Enersis S.A. ADR ( ENI)

Q3 2010 Earnings Call

October 28, 2010 11:00 am ET

Executives

Alfredo Ergas - CFO

Analysts

Diego Moreno - Bank of America Merrill Lynch

Cristian Jadue - Santander

Presentation

Operator

Good day ladies and gentlemen and welcome to the Third Quarter 2010 Enersis S.A. ADS Conference call. My name is Veronica and I will be your operator for today. At this time all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of the conference. (Operator Instructions)

During this conference call we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements could include statements regarding the intent, belief or current expectations of Enersis and it’s management within respect to, among other things, Enersis’ business plans; Enersis’ cost-reduction plans; trends affecting Enersis’ financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; supervision and regulation of the electricity sector in Chile or elsewhere; and the future effect of any changes in the laws and regulations applicable to Enersis or its affiliates.

Such forward-looking statements reflect only our current expectations, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets of the United States or Chile, an increase in the market rates of the interest in the United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Enersis’ Annual Report on Form 20-F including under Risk Factors. You may access our 20F under SEC’s website www.sec.gov. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their dates. Enersis undertakes no obligation to update these forward-looking statements or to disclose any development as a result of which these forward-looking statements become inaccurate.

I would now like to turn the presentation over to Mr. Alfredo Ergas, Enersis’ CFO. Please proceed.

Alfredo Ergas

Thank you very much. Good morning to everyone and thank you for participating today in our conference call to review the performance of Enersis Group for the nine-month period ending September 30, 2010. My name is Alfredo Ergas, CFO of Enersis and with me are Ricardo Alvial, Investment and Risk Director; Mr. Rodrigo Perez, our Head of Investor Relations, (inaudible).

I would like to highlight some important events that have taken place this year. First, we continue evidencing a strong growth in electricity demand in the five countries in which we operate specially in Brazil and Peru. This increasing demand has been largely supported by the strong economic activity experienced by these markets.

The performance in Latin America economies even under the financial stress experienced in the worldwide basis during this year reveals a clear sign of the strong demand resilience and economic activity. So these are the basis for us to expect an improving trend towards the next few quarters in terms of revenues and demand. Secondly, this increasing demand in every country bring force the necessity of accounting with additional capacity, opening of opportunities to new projects.

Consequently, last September, we proudly announced the construction of a new Hydroelectrical plant in Colombia named El Quimbo with an investment higher than $800 million. The new facility will have the installed capacity of 400 megawatts and will generate nearly 2,200 gigawatts per year. In this way, our subsidiary Emgesa will be in a very good position to obtain important benefit coming from the sustained increase in demand in Colombia. And this action is confirming our corporate goal of developing products of a solid basis rather than just being bigger.

Thirdly, good to highlight that our generation asset located in Chile continue to operate with not interactions since the earthquake with the sole exception of our 128 megawatt thermal (inaudible) Bocamina in the southern part of Chile. In this respect I’m glad to inform you that after our recovery program to repair damage, Bocamina I will resume operations in the coming days.

Fourthly, continuing our deep commitment in terms of supplying clean energy for the growth of the country, during the fourth quarter we will deliver the second round of answer to the environmental authorities in connection to our project (inaudible) in the southern part of Chile. As part of our corporate goals, we have maintained a prudent financial management. This can be seen in a good label of liquidity.

In fact, we closed the quarter with over $1.5 billion in cash and cash equivalent on a consolidated base plus committed lines, credit lines for $900 million and uncommitted credit lines for an additional $577 million, all of those credit lines available for Enersis and it is achieving. All these positive financial measures have been recognized by the rating agencies. On September 29th, Moody’s placed the Baa3 senior unsecured rating of Enersis under review for a possible upgrade.

And now let me move into some specific topics in our business. Let’s talk about distribution. Main drivers of the result from our distribution business line were a 5.8% increase in physical sales, the addition of 380,000 new clients as part of our natural growth, and a strong increase in demand in the five countries where we operate with remarkable figures in Brazil and in Peru.

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