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

Transcription

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

2 4besalco group CONSOLIDATED STATEMENT OF EARNINGS (CLP million) March 2014 March 2013 Variation December 2013 December 2012 Variation Ordinary incomes 99,746) 82,752) 21% 392,301) 385,879) 2% Cost of sales (93,899) (73,253) 28% (364,224) (341,847) 7% Gross profit 5,847) 9,499) -38% 28,077) 44,032) -36% Administrative expenses (3,996) (3,751) 7% (18,412) (17,486) 5% Net financial expenses (2,194) (641) 242% (4,390) (4,311) 2% Net profit in associated companies 1,717) 1,111) 54% 5,092) 5,365) -5% Others (1,131) (940) -20% 4,029) 4,645) -13% Profit of the period 244) 5,278) -95% 14,396) 32,246) -55% Stockholders' profits 1,287) 4,327) -70% 12,567) 25,617) -51% CONSOLIDATED BALANCE SHEET ASSETS (CLP million) March 2014 March 2013 Variation Current assets 279,281) 225,482) 24% Non-current assets 274,173) 231,166) 19% Total assets 553,454) 456,648) 21% LIABILITIES AND EQUITY (CLP million) Current liabilities 208,335) 146,165) 43% Non-current liabilities 155,253) 122,433) 27% Shareholders' equity 176,676) 172,147) 3% Minority interest 13,191) 15,903) -17% Total liabilities and equity 553,454) 456,648) 21% PERFORMANCE OF BESALCO STOCK PRICE (CLP) CLP 1,200 CLP 1,000 CLP 800 CLP 600 CLP 400 Besalco IPSA (indexed to Besalco stock price) CLP 200 CLP 0 jan feb mar apr may jun jul aug sep oct nov dec jan feb mar apr may jun jul aug sep oct nov dec jan feb mar apr

3 4besalco s.a. As of March of this year, the company held a portfolio consisting of 87 projects under execution: 39 projects corresponding to civil works and industrial construction area, 12 to real estate area, 32 to machinery services, and 4 to Besco Peru. Results as of March 2014 show a 21% increase in sales, as well as reduced margins and profits related to them. Profits attributable to the controlling interest s owners amounted to CLP 1,287 million, compared to the CLP 4,327 million obtained during the same period of The reduction is due to losses recorded by Besalco Construcciones added to the negative impact caused by the reversal of a provision in Besalco MD Montajes for trial completion estimated by the attorneys was higher than the amount finally achieved. The affiliates Besalco Maquinarias, Kipreos, and Besco Peru showed, in turn, higher than expected results. During this year, Besalco has focused on restructuring certain corporate areas and functions in order to obtain higher efficiency and control of worksites. 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 STOCK EXCHANGE PRECEDENTS March 2014 March 2013 Stock price (CLP) Book value per share (CLP) Number of shares (million) Equity market value (CLP million) 303, ,886 Earnings per share (CLP) Price to book value P/E price earning ratio

4 The backlog balance of Works to be executed as of March 2014 was USD 847 million, having 33 months duration. Of the total Works to be executed, 13% is connected to the Chilean state through the ministries of Public Works and Health; 42% to mining industry (copper, iron, and salts, among others); 13% to residential construction, and the remaining 32% is divided into forest, energy, and ready-mix concrete services, among other economic sectors. As of March 2014, the company held a portfolio consisting of 87 projects under execution: 39 corresponding to civil works construction and industrial construction, 12 to the real estate area, 32 to machinery services, and 4 to Besco Peru. BACKLOG (USD million) , '09 '10 '11 '12 '13 1Q'14 Backlog distribution by market segment at March 2014_USD 847 million 8% energy 2% health 9% public works direct government contracts Total Backlog USD million Health 21 Public Works - Direct Government Contracts 74 Public Works - Concessions 14 Copper Mining 141 Iron Ore Mining 123 Mining, other 88 Other Civil Works 49 Retail 108 Transport 18 Forestry 139 Energy 72 TOTAL 847 2% transport 16% forestry 13% retail 6% other civil works USD 847 million 2% public works concessions 17% copper mining 15% iron ore mining 10% mining, other 4

