Quarterly FINANCIAL REPORT. june Construcciones Maquinarias Inmobiliaria Concesiones Energía Renovable MD Montajes Besco (Peru) Kipreos

Transcription

1 Quarterly FINANCIAL REPORT june 2014 Construcciones Maquinarias Inmobiliaria Concesiones Energía Renovable MD Montajes Besco (Peru) Kipreos

2 4besalco group CONSOLIDATED STATEMENT OF EARNINGS (CLP million) June 2014 June 2013 Variation 2Q Q 2013 Variation Ordinary incomes 175,800) 168,598) 4% 76,054) 85,846) -11% Cost of sales (160,089) (154,509) 4% (66,190) (81,255) -19% Gross profit 15,712) 14,090) 12% 9,865) 4,591) 115% Administrative expenses (7,968) (7,936) 0% (3,972) (4,185) -5% Net financial expense (4,978) (1,865) 167% (2,784) (1,223) 128% Net profit in associated companies 298) 2,740) -89% (1,418) 1,629) -187% Others (2,628) (1,342) -96% (1,498) (402) 272% Profit of the period 436) 5,687) -92% 192) 409) -53% Stockholders' profits 2,098) 5,520) -62% 811) 1,194) -32% CONSOLIDATED BALANCE SHEET ASSETS (CLP million) June 2014 June 2013 Variation Current assets 291,324) 221,924) 31% Non-current assets 281,886) 253,698) 11% Total assets 573,210) 475,622) 21% LIABILITIES AND EQUITY (CLP million) Current liabilities 224,457) 139,650) 61% Non-current liabilities 164,798) 150,942) 9% Shareholders' equity 175,634) 170,926) 3% Minority interest 8,321) 14,105) -41% Total liabilities and equity 573,210) 475,622) 21% PERFORMANCE OF BESALCO STOCK PRICE (CLP) STOCK PRICE CLP 1,000 CLP 900 CLP 800 Daily share traded Stock price IPSA (referred to stock price) CLP 7,000 mill CLP 6,000 mill CLP 5,000 mill DAILY SHARE TRADED CLP 700 CLP 4,000 mill CLP 600 CLP 3,000 mill CLP 500 CLP 2,000 mill CLP 400 CLP 1,000 mill CLP 300 CLP 0 mill jan mar may jul sep nov jan mar may jul sep nov jan mar may jul aug

3 4besalco s.a. As of June 2014, the results reflect the recognition of construction cost overrun in the civil works branch of Besalco Construcciones. However, all other group companies with the exception of Besalco Inmobiliaria show a significant increase in their billing and profits. The negative results of June for the Inmobiliaria branch had been forecasted since the beginning of the year due to a low number of deeds registered during this period, aspect that will be reversed in the last quarter of the year after the municipal acknowledgement and the subsequent registration of deeds for several of their projects. Besalco Construcciones has sustained a negative results recognition policy, according to the IFRS standard. We are confident that the earnings of our new projects will promptly appear in the consolidated results. STOCK EXCHANGE PRECEDENTS June 2014 June 2013 Stock price (CLP) Book value per share (CLP) Number of shares (million) Equity market value (CLP million) 208, ,454 Earnings per share (CLP) Price to book value P/E price earning ratio RATINGS Fitch-Ratings Feller Rate February 2014 February 2014 Long term debt rating BBB+ A- Equity rating 1 st Class Level 3 1 st Class Level 2 Commercial papers N2 / BBB+ A- / Level 2 Outlook Negative Negative 3

