SECOND QUARTER 2013 RESULTS Medellín, Colombia August 1, … · TOTAL 9,392 9,491 1.1% 4,920 Breakdown by Rate Breakdown by Source Breakdown by Currency Exchange rate US$ 1.00 =

© All rights reserved Interconexión Eléctrica S.A. E.S.P.

SECOND QUARTER 2013 RESULTS

Medellín, Colombia

August 1, 2013

Luis Fernando Alarcón, CEO

Judith Cure, CFO(E)

2

Operating Highlights

Strategic update ISA 2020

Second Quarter 2013 Results

Q&A

© All rights reserved by Interconexión Eléctrica S.A. E.S.P.

AGENDA

3

3 HIGHLIGHTS - SECOND QUARTER 2013

Energy transmission line in Chile:

It belongs to the Interconnection of the Norte Grande System

(Sistema Interconectado del Norte Grande –SING-).

174 km of transmission lines in total.

Estimated entry into operation in 2017.

Estimated investment of USD 80 million.

Annual revenues of USD 5,849,000.

1

PROJECTS AWARDED TO ISA

Energy transmission line in Peru:

500- kV Mantaro–Marcona–Socabaya–Montalvo transmission line.

900 km of transmission lines in total.

Concession term: 30 years. 36 months for construction period.

Estimated investment of USD412 million.

Annual revenues of USD41.5 million.

4

4 HIGHLIGHTS - SECOND QUARTER 2013

ISA acquired 11,304,604 shares, corresponding to 17.07% of ISA Peru S.A., formerly

belonging to the Fund for Investment on Infrastructure.

ISA placed bonds for COP 220 billion in the local market.

ISA’s shareholders received a dividend payment of COP 188 per share, representing

5.03% increase compared to last year.

ISA approved the creation of the affiliate INTERCOLOMBIA, dedicated to energy

transmission, to represent the electricity assets belonging to ISA in Colombia and to

manage, operate and maintain them.

Risk ratings:

Fitch Ratings affirmed ISA’s AAA (col) rating for the Bond Program, and the

F1+(col) rating for the papers, with a stable outlook. It upgraded the foreign and

local currency Issuer Risk Rating of ISA to BBB, with a stable outlook.

Standard & Poor’s ratified ISA’s international BBB- rating with a stable outlook.

5 © All rights reserved by Interconexión Eléctrica S.A. E.S.P.




Q&A

AGENDA

By 2020, ISA will have tripled its profits, by capturing the most profitable growth

opportunities in its businesses existing in Latin America, the boost of operational efficiency

and the optimization of its business portfolio.

6

6 STRATEGIC UPDATE ISA 2020

ISA will have a return higher than its equity cost, sustainable over time.

In the Energy Transmission business, ISA continues to be the operator with the largest presence

in Latin America, will strengthen its position in the region and will achieve operational efficiency levels

aligned with the world’s best practices.

In the Road Concessions business, ISA will capture opportunities in the region, focused on

Colombia.

In the Telecommunications Transport business, ISA will consolidate its leading position as an

independent carrier in Latin America and will have developed an IP ecosystem in the region.

ISA will extend its ability for the Smart Management of Real-Time Systems to new services,

accessing highly profitable opportunities in other businesses.

7

7 STRATEGIC UPDATE ISA 2020

Project Office

(PMO)

Implementation Scheme

Corporate Reorganization

Reorganization

Opex

Procurement

Capex

Align internally and externally the

main stakeholders

Implement the organizational

change in order to propel strategic

initiatives (structure, governance

and incentives)

Define and develop efficiency

initiatives, establish the bases for

their capturing and estimate their

potential

Develop capabilities for the next

strategic cycle (future)

2013

2013 -14

2013-17

2014-22

Implementation Plan

1

2

3

4 Road Efficiency

Communication and Alignment

TE

Asse

t M

an

ag

em

en

t

8

8 STRATEGIC UPDATE ISA 2020 - IMPLEMENTATION PLAN

Initiatives Advances 2013 2014

Communication

and Alignment

ISA 2020 launch at internal and external media.

ISA 2020 presentation to employees, government entities,

investors and shareholders, suppliers and risk rating agencies

Alignment workshops with executive officers and employees

Corporate

Separation

Board of Directors’ approval for creation of new affiliate

INTERCOLOMBIA

Definition of Managing scheme for TE (Energy Transmission)

assets’ investments

Employer’s substitution for mobilizing employees to

INTERCOLOMBIA

Reorganization

Organizational analyses to define ISA’s and INTERCOLOMBIA’s

structures

Analysis of governance model to manage the business group

1

2.1

2.2

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

9

9 STRATEGIC UPDATE ISA 2020 - IMPLEMENTATION PLAN

Initiatives Advances 2013 2014

Efficiencies in

Opex

Advance on analysis for the application of best international

practices on maintenance of substations, lines, protections and

inductive equipment

Efficiencies in

Capex

Advance on analysis for the application of best international

practices on design and implementation of projects according to

the Project Management Institute’s (PMI) methodologies

Supply

Identification and prioritization of key categories

First category negotiation closing

Second category negotiation advance

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

3.1

3.2

3.3

10

10 STRATEGIC UPDATE ISA 2020 – INVESTMENT OPPORTUNITIES

Business Projects

Energy

Transmission

UPME Projects: Suria 230-kV and Tuluní 230-kV Substations. Estimated date of bid: second

semester 2013.