5 4financial analysis Non-current financial liabilities increased in CLP 19,954 million due to the construction of Los Hierros II hydroelectric power station and the purchase of new machines and equipment by Besalco Maquinarias. Ordinary incomes obtained during the first quarter of 2014 were CLP 99,746 million, showing 21% increase compared to those obtained during the same period of 2013, which amounted to CLP 82,752 million. The most relevant increases come from the civil works, real estate development, and machinery service areas. Incomes per business area shows a 60% share in construction of infrastructure and civil works, 31% share in machinery service, 7% in real estate development, and 2% in investment projects. When comparing the first quarters of both years, gross profit showed 38% reduction, while the gross margin was reduced from 11.5% to 5.9% between the same periods. The operating result gross profit less administrative expenses showed a similar trend with a 68% reduction over the same periods. Both figures were affected by negative results obtained in works of Besalco Construcciones and Besalco MD Montajes. The industrial construction affiliate generated loss amounting to CLP 1,333 million from results lower than expected according to attorneys and accountants projections of the trial involving this company and ABB. This trial that begun in 2011, was the only dispute in the entire Besalco group. The difference was acknowledged in the first quarter s operating result. Profits attributable to controlling interest s owners amounted to CLP 1,287 million on March 2014, compared to the CLP 4,237 million obtained during the same period of ORDINARY INCOME (CLP Mill) STOCKHOLDERS' PROFITS (CLP Mill) 385,789 Stockholders' profits (CLP million) Net margin 82,752 99,746 4,327 12, , ,563 17,136 17,062 19, ,612 25, ,301 1, % 6.8% 6.1% 6.6% 3.2% 5.2% 1.3% '09 '10 '11 '12 '13 1Q'13 1Q'14 '09 '10 '11 '12 '13 1Q'13 1Q'14 5

6 Net margin, measured as profits attributable to controlling interest s owners on total ordinary incomes, was reduced from 5.2% to 1.3% when comparing the first quarters of 2013 and The effect is also due to the reduced operating result and to a negative nonoperating result. EBITDA (CLP million) Ebitda (CLP million) Ebitda margin The non-operating result accounts having the most significant differences were: - financial costs: both due to increased financial debt amount and increased market rates. - exchange differences and result per adjustment units: passing from a contribution amounting to CLP 124 million to a negative result of CLP 1,688 million. - related companies profits: Related Companies increased from CLP 1,111 million to CLP 1,717 million during the comparison period. Concession holders BAS and Convento Viejo, as well as the related company GmVBS in Peru, are those having the best figures. Margin reduction resulted in Ebitda that went from CLP 13,295 million to CLP 10,884 million from March 2013 to March The Ebitda margin was in turn reduced from 16.1% to 10.9% over the same comparison period. 46,450 46,181 53,583 64,466 42,785 Profitability measured as annual profit over average equity reached 5.5% compared to the 15.6% measured on March The financial debt went from CLP 218,145 million on December 2013 to CLP 227,278 million on March The increase was recorded in 3 affiliates: - besalco construcciones: that requested a 6 year loan for payment of contributions made by Besalco S.A. for deficit funding. - besalco maquinarias: for purchasing new machines and equipment for a new contract. - energy: for construction of the hydroelectric power station Los Hierros II. Besalco Inmobiliaria y Besalco S.A. reduced in turn their indebtedness level. 13,295 10, % 18.4% 16.7% 16.7% 16.1% 10.9% 10.9% '09 '10 '11 '12 '13 1Q'13 1Q'14 financial debt at March 2014_CLP 227,278 million 9% cerro alto machinery leasing 11% machinery leasing 1% other leasings 13% short term banks 10% long term banks clp 227,278 million 11% long term public concessions projects CLP million Short Term Banks 29,585 Long Term Banks 23,745 21% real estate bank projects LT Public Concessions Projects 23,880 Long Term Energy Projects 54,570 Real Estate Bank Projects 47,082 Cerro Alto Machinery Leasing 20,104 24% long term energy projects Machinery Leasing 26,048 Other Leasings 2,264 TOTAL 227,278 6