4 As of June of this year, the balance of works to be executed backlog proportional to the interest of each branch of the executing company, in the case of consortia, amounts to USD891 million. Contracted works are widely diversified by contract and principal type. From a total of 84 contracts, 21 correspond to civil works belonging to Besalco Construcciones and its branches, 13 to real estate development, 25 to machinery services, 16 to the Kipreos branch, 5 to Besalco MD Montajes and 4 to works in Peru. The duration weighted by amount and period of the works is of 32 months, with machinery services contracts contributing forward contracts with terms of 3 to 5 years. BACKLOG (USD million) , We are very satisfied with the operation of Besalco Energía S.A., which contributed earnings of CLP 835 million to Besalco through its Aguas del Melado S.A. branch. At the same time, the Los Hierros II hydroelectric power station of 5.5 MW is on the final construction stage and is expected to start operating at the end of Besalco Maquinarias acquired the complete shareholding of Besalco Cerro Alto. At the same time, it celebrated a new contract with Minera Escondida for a period of four years. '09 '10 '11 '12 '13 june 14 BACKLOG DISTRIBUTION BY MARKET SEGMENT AT JUNE % energy 8% health 8% public works direct government contracts 15% forestry 4% public works concessions TOTAL BACKLOG USD million Health 72 2% transport 11% retail USD 891 million Public Works - Direct Government Contracts 69 Public Works - Concessions 37 Copper Mining 170 Iron Ore Mining 107 Mining, other 84 Other Civil Works 31 3% other civil works 19% copper mining Retail 102 Transport 16 Forestry % mining, other 12% iron ore mining Energy 69 TOTAL 891 4

5 4financial analysis The gross margin and the operating margin show an increase when comparing the June 2014 and June 2013 periods. The figure for the former went from 8.4% to 8.9% while the latter increased from 3.6% to 4.4%. Ordinary income as of June 2014 has reached CLP 175,800 million, 4% higher than on This is mainly explained by the increase in billing in Besalco Maquinarias (48%), Besalco MD Montajes (29%), and Kipreos (147%). Profit attributable to the shareholders amounts to CLP 2,098 million, 62% lower than the previous year. The highest contribution to this income comes from machinery services, the international area, and Kipreos. In addition, the Energy branch started showing earnings starting from this semester and has contributed CLP 835 million to the consolidated total. Both the gross margin and the operating margin have shown an increase when comparing the June 2014 and June 2013 periods. The figure for the former went from 8.4% to 8.9% while the later increased from 3.6% to 4.4%. ORDINARY INCOME (CLP Mill) STOCKHOLDERS' PROFITS (CLP Mill) 385, ,301 Stockholders' profits (CLP million) Net margin 5, , , , ,800 17,136 17,062 19,501 12, ,612 25, % 6.8% 6.1% 6.6% 2,098 '09 '10 '11 '12 '13 jun 13 jun % 3.3% '09 '10 '11 '12 '13 jun % jun 14 5

6 The sum of the non-operating items without taking into consideration administrative costs or taxes has had a loss of CLP 8,938 million in comparison to the positive result of CLP 435 million achieved in June This has happened due to three factors: the negative affect of adjustment units and the exchange difference; due to the lower related earnings in comparison to those obtained during the previous year, and due to an increase in the financial costs, especially due to the balance consolidation of the Eléctrica Aguas del Melado branch which started operating at the beginning of the year. EBITDA Ebitda (CLP million) Ebitda margin (%) 64,466 This decrease in the non-operating result translates into a lower net margin calculated over the profit attributable to the shareholders, which reached a 1.2% in comparison to the 3.3% obtained in June The Ebitda totaled CLP 19,433 million, which shows a 7% decrease with respect to the same period of the previous year. At the same time, the Ebitda margin has decreased from 12.4% to 11.1% in the same period of analysis. 46,450 46,181 53,583 42,785 This effect in the results happens mainly due to the margin decrease and loss generated by the Besalco Construcciones branch, which in June registered a negative result of CLP 6,078 million. Financial debt increased from CLP 218,145 million in December 2013 to CLP 259,592 million in June The highest level of debt is a consequence of the following funding: long term credits for CLP 16,000 million for Besalco Construcciones; funding for the Los Hierros II hydroelectric power stationand of the Plaza Sucre concession in Viña del Mar; credit remittance for the construction of real estate projects and some credits for a specific deficit in work capital by Besalco S.A. 20,881 19, % 18.4% 16.7% 16.7% 12.4% 10.9% 11.1% '09 '10 '11 '12 '13 jun 13 jun 14 FINANCIAL DEBT AT JUNE % machinery leasing 20% short term banks CLP 259,592 million 9% long term banks CLP million Short Term Banks 50,648 22% real estate bank projects Long Term Banks 24,103 LT Public Concessions Projects 25,669 LT Energy Projects 51,967 Real Estate Bank Projects 58,154 Machinery Leasing 49,051 20% long term energy projects 10% long term public concessions projects TOTAL 259,592 6

