Aguas Andinas' results were affected by water stoppages in January and February

Aguas Andinas' earnings for the first quarter of 2013 reached Ch$38,205 million, 8.6% lower than the same period of the previous year, based on the information presented by the company to the Chilean Securities and Insurance Supervisor (Superintendencia de Valores y Seguros - SVS.

According to the analysis of the three months period ended on march, 31st, Aguas Andinas'  operating revenues amounted to CLP $108,284 million, CLP $426 million (0.4%) lower than in the previous period, due mainly to a lower sales volumes (2.9 million m3) of potable water as a result of the water stoppages in January and February 2013 caused by mudslides that fed into the Maipo river, forcing the company to stop water production. Additionally, average water consumption per customer during 1Q13 was lower compared 1Q12, as a result as a result of milder summer weather during the first months of 2013.

Consolidated EBITDA for the period amounted to CLP $70,354 million, CLP $3,186 million (4.3%) lower compared to same period of last year. This decrease is mainly explained by lower revenues and increased costs of 7.8% related to provisions made for customer compensation as a result of water stoppages during the months of January and February 2013.

Due to the problems related to the water stoppages, the company reached an agreement with Sernac (the Chilean consumer protection agency), in which the Company, beginning in May 2013, will compensate customers that were affected. The total number of clients who will receive compensation is 821,860. This group represents those customers whose service was interrupted before and/or after the programmed hour and those customers whose service was returned before and/or after the programmed hour. The total compensation for customers is CLP $2,580,503,928, which is reflected in the Company’s financial statements for the first quarter of 2013.

Assets

Total consolidated assets as of March 31, 2013 were CLP $1,576,001 million, an increase of 1.9% compared to December 31, 2012 when total assets were CLP $1,546,225 million.

Current assets were CLP $153,463 million as of March 31, 2013, an increase of CLP $32,181 million

compared to December 31, 2012. This increase was mainly due to an increase in cash and cash equivalents, as a result of increased collections and increased trade accounts and other accounts receivables due to the higher number of customers.

As of March 31, 2013, non-current assets decreased CLP $2,404 million compared to December 31, 2012. The Mapocho sewage treatment plant came online, resulting in increased depreciation, which was offset by increases in property, plant and equipment.

Cash Flow

The net cash flow from operating activities increased 3.9% in the first quarter of 2013 compared to the same period of the previous year. This increase is due mainly to increased collection of trade account receivables. The increase in receivables was offset by interest paid on Series R and S bonds and capitalized interest. Additionally, other operating payments were lower in the first quarter of 2013 because of lower value-added tax.

Investment activities as of March 31, 2013 produced a negative net cash flow of CLP $32,588 million, compared to the negative net cash flow of CLP $32,504 million in the first quarter of 2012, mainly related to the increase of property, plant and equipment for CLP $2,702 million, mainly the Mapocho sewage treatment plant, which was partially offset by lower capitalization of interest of CLP $2,865 million.

The negative net cash flow from financing activities was CLP $4,422 million as of March 31, 2013, generating a difference of CLP $(29,034) million compared to the same period of the previous year. This negative variation was due in part to the Series Q Bond issuance in the first quarter of 2012 (there was no bond issuance during the first quarter of 2013) and to higher repayment of bank debt in the first quarter of 2012 compared to the level of debt repayment in the first quarter of 2013.