7 The financial leverage amounted to 1.2 times as of March 2014, compared to the 1.1 times reached on December This index reaches 0.9 times when discounting hydroelectric power stations from the financial debt. In turn, the annual net cash financial debt on Ebitda was 5.3 times; and the index reaches 4.0 times if Besalco Energía debt and flow are discounted from both accounts. Please note that the financial debt of the hydroelectric power station Los Hierros I (structured at 13 years) is fully added to company balance sheets and their flow generations hast just started on the first quarter of When comparing December 2013 to March 2014, we can observe reduced current liabilities (CLP 10,822 million), due to credit of construction financial lines to pay for houses that had been registered during the last quarter of 2013; and also due to Besalco Construcciones debt restructuring from short to long term, and to payment of Besalco S.A. s current bank debts which had been incurred in order to finance the civil works affiliate deficit. On the other hand, non-current financial liabilities increased in CLP 19,954 million as a result of the construction of the hydroelectric power station Los Hierros II and the purchase of new machines and equipment by Besalco Maquinarias. Of the total short term financial debt, CLP 11,522 million are used to finance lands expecting works commencement within the next six months, due to which the debt will be accounted as per the project completion term that will range from 18 to 30 months, depending on the case. These credits will be paid using the respective real estate sales, and banks are guaranteed through this same project mortgage. In addition, the concession affiliate contributed on March with CLP 6,282 million to the short term debt, which will be rescheduled at 18 years following commencement of the concession operation in Plaza Sucre in Viña del Mar. leverage Total leverage Financial leverage Financial leverage net energy FINANCIAL NET DEBT / EBITDA Financial net debt / Ebitda Financial net debt / Ebitda (both net energy) '09 '10 '11 '12 '13 1Q'14 '09 '10 '11 '12 '13 1Q'14 7

8 4construcciones s.a. (Civil Works Constructions) Besalco S.A. made a capital contributions of CLP 11,038 million during March 2014 to strengthen the resources of the company, which amounted to CLP 17,951 million at the end of the quarter. Currently, this subsidiary has 20 contracts, 11 of which are carried out entirely by the company. The remaining 9 are carried out in consortia with Spanish and Chilean companies. Many of these were contracted by the Ministry of Public Works (MOP, by its acronym in Spanish) to build bridges, roads, and a viaduct with a total backlog value of USD 74 million. MOP plans to invest a total amount of USD 2,590 million at the national level, mainly in intercity highways. Moreover the State will invest USD 1,530 million during the current year in public infrastructure for all regions through its National Fund for Regional Development. Besalco Construcciones has a minor interest with good growth prospects in this public market. BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Mar 14 Besalco Construcciones March 2014 March 2013 Variation Dec 2013 Dec 2012 Variation Ordinary incomes / CLP million 32,417) 26,867 21% 133,479) 159,236) -16% Gross profit / CLP million (1,474) 1, % (10,374) 8,152) -227% Gross mar. less selling exp. (*) / CLP mill. (2,023) 1, % (12,120) 5,107) -337% Net financial expenses / CLP million (186) % (820) (299) 174% Profit of the period / CLP million (2,356) 1, % (10,777) 4,950) -318% Controllers profit/loss / CLP million (2,404) % (11,093) 2,759) -502% Ebitda / CLP million (1,732) 1, % (9,881) 8,326) -219% Financial leverage 1.6) ) 0.4) Liquidity ratio 1.3) ) 1.1) Total employees 3,021) 3,533 3,073) 3,395) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. As of March, the backlog amounted to USD 164 million, which fell in comparison to December 2013 due to the progress of the works and the effect of an unfavorable exchange rate with a currency devalued by a 5.1% during the quarter. There were no new contracts entered into the backlog during the quarter, however, the company is active in terms of the selective evaluation of new works. There are works that have major budget slippages due to the rise in labor costs and projects where the interference of the client has made planning very difficult, specifically the construction of Mall de Copiapó and Hospital de Copiapó, which have had the highest costs both in 2013 and the current year. Several obstacles have also been recorded in the realization of the Hospital of the city of Talca in the consortium were the company has onethird of the shares that have led to losses to date. Due to the aforementioned, the Company experienced a loss of CLP 2,404 million as the operating performance and the Ebitda are negative. The sales of the quarter recorded an increase of 21% in comparison to the same period of This circumstantial rise can be explained by a greater number of companies accounted for and a greater number of company projects that are included this year as were not in A long-term credit of six years was agreed and drawn during March 2014 with repayment of principal as of March 2015 increasing over time. Moreover, during that same month, the parent company Besalco S.A. made a capital contribution of CLP 11,038 million to strengthen the resources of the company, which amounted to CLP 17,951 million at the end of the quarter. The equity as of the same dates was of CLP 15,547 million. Financial leverage dropped 1.6 times since the previous quarter and is higher than the 0.3 times of The company maintains an adequate level of liquidity thanks to the contributions made by the parent company to address works with budget slippages. 8