7 According to company policies, projects are funded through project finance, ensuring that periods, currency, and other credit characteristics are determined according to the program they fund. Financial debt as of June 2014 is divided mainly in leasing for machinery and equipment procurement (19%); bank debts that fund plots according to their development period and the subsequent real estate project involved (22%); structured long term bank debts (9%); concession funding (10%); long term energy projects debts (20%); and working capital funding through letters of credit, bills of trade, and short term credits (20%). The indebtedness level measured as the total liabilities over the total equity has increased to 2.1 times in June 2014, compared to the 1.6 times obtained in June At the same time, the company s ability to pay calculated as the net financial debt over the Ebitda is of 6 years. It is worth mentioning that the total financial debt includes long term funding for the following projects: Plaza Las Condes concession (19 years), energy projects (14 years), the acquisition of Kipreos (7 years), and the plot purchases for stage development (5 years). If we discount the financial debt and Ebitda from the energy projects, this index decreases to 5.2 years. LEVERAGE Total leverage Financial leverage Financial leverage net of energy business FINANCIAL NET DEBT / EBITDA Financial net debt / Ebitda Financial net debt / Ebitda (both net of energy business) '09 '10 '11 '12 '13 june 14 '09 '10 '11 '12 '13 june 14 7

8 4construcciones s.a. (civil works) Total backlog of this subsidiary shows a 29% increase with respect to March 2014, which is explained by the new projects awarded. At the end of June 2014, Besalco Construcciones S.A. maintains a total of 21 contracts in progress, 10 of which are carried out through consortia with different companies and 11 are carried out in their totality by the subsidiary. Among the projects in progress, it is worth mentioning the contracts carried out for the Ministry of Public Works (MOP by its acronym in Spanish), which have recorded a backlog of USD69 million to the date. This represents a 33% of the total backlog of the company that at the end of June 2014 totaled USD212 million. BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Jun 14 Besalco Construcciones June 2014 June 2013 Variation 2Q Q 2013 Variation Ordinary incomes / CLP million 52,770) 59,248) -11% 20,354) 32,381) -37% Gross profit / CLP million (3,852) 1,653) -333% (2,378) (235) N.A. Gross mar. less selling exp. (*) / CLP mill. (4,896) 626) -882% (2,873) (666) N.A. Net financial expenses / CLP million (679) (47) N.A. (494) (72) N.A. Profit of the period / CLP million (5,911) 237) N.A. (3,555) (1,043) N.A. Controllers profit/loss / CLP million (6,078) 90) N.A. (3,674) (594) N.A. Ebitda / CLP million (4,440) 1,526) -391% (2,707) (473) N.A. Financial leverage 2.5) 0.3) Liquidity ratio 1.2) 1.2) Total employees 3,113) 3,877) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. In this way, the total backlog of the subsidiary rose a 29% with respect to March This is explained by the new projects awarded which correspond to "Clínica Cruz Blanca Salud" for a total of USD100 million (50% Besalco stock/share participation), "Edificio Bodegas Sur Aeropuerto Arturo Merino Benítez [South Warehouse Building for the Arturo Merino Benítez Airport" for USD25 million, and "Vergara Wharf Repair" for USD10 million. Similarly, the Company is currently assessing new works in several areas, both in the public and private sector. Works with budget slippages such as Mall de Copiapó and Hospital de Copiapó, remain to the date and their higher costs have been included both in 2013 and the current exercise. These slippages correspond mainly to the rise in the labor costs, interferences, and the subsequent modifications in the projects by some clients. The latter has translated into a complex planning of the works as a consequence. Similarly, the obstacles found in the construction of Hospital de Talca work in consortium where Besalco has a third of the property interest have, to the date, translated into losses. However, Mall de Copiapó and Hospital de Talca are in their final construction stages and their works will be completed during the next months. At the same time, the works for Hospital de Copiapó will be completed in the second quarter of A significant organizational restructuring of the branch has been carried out during this year, which includes among others the works administrative area and the proposal studies area. At the same time, Guillermo García Cano has been appointed as Besalco Construcciones S.A. s General Manager and has taken office on April, 2014, endorsed by an outstanding career and knowledge of the construction industry in Chile. 8

