Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Interconexion Electrica SA ESP (IESFY, Financial) reported a net income of COP708 billion for Q2 2024, marking a 2% increase compared to the previous year.
- The company has 39 projects under construction, expected to add approximately COP1.8 trillion to annual revenue.
- IESFY achieved a return on average equity of 14% by the end of June 2024.
- The company secured third place in sustainability rankings by ALAS20, recognizing its social and environmental impact.
- IESFY's EBITDA for Q2 2024 was COP2.2 trillion, a 7% increase from the same period last year, driven by new projects and reinforcements in Brazil.
Negative Points
- The strengthening of the Colombian peso against the dollar and other currencies has negatively impacted financial results when consolidated to Colombian pesos.
- The accrued EBITDA decreased by 12% when considering the exchange effect.
- Debt levels increased by 6% to COP33 trillion, partly due to currency devaluation and financing of the investment plan.
- The company's debt over EBITDA ratio rose to 3.7 times, up from 3.4 times last year, indicating increased leverage.
- The financial results were affected by the devaluation of the Colombian peso against the Chilean peso, impacting returns on financial assets.
Q & A Highlights
Q: Can you provide an update on the selection process for the new CEO?
A: The CEO selection process is managed by ISA's Board of Directors with the assistance of a specialized firm, [Ferry]. The process is thorough, and we are confident that the Board will make the best decision. Meanwhile, ISA continues to execute its strategy effectively with a strong team in place. β Gabriel Melguizo, Interim CEO
Q: What is the company's stance on the proposed changes to the indexation of charges or tariffs in Colombia?
A: We are analyzing the impact of the proposed indexation changes and will provide feedback within the allowed timeframe. We aim to ensure that any indexation accurately reflects cost variations for energy transmission companies. β Gabriel Melguizo, Interim CEO
Q: What is the current cost of debt for the company?
A: Our consolidated debt portfolio, which totals COP33 trillion with an average life of 9.5 years, has a cost close to 7% in dollars. This includes a mix of currencies such as Brazilian reals and Colombian pesos. β Jaime Falquez, VP of Corporate Finance
Q: Are there plans for further debt management operations this year?
A: We continuously manage our liabilities to maintain competitive conditions. We conducted an operation in Colombia this year and are evaluating other potential operations, depending on market conditions. β Jaime Falquez, VP of Corporate Finance
Q: Is leverage calculated using adjusted EBITDA or IFRS?
A: We use IFRS for leverage calculations, as this is the standard used by rating agencies. It includes income minus IOM and incorporates DRS data. β Jaime Falquez, VP of Corporate Finance
Q: Is ISA interested in acquiring the [Tepix] package?
A: Currently, ISA has control over CTEEP shares and is not considering increasing its share. β Sebastian Castaneda, VP of Growth & Business Development
Q: How does the Colombian government view the importance of transmission for energy transition?
A: The Colombian government recognizes the importance of transmission for energy transition. They have published a vision for transmission, which includes urgent works and a modernization plan, aligning with ISA's strategic goals. β Unidentified Company Representative
Q: Have you considered currency hedging strategies given the impact of exchange rate variations?
A: We maintain a natural hedge by matching income and expenses in the same currency within each geography. While we report in Colombian pesos, the results in local currencies are stable and aligned with business expectations. β Jaime Falquez, VP of Corporate Finance
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