9 4maquinarias s.a. (Machinery Services) Starting late 2013, Besalco Cerro Alto will be managed in its entirety by Besalco Maquinarias. As the subsidiary s contract with Minera Escondida ends next June. As of March 2014, the balance of works to be executed backlog was of USD 495 million, with a duration of 4.3 years. In this first quarter, beside the renewal of contracts, a new 5-year contract was integrated in the mining sector. Several considerable investments in machinery and equipment were made during the first months of the year. These will be used in recent contracts and will allow maintaining a modern machinery park without incurring in higher maintenance costs. BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Mar 14 "This backlog does not consider the participation of Besalco Maquinarias on Besalco Cerro Alto." Besalco Maquinarias March 2014 March 2013 Variation Dec 2013 Dec 2012 Variation Ordinary incomes / CLP million 25,801) 17,839) 45% 85,189) 70,872) 20% Gross profit / CLP million 5,447) 2,347) 132% 12,965) 8,436) 54% Gross mar. less selling exp. (*) / CLP mill. 4,864) 1,940) 151% 11,141) 6,965) 60% Net financial expenses / CLP million (238) (175) 36% (875) (590) 48% Profit of the period / CLP million 2,962) 1,664) 78% 9,174) 6,044) 52% Controllers profit/loss / CLP million 2,962) 1,641) 80% 9,177) 6,012) 53% Ebitda / CLP million 7,714) 4,806) 61% 24,209) 18,323) 32% Financial leverage 0.7) 0.6) 0.6) 0.5) Liquidity ratio 1.0) 0.9) 1.1) 1.2) Total employees 2,148) 1,864) 1,959) 1,741) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. net margin went from 9.2% to 11.5%, and the Ebitda margin, which rose during the same period, increased from 26.9% to 29.9%. The margins on this first quarter surpassed those achieved in At the end of the first semester of 2014, the total leverage amounted to 1.5 times, slightly higher than the 1.3 times recorded a year before. The net financial debt over the equity ratio plus the non-controlling interest increased from 0.6 to 0.7 times, respectively. This increase in indebtedness is the result of the investment demand carried out for the execution of the company s largest contracts. Starting late 2013, Besalco Cerro Alto will be managed in its entirety by Besalco Maquinarias. As the subsidiary s contract with Minera Escondida ends next June. Ordinary income increased by 45% from March 2013 to March Along with this, gross margins rose from 13.2% to 21.1%; the operating margin increased from 10.9% to 19.9%; the The capacity to generate cash flow, measured as Ebitda, amounted to CLP 7,714 million, which covers financial commitments (CLP 26,072 million) with the annualized Ebitda generated in less than a year. 9

