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Enersis S.A. 6-K 2008 Documents found in this filing:
FORM 6-K SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of For the month of July, 2008 Commission File Number: 001-12440 ENERSIS S.A. (Translation of Registrant’s Name into English)
Santa Rosa 76 (Address of principal executive office)
Indicate by check mark whether the registrant files or will file Form 20-F [X] Form 40-F [ ] Indicate by check mark if the registrant is submitting the
Form 6-K Yes [ ] No [X] Indicate by check mark if the registrant is submitting the
Form 6-K Yes [ ] No [X] Indicate by check mark whether by furnishing the information Yes [ ] No [X] If °;Yes” is marked, indicate below the file number assigned to
the registrant
ENERSIS ANNOUNCES CONSOLIDATED RESULTS FOR HIGHLIGHTS FOR THE PERIOD ECONOMIC-FINANCIAL SUMMARY The most important topics as of June 2008, as compared with June 2007, may be summarized as follows: • Operating Revenues grew by 28.5%, for the first time overstepping Ch$ 3 trillion, recording Ch$3,000,843 million. • Operating Income increased by 19.1%, reaching Ch$794,694 million, due to an increase in:
• Net Income amounted to Ch$155,940 million, representing a 137.8% increase. • Business liquidity, reflected by the net cash flow from operating activities, increased by 74.7%, reaching Ch$747,347 million. • Net Interest Income improved by Ch$13,469 million, an 8.3% income. SUMMARY OF DISTRIBUTION BUSINESS • Operating Revenues provided by Distribution business continued to grow, this time, by 18.7%, reaching Ch$283,452 million. • In addition to other reasons, higher revenues were recorded thanks to an additional 385,000 new clients over the last 12 months, broken down as follows:
• Chile 3.2% or 47 thousand new clients This reflects the natural growth of our subsidiaries, due to the incorporation of new clients at an annual average rate of 3% and 4%. In terms of number of new clients, this is equivalent to opening a new medium size Distribution company every year. • Consolidated physical sales increased by 2.1%, while Peru taking the lead in terms of growth, with a 7.6% increase over June 2007 figures. Pg. 1
• An important improvement in Distribution business was the reduction in energy losses, which dropped from 11.3% to 10.8% . • On March 11, 2008, the third auction of energy for distribution companies was made. It was done in two blocks, 1,800 GWh/year for years 2011 to 2021 and 1,500 GWh/year for years 2022 and 2023 and adjudged 1.8 TWh/ year at an average price of 65.8 US$/MWh. • Regarding Tariff Revisions, the schedule is as follows;
• Codensa, scheduled for 2008. SUMMARY OF GENERATION BUSINESS • As Distribution business, Operating Income coming from Generation and Transmission also showed an important increase by 40%, reaching Ch$396,633 million. • Operating revenues increased, due to a 3.0% higher consolidated sales explained by an increase in installed capacity from 13,602 to 13,885 MW, basically due to the incorporation of new projects, such as San Isidro II, Taltal, Palmucho, Canela and Ojos de Agua. • The incorporation of these new projects reflects the real commitment of Enersis to providing a safe energy supply in keeping with the country’s demand. At the same time, two of the above-mentioned projects are part of initiatives intended to supply the environmentally-compatible system of solutions with the highest degree of standards and sustainability requirements. • Generation subsidiaries reporting the highest operating increases were Emgesa and Endesa Costanera. MARKET SUMMARY • Enersis continues to be one of the most liquid companies in Chile
RISK RATING CLASSIFICATION INFORMATION In the macroeconomic arena, is important to highlight that in the second quarter of 2008, two of the countries in which Enersis operates received an Investment Grade classification. This means that cash flow coming from our businesses in those countries may become increasingly predictable and stable. Moreover, these countries have been awarded at least two ratings, thus facilitating the participation of new international funds in the development and financing of large-scale energy projects, for which Enersis is an excellent market reference. Pg. 2
The upgrades are as follows: Brazil
• S Fitch BBB- April 2, 2008 Peru
• S&P BBB- April 30, 2008 Enersis risk classification is as follows; INTERNATIONAL CORPORATIVE CLASSIFICATION
CHILEAN BOND CLASSIFICATION
Pg. 3
Pg. 4
Pg. 5
GENERAL INFORMATION (Santiago, Chile, July 31, 2008) Enersis S.A. (NYSE: ENI), announced today its consolidated financial results for the first half ended on June 30, 2008. All figures are in both US$ and Ch$, under Chilean Generally Accepted Accounting Principles (Chilean GAAP), as seen in the standardized form required by Chilean authorities (FECU). Variations refer to the period between June 30, 2007 and June 30, 2008. Figures for 2008 have been adjusted by the accounting convention for CPI variation between both periods, accounting to 8.9% . Any figures in US$ are merely offered as a convenience translation, using the observado exchange rate of Ch$526.05 = US$1 for June 30, 2008. The Chilean pesos appreciated by 0.2% against the US$ between June 30, 2007 and the comparable date in 2008.
