Grupo Energía Bogotá S.A. E.S.P. (GEB) Earnings Call Transcript & Summary

[Audio Gap] because we're going to have a decreasing [ COP 2,690 million ], so we're going to highlight the utility with to those that have reduction of 21%. This is mainly because of a negative exchange to a portion because of the debt and significant because of the deferred taxes because it's not a [ flash coal ]. Finally, we just get it an organic algorithm. It's just one of the investments, reeling in COP 63 million as well. We decreased just the downflow because of the acquisition of something that it has in this period as well this year. And finally, to the right, we have a debt net of EBITDA, 3.2 with 2 points to the down. And after, we're going to have this reflected capacity of investment and with this leverage with this two years. Next slide, please. In terms of involving with the community and this corporative, we highlight, we have been implementing just reform to extend the corporate to -- we had an increasing from 3 to 5 of the members -- we just increasing as well. We define the minimum of women in our Board of Trustees with 3 women, which is currently -- we have this 3 of the Board of Trustees with trajectory and everything. And in addition, we have some measurements, when we have the gradual situation we related to the Board of Trustees, where we're going to have to keep the corporate historical and to renew the Board of trustees to bring some members with news to holders, with new ideas as well, with these kind of things. And after, we're going to start talking with this 21%. Of course, we have 2 women in the Board of Trustees from Cali as well. So according to what is happening and likely when communities and all these kind of restrictions and these kind of things with a significant poverty, we need to contribute here COP 2 million of the district related to COVID causes as well, and it's going to help to the communities. And afterwards, we delivered COP 2,500 million of medical equipment as well in 3 municips announced where we're going to start working. And we're talking about this related to those rural. And in Cali, we just have the municipality of Lima as well with the Solidarias Ollas as well in order to assist some communities related to COVID. And afterwards, we highlight at Cali participation of integrity participants as well, where we were -- we got a certification with 0 corruption with this initiative as well. So always, with this -- with all this, with this group as well and in this trajectory in this way. Next slide, please. At the beginning with this financial thing as well, what we know about everything where we're going to happen into here with the incomes as well because of the cost records. We're going to start talking with this part of the group with these costs. And with this download of these things and the main topic that we have is TGA with this important thing. And after, we just delivered COP 38,000 million like a reduction. We're going to explain a little bit a little more related to administrative expenses of [ COP 31 million ] decrease and delivering COP 34,000 million in order to have a compensation. And according to this, we're going to go here to the left, the incomes. With this kind of numbers as well, so we will have this scratch as well and during the delivery related to the coast and the business of distribution of natural gas as well. It has a real contribution related to this efficiency, and this amount on TG is going to be able to compensate as well in the direct cost directly. We are talking about related to -- we are going to have reduction in these incomes, and that shows that -- and we're talking about the expenses and costs as well and huge topics. And administrative expenses had contributed the total of the reduction with COP 36,000 million. They implement the support as well, the resignation of expenses of some teams and some personnel as well that we should classify, but we were specified like TGA as well as a net -- is a positive net with its contribution as well. And as we were saying in the presentation, there is a huge plan in detail, of course, in order to achieve better savings or to have an inter-counter situation because of the incomes. Next slide, please. In the EBITDA is the one who can highlight, 6.9% of the income and increasing as well. That's why we have been -- so we received more than that we have applied, the policy of 70% through the 4 -- latest 4 years. And we can see down low how it can help us that the profits related to this part related to this point with increasing of this part as well. This effect and the relationship with partners, it has a compensation related to these kind of things with the gas natural and this is just a reduction. It's not a recurring option, mainly because of -- in Peru, ISA, when in 2020, we have a -- so that's why we have this kind of thing. So in the EBITDA and the controlled ones are related to the losses. We have a little bit loss in natural gas natural of COP 5,000 million mentioned related to TGA and increasing of 1% -- COP 1,000 million, I'm sorry, related to 5% and taking into account this change so we have a positive way on that part than before. Net profit, so we have this story here. We have a mixed history because the names of these were -- anyway, an increase that a -- it's an increasing of this side as well according to the increasing and chose a really important impact with the nonorganic increasing and to the ride to increase. It's in operationals on how the rest of the companies or the other companies can show us an increase in its participation itself. I insist this is just a reflect of the portfolio because all of those companies are contributing in a really important way. And we have finally a different -- and we have an increase, the 51% because of the first -- the EBITDA related to the millions. And mainly, we're talking about the balances that we can see in 2030, even if the deferred taxes is going to be a really important change because the last part, we have [ COP 189,000 million ] profit and disguised [ COP 150,000 million ]. That's because of the change of the taxes and the ratios as well because the utility, that doesn't mean there's a cash flow or something. So there are some topics that we're going to be in a long term. Next, well, in terms of composition of the debt, there is just a little bit this kind, of course. And we have some changes in this part, COP 189 million debt or millions to the right. In fixed rate as well, this is very positive in this scenario because many analysts have some interest rate increases and not only having a fixed rate, but with the graphic to the right, with the portfolio, we have some modulations in the long-term and medium-term as well, a long of 80 years and this means that we have an instability in those rates of interest. At to the right, so we're going to have an inquisition of interest as well as too many significant. We don't have some relevant scratches to the '21 or '22. And the next debt line is just the bonus of Cali, $30 million to $100 million, in order to see when we're going to be able to do an efficient operation of management and to extend that maturity, of course. Next. In terms of CapEx, what we could do is to invest $63 million. This is a 5% of increasing while with a measure in organic on terms as well. The 9% is what's going to cover with $5 million additional dollars and mainly in Cálidda, the transmission business as well. Even though we're going to have -- we are over our budget of investments, things don't flow as the speeds we want, and we would like in terms of interaction as a consecution and authorizations. So it's very important, of course, for that kind of investments as well related to what is the dark green, is including transmission lines, which are paramount for the country and really important for the country as well. We're trying to look for some licenses with the dialogues with the communities as well and institutional. To be, of course, to execute those investments and the infrastructure and the transmission of the country will be bigger in order to have this intention to contribute to the country. In these coming years, enhancing the number of connections, of course, we are evaluating the possibilities to have a bigger contribution, of course, to the partnership and to be able to have a good coordination with the government. And finally, there is the fuchsia lines, which are the investments and the needed investments in TRECSA, related to pay as well. And according to these things, that is going to have improving this, and we are really committed with this as well absolutely to end these planned investments plans up. A return related to the heritage, which has an increase in related to 12 months and reflects the result in 2021 related to the loss that we mentioned before, up 20% of the net of this semester of this year. And finally, the cash flow, we need to highlight COP 1.585 million, almost $500 million in the cash flow in order to have something organic related to these vestments according to a really good future as well. This is just briefly of the main points. I don't know about the area. Maybe if you want to -- Juan Ricardo is here to tell his words or we give the floor of -- maybe we're going to go through Q&A sessions. First of all, Q&A sessions. And afterwards, we're going to have too many in the chatter or 2 that maybe you can continue collaborating as well.

