ISA 3Q 2021 Net Income Drops Sharply Year-on-Year
Medellin-based multinational electric-power transmission builder-operator, highways concessionaire and telecom services provider ISA – now 51% owned by Colombia’s mostly state-owned Ecopetrol oil company – on November 3 reported third quarter (3Q) 2021 net income of COP$121 billion (US$31.5 million), down 78% from 3Q 2020.
Despite the profit decline, ISA’s earnings before interest, taxes, depreciation and amortization (EBITDA) actually rose 5.8% year-on-year, to COP$1.86 trillion (US$486 million), while operating revenues likewise rose 7%, to COP$2.86 trillion (US$747 million), according to the company.
The rise in operating revenues “was mainly due to the entry-into-operation of energy transmission projects, the consolidation of Orazul Energy Group at the end of the third quarter of 2020, the Ruta Costera [Colombia highway concession] project as of the fourth quarter of 2020 and PBTE [Brazil power transmission] as of March 2021, in addition to the increase in construction activity of concessions in Brazil and Chile,” according to ISA.
“When deducting the impact of the costs associated with the reprofiling of ISA InterChile’s debt and the change in the income tax rate in Colombia, accumulated income would total COP$1.6 trillion [US$418 million], 4.8% higher with respect to the same period of the previous year,” according to the company.
“ISA’s natural hedging strategy, where each company seeks to incur debt in the same currency in which revenues are received, resulted in the effect of exchange rate variations on net income for the whole year to be -1.1%,” the company added..
Among 3Q 2021 highlights:
1. More electricity transmission projects entering into commercial operation, including the Nueva Pan de Azúcar-Polpaico Reactive Compensation in ISA InterChile; the IE Itaipura in ISA CTEEP in Brazil; the Triple A Connection in Transelca (Colombia) and “72 reinforcements to the existing network in ISA CTEEP in Brazil, which together contributed total annual revenues of US$30 million,” according to the company.
2. ISA InterChile issued its first structured green bond on July 26, totaling US$1.2 billion, at a 35-year term and a 4,5% coupon. “This allowed the re-profiling of the existing debt of the Cardones-Polpaico project, lowering the financial cost and increasing the average life of the loan, thereby achieving a better match with the life of the asset. This is a key project in Chile, under the government’s program of decarbonization and mitigation of climate change impacts,” according to ISA.
3. Construction of 25 energy transmission projects and 257 reinforcements in Brazil. “These will contribute total annual revenues of US$382 million once they are in operation,” according to ISA.
4. Winning a crucial environmental license for the UPME07-2017 Sabanalarga-Bolívar 500-kV transmission project in Colombia, thereby clearing the way for construction to begin.