The consolidation includes the following investment vehicles and companies, In the following pages you will find a detailed analysis of financial statements, a brief explanation for most variations, and comments on main items in the Income and Cash Flow Statements compared to the information as of June 2007.
* Includes its Chilean subsidiaries (Celta, Pangue, Pehuenche, San Isidro, Tunel El Melon) and Costanera, El Chocón, Edegel. Pg. 6
SIMPLIFIED ORGANIZATIONAL STRUCTURE 
Pg. 7
MARKET INFORMATION EQUITY MARKET New York Stock Exchange (NYSE) The chart below presents the performance of Enersis’ ADS stock price listing in NYSE (“ENI”) against Dow Jones and the DJ Utilities Index: 
Bolsa de Comercio de Santiago (BCS) The chart below presents the performance of the Enersis’ Chilean stock price during the last 12 months compared to selective Chilean Stock Index:  Pg. 8
Madrid Stock Exchange (Latibex) The chart below illustrates the Enersis’ share price at the Madrid Stock Exchange, (Latibex) over the last 12 months compared with the Local Stock Index: 
Pg. 9
DEBT MARKET The following chart shows the pricing of our Yankee Bonds during the last twelve months. 
Pg. 10
RISK RATING CLASSIFICATION
Fitch: BBB / Stable
Standard & Poor’s: BBB / Stable
Moody’s: Baa3 / Stable
Feller Rate: Bonds: AA- / Positive - Shares: 1st Class Level 1
Fitch Chile: Bonds: AA- / Stable - Shares: 1st Class Level 1 Pg. 11
CONSOLIDATED INCOME STATEMENT UNDER CHILEAN GAAP, MILLION CH$
Pg. 12
UNDER CHILEAN GAAP, THOUSAND US$
Pg. 13
CONSOLIDATED INCOME STATEMENT ANALYSIS NET INCOME As of June 30, 2008, Enersis’ income had increased significantly by 137.8% totaling Ch$155,940 million, which is Ch$90,362 million greater than the previous year’s first half income, which amounted to Ch$65,578 million. OPERATING INCOME Operating income ending June 30, 2008 increased by Ch$127,494 million, up from Ch$667,200 million on June 30, 2007 to Ch$794,694 million for this period, corresponding to a 19.1% increase. This is due to the good results recorded in the distribution and generation businesses. Generation and Transmission Businesses showed a Ch$58,882 million increase in their operating income, equal to 16.8%, totaling Ch$409,108 million. This increase was recorded despite a 3.9% decrease in physical generation sales, which dropped from 32,801 GWh in June 2007 to 31,532 GWh in June 2008 primarily as a result of a 4.9% decrease in Chile, and a 9.9% decrease in Argentina brought on by lower hydrology in both countries and shrinking demand due to public and private sector campaigns to save electricity in Chile. In the Distribution sector our subsidiaries recorded a Ch$67,711 million increase in their operating income, which is equal to a 21.3% hike amounting to Ch$385,041 million. Physical sales ending June 30, 2008 totaled 31,085 GWh, up 645 GWh or 2.1% from the same period last year. Furthermore, a total of 385 thousand new customers signed on representing a 3.3% increase over same period last year for a total customer base greater than 12.1 million.
