ISA 1Q 2020 Net Income Rises 7.2% Year-on-Year

Medellin-based multinational electric-power transmission, highways concessions and telecom-services operator ISA announced May 12 that its first quarter (1Q) 2020 net income rose 7.2% year-on-year, to COP$378 billion (US$97 million).

The profitability improvement “was mainly due to higher revenues from the initiation of new project operations in Peru, Colombia, and Chile; higher revenues from the December [power-transmission tariff] inflation adjustment in Brazil; and positive macroeconomic variables effects in Colombia,” according to ISA.

Operating revenues rose 14%, to COP$2.1 trillion (US$538 million), while earnings before interest, taxes, depreciation and amortization (EBITDA) rose 7.5%, to COP$1.3 trillion (US$333 million).

“These results reflect a rigorous and efficient administration, operation and maintenance (AOM) [system] for costs and expenses,” according to ISA. “Net margin closed at 18.3% and return-on-equity reached 13.1%, as evidence of the company’s financial efficiency and focus on profitability.”

Corporate-wide assets rose 5.2%, to COP$51.3 trillion (US$13.1 billion), while liabilities rose 11.6%, to COP$30.9 trillion (US$7.9 billion), “explained by COP$2 trillion [US$512 million] of debt in Peru and Chile due to the devaluation of the COP with respect to the dollar and to the Chilean peso,” according to ISA.

Net debt-to-EBITDA and EBITDA-to-financial-expenses ratios closed at 3.01x and 6.14x, “complying with the levels needed in order to maintain the current credit rating,” according to ISA.

Investments in 1Q 2020 totaled COP$986 billion (US$252 million), mainly on construction projects.

Among highlights from 1Q 2020:

1. ISA Perú inked a deal to acquire 100% of the shares of Orazul Energy Perú S.A. and Orazul Energy (UK) Holdings. “The latter is owner of ETENORTE and ETESELVA, which operate six transmission lines, totaling 746 kilometers, with an approximate annual revenues of US$13 million,” according to ISA.

2. In Colombia, ISA won a bid for the design, construction, operation, and maintenance of the La Loma-Sogamoso 500-kV transmission line and related works. “This project will reinforce service to the northern part of the country, facilitating the connection of unconventional renewable energy sources. It represents annual revenues of US$9.4 million,” the company added.

3. Corporate-wide construction revenues totaled COP$315 billion (US$80 million), up 41.9% year-on-year. “This change was explained by greater construction works in the road concessions business unit and by improvements, reinforcements, and new energy transmission projects,” according to ISA.

4. Corporate-wide power-transmission revenues rose 14%, to COP$175 billion (US$45 million). This improvement came from “entry-into-operation of projects in Colombia, Chile, and Peru between 2019 and 2020 (COP$34 billion/US$8.7 million)” along with “higher revenues in ISA CTEEP [Brazil power transmission] and its companies as a result of the net inflation adjustments [to transmission tariffs] and higher returns from accounts receivable coming from the increase in construction activity (COP$11 billion/US$2.8 million),” according to ISA.

5. Corporate-wide road concessions revenues dipped 8.7% year-on-year, to COP$22 billion (US$5.6 million) “as a result of the revaluation of the Colombian peso versus the Chilean peso and lower financial returns from concessions, given the decrease in the accounts receivables due to the concession time elapsed.”

6. Corporate-wide telecommunications revenues rose 9.2%, to COP$7.6 billion (US$1.9 million) “mainly due to the increase in the sale of capacities in Colombia, Peru, and Chile,” according to ISA.