CORPORATE PRESENTATION APRIL 2018
AGENDA Company Overview 1. Market Overview 2. Operations 3. Financial Review 4.
Company Overview Fenix Power: a relevant & efficient CCGT in Peru Most efficient CCGT in Peru KEY FIGURES SHAREHOLDERS Based on Heat Rate 51 % Colbún LTM EBITDA US$ 52 mm 36 % ADIA 40 miles south of Lima 13 % Sigma Capital of Peru and largest city of the country Cash 565 MW MARKET US$ 41 mm Gross effective capacity SHARE 1 3.5 TWh Others Internacional Peruvian 12% Net annual generation Huallaga Gov. Ratings 4% 22% Statkraft Baa3 Stable 3 TWh / year 5% Moody’s Long term contracts (~75% capacity) Fenix 8% BBB- Stable Orazul 18% S&P/Fitch Enel 15% Engie 16% Note: All figures as of Mar18 3 1 In terms of generation
Company Overview Highly experienced shareholders 51% 36% Chilean power generation company 13% 3rd largest player in the SEN (Chile’s main Established by the Government of the grid), with 17% of market share 1 in terms of Emirate of Abu Dhabi (Aa2/AA/AA) generation One of the largest global sovereign wealth 3.282 MW of installed capacity, 49% hydro funds and 51% thermal Globally diversified investment portfolio Matte Group as Controlling shareholder One of the largest investment Relevant experience as a partner and funds managers in Peru financial investor MAIN FIGURES Mainly dedicated to investments in infrastructure projects Mkt. Cap: US$4.2 bn Total AUM : ~US$640 Mn Total assets: US$7.0 bn Key investors: 3 private pension funds, a state pension fund and COFIDE Note: as of Mar18 4 1 In terms of generation in the SEN in Chile (23% in the SIC, prior to the interconnection with the SING effective as of October 2017)
AGENDA Company Overview 1. Market Overview 2. Operations 3. Financial Review 4.
Market Overview Power industry dynamics in Peru INSTALLED CAPACITY BY LARGE CUSTOMERS 1 2 3 SEIN DEMAND GROWTH & GDP. (%) TECHNOLOGY. (%) BREAKDOWN. (%) Power Demand GDP Thermal - 10% Diesel Combined Commerce Others 21% Cycle 16% 24% 8% 26% Thermal 6% Simple- 12,826 Cycle 9% 4% 3,0% MW Renewable 1,7% 4% 2% Coal & Manufacturing Mining Others 0% Hydro 27% 34% 2% 2011 2012 2013 2014 2015 2016 2017 1Q18 38% Power demand highly correlated with Peru’s Stable regulatory framework. GDP . US$ currency denominated market. High growth potential: per capita energy Investment grade country. consumption in Peru is 1.3 MWh; while the average for OECD countries is 8.0 MWh. 1 Source: COES, OSINERGMIN. Figures as of December 31, 2017, Commercial Management – Fenix Power. 6 1 World Bank
Market overview Marginal costs & demand in Peru Currently in a situation of oversupply and low prices. - Spot prices affected by take or pay scheme of gas contracts and by price declaration strategies. Marginal cost (US$/MWh) 59% 27 30 14 25 56% 12 25 75% 44% 10 20 33% 43% 15 21 14 8 Power (GW) 10 15 6 10 4 5 2 0 0 2013 2014 2015 2016 2017 1Q18 5.4% 6.4% 6.3% 8.5% 1.4% 1.7% 2 SEIN Demand growth 1 3 Reserve margin (%) Installed capacity (GW) Maximum demand (GW) Marginal cost (US$/MWh) Source: COES 1 In GWh. 2 According to the latest monthly report of COES - March 2018. 3 Considers firm capacity, according to Coes methodology. 7
Market Overview Positive gas industry trends in Peru 1 GAS RESERVES. 3 REGULATED GAS SUPPLY TARIFFS: OVERVIEW Camisea Consortium is a joint venture of six companies Current proven reserves of 15 trillion cubic feet (“TCF”) that produce and process natural gas at the Malvinas and Expected possible gas potential of 27 TCF Pisco facilities Camisea represents ~95.0% of total natural gas reserves in Peru Production Transport Distribution 2 GAS PRODUCTION. (MMCFD) 1.600 92% 95% 95% 97% 96% 95% 96% 95% 95% 4 REGULATED GAS SUPPLY TARIFFS: OVERVIEW 1.400 73% 77% 82% 1.200 Final Well Transport. Single 60% 1.000 price Price Fee Dist. Fee 50% 800 600 Well gas price applied to electricity generation and 23% 400 adjusted through O&G indexes 200 Regulated gas distribution and transportation segments 0 Rates adjusted every two and four years for transport and distribution, respectively PPAs energy contracts indexed to variations in Total Gas Production % Camisea natural gas prices 8 Source: Ministerio de Energía y Minas
AGENDA Company Overview 1. 1. Market Overview 2. Commercial Strategy 3. Financial Review 4.