10 4inmobiliaria s.a. (Real Estate) BACKLOG (USD million) Apartment projects currently under construction are Espacio el Llano II in San Miguel and Las Dalias in Providencia. Both of them have estimated dates for municipal acknowledgment during the fourth quarter of During the first quarter of 2014, the balance of projects which received municipal acknowledgement in 2013 was placed in public record. This corresponds to the new stages of Haras in San Bernardo, Hacienda Conquistadores in Puente Alto, the Kandinsky building in the V Region, and Espacio El Llano in San Miguel. 23 Dec 10 Dec 11 Dec 12 Dec 13 Mar 14 Besalco Inmobiliaria March 2014 March 2013 Variation Dec 2013 Dec 2012 Variation Ordinary incomes / CLP million 5,236) 10,446) -50% 44,286) 37,318) 19% Gross profit / CLP million 880) 1,397) -37% 7,030) 7,265) -3% Gross mar. less selling exp. (*) / CLP mill. 347) 818) -58% 4,827) 5,061) -5% Net financial expenses / CLP million (528) (407) 30% (1,945) (1,786) 9% Profit of the period / CLP million (546) 201) -371% 2,273) 2,480) -8% Controllers profit/loss / CLP million (358) 235) -253% 2,612) 2,610) 0% Ebitda / CLP million 392) 822) -52% 5,210) 5,167) 1% Financial leverage 1.5) 0.5) 1.5) 0.6) Liquidity ratio 1.9) 5.7) 1.9) 3.8) Total employees 788) 723) 532) 680) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. Type N N Total sales Sold (UF) For sale of dwelling projects units (UF) Home sales Pre sales (UF) Housing ,300, ,794 1,106, ,821 Apartments ,104, , ,344 1,042,039 Total 14 1,301 4,405, ,750 1,594,684 1,818,860 In that same period, the sales of construction projects in terms of promises of purchase not accounted for as income until they receive municipal acknowledgment, amount to UF357,567 (127 units), compared to last year s UF (179 units). The first two stages of the Terralta Chamisero project (58 and 70 houses respectively) are under construction in Chamisero. Both stages amount to a sales total of UF1,231 thousands, and as of the date, there are 57 houses with executed promises of purchase contracts. In the meantime, the process of placing J stage (105 houses) on public record has started, the construction of G stage (130 houses) continues and a new stage will begin in May. Department projects currently under construction are Espacio El Llano II in San Miguel and Las Dalias in Providencia. Both of them have an estimated date for municipal acknowledgment for the fourth quarter of In Viña del Mar, in the Recreo sector, the first building (of a total of two) is being built. This project is called Travesía and has a strip center, which is already finished and in the process of being placed in public record and sold to an investment fund. Sales income for the year s first quarter ascended to CLP 5,236 million, 50% less than the previous year. Gross margin increased dramatically when compared to the first quarter of both years (it rose from 13.4% to 16.8%), due to higher direct margins for projects sold. However, the operating margin dropped from 7.8% to 6.6% in the same period as a result of the impact of management expenses (fixed) on a lower turnover. The profit attributable to the shareholders had a negative result of CLP 358 million compared to the CLP 235 million earnings recorded in the first quarter of Leverage increased from 1.6 to 2.2 times. Financial debt rose from CLP 14,712 million to CLP 43,925 million due to Besalco s S.A. contribution to the acquisition of the Haras land in San Bernardo through storage of said land, and due to the increase of construction projects plus the acquisition of an impressive portfolio of lands that will be developed in the second quarter of

11 4concesiones s.a. (Public Concessions) The construction of warehouses and offices for the Bodegas Sur Aeropuerto Arturo Merino Benítez Express project is expected to start during May. 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) 73,546 Value per DCF (UF) 228,700 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) 4,715,247 Subsidy incomes 1Q 2014 (UF) - Equity book (UF) 618,879 Value per DCF (UF) / 100% of the companyad 874,100 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 1Q 2014 (UF) 549,900 Subsidy operating incomes 1Q 2014 (UF) 600,360 Average internal N March ,617 Equity book (UF) 1,041,600 Value per DCF (UF) / 100% of the company 536,600 The construction of warehouses and offices for the Bodegas Sur Aeropuerto Arturo Merino Benitez project (30% Besalco Concesiones S.A. and 70% Agunsa) is expected to start during May. Sub-concession considers the execution of works and the subsequent exploitation of 22,703 m² of office buildings and warehouses in for courier companies and companies related to the airport cargo area in the southernmost point of the AMB airport grounds. Concesionaria BAS S.A. and Concesionaria Convento Viejo S.A. (a third of the shareholding of each) are fully operational and recorded earnings of CLP 433 million and CLP 418 million, respectively, in the first quarter of The traffic and income of Plaza Las Condes concession for parking lots has increased significantly due to the new advertising campaign that was launched. When comparing the first quarters of 2013 and 2014, traffic rose a 12.3% and the overall revenue increased a 26.6%. Ordinary income as of March 2014 reached CLP 265 million, 18% higher than on It is worth mentioning that due to the system for recording income through IFRS, sales are not reflected in the earnings of concessionary companies. Profit attributable to the shareholders showed profits of CLP 277 million compared to the loss of CLP 232 million recorded in the previous year. 11

