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Grupo Energía de Bogotá
First Quarter 2013 Results
and Key Developments
Special Report on ConTugas
Investor Conference Call
May 2013
I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Agenda
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Overview and Stragegy of GEB
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Strategy
Transportation and distribution of energy.
Regional scope.
68.1%
25%
15.6%
Electricity
Transmission
40% 40%
1.8%
98.4%
Generation
51.5% *
2.5%
Distribution
51.5% *
16.2%
51%
82%
Distribution Transportation
Natural Gas
75%
60%
100%
99.94%
*EEB is not the controlling shareholder.
Shareholder Agreements ensure the
maximum distribution of dividends and
provide veto rights for major decisions.
40%
25%
Grupo EEB overview
Regional leader in the energy sector: electricity and natural gas – except E&P;
operations in Colombia, Peru, and Guatemala.
Founded in 1896
District of Bogota is the controlling shareholder: 76.2%.
Shares listed on the Colombian stock exchange; international standards of corporate
governance.
One of Colombia’s largest issuers of debt and equity.
USD Million F 12
Operating revenue 896
Operating income 316
Consolidated EBITDA LTM 724
Net Income 391
Focus on
natural
monopolies
Ample access
to capital
markets
Ambitious
projects in
execution
Growth in
controlled
subsidiaries
Sound
regulatory
framework
Experienced
management
and partners
I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Agenda
4
5
Key Developments
On March 31, 2013, the EEB Shareholders’ Meeting approved payment of dividends of COP
403,604 million (COP 43.96 per share). The dividend was the equivalent to 96% of the total
that could legally be distributed. Minority investors will be paid their dividend in a single
installment on May 22, 2013. The Capital District will be paid in two equal installments on June
20, 2013 and November 27, 2013
EEB was included in the COLCAP stock index effective February 1, 2013, reflecting the
increase in trading volumes. This is a tradable index that includes the most representative and
liquid shares in Colombia.
On April 16, 2013, EEB was awarded the Chivor II electricity transmission project through a
bidding process, with an estimated value of USD 101 million.
The Board of Directors approved presenting an offer in the bidding process in Chile to
construct and operate electricity transmission lines. The total estimated value of the projects is
USD 165 million. The results of the bidding process will be announced in June 2013
The Board of Directors authorized the creation of an engineering services company in Peru.
This new subsidiary will seek to develop business in the natural gas and electricity
transportation and distribution sectors.
The CEO of EEB confirmed EEB’s interest in participating in the Panama interconnection
project, and noted the importance of having an open, competitive process.
The February 2013 Shareholders’ Meeting of TGI approved not distributing earnings and constituting
the appropriate legal reserves. A reserve of COP 157,805 million was established to protect future
earnings from exchange fluctuations.
On May 7, 2013, Standard & Poor´s raised TGI’s foreign currency credit rating from “BB” to “BBB-”,
Regulated revenues are expected to increase approximately 10% as a result of the increase in tariffs
authorized by the regulatory agency in December 2012. The new rates will be in effect until 2017.
On April 1, 2013, Cálidda issued USD 320 million in bonds in the international capital markets (2023/
4.375%) under Rule 144A/Reg. S. The resources obtained will enable the company to finance its
2013-14 expansion plan and improve the debt maturity profile.
EEB was awarded projects with a value of approximately USD 73 million, to connect cogeneration
plants to the national grid. TRECSA, an EEB subsidiary, is expected to carry out the works.
Key Developments
The Board of Directors of EEB authorized providing guarantees or making intercompany loans to its
Guatemalan subsidiary for up to USD 230 million (2013-14). These resources complement and are
in addition to the equity contributions already made, and will enable the company to advance with
the negotiation of credits.
I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Agenda
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Consolidated financial results EEB
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The growth in net income is principally explained
by:
Increase in operating income
Increase in dividends declared payable to EEB
Reduction in financial expense as a result of the debt
management operation carried out by TGI at the
beginning of 2012.
Operating income and EBITDA grew
faster than operating revenues, as a
result of :
Increased revenues from the Cusiana
Phase II expansion (TGI)
Tariff increases for TGI
Non recurring costs during the 2012
period, principally related to TGI’s debt
management operation.
Increased dividends from non-
controlled affiliates reflect improved
operational performance in 2012 and
increased dividends declared by
Codensa in 2013; during the prior year
the dividends were based on the results
of the final months of 2011 only.
COP Million 1Q 13 1Q 12 Var%
Operating revenue 449,468 373,383 20.4
Operating income 170,926 136,819 24.9
Consolidated Adjusted EBITDA Qtrly. 1,010,355 684,833 47.5
Consolidated EBITDA LTM 1,604,916 1,428,424 12.4
EBITDA Consolidado UDM 1,604,916 1,428,424 12.4
Dividends and reserves declared to EEB 785,091 494,117 58.9
Net income 767,244 540,005 42.1
Dividends and reserves declared by EEB 403,604 319,964 26.1
Latest international credit ratings
S&P - Oct. 12: BB+ stable
Fitch - Nov 12: BBB- stable
Moody’s - Nov 12 Baa3 stable
EEB´s consolidated financial indicators
Debt indicators
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The reduction in net leverage is the
result of:
Increase in consolidated EBITDA.
Reduction in net debt ( -1.6%) as a
result of the payment of EEB short term
debt.
The interest coverage ratio improved
as a result of:
Increase in consolidated EBITDA.
Lower financial expenses, as a result of
the debt management operations
carried out by EEB and TGI.
Agenda
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I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Overview ConTugas
Departamento de Ica
Poblacun Population: 763,558
GDP Growth: 5.9% - 2012
Pisco and Marcona designated as petrochemical
industry hub.