Commercial Strategy Commercial policy that aims to provide competitive, secure and sustainable energy Contracting a relevant portion of capacity Fenix maintains long-term power supply 1 contracts Significant base of PPAs that reduces cash flow volatility, ensuring stable revenues over time Indexation formulas PPAs indexed to dollar , in order to mitigate its foreign Exchange Solid customers base 2 3 risk Creditworthy counterparties Additionally, the Company indexes the prices of its Most of Fenix PPAs are signed with contracts to fuel prices, in order the main distribution companies of to reduce the volatility of its Peru cash flows 10
Commercial Strategy Operational long-term contracts 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 ECL88 NATURAL GAS SUPPLY. 1 Counterparty: Camisea Consortium Expiration: August 2022 TGP NATURAL GAS TRANSPORT. 2 Counterparty: TGP Expiration : May 2032 Calidda GAS DISTRIBUTION & O&M. 3 Counterparty : CALIDDA Expiration: March 2035 CTM ELECTRIC TRANSMISSION & O&M. 4 Counterparty: Consorcio Transmantaro S.A. Expiration: February 2033 GE CONTRACT SERVICE AGREEMENT. 5 Counterparty: GE. Expiration: 3 major inspections over 25 years 11
Company Overview Stable cash flow profile supported by long-term PPAs 1 PPA PROFILE. 2 ENERGY SALES & INDEXATION. (%) Average life of long-term PPAs of ~6 years. Spot US PPI US$ FX adjusted and US$ denominated capacity payments. 27% 22% ~75% contracted through 2023. Strong AAA locally-rated off takers. PPAs Gas 73% 78% 3 PPA PORTFOLIO. (TWh) Regulated Customers Unregulated Customers 4 3 2 1 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 12 Note: as of Mar18
AGENDA Company Overview 1. Market Overview 2. Operations 3. Financial Review 4.
Financial Review Financial results 1 2 EBITDA & EBITDA MG. (US$ million & %) OPERATING REVENUES. (US$ million) 20 57 60 56 55 18 20 40% 53 52 49 17 48 47 35% 47 16 38% 14 15 30% 14 33% 40 30% 11 25% 25% 26% 10 24% 9 10 20% 23% 19% 15% 20 17% 5 10% 5% 0 0 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 EBITDA Fenix EBITDA Mg 14 Note: as of Mar18
Financial Review Financial results 1 2 NET DEBT/EBITDA LTM. (X) GROSS DEBT/EBITDA LTM. (X) 12 12 10 10 8,9 8,2 8,1 7,2 7,2 7,1 8 7,0 8 6,9 6,8 6,7 6,6 6,5 6,4 6,2 6,2 6,1 5,9 5,6 6 6 4 4 2 2 0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 4 3 LIABILITIES / EQUITY. (X) INTEREST COVERAGE. (x) 1,2 6 1,0 1,0 1,0 0,9 0,9 0,9 1,0 5 0,9 0,8 0,8 4,3 4,2 4,0 3,9 3,8 0,8 4 3,4 0,6 3 0,4 2 1,4 1,2 1,1 0,2 1 0,0 0 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 15 Note: as of Mar18
Financial Review Debt profile 1 DEBT PROFILE. 2 FENIX BOND ISSUANCE. Amount: US$340 mm Financial Debt Debt profile Term: 10 years US$350 100 % bonds Coupon: 4.317% Date of issuance: 09-20-2017 million 100% USD Format: 144A/Reg S Ratings (Moody ´ s/S&P/Fitch): Baa3 / BBB- / BBB- 100% Fixed rate Repayment profile: Amortizing, Bullet 44% Use of proceeds: Bank debt prepayment Oversubscription: 4 x 3 AMORTIZATION STRUCTURE. (US$ million) 200 168 Fenix Bond 160 120 80 40 0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 16 Note: as of Mar18
KEY TAKEAWAYS 1 Attractive Long- Peru's power generation industry currently affected by short-term transitory factors, but continues to exhibit high growth potential in the medium / long term Growth term Prospects 2 State-of-the-art combined-cycle dual-fueled power plant with 565 MW of effective capacity Highly Efficient Strategically located asset, close to demand hubs and to the SEIN substation CCGT (Chilca) Highly efficient plant with low and flexible variable costs 3 Fenix is the 4 th largest power generator of Peru Relevant Asset Critical power plant for the country for Peru Strategic for its shareholders 4 Strong sponsorship from highly experienced shareholders, including a key Strategic power generation player in Chile and leading asset managers (Peru and investment for internationally), over all long-term investors shareholders 5 Highly- Management with vast knowledge in the power industry Experienced Management 6 Stable Revenues from Long-Term Attractive long-term PPA contracts with creditworthy counterparties providing PPAs & stable cash flow generation; weighted average remaining life of our long-term PPAs is 7.2 years Operational 17 Contracts
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