Enel Generación Perú continues with strong performance in 2017, withstanding difficult market conditions

Published on Monday, 26 February 2018

Lima, February 26th, 2018 – The Board of Directors of Enel Generación Perú S.A.A., chaired by Carlos Temboury, approved today the financial and operational results for 2017.

“Our 2017 results have been broadly in line with those of 2016, net of extraordinary effects. Through our business strategy, we managed to defend our margins and continue to post solid results. Looking ahead, our strategy will allow us to maintain this performance and overcome the challenging overcapacity situation of the Peruvian energy sector,” said Carlos Temboury, Country Manager of Enel Perú.

 

MAIN FINANCIAL RESULTS

(in millions of Soles)

 

2017

2016

Change

REVENUES

1,802

1,786

+0.9%

EBITDA

768

606

+26.6%

ORDINARY EBITDA*

768

815

-5.8%

NET INCOME

444

214

+108.1%

ORDINARY NET INCOME*

444

422

+5.3%

LEVERAGE

0.06

0.13

NA

CAPEX

+154

+145

+6.2%

*Calculation excludes effects of the one-off events occurred in 2016.

 

  • REVENUES: increased as a result of the signing of new contracts with free clients, despite lower average energy prices in this market, which were caused by oversupply.

 

  • EBITDA: grew mainly due to one-off events in 2016: (i) temporary interruption of the Curibamba Hydro Project (68 million PEN) and (ii) provision for an ongoing litigation (140 million PEN).

 

  • ORDINARY EBITDA: net of the above one-off items, EBITDA would have decreased due to higher purchases of energy on the spot market given that the “Niño Costero” phenomenon in 2017 led to the unavailability of the Callahuanca and Moyopampa hydro plants. The resulting negative impact on Enel Generación Peru’s ordinary EBITDA has more than offset the commented increase in revenues and the insurance compensation received by the company for such climatic event.

 

  • NET INCOME: increased by 231 million PEN mainly due to: i) EBITDA growth (161 million PEN); ii) a positive impact of 10 million PEN brought about by the dividends received from the Chinango subsidiary, which operates Enel Generación Peru’s hydro plants in the Junín region and posted a stronger performance than in 2016 and iii) the decrease of the income tax (62 million PEN) due to the 2016 income tax adjustment following legislative decree n.1261. These positive impacts more than offset the negative exchange rate effect brought about by appreciation of Peruvian Sol over the US dollar, which is the currency through which the company’s liquid assets are valued.

 

  • NET ORDINARY INCOME: net of the one-off items reported in 2016 and described above, the increase of net income would have been more contained.

 

  • DEBT TO EQUITY RATIO (LEVERAGE): improvement of the company’s solvency due to the reduction of the leverage to 0.06x from 0.13x, as a result of the cancellation of some debts.

 

  • CAPEX: increased due to refurbishment works carried out on the Callahuanca hydro plant, which amounted to 42 million PEN. The amount was compensated by the Enel Group’s corporate insurance policy.

 

MAIN OPERATIONAL RESULTS

 

2017

2016

Variation

NET ENERGY GENERATION (GWH)

5,778

7,085

-18.5%

ENERGY SALES (GWH)

8,265

8,079

2.3%

 

  • NET ENERGY GENERATION: total production decreased compared to 2016 as hydropower generation declined by 9.8%, to 2,911 GWh from 3,227 GWh, mainly due to the impact of the “Niño Costero” phenomenon on Enel hydro plants in Peru. On the other hand, thermal generation decreased by 25.7%, to 2,867 GWh from 3,858 GWh, as a result of the greater water availability and the launch of new hydro plants in the overall Peruvian energy system.

 

  • ENERGY SALES (GWH): sales increased as a result of the signing of new contracts in the free market.

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