Strong agroindustry, fishing, and steel industries
Geography: Desert and plains.
Ica Department
Natural gas market in Peru
Official studies show that there is a
high potential for reserves from other
fields to meet internal demand.
One of the principal government
policies – continued from the previous
administration – is “Mass Distribution of
Natural Gas” to broaden access to this
energy source to the different regions
of the country.
Currently, the gas
transportation company
(TGP) is expanding its
capacity
Fuente: Ministerio de Energía y Minas
Provinces served: Ica, Pisco, Nazca (including
Marcona District) and Chincha
Concession term: 30 years
Length:
Aprox. 251 km (Trunk pipeline)
Aprox. 54 km (Branches)
Rights of way: 87.3 % of the rights of way are on
properties owned by the Peruvian government.
Principal contractual obligations:
-Begin Commercial Operations (“POC”) 24
months after the Closing Date
-Connect 31,625 residential clients 12 months
after POC, and 50,000 clients 6 years after POC.
Project Characteristics
Concession authorized by PROINVERSION for
the distribution of natural gas in the Ica
Department of Peru
ConTugas project
Strengths Characteristics
Natural monopoly with a
stable regulatory framework
Exclusive rights to distribute natural gas over the life of the concession (30 years)
in the Ica Department
Capital intensive.
Essential infrastructure
asset for Peru
Major social and economic impact in the service area.
Potential demand: service area is expected to have major growth in demand for
natural gas in the coming years as a result of potential projects steel, agro
industrial, power plant generation and petrochemical sectors that are being
developed in the region.
Predictable, stable long
term revenues after signing
contracts
Regulation allows stability in the revenues from the distribution system:
- Tariffs are denominated in USD and adjusted by the combination of inflation
indexes.
- Tariffs for the initial period (8 years) are established in the concession agreement
and consider three scenarios for the growth in demand.
- Future tariff revisions (every 4 years) are determined based on recognition of
CAPEX and OPEX and a regulated return equal to the Actualization Rate defined
in the Regulations for the Distribution of Natural Gas (12% real per year) (D.S.
N° 040-2008-EM).
Long-term take or pay contracts (minimum 10 years).
Competitive natural gas
prices
Prices of natural gas are competitive compared to alternative fuels, ensuring
sustainability of the business (average savings of 43% to 75% depending on the
type of consumer) .
Experienced sponsor GEB is a leader in the natural gas transportation and distribution sectors in
Colombia and Peru.
ConTugas project
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Tariff
1 • Stamp tariff
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•Distribution tariff based on demand. Three scenarios for tariffs based on demand growth in the concession area.
3
• Initial tariffs set for 8 years, from the start of commercial operations.
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• Cross subsidy of USD 150 per client to help pay for installation.
Natural Gas Demand
ConTugas project
Equivalent numbers for Ica
Residential 0%
Commercial and SME´s
0% NGV 5%
Industry 44%
Electric Generators
51%
Demand by Sector
Project Status
The project as a whole has a 75% advance as of
March 2013
- More than 100 km of high pressure pipeline
welded.
- More than 148 km of low pressure networks
(polyethylene) constructed.
- More than 10,000 sales to residential clients
and 7,500 internal installations built. Currently
services are only available in Pisco; during
2013, services are expected to begin in the
other cities.
- Approximately 90% of the rights of way have
been negotiated or have been resolved.
Environmental and social action:
- CONTUGAS presented the Environmental
Impact Studies (“EIA”) to MINEM, carried
out the workshops and required public
hearings, and addressed the observations
made to the EIA compiled by MINEM.
- The ConTugas EIA was approved on
December 15, 2010 through Resolution Nº
435-2010-MEM/AAE.
- To date, the company has complied with
the EIA, without any social conflict.
Financial Aspects
Gasoducto Regional de Ica
Dpto. Ica
Punto
Entrega TGP 0.5km
40km
220km
TOTAL: USD 345 MM
USD 98MM capital from shareholders
USD 23MM disbursements IGV
USD 133MM in construction loans
(syndicated credit for up to USD 215MM).
Funding sources through March 2013
I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Agenda
18
Thank you
Additional information
Grupo Energía de Bogotá – Investor Relations webpage:
─ http://www.grupoenergiadebogota.com/inversionistas
─ http://www.grupoenergiadebogota.com/en/investors
+ 57 1 326 8000 Ext. 1546 / 1675
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Agenda
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I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Disclaimer
The information presented herein is for informational and illustrative purposes
only. It is not, and does not seek to, provide legal or financial advice on any
subject. This information does not constitute an offer of any sort, and is subject
to change without notice.
EEB expressly states that it does not accept responsibility for any acts or
decisions taken or not taken based on this information. EEB does not accept
any responsibility for losses that might result from the execution of proposals or
recommendations presented. EEB is not responsible for any content that
originated with third parties. EEB may have provided, and might provide in the
future, information that is inconsistent with the information herein presented.
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I. Grupo Energía de Bogotá overview and strategy
II. Key developments for Grupo Energía de Bogotá
III. Consolidated financial results and indicators
IV. Special report on ConTugas
V. Questions and answers
VI. Disclaimer
VII. Annex
Agenda
22
Annex – Indicators EEB
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1Q 13 Share 1Q 12 Part. 1Q 13 1Q 12COP Million % COP Million % USD Million USD Million
Financial debt in COP 1,340 0.0 161,353 4.6 0.7 90Financial debt in USD 3,230,256 93.0 3,103,854 89.3 1,763.0 1,732Derivatives position 242,120 7.0 211,896 6.1 132.1 118Total f inancial debt 3,473,716 100.0 3,477,104 100.0 1,895.9 1,940
EEB Consolidated debt structure