversified and atomized customer base• High % of sales in cash: very low % of uncollectables

• Chile• # 1 suppliers are LNG Terminal and ENAP (XII Region)

• Geographic diversification: BG has sources in

• Chile• Res-Comm: stable demand ,Basic Need Product• Industry: strong demand growth driven by

i / i t l• Geographic diversification: BG has sources in more than 20 countries

• Hedge Program in place to mitigate price fluctuations

• Argentina

NG price/environmental concern• Diversified and atomized customer base• Very low % of uncollectables

• Argentina• Stable consumption• Diverse pool of local suppliers

• 100% domestic NG production• Stable consumption• Diversified and atomized customer base

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EBITDA December 2009167 US$ million Consolidated EBITDA

247300

LPG

111129

154

188 195 182

121

167

247

150

200

250

USD

MM

NG50%

50%

EBITDA December 2010247 US$ million

43

95 99 111

0

50

100

U

NG

Figures as December of each year

01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 201064%

LPG 36%

EBITDA affected by Natural Gas shortages from Argentina (2007 - 2009)

With LNG terminal service, NG subsidiaries able to recover operation:, p

EBITDA in 2010 is 47% higher than in 2009 EBITDA composition changes importantly: NG recovers importance

18

p g p y p


EBIT Net Income

177

160180200

100100

120

69 74 7996

109

137 134117

97

80100120140160

USD

MM

3746 48

6251

75

60

80

100

USD

MM

28

55

0204060

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2737

2313

30

50

20

40

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Results decline in 2008 are due to NG

Ratios

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

7 307 00

8,00esu ts dec e 008 a e due to G

shortages4,90

5,90 5,705,10

4,404,10

4 30

7,30

5,19

4 60

4,805,20

4,604,30

4,00

5,00

6,00

7,00

* Figures as December of each year

3,60 3,60

4,30

3,403,90

4,60

3,60 3,303,80 4,10

2,90 3,16

1,00

2,00

3,00

,

19

0,001999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Debt / EBITDA EBITDA / Interest Expenses


Total Assets December 20102.340 US$ million

IFRS

1 221,40

1,60

2 000

2.500

$1,22

1,14

0,80

1,00

1,20

1 000

1.500

2.000

NG64%

LPG 29%

-

0,20

0,40

0,60

0

500

1.000

Other

Main Financial CovenantFinancial Debt US$ million

01999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Liabilities Minority Interest Equity Leverage

7%

IFRSLeverage < 1,53

Leverage December 2010 = 1,14

$

66623 667 684

776879 865 838

700800900

1000

Aprox. US$450mm of Extra Debt capacity

207

562 566 561 562

200300400500600

20

* Figures as December of each year

0100200

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


CapexUS$ million as of 31 December 2010

232

200

250

118

150

200

90

6676 85 80

63

11899

7094

50

100

‐

50

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

LPG Natural Gas Other Investments

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

21


Financial Debt Profile

Rate Structure: aim to CLP/UF 94%Fixed 87% Rate Structure: aim to

maintain 80-90% fixed

Well diversified debt

Fixed 87%

Interest Rate Structure Currency Structure

USD 6%

Variable 13% Debt currency aligned

to businesses purpose

Bonds 64% Banks 36%Long Term Debt Maturity Profile

to businesses purposeHolding37%

Maturity Profile

Estado 30%

NG 45%

LPG 18%

* Fi f D b 2010

Debt by InstrumentDebt by BusinessBBVA 21%

30%

Chile 6%

22

* Figures as of December 2010

Corpbanca 21%

Santander 2%

BCI 6%

Scotiabank 12%Otros 1%

IV. Financial Profile250

200

250

Long Debt MaturityDuration: 6 years

Financial Debt Structure

150

Gasmar

IAC‐IGLP

Gas Sur

G GLP

Long Debt Maturityy

100

Gasco GLP

Metrogas

Gasco

50

Equivalent International Domestic

02011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

BBB - Fitch Ratings

A+

Rating*Rating

23 BBB Humphreys

AA-

* Gasco doesn’t have a formal international rating


Market Cap (US$mm)1 800

1.376

1.643

1.407 1.439 1 400

1.600

1.800

1.176

3 6

1.244

1.139

9601.031

1.109

1 000

1.200

1.400

598

875 960

565600

800

1.000

565

200

400

600

-

200

Dec 1998 Dec 1999 Dec 2000 Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010

24

CLP/USD: constant


Financial Strengths

Steady cash flows from LPG Business Enough to cover all financial obligations of the company

Very Strong cash flow projections from NG Business Strong commercial basis / supply from all over the world Strong commercial basis / supply from all over the world

Facility to access domestic financial markets

Long debt maturity, according to extended development of energy projectsenergy projects

Ample capacity to comply financial covenants

25

p p y p y

V. Perspectives…..

NG business has overcome Argentinean supply shortages and has a strong outlook with LNG terminalhas a strong outlook with LNG terminal

LPG Chile business has provided a steady cash flow to the P i f t f LPG C l bicompany. Promissory future of LPG Colombia

Company focused in core business. Divestiture of non-core p yassets (US$116mm Polpaico) will be destined LPG and NG business

Gasco has a strong commitment with the atmosphere, developing processes and products environmentally friendly, specially by replacing contaminating energiesspecially by replacing contaminating energies

26

V. Perspectives…..next steps

LPG• GASCO GLP: improve market share, strengthen operations in regions. Lead industry

by coverage, service and innovationy g• INV. GLP: become the leading LPG distributor in Colombia aiming 35-40%

market share• GASMAR: maintain leadership in LPG import through high level of operating

efficiency, supplier diversification and service excellence

NATURAL GAS

y, pp

METROGAS: consolidate operation Increase importantly NG commercialized after• METROGAS: consolidate operation. Increase importantly NG commercialized after supply shortage period

• GASNOR: maintain efficiencies awaiting Argentinean Government price revision• GAS SUR: recover momentum after 2010 earthquake effect in operations

GASCO MAG ti i ll th h ffi i d

AUTOGASCO

• GASCO MAG: continue service excellence through coverage, efficiency and innovation

Become the Leading and Reference company for clean and efficient energy (NG and LPG) for public and private transport in Chile

27

For further information please contact:For further information, please contact:

Pablo Sobarzo Alejandro [email protected] 2 6944350

Mngt. Control & [email protected] 2 6944350

Sebastian Moraga Paulina UgartegDeputy [email protected] 2 6944350

Paulina UgarteManagement [email protected] 2 694435056 2 6944350 56 2 6944350

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This presentation contains forward-looking opinions including the intent, belief or current expectations of the Company and its managementits management.

Investors are cautioned that any such forward-looking opinions are not guarantee of future performance and involveopinions are not guarantee of future performance and involve a number of risks and uncertainties including, but not limited to, the risks detailed in the company’s financial statements.

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Documents

ANDEAN CONFERENCE Larraín Vial · I. Company Profile Gasco S.A. is one of the eldest companies in Chile, with over 154 years of experience in the Gas industry, operating: LPG: distribution