AES Gener earnings decreased 34% in the first quarter of 2013

AES Gener presented it's financial information for the three first months of the current year. In this period, the company registered earnings of USD $62 million in the same period, 34% lower than the net income of USD $93 million in the same period in 2012.  At the same time, it reported an EBITDA of US$167 million, which represents a decrease of 10% over the first quarter of 2012, principally the result of lower gross profit in 2013.

Among the company's main highlights during this quarter was the closed of the financing of the Cochrane project, a 532 MW coal facility in the SING, under a US$1.0 billion non-recourse project finance facility. The financing was granted by a syndicate of international financial institutions made up of export credit agencies from Japan and Korea and Asian commercial banks.  Construction of the plant started on March 28, 2013, with delivery of the notice to proceed under the turn-key engineering, procurement and construction contract with Posco E&C.  The project is being developed by subsidiary Eléctrica Cochrane, whose shareholders are AES Gener (60%) and Mitsubishi Corporation (40%).  The project investment totals approximately US$1.35 billion and the plant's energy has been contracted over the long term with mining companies and projects.  The start-up of commercial operations is expected in 2016.

In the first quarter of 2013, construction works for the installation of new emission control equipment ("retrofits") continued at the Ventanas I and II and Norgener I and II coal plants. At the end of March 2013, capital expenditures totaled US$99 million. Contract sales in Chile increased by 14% between the first quarter of 2012 and 2013, as a result of higher contract demand and the initiation of new long term contracts. 

In terms of the financial results of the company, it's gross profit totaled USD $137 million, representing a decrease of 18%, when compared to the total of USD $167 million recorded in the first quarter last year. This negative variation is principally due to lower gross profit in the Central Interconnected System (SIC) and to a lesser extent Colombia, which was partially offset by improved operating results in the Greater Northern Interconnected System and Argentina.

In the SIC, the lower gross profit was driven by lower spot sales due to the combined effect of lower dispatch of the Nueva Renca back-up plant and lower spot prices, both associated with the entry of new efficient coal plants in the system, including the Ventanas IV plant which was in commissioning throughout most of the first quarter of 2013.  Additionally, the temporary imbalance between the Company's level of energy supply contracts and its efficient generation, as a result of new long term supply contracts which initiated in 2012, continued until the start-up of commercial operations of the Ventanas IV plant in mid-March 2013.  The lower gross profit in Colombia was driven by an increase in net spot energy purchases at higher prices as a result of dry hydrological conditions.

In the SING, higher gross profit was registered between the first quarter of 2012 and 2013, driven by an increase in the Angamos plant's contract volumes.  Higher contract revenue was also recorded in the SADI due to the increase in Energy Plus contract sales.  These positive impacts in the SING & SADI were partially offset by higher fuel costs as a result of the increase in generation.

Non-operating income decreased between the first quarter of 2012 and 2013, with a negative variation of US$21 million in foreign exchange differentials mainly due to the appreciation of the Chilean peso and the depreciation of the Colombian peso.  This loss was partially compensated by lower income taxes of US$8 million.