9 4maquinarias s.a. (machinery services) A new contract was celebrated in June with Minera Escondida for drilling and support works, which will contribute an income of approximately CLP 5,500 million a year during four years. The company s ordinary income as of June 2014 shows a 48% increase with respect to the same period in At the same time, the profit attributable to the shareholders rose a 51%, going from CLP 3,387 million in 2013 to CLP 5,112 million in Both the gross margin and the operating margin have increased, from 13% to 16% for the former and 11% to 13% for the latter. For its part, the Ebitda has risen from CLP 10,067 million to CLP 17,521 million in the same period of comparison, which translates into the margin increasing from 26% to 31%. BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Jun 14 Besalco Maquinarias June 2014 June 2013 Variation 2Q Q 2013 Variation Ordinary incomes / CLP million 56,705) 38,369) 48% 30,903) 20,531) 51% Gross profit / CLP million 9,050) 5,049) 79% 3,603) 2,702) 33% Gross mar. less selling exp. (*) / CLP mill. 7,522) 4,218) 78% 2,658) 2,278) 17% Net financial expenses / CLP million (912) (359) 154% (674) (185) 265% Profit of the period / CLP million 5,112) 3,438) 49% 2,150) 1,774) 21% Controllers profit/loss / CLP million 5,112) 3,387) 51% 2,150) 1,746) 23% Ebitda / CLP million 17,521) 10,067) 74% 9,807) 5,261) 86% Financial leverage 1.1) 0.6) Liquidity ratio 0.8) 0.8) Total employees 1,826) 1,959) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. A new contract was celebrated in June with Minera Escondida for drilling and support works, which will contribute an income of approximately CLP 5,500 million a year during four years. Seven new contracts were developed for a total of CLP 92,779 million at the beginning of the year, which have an execution duration that ranges from 8 to 60 months. As of June 2014, the result correspond to the merger of Besalco Maquinarias and Besalco Minería (former Besalco Cerro Alto), in which all shares were acquired during the first semester of the year. As of June 2013, the profit of the exercise only considers participation of 20% in company in its non-operating result. Following the machinery and modern equipment maintenance policy, and related to the new contracts started during the year, the Company has invested CLP 17,176 million in trucks, cranes, loaders, and other support equipment during these months. At the same time, it sold CLP 2,184 million worth of fixed assets. 9

10 4inmobiliaria s.a. (real estate) Sales per book (registration of the deeds) of four important projects are planned for the second semester of the year. Ordinary income has amounted to CLP 8,169 million as of June 2014, 51% less than what was registered in the same period of the previous year. The relevant registration of deeds stems from the sale of two stages of the Haras de San Bernardo project. Deeds for the sales of the Kandinsky building in Viña del Mar, Espacio El Llano I building in San Miguel and Hacienda los Conquistadores in Puente Alto were also registered. BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Jun 14 Besalco Inmobiliaria June 2014 June 2013 Variation 2Q Q 2013 Variation Ordinary incomes / CLP million 8,169) 16,645) -51% 2,933) 6,199) -53% Gross profit / CLP million 1,145) 1,978) -42% 265) 581) -54% Gross mar. less selling exp. (*) / CLP mill. 40) 905) -96% (307) 86) N.A. Net financial expenses / CLP million (939) (918) 2% (411) (511) -20% Profit of the period / CLP million (1,169) 2) N.A. (623) (199) N.A. Controllers profit/loss / CLP million (789) 75) N.A. (431) (160) N.A. Ebitda / CLP million 230) 927) -75% (163) 105) N.A. Financial leverage 1.9) 1.2) Liquidity ratio 1.7) 4.0) Total employees 856) 710) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. Type N N Total sales Sold (UF Thd.) For sale Notarial deeds Notarial deeds of dwelling projects units to be signed to be signed (UF Thd.) sales pre sales (UF Thd.) Dec Housing , , Apartments , , Total 14 1,405 4, ,976 2, ,144 As of June 2014, promises to sell have increased to UF980 million (299 units) compared to the UF1,024 million (366 units) achieved during the same period of As of June, there were 14 projects for sale recorded with a potential of UF4,662 million (1,405 units). A 42% had a signed promise to sell and 9% had signed its deed of sale. Similarly, from those promised in June, an UF832 million is expected to have their deed registered during the second semester of The municipal acknowledgement and the respective sales per book (registration of the deeds) of the following projects are planned for the second semester of the year: _Las Dalias (Providencia, Santiago): 40 apartments with a sales total of UF253,000. _Espacio El Llano Sur (San Miguel, Santiago): 162 apartments with a sales total of UF276,000. _Hacienda Conquistadores, plot J (Puente Alto, Santiago): 105 houses with a sales total of UF231,000. This project does not consolidate in Besalco. _Haras de San Bernardo, stage 4 (San Bernardo, Santiago): 77 houses with a sales total of UF192,000. Three projects have started their construction phase during the month of June: building I of the Nova project in Ñuñoa, which includes two apartment towers and a strip center with an underground supermarket, Los Gomeros building in Vitacura, and a strip center in Chamisero. As it is a company policy, all projects are funded with bank credit lines formalized through a notarial deed and with the plot guarantee and construction of the project limited to the funding amount. The profit attributable to the shareholders has registered a loss of CLP 789 million as of June 2014, compared to the CLP 75 million profit obtained during the same period in The gross margin has increased from 12% to 14% between June 2013 and June However, the operating margin has decreased in the same period (from 5% to 0.5%) due to the effect of the management costs related to a lower operating income. The level of financial debt has risen from CLP 34,713 million to CLP 55,469 million over the course of a year. This increase happened in 2013 mainly due to the purchase of new plots and the large amount of projects in progress. Reduction of the indebtedness level is expected to begin at the end of the current year. 10