And the first one is Andrés Duarte from Corficolombiana. How could be the agreement with Enel the 90% of the layout related to this understanding?

Well, thank you, Andres. But particularly, there is not news here related to this enhancing, enabling to improve this generation with the partner related to the having the long -- and the short and long term. So we continue with these negotiations. You need to know that they have a lot of things in detail because we have a point of view, which is really important in order to orientate with the direction of these dividends. Of course, we have been working on finding this middle point in order to not to get these benefits and to have -- to be able not to increase these kind of things to know about the know-how related to these kind of things with intelligent portfolio as well.

There is some other questions related to MetLife as well. A downgrade of Colombia to value as much because of each. What is the impact that we're waiting for it in these bonuses as well?

Yes. Well, we do believe there are 2 elements. These kind of things, there are some technical criteria as well, but the things of the -- for diversification of geographical, of the incomes and the high productivity of our cash flows as well related to the resiliency that we have despite of the pandemic and those kind of things with too many -- on the crisis related to the economical part, the sector has been having a behavior. I need that need to have a behavior itself in order to not necessarily to be in, say, matching with what is happening with the nation. And I see this is just a point of view related to our task and some other things related to our kind of things. And we have these kind of things, and there are really, really strong points of view as well.

Thank you very much. Jorge, there is another question from Diego Buitrago from Bancolombia. In a sense, the effects of the taxes and the diminishing of expenses, operational expenses, is going to be in this -- through this coming, so I guess, he's doing some reference to industry and trade as well on the distribution of the dividends as well per se.

Well, Diego, I do believe there is a huge part of the industry and commerce, when it's going to be a recurrent topic. And I guess, [ Julio ] is doing a little bit because we've been just enhancing and just in a particular moment because the main element on this, there is just a recurrent topic in this case as well.