Projects for connection with private agents in Colombia.

Road

Concessions

Bidding processes for road infrastructure in Fourth Generation concessions, first quarter 2013.

Group : G1 – Central South

Corridor: Honda – Puerto Salgar – Girardot

Length: 221 km

Estimated Capex : COP 1,226 billion

Intervention:

Rehabilitation and improvement of existing roads

Construction of bridge over Magdalena river

There are no tolls

New tolls: 4





Q&A

AGENDA

12

12 CONSIDERATIONS

Recognition as a financial asset (formerly an intangible asset) of Chilean and Brazilian

concessions. It became effective for the 2013 fiscal period, according to technical concept

issued by the General Accounting Office N° 20132000017991 of 05-28-2013.

Impact of early termination and further renewal of Concession Contract 059 of 2001 of

affiliate CTEEP.

Guaranteed revenues that enable the recovery

of the investment value?

Financial

Asset

Intangible

asset

YES NO Less risk Higher risk

Determination of concession services?

Construction Stage

AOM

Operation Stage

Investment return AOM Greater maintenance Financing

Construction ends, Operation

begins

OPERATION SERVICES

Barter

Construction

services Right

Exploit

concession

CONSTRUCTION SERVICES

Remuneration may be either an

intangible or financial asset

Devaluation of the

Colombian peso

compared to the US

Dollar, Brazilian Real

and Chilean Peso

Controlled

inflation

IPP below IPC

13

13

Macroeconomic

scenario June 2012 June 2013 Variation

COLOMBIA

IPP -2.17% 0.60% 2.76%

IPC 2.00% 1.73% -0.27%

Colombia devaluation -8.14% 9.09% 17.23%

COP/USD last 1,784.60 1,929.00 144.40

COP/BRL last 882.90 870.64 -12.25

COP/CLP last 3.56 3.80 0.25

COP/USD average 1,793.83 1,826.83 32.99

COP/BRL average 962.36 898.16 -64.19

COP/CLP average 3.64 3.82 0.18

BRAZIL

IGPM 3.19% 1.75% -1.44%

Brazil devaluation 7.76% 9.11% 1.36%

Peso vs Real devaluation -14.75% -0.02% 14.73%

BRL/USD last 2.02 2.22 0.19

BRL/USD average 1.86 2.03 0.17

CHILE

IPC 0.43% 0.47% 0.04%

Chile devaluation -3.34% 5.67% 9.01%

Peso vs CLP devaluation -4.96% 3.24% 8.20%

CLP/USD last 501.84 507.16 5.32

CLP/USD average 492.83 478.68 -14.14

MACROECONOMIC SCENARIO

Energy 68.5%

Roads 25.0%

Telecommunications

3.9%

SMRTS 2.6%

14

Total operating

revenues reached

USD467 million in

2Q13.

Breakdown by Business – 2Q13 Breakdown by Country – 2Q13

CO

P b

illio

ns

SMRTS: Smart Management of Real Time Systems

14 CONSOLIDATED FINANCIAL RESULTS

REVENUES

1,045 900

2,186 1,716

4,303

3,550

0

1,000

2,000

3,000

4,000

5,000

2Q12 2Q13 6M12 6M13 2012 2013P

-13.8%

-21.5%

-17.5%

COLOMBIA 38.2%

CHILE 25.1%

BRAZIL 24.4%

PERU 11.3% OTHERS

1.0%

542 477

1,075 1,009

2,300 2,562

0

500

1,000

1,500

2,000

2,500

3,000

2Q12 2Q13 6M12 6M13 2012 2013P

15

CO

P b

illio

ns

COP billions 1Q12 1Q13 Change

$

Change

%

AOM Costs and Expenses

(ex. Pensions) 342 433 91 26.8%

Provisions, Depreciation, Amortization and Pensions 200 43 (157) -78.3%

Total 542 477 (65) -12.0%


COSTS AND OPERATING EXPENSES

-12.0%

-6.2%

11.0%

Energy 59.0%

Roads 39.1%

Telecommunications

1.6%

SMRTS 0.3%

16

EBITDA reached USD242

million in 2Q13.

EBITDA margin was 51.9% in

2Q13.