11 4concesiones s.a. (public concessions) Construction of the "Edificio Bodegas Sur Aeropuerto Arturo Merino Benítez [South Warehouse Building for the Arturo Merino Benítez Airport]" concession started in July of the current year and is expected to be completed and start operating in June plaza las condes (100%) Concession term 35 years Concession start up 2007 Operation start up 2009 Concession termination 2042 Total investment (UF) 519,066 Equity book & partners' subordin. debt (UF) 60,486 Value per DCF (UF) 231,000 sociedad concesionaria convento viejo (33.3%) Concession term 25 years Operation start up (Stage I) 2008 Concession termination 2030 Total investment (UF) 5,751,340 Investment to the date (UF) 4,783,724 Subsidy incomes 1 st sem (UF) 426,000 Equity book (UF) 518,095 Value per DCF (UF) / 100% of the companyad 882,000 sociedad concesionaria bas (33.3%) Concession term 20 years Operation start up 2006 Concession termination 2026 Total investment (without "claim") (UF) 3,450,000 Subsidy construction incomes 1 st sem (UF) 274,950 Subsidy operating incomes 1 st sem (UF) 298,767 Average internal N June ,770 Equity book (UF) 1,035,267 Value per DCF (UF) / 100% of the company 542,000 Merino Benítez [South Warehous Building for the Arturo Merino Benítez Airport]" concession started in July of the current year and is expected to be completed and start operating in June The company holding the concession is comprised of two companies: Agunsa S.A. (70%) and Besalco Concesiones S.A. (30%). At the same time, building works for two 22,703 m² buildings are carried out by Besalco Construcciones. The contract consists of a sub concession at a 15-year term that transcends the airport concession period. The object is the lease of offices and warehouses for courier companies related to the airport cargo sector, in the main area of the airport, where products must be cleared for their import. During the past July, the Ministry of Public Works paid through MOP resolutions the amount of UF787,764 to Sociedad Concesionaria La Fruta S.A. (Besalco Concesiones has a 22.5% interest) as part of the partial reconciliation between the Company and MOP due to the anticipated termination of the concession of the same name. All funds were returned to the partners. Construction of the third stage of the Convento Viejo reservoir which considers and investment of UF1,262,000 has a 27% of progress. The works are expected to be completed in their totality in April However, starting from 2014 and 2015, 4,000 hectares of irrigable land will be covered in the Lolol area. Construction of the "Edificio Bodegas Sur Aeropuerto Arturo The construction of the Plaza Sucre parking lots in Viña del Mar has reached a 60% of progress in its works. It is expected to be completed in April 2015 and the delay is due to the late delivery of the plots and permits by the Municipality of Viña del Mar, as well as the inadequate existing blueprints that supported the service change to be executed. Recently, the Ministry of Public Works has ratified its intention of bringing to life and ambitious concession plan that includes several interesting projects such as highways, roads and reservoirs, among others, which we have welcomed. The company is also carrying out studies to tender in private concessions. 11