Well, Diego, as Jorge said, it's just a recurrent topic here because it has been -- we can now talk about [ flash coal ] effect, related to concession effect. This is just the change of -- in this kind of things in the way we're just receiving this kind of cash flow as well because it's not going to be recurrent in this case.

We have somewhere from [ Juan Diego Paredes ] with from Banking Corporation as well, which were the basic determines in order to have the current leverage in EBITDA 3.2 against 3.3. And what is the sustainable conditions related to those situations in 2021 to 2022? And more, in addition, which is the objective of this indicator to this half 2022?

And we have a reimbursement for a little credit, $10 million in Peru. And that was the reimbursement. However, there was a devaluation of the quarter related to the debt as well. It has a compensation in part of this increasing of EBITDA as well. So we do believe 3.2 is a little low level that we need to start working on a higher leverage related to the operation because it doesn't require too much cash flows, we're talking about $63 million. In terms of organical issues, well, definitely what we achieved in this part with this business idea in order to invest, as you said, it's kind of difficult to try to find this kind of difficult position because we're trying to look for them every single day because we know that it's really important because it has an enhancing situation in this case. And well, we're going to have a topic in Buenaventura. Remember, we're going to start assessing and as a warning things in order to participate in that [ convocatory ], but the adjustments, for example, of the -- you see for the cash flow and organical, but as we have had some successful situations in the latest acquisitions as well and these kind of things and the level of leverage as well. EBITDA [ level 4 ] is really doable with this qualification that we have this kind of investments according to the investment level as well. And with this kind of thing, this is just a binary events because we can get an acquisition and that is going to generate some changes in the EBITDA level. And as I mentioned before, because it's that the objective more than the objective is just the limit that we're going to start believing in sustainable. And it optimizes, of course, the potential to have these finance leverage as well and a very good access to these kind of situations and the markets of credit that we've got. Maybe because of the international bonuses markets or low cost of the event that maybe they have soon good intentions in order to have some increases and to materialize them as well.

Thank you very much, Jorge. We're going to change just a little bit the financial topic. I'll let you go. Some more questions related to projects as well, Fredy Zuleta, in this case, can you elaborate as well with this answer. First of all, question from Corficolombiana, the state of the collecting line will start in 2024? Do you know the level of the advance of the solar panels, in order to connect and ready? Also associated to this, they have been asking us. And there are too many questions related to what kind of effect that would have been happening, and we can have all these situations with these public things that is happening in Colombia.

Well, Valeria, yes, good morning, everyone. And indeed, of course, every single projects that we are existing in the Caribbean region as well and specifically in La Guajira. But of course, we need to have some similar problematics as well because those projects, they have some characteristic, common characteristic with the relationship with the communities at times as well. And then to be able to ask for those kind of things as well, it has been having a delayed or pandemic or because of the strikes as well, protesters as well. And of course, there's a relationship because of the COVID the possibility that we have because there is a contagious as well in order to extend the meetings as well. And we need to start programming these kind of things because of the cap because it's just the process of devaluation in this case. And to move forward in the time as well, we have been moving forward because we have related to the [ 60C ] agreements that we have from 2020. And we're going to have establishing this kind of previous deals as well. So the process is moving forward. It's a little bit slower. Obviously, all of us, we want to be moving forward as well. But definitely, this is the dynamic and in order to be able to related to these [ convocatory ] in November 20, related to this administrative Vice Ministry October 2023. And with the -- in order to deliver the inconvenience and, of course, of the mines and energy and the competitiveness as well of the presidency in order to solve the topics in order to be able to be near the most as possible in these cases as well. According to that date and, of course, to generators to move forward. And even within some lines of connection than the ones we are working on too hard. So the project is going to be in a maximum dynamic that the situation allows us and keeping the expectation of those '23.

Thank you, Fredy. So we're going to change a little bit to TGA. And we have [ Monica Contreras ], who is the President; and Munévar, the Financial President. And we have a question from Diego Buitrago from Bancolombia. It says over the current conditions with TGI, we reached that EBITDA of 80% between -- within the pandemic. In the long term, what could be the EBITDA margin sustainable for TGI?

Thank you very much, Valeria, Andres. Within the financial projections that we've got and we have been sharing with the EBITDA margin in the middle term, and let's say, in the short term, it could be -- have a reduction as well. But in the long term, going to be within the 75% approximately. And this is thanks to all the strategy we have been sharing in our results and previous results as well and in this one and all the search and developments of the strategical pillars and enhancing and expansion as well and all of the efficiencies that we have been working and we have been implementing of this part as well.