12 4energía renovable s.a. Over 60 executives, professionals, and operators in the different specialized fields required for electrical development work in this company which belongs a 100% to Besalco S.A. Besalco Energías Renovables S.A. is the new subsidiary created to act as a parent Company for all power generation companies that may be created in the future. Over 60 executives, professionals, and operators in the different fields required for electrical development work in this company which belongs a 100% to Besalco S.A. Both sole purpose companies Eléctrica Aguas del Melado S.A. and Eléctrica Portezuelo S.A. are developing the Los Hierros and Los Hierros II projects, respectively The former corresponds to the run-of-the-river power plant of 25 WM, which carried out generation and connection tests at the end of 2013, and started operating on January of this year, supplying power to the Central Interconnected System (Sistema Interconnectado Central, SIC by its acronym in Spanish). The second station is a mini-hydro station that uses the same waters already processed by Los Hierros to generate a capacity of 5.5 MW. Its construction is at an advanced stage and the realization of electrical tests is expected for the last quarter of this year. There are no contracts for the delivery of energy, sales are made to the substation Ancoa which has a 220 kv spot market. The operational station Los Hierros shares the waters of the canal of the same name with the irrigation systems of the area; therefore it has an estimated plant factor of 63%. The 145 GWh-year generation is concentrated between the months of May and October. Generation on the first quarter of 2014 was of 8 GWh, while generation this year is expected to be lower than what was estimated in the scheme. Plant factor for Los Hierros II is the same as for the aforementioned. Projects Capacity Generation Investment Date of operation MW GWh-year USD million Los Hierros January 2014 Los Hierros II December 2014 Túnel Melado Q 2016 Chupallar Q 2017 Complex 1 (3 projects) > 2017 Complex 2 (5 projects) > 2017 Total 12 hydro projects Besalco Energía has total assets of CLP 85,673 million and has long term project debts for CLP 50,528 million with the BCI and Santander banks. marginal costs USD/MWh - SUBSTATION Ancoa 220kV jan feb mar apr may jun jul aug sep oct nov dec jan feb mar apr USD/MWh 12

13 4md montajes s.a. (60% besalco) 4(Industrial Constructions) Works for two contracts of this Company are in the process of being finalized. One of them for Codelco, and the other for Minera Esperanza; the latter consists of the construction, assembly, and testing of tailings thickeners. Besalco MD Montajes is a company which focuses on the execution of industrial, mining, and infrastructure projects, especially in the civil works, multidisciplinary assembly, and commissioning area of industrial projects. BACKLOG (USD million) Dec 10 Dec 11 Dec 12 Dec 13 Mar 14 Besalco MD Montajes March 2014 March 2013 Variation Dec 2013 Dec 2012 Variation Ordinary incomes / CLP million 10,703) 6,704 60% 36,113 19,656) 84% Gross profit / CLP million (498) 1, % 4,349 3,665) 19% Gross mar. less selling exp. (*) / CLP mill. (807) % 2,939 2,216) 33% Net financial expenses / CLP million (1) % 179 (12) -1,564% Profit of the period / CLP million (615) % 2,680 2,358) 14% Controllers profit/loss / CLP million (615) % 2,680 2,358) 14% Ebitda / CLP million (750) % 3,318 3,061) 8% Financial leverage -) ) Liquidity ratio 2.0) ) Total employees 1,066) 746 1, ) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. The Company is in the process of finalizing works for two contracts for Codelco and Minera Esperanza; the latter consists of the construction, assembly, and testing of tailings thickeners. On the closing date of financial statements for this past March, the negative impact generated by the result of the Besalco MD Montajes v. ABB lawsuit at ICC was recognized. The ruling, although successful, was less successful in terms of recovery than what the attorneys had estimated and what was accrued as income in previous years. As of March 2014, ordinary income increased by 60% in comparison to the same period of However, both the margins associated to operating profit as well as the shareholder s profit were negative. This is due to the adverse impact produced by the aforementioned lawsuit, which translated into the reversal of operating provisions for CLP 1,333 million. It is the company s policy to maintain low leverage indexes, recording a total leverage of 0.9 times in March There is no financial indebtedness, with the exception of bank guarantee certificates needed for the operation of their contracts. 13