Pg. 14
NON OPERATING INCOME As of the end of first semester 2008, the company had recorded a loss in non-operating income amounting to Ch$276,597 million, which represents Ch$60,148 million less in losses compared to the same period in 2007, which totaled Ch$336,745 million. Interest expense net of interest income underwent an 8.3% decrease equal to Ch$13.469 million, resulting from a drop in net expenses of Ch$161.942 million as of June 2007 to net expenses of Ch$148.473 million for the current period. This decrease in interest expense is primarily due to greater interest income of Ch$7.965 million, mostly from Chilectra, Edesur, and Codensa, and greater interest expense of Ch$5.504 million, primarily from Endesa Chile, given a lower average exchange rate, and from Edesur as a result of lower fine updates which were partially offset by Codensa’s greater debt. Equity in income of related companies, net, increased by Ch$5,925 million after having gone from a net loss of Ch$2,517 million during first semester 2007 to a net income of Ch$3,408 million in the current period. This increased benefit was partially the result of having recognized the Ch$2,692 million in income obtained from Inversiones Gas Atacama Holding during the period (a Ch$3,002 million loss for the June 2007 period). Goodwill amortization did not undergo any significant changes and amounted to Ch$30,941 million as of June 30th, 2008, with a decrease of Ch$18 million. Other non-operating income and expenses, net, recorded a loss of Ch$45,572 million, from Ch$142,772 million in June 2007 to a net loss of Ch$97,200 million in the current period. The main reasons for this change are as follows:
• A lower net loss of Ch$60,944 million resulting from an adjustment for converting to Chilean standards, after having reconciled under Technical Bulletin No. 64 primarily in the Brazilian and Colombian subsidiaries (Ch$24,276
million, net of minority interest). Pg. 15
The above was partially offset by:
• Ch$31,880 million less in income due to tariff adjustments in previous fiscal years in Edesur, which was recognized during first quarter 2007. Price-level restatement underwent a negative change of Ch$1,564 million, primarily due to the impact of higher inflation during first semester 2008 which hit 3.2% versus 1.9% during the same period in 2007. This change has affected both non-monetary and monetary assets and liabilities, mainly UF-denominated bonds, in addition to updated income accounts. Foreign currency translation as of June 30th, 2008 revealed a negative change of Ch$3,272 million, moving from a positive balance of Ch$3,845 million in first semester 2007 to Ch$573 million for the current period. This is the result of both an active position of mismatch in dollars held by the company during both periods and changes in the Chilean peso-dollar parity. Consequently during the previous period the exchange rate fell $5.53 pesos from Ch$532.39 to Ch$526.86 while it actually increased Ch$29.16 this period from Ch$496.89 to Ch$526.05. Income Taxes and Deferred Taxes during first semester 2008 recorded an expense of Ch$171,503 million, which represents a positive change of Ch$2,266 million when compared to the Ch$173,769 million expense recorded as of June 30, 2007. The Income Tax Expense decreased Ch$4,714 million, which is primarily due to lower income tax provisions in our following subsidiaries: Endesa Chile, Ch$22,650 million; Coelce, Ch$10,048 million; CIEN, Ch$7,888 million; El Chocón, Ch$3,972 million; and CGTF, Ch$2,642 million. This was partially offset by greater provisions in Ampla, Ch$12,536 million; Codensa, Ch$9,568 million; Emgesa, Ch$5,334 million; Pehuenche, Ch$5,207 million; Costanera, Ch$4,585 million; and San Isidro, Ch$3,727 million. Regarding Deferred Taxes, which do not represent cash flows, they recorded a negative change of Ch$2,448 million, primarily due to the recorded changes in CIEN for Ch$13,983; San