Okay. Thank you very much, Adriana. We can continue working, of course, with these questions from -- with Metlife, Nicolas Romo. Nicolas says, we're hoping more losses for increases for PE?

Well, if you want Barranca, I can answer for Adriana. Maybe you're in there?

Okay. Thank you very much, [ Monica ]. Well, to confirm, that's the only deadlines, expirations and the long short terms related to the Barrancas. And we are leaving that impact as we have been anticipating since the last or previous semester. That loss is just approximately $118 million a year. And for the next coming quarters, we're going to see the same effect as well. And to connect with the measures that we have been working related to the previous measures related to this drop here to this administration as well. We have been working with this strategy. And of course, the huge focus that we have in these strategical pillars that we've got there, just one site to looking for this enhancing and expansion, because we're capitalizing as well as we reported yesterday, and we'll start continue working on that and really had a way capturing this opportunity of the development of new incomes as well on the other side. And in the long-term as efficiency, we've got an objective for this year and savings, at least $18 million, as we confirmed yesterday, but we go for more. I don't know if you want to say something else.

Our objective is continue working this. Adriana has, of course, as it was mentioned, hopefully, in the 80% related to this answer, according to Adriana's answer is to say, well, because of -- to more efficiencies as well. We have been capturing in the second semester of the year in order -- where it was the way because we need to start establishing these kind of results. And you're going to be a little bit harder in the second quarter related to income. Remember that the way this business is designed is to recover incomes in the short-term of our deadlines or expiration of contract of Ballena-Barranca, which really meaning a loss of 20% of the incomes of the DPE that we did last year, the previous year that happened in December. In fact, we feel really proud because we're going to be able to recover in the first quarter of the year [ COP 7 million ] of income for the business itself. That in fact, we have 2 new modules to operate with new products that we have. We need to have been establishing and really in order to work as a part of the incomes according to the PG as it belongs in the margin.

We have another question from [ Thomas Lemons ] from [ Barings ]. It says, hello, TGI. We have what dollars-pesos designated time of application? Okay, Adri, I don't know. Is it [ Juan Pablo ] or you go?

Can you repeat please, Valeria, the question?

Sure. Can you give us an update related to regulations, what currency, the pesos, dollars and application estimated time?

That question is relation with this resolution 160, that resolution with some comments in the last year. And we have all the comments including the concerns that these generates from the financial structure. However, up now, we haven't had a resolution when we regain -- we've worked with all the resolutions, and the answers and discussions that we have been discussing or talking about it because in June, we're going to have the resolution, the answer, or July. But it's not a certain thing that that's going to happen in the resolution. On the other hand, related to the pack, we're going to have some advances. And I think there are some recent adjustments. We're going to do the final calculations. We're anticipating that the tariff will be just 2 digits, a little bit of what we have been estimating according to the previous year, when we have been talking about that resolution.

Thank you, Adriana. I do believe for closing these DB questions. This is the general questions that we've got to every single operations, an idea for -- related to the -- with TGI, [ Catherine ], could you tell us the impact of the inspector relating to the blocks that we have been working 1 month in Colombia? And I have another question from [ Juan Carlos Alvarez ] from [ Kiriavala ]. Recall that it says he's also doing a reference to the same thing. So can you give us a vision related to this topic, please?

Well, basically, what we've got is very important. Thank you very much for the question as well. But it's very important to mention that from this point of view, TGI in order to -- all these difficulties as well that has happened in the Colombian market, we've been offering our level of services. We haven't had any preclusion, that's full of satisfaction. According to that, because obviously, logically, we have been working and facing to the distributors and that, in fact, they have been affected on these kind of things because you have seen this diminishing of the operation, of course, with all satisfaction that it has been delivering this section levels line with -- we have been working with these plan extensions related to services as well. We have been having some stories of vehicles when some employees have been our partners have been mobilizing, but nothing that has been affected the service, which is really important. It's relevant for the industry as well as everything was related to homes.

Thank you, [ Monica ]. So we also have Juan Ricardo as well. And he also is going to be able to present a little bit and go deep in on these questions that will reference the general terms of the operations in Colombia because we have been working in this because of [ ENFAC ] or [ INSA ]. And he'd be that -- Juan Ricardo, Please, we give the floor to you.