14 4besco s.a. (peru) The revenue for the involvement in associations reached CLP 968 million due to the good pace and profitability level of company s projects placed on public record plus the earnings coming from the interest in consortia that are not consolidated. BACKLOG (USD million) This subsidiary in Peru will become a real estate company in its totality, as a result of the sale of the concessionaire it was part of until the end of It focuses in the construction and sale of apartments at prices that fluctuate between USD 40 thousands and USD 70 thousands approximately As of March 2014, it still had significant real estate projects, both their own and in consortia. Dec 10 Dec 11 Dec 12 Dec 13 Mar 14 Besco (Peru) March 2014 March 2013 Variation Dec 2013 Dec 2012 Variation Ordinary incomes / CLP million 1,794 2,322) -23% 12,019) 13,108) -8% Gross profit / CLP million ) 7% 4,445) 4,942) -10% Gross mar. less selling exp. (*) / CLP mill ) 21% 2,243) 3,012) -26% Net financial expenses / CLP million 3 (17) -118% (70) (2) 3,151% Profit of the period / CLP million ) 48% 8,689) 4,234) 105% Controllers profit/loss / CLP million ) 43% 8,764) 4,262) 106% Ebitda / CLP million 1, ) 47% 10,213) 5,043) 103% Financial leverage ) 0.2) 0.3) Liquidity ratio ) 1.9) 1.9) Total employees ) 137) 80) All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. The total potential sales of their own works that amount to USD 116 million are: Villa Santa Clara (544 units), Central 10.5 (544 units), Alcázar (595 units), Zafiro (78 units), and Los Prados de Chaclacayo (200 units). From a total of 1,961 apartments, a 62% has a signed draft (promise of purchase) and 42% have municipal acknowledgment and have been handed over to their owners. The projects in consortia are: Parque Central with 2,112 units (50% of interests in Besco), Alameda Santa Ana with 264 units (70% of interest in Besco), and Alameda Central with 216 units (70% of interest in Besco). Of the overall departments, a 79% has a signed draft (promise of purchase) and 73% has already been handed over to its owners. Ordinary income for the first quarter of 2014 ascended to CLP 1,794 million, 23% lower than the one obtained in the same period of Earnings for interests in associations reached CLP 968 million, due to the good pace and profitability level of the company s projects placed on public record plus the earnings coming from their interest in consortia that are not consolidated. It is the company s policy to maintain a low debt level, reaching a total leverage of 0.6 times and a financial leverage of 0.2 times. 14

15 4kipreos During the first quarter, important services were provided for the National Office for Emergencies, consisting of wildfire suppression through the use of helitankers. BACKLOG (USD million) The construction of the 2x220 kv Cardones Diego de Almagro power line began in March and it is expected to be finished by August 2015, which will mean a sale of USD 47 million. This project considers the installation of double circuit towers, with the one circuit lay-out within reach of Kipreos. This contract corresponds to one of two that will be executed by Eletrans. 10 Dec 11 Dec 12 Dec 13 Mar 14 kipreos ingeniería (68% besalco) kipreos aéreos (68% besalco) Kipreos Mar 2014 Mar 2013 Variation Dec 2013 Mar 2014 Mar 2013 Variation Dec 2013 Ordinary incomes / CLP million 7,139 3,718 92% 18, % 1,710 Gross profit / CLP million % 3, % 494 Gross mar. less selling exp. (*) / CLP mill ,348% 1, % 276 Net financial expenses / CLP million % % -8 Profit of the period / CLP million % 1, % 220 Controllers profit/loss / CLP million % 1, % 220 Ebitda / CLP million % 2, % 496 Financial leverage Liquidity ratio Total employees All values according to IFRS standard. (*) Under IFRS it corresponds to Gross Profit less Administration Expenses. Another project that shall begin its construction phase soon is the 1x220 kv power line to support the Maule sub-station. The respective environmental qualification was approved during the first week of May. The electromechanical assembly works for the Caserones project belonging to Minera Lumina Copper Chile S.A. are still being carried out during this period, contract whose completion is expected towards the middle of the current year. Furthermore, important services were provided to the National Office for Emergencies, consisting of wildfire suppression through the use of helitankers. The backlog which ascends to CLP 72 million is similar to the one of the previous quarter. It is composed of 14 contracts with a duration of 21 months. Operating income for Kipreos Ingenieros recorded CLP 7,139 million, a 92% higher than what was achieved in the same quarter of This is due to a higher activity of the Caserones and Cardones Diego de Almagro contracts. The Ebitda and the earnings of the quarter reached CLP 427 million and CLP 248 million respectively; significantly higher values than those recorded in the quarter used for comparison. The quarterly Ebitda margin rose to 6%, which represents a good recovery compared to the 2.7% reached in March Kipreos Ingenieros does not have a financial debt, on the other hand, Kipreos Aéreos has a leasing debt that represents a low leverage of 0.1 times. 15