12 4energía renovable s.a. Recently, Besalco has decided to sell the Eléctrica Aguas del Melado S.A. and Eléctrica Portezuelo SpA companies. For this purpose, it has hired the financial services of BTG Pactual, which has aroused the interest of national and international bidders. The company is still focusing on the operation of the first hydroelectric power station, Los Hierros (25 MW) and on completing the works of the second project, Los Hierros II (5.5 MW). In parallel to this, it has been developing environmental studies and is waiting for the respective permits to be issued in order to start the works for the next projects mentioned in previous reports. Energía Renovable June 2014 Dec 2013 Ordinary incomes / CLP million 5,061) 4,874 Gross profit / CLP million 3,073) 1,047 Gross mar. less selling exp. (*) / CLP mill. 2,711) 341 Net financial expenses / CLP million (1,376) 36 Profit of the period / CLP million 842) 405 Controllers profit/loss / CLP million 835) 405 Ebitda / CLP million 3,600) 370 Financial leverage 5.9) 4.5 Liquidity ratio 0.4) 0.4 Total employees 65) 51 All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. Eléctrica Aguas del Melado S.A. company, which is in charge of the operation of Los Hierros power station, generated a total of 45 GWh in its first semester, which was distributed to the market at the electrical system s marginal cost, called spot. The graph indicates the monthly average variation that this price has suffered recently. During the semester, the canal had to be cleaned which caused a loss of work-days which in the future will be done in a more efficient way. Furthermore, the water load of the canal has been gradual. It is expected that under a normal year regime, and estimate of 145 GWh will be generated. Eléctrica Portezuelo SpA company, which is carrying out the Los Hierros II project, will start operating at the end of the year with an estimated annual generation of 30 GWh. Recently, Besalco has decided to sell the aforementioned companies. For this purpose, it has hired the financial services of BTG Pactual. It is expected that this transaction, which has aroused the interest of national and international bidders, will come into fruition during the current year. MARGINAL COSTS USD/MWh - SUBSTATION ANCOA 220KV (SPOT PRICE) jan feb mar apr may jun jul aug sep oct nov dec jan feb mar apr may jun jul USD/MWh 12

13 4md montajes s.a. (60% besalco) 4(industrial constructions) This subsidiary is currently carrying out the works for the "Habilitación Chimenea ex Horno Reverbero [Modification of the former Reverbero Furnace Chimney]" for Codelco in the El Salvador Mine, project that will be completed in February BACKLOG (USD million) 38 During the first semester of 2014, the company was in the process of completing two works for the mining area. Two contracts with Codelco and one with Minera Esperanza. As of June 2014, the backlog to be executed was of USD9 million, which consisted of the completion of the aforementioned projects plus another one for Codelco which is currently in progress Dec 10 Dec 11 Dec 12 Dec 13 Jun 14 Besalco MD Montajes June 2014 June 2013 Variation 2Q Q 2013 Variation Ordinary incomes / CLP million 17,832) 13,843 29% 7,129) 7,139 0% Gross profit / CLP million 2,576) 1,430 80% 3,073) % Gross mar. less selling exp. (*) / CLP mill. 1,826) % 2,633) 50 N.A. Net financial expenses / CLP million (19) % (18) % Profit of the period / CLP million 465) % 1,080) % Controllers profit/loss / CLP million 465) % 1,080) % Ebitda / CLP million 494) % 1,244) 110 N.A. Financial leverage -) 0.0 Liquidity ratio 2.9) 2.5 Total employees 106) 1,090 All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. It is currently carrying out the works for the "Habilitación Chimenea ex Horno Reverbero [Modification of the former Reverbero Furnace Chimney]" for Codelco in the El Salvador mine, project that will be completed in February The Company is currently studying new projects and responding to calls for tender in mining works in the north with Codelco and other private companies. Ordinary income reached CLP 17,832 million as of June 2014, 29% higher than what was recorded in the same period of Both the gross margin and the operating margins increased significantly, which are not completely reflected in the profit due to the fact that a negative impact was recognized during the first quarter in its non-operating result (CLP 1,333 million), as a result of the ruling in a case for a lower amount than what was budgeted. 13