Breakdown by Country – 2Q13

CO

P b

illio

ns

Breakdown by Business – 2Q13


EBITDA

COLOMBIA 40.9%

CHILE 39.0%

BRAZIL 4.1%

PERU 14.9%

OTHERS 1.1%

703 467

1,518

938

2,903

1,915

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2Q12 2Q13 6M12 6M13 2012 2013P

-33.6%

-38.2%

-34.0%

-200 -168

-406

-245

-371

-508

-800

-700

-600

-500

-400

-300

-200

-100

0

2Q12 2Q13 6M12 6M13 2012 2013P

17

Non-operating results

was –USD87 million in

2Q13

COP billions 2Q12 2Q13 Var. $ Var. %

Financial (199) (167) 32 -16.2%

Others (1) (2) (1) 62.6%

TOTAL (200) (168) 32 -15.8%

© Todos los derechos reservados por Interconexión Eléctrica S.A. E.S.P.

CO

P b

illio

ns


NON-OPERATING RESULTS

-15.8%

-39.6%

37.0%

Net Income for 2Q13

amounted USD76 million

Net margin before minority

interest was 22.6% for 2Q13

18

Billions 2Q12 2Q13 Var. $ Var. %

Income before taxes 303 255 (48) -15.8%

Income tax provisions 115 52 (64) -55.3%

Income before minority interest 187 203 16 8.6%

Minority interest 141 56 (85) -60.2%

NET INCOME 46 147 101 218.7%

CO

P b

illio

ns


NET INCOME

46

147 146

218

273

428

0

100

200

300

400

500

2Q12 2Q13 6M12 6M13 2012 2013P

218.7%

49.3%

57.0%

Assets 25,771 27,127

19

Assets by Country – 2Q13

As of June 2013, assets totaled

USD14,063 million.

CO

P b

illio

ns

Assets by Business – 2Q13


BALANCE SHEET

-0.8%

23.5%

1.2%

5.3%

6,111 7,546

4,173 4,222

15,487 15,359

0

5,000

10,000

15,000

20,000

25,000

30,000

2012 2Q13

Liabilities Minority interest Equity

Energy 63.9% Roads

33.5%

Telecommunications

1.8%

SMRTS 0.8%

COLOMBIA 27.6%

CHILE 33.6%

BRAZIL 27.5%

PERU 10.8%

OTHERS 0.4%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1Q13 2Q13 2013E

Colombia Brazil Peru Chile Other

Colombia 32.9%

Brazil 32.0%

Peru 29.0%

Chile 6.1%

Other 0.0%

20

CAPEX and permanent

investments reached

USD154 million 2Q13

Billions 6M13 % 2013E

Energy Transmission 454 87 1,401

Road Concessions 27 5 2

Telecommunications Transport 33 6 101

SMRTS 10 2 32

Breakdown by Country – 6M13 Breakdown by Business

CO

P b

illio

ns

20

Average exchange rate 2Q13 = 1,863.19

CAPEX AND INVESTMENTS

240

1,536

286

21

Net Debt / EBITDA: 2.9x

EBITDA / Interest: 3.9x

COP in billions 2012 2Q13 Var. % 2Q13

USD

CHILE 4,330 4,401 1.7% 2,282

COLOMBIA 1,777 1,902 7.1% 986

BRAZIL 2,165 1,660 -23.3% 861

PERU 1,057 1,465 38.5% 759

BOLIVIA 55 56 0.7% 29

ARGENTINA 8 7 -10.6% 4

TOTAL 9,392 9,491 1.1% 4,920

Breakdown by Currency Breakdown by Rate Breakdown by Source

Exchange rate US$ 1.00 = COP 1,929.00

USD in millions

21 CONSOLIDATED FINANCIAL - DEBT

Fixed 57.7%

CDI 9.4%

ICP 15.2%

TJLP 4.4%

TAB 4.2%

Libor 3.1%

DTF 3.7%

vc 1.7% Other

0.6%

Capital Market 74.7%

Banks 24.4%

Other 0.9%

BRL 15.1%

COP 18.9%

USD 30.4%

UF + CLP 34.4%

Others 1.2%





Q&A

AGENDA

23

23 CONTACT – INVESTOR RELATIONS

Email [email protected]

Website www.isa.com.co

Twitter @ISA_Avanza

24

24 DISCLAIMER

Certain statements contained in this report constitute "forward-looking statements" within the

meaning of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements reflect our current views with respect to future events and

are based on assumptions and subject to risks and uncertainties. Also, these forward-looking

statements present our estimates and assumptions only as of the date of this report. Except

for our ongoing obligation to disclose material information as required by federal securities

laws, we do not intend to update you concerning any future revisions to any forward-looking

statements to reflect events or circumstances occurring after the date of this report.

Amounts expressed in US dollars are for information purposes only, and do not reflect

accounting conversion techniques usually applied. As of June 30, 2013, the exchange

rate was of USD 1.00 = COP 1,929.00 (Source: Banco de la República de Colombia).

Documents

SECOND QUARTER 2013 RESULTS Medellín, Colombia August 1, … · TOTAL 9,392 9,491 1.1% 4,920 Breakdown by Rate Breakdown by Source Breakdown by Currency Exchange rate US$ 1.00 =