Okay. Well, in fact, we have been seeing a panorama, a positive panorama related to increasing the situation of dialogue as well related to these things that are the interest of this kind of increasing, of course, related to these opportunities of the new offers for some investments in the Guajiras. We are working together to be ready to these kind of things in order to do these value of things of these cadence because of the investments is going to be very important as well. Because related to this, it's really important as well to reach the intelligent things and the media intelligence mitigators, of course, of the city is going to be able to make sure just an agreement of the lighting as well related to these kind of things and all kind of things and these things. Because of the part of the strength of the digital technologies and the analysis capability related to data as well in order to see how we can see huge opportunities of increasing in the city and, of course, to be able to start establishing these kind of technologies.

Thank you very much, Ricardo. We have a question related to [ Argo ] of [ Romandrez Argo ]. Argo, and please remember while we have been working on these kind of things. [ Argo ], in this part, we are working on these kind of things. Previous year, we have been having some saving event because of the Brazilian market is very competitive, so we couldn't accomplish it, but we hope this year, we'll be able to be ready of these kind of things in order to have the next possibility to work on that in order to continue working on those kind of things in order to have certainly things as well. We have another question from a really good estimation. We're going to start working on the democratization process related to the charter contingency, what the mayor just announced.

It's just a decision related to the stockholders. It's not ours because we're ready to -- based on working on that, and we do believe that is getting a decision from the group as well and as well for the [ tristate ] itself.

Okay. Thank you, Juan Ricardo. We have more -- 2 more questions related to this topic. And well, [ Jorge Vargas ] is asking us because it just -- good morning. What kind of updates can you can deliver us in order to compete with Enel? We can hope some good news in these coming quarters? Finally, how much do you think to gather relating to the dividends as well, of course?

In these things, topics are really advanced. So there is a good climate, a good environment as well. We're working related to this agreement that we can present to the public.

And [ Irina Corredores ] is asking about Enel. So we can have an update in how could be ended up integration? What about the implication that we have related to these kind of things?

Well, we have all the capacity to have a capability to have this kind of increasing because we have some positive perspectives as well. And to warranty, of course, its strength related to that vehicle. Of course, with the rails and with the team work, understanding that the future of both companies are working together related to the benefits that we're working in this energy related to the city and the capability to be able to develop these projects of generation as well in regions where, definitely, the group is no matter what is the leader of that infrastructure.

Thank you very much. We don't have any more questions related to the chat. I don't know if you want to give us some closing messages to every single person who are here.

Well, thank you very much for being here with us for having me here. We are really committed with our strategical plan as well. And we have some solid teams as well. We're going to continue working and expecting the company, as you can see, of course, related to these corporative plans is going to be increasing. And in a -- we're hoping in the future, we have better results and better digits as well in order to work related to guarantee preservation of documents and the accountability that every single stockholders and the transparency and all these kind of things. We have very good partners. That's why we're really optimistic as well. And the world has been telling us the last report. And the last report of energy has been highlighting the Mexico industry. It's a winner sector. And of course, we're going to bet in a really aggressive way. And according to the competencies as well in the country and in the region as well. And got once, we're going to be the leaders in from Mexico to Chile, even Brazil as well. And the transmission of energy, which is our main focus in as well in this case.

Well, thank you very much. I don't know if something came up. And in addition, of course, and [ Thomas Lemons ] as well from [ Barings ]. I'm not pretty sure if I already answered. Could you give us a little bit color related to the impact of these turfs or the strikes in Colombia related to the operations? Have they -- dividends possible, minimum dividends to receive, especially with the distributors as well?

I do not believe there's going to be an impact in that way because clearly, we have been increasing. The consumption of energy, something dropped. But well, it was just a loss. And in this case, we're going to be able to work to this caucus thing because the situation has been a little bit more complex because these are huge strengths. I guess it's a little bit more expensive in the systems because it's related to these incomes. And of course, the bigger exchange, it has been -- maybe they don't have a higher impact because of higher or better infrastructures in our country.

Well, perfect. Juan Ricardo, so thank you very much. We don't have any more questions in the chat. So thank you very much to you all, to all external interest as the internal as well for always being here, ready to answer all our debts as well. We remember all of you, guys, all this information related to delivery of results is available in our webpage in the stockholders section related to financial investments as well, which really -- I hope you had the opportunity because for the first time, we launched all the package related to, I hope, will be really helpful to all of you and all your analysis as well. And we hope all receiving all your comments in order to continue improving in order to give the best information that you can require. And as usual, from the area from relationships and investors as well related to this conference and these results of however that would be. Thank you very much, and have a great day.