14 4besco s.a. (peru) As of June 2014, there has been participation in eight real estate projects, three in consortia with other local companies and five belonging completely to Besco. Ordinary income as of June 2014 showed a reduction of 17%, in line with the 16% obtained for the profit attributable to the shareholders. However, the gross margin and operating margin showed significant increases, from 30% to 39% for the former and 17% to 26% in the latter. This effect of increase in the margins and decrease in earnings happened because since the beginning of the year 2014 the company s income has come from real estate projects and they do not include the non-operating result of the earnings of its associate Norvial which was sold at the end of BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Jun 14 Besco (Peru) June 2014 June 2013 Variation 2Q Q 2013 Variation Ordinary incomes / CLP million 4,009 4,816) -17% 2,215 2,494) -11% Gross profit / CLP million 1,575 1,451) 9% ) 10% Gross mar. less selling exp. (*) / CLP mill. 1, ) 33% ) 40% Net financial expenses / CLP million 6 (43) -113% 2 (26) -110% Profit of the period / CLP million 1,280 1,501) -15% ) -63% Controllers profit/loss / CLP million 1,305 1,548) -16% ) -61% Ebitda / CLP million 1,431 1,776) -19% 362 1,050) -65% Financial leverage ) Liquidity ratio ) Total employees ) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. As of June 2014, there has been participation in eight real estate projects, three in consortia with other local companies and five belonging completely to Besco. The projects have 4,553 apartments and a potential sales total of USD270 million. 62% of them are committed for sales or its deed has been registered and delivered. Project Parque de Comas, which obtained its permits during the first semester of this year and is expected to begin its building phase at the beginning of 2015, has recently started its sales phase. It considers a cluster of 10,625 apartments for a sales total ascending to USD430 million. Besco has equal participation in this project with the Graña & Montero company. Furthermore, Besco is studying some public works tendering projects in Peru, in addition too it s potential participation in Colombia s real estate area. 14

15 4kipreos (civil works for energy transmission) The delivery of the electromechanical assembly works for the Caserones project, as well as of the transmission line works for the Antucoya mining project, are expected for the next quarter. At the end of the first semester, the Kipreos Company (where Besalco S.A. has a 68% interest) has ten projects in progress and a backlog of USD65 million. kipreos ingeniería (68% besalco) kipreos aéreos (68% besalco) Kipreos Jun 2014 Jun 2013 Variation 2Q 2014 Jun 2014 Jun 2013 Variation 2Q 2014 Ordinary incomes / CLP million 17,216) 6,970) 147% 10,077) 561) 845) -34% 173) Gross profit / CLP million 2,084) 800) 161% 1,393) 92) 203) -55% (23) Gross mar. less selling exp. (*) / CLP mill. 1,319) 218) 505% 1,001) 44) 129) -66% (37) Net financial expenses / CLP million (40) (16) 152% (29) (6) (7) -16% (3) Profit of the period / CLP million 965) 1) N.A. 717) 37) 74) -51% (21) Controllers profit/loss / CLP million 965) 1) N.A. 717) 37) 74) -51% (21) Ebitda / CLP million 1,530) 419) 265% 1,103) 98) 262) -63% (22) Financial leverage 0.0) 0.0) 0.2) 0.3) Liquidity ratio 1.2) 2.3) 1.6) 1.6) Total employees 1,047) 451) 25) 25) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. Kipreos Ingeniería stands out due to its career and its experiences in high, medium, and low voltage electric system design, construction, and maintenance. It currently participates in several areas of the industry, with transmission lines engineering, supply and construction projects for Eletrans S.A. in the Atacama region and in Los Ríos region, projects that fall under the main transmission system expansion plan for the SIC and SING (Central and Northern Interconnected Transmission Systems by its acronyms in Spanish) that has been promoted by the National Energy Commission since All income belonging to this branch showed a 147% increase between June 2013 and June At the same time, the profit attributable to the shareholders increased to CLP 965 million, a 79% of the total profit recorded throughout the year The delivery of the electromechanical assembly works for the Caserones project of Minera Lumina Copper Chile S.A., as well as the transmission lines works for the Antucoya mining project belonging to Dessau Chile Ingeniería S.A., are expected for the next quarter. BACKLOG (USD million) Dec 11 Dec 12 Dec 13 Jun 14 15