Isidro for Ch$8,674 million; Endesa Chile for Ch$4,977 million; Chilectra for Ch$2,572 million; Edelnor for Ch$1,995 million; and CGTF for Ch$1,010 million, which was partially offset by Coelce for Ch$9,418 million; Edesur for Ch$9,363 million; Ampla for Ch$5,699 million; Enersis for Ch$4,886 million; and Codensa for Ch$3,047 million. Goodwill Amortization amounted to Ch$2,425 million as of June 30th, 2008, which does not represent any significant change from the same period last year for which this figure totaled Ch$2,501 million. Minority Interest increased by Ch$99,470 million for a total of Ch$193,079 million. This was triggered by a significant increase in the results of some of our subsidiaries that now have a high percentage of minority interest, to which Codensa underwent an increase of Ch$35,502 million; Endesa Chile, Ch$27,056 million; Emgesa, Ch$18,141 million; Endesa Brazil, Ch$16,403 million; and Coelce, Ch$6,210; this was partially offset by a decrease in Edesur of Ch$ 5,193 million and in El Chocón of Ch$2,034 million. (See Note 21.b of the FECU for more information) Pg. 16
EVOLUTION OF KEY FINANCIAL RATIOS
The liquidity index as of June 2008 amounted to 1.20 times, revealing a 0.11 -fold decrease, equal to 8.4%, compared to the same period last year. The latter is due to a temporary situation. In effect, during the second quarter took place the refinancing of Endesa Chile’s bonds that mature in less than one year and that were transferred to the short term. Despite the latter, the indexes reflect that the company enjoys a sound position in terms of liquidity, while it continues to hold bank debt and finance its investments with cash surplus, while having an appropriate schedule of debt maturity. The indebtedness ratio sits at 1.10 as of June 30, 2008, having increasing 8.9% over its 2007 level. Financial expenses coverage increased 0.73 times or the equivalent of 16.9%, having jumped from 4.33 times in June 2007 to 5.06 times in the current period. This is due to the better results obtained by the Enersis Group during this period, in addition to a reduction in interest expense. Furthermore, the annual profitability based on shareholders’ equity amounted to 10.22%, which was 4.30% for the same period last year. Annual profitability based on assets jumped from 1.08% in June 2007 to 2.52% in June 2008, which is also a reflection of the better results recorded for this year, partly offset by an increase in dollar-denominated assets. Pg. 17
CONSOLIDATED BALANCE SHEET ASSETS UNDER CHILEAN GAAP, MILLION CH$
Pg. 18
ASSETS UNDER CHILEAN GAAP, THOUSAND US$
Pg. 19
LIABILITIES AND SHAREHOLDERS EQUITY UNDER CHILEAN GAAP, MILLION CH$
Pg. 20
LIABILITIES AND SHAREHOLDERS EQUITY UNDER CHILEAN GAAP, THOUSAND US$
Pg. 21
CONSOLIDATED BALANCE SHEET ANALYSIS The company’s total assets as of June 2008 increased by Ch$242,736 million compared to the same period last year, which is mainly due to:
Pg. 22
The company’s total liabilities increased by Ch$242,736 million from the same period last year, which was largely due to the following:
Pg. 23
Minority interest totaled Ch$2,838,355 million, revealing a reduction of Ch$158,174 million, equal to 5.3%, as a result of reductions in the amount of shareholders’ equity the companies had because of paid dividends, and the effect of the dollar-peso exchange rate (See Note 21 of FECU for more information). Shareholders’ equity increased by Ch$8,523 million as of June 2007. This change is primarily due to the period’s income of Ch$155,940 million, partly offset by a decrease in reserves of Ch$141,087 million, largely due to the exchange rate effect of the dollar on investment hedges abroad, a reduction in the cumulative results of Ch$2,905 million, and a Ch$3,423 million decrease in capital revaluation. Pg. 24
DEBT MATURITY WITH THIRD PARTIES, MILLION CH$ Table 8
(*) Includes: CAM DEBT MATURITY WITH THIRD PARTIES, THOUSAND US$ Table 8.1
(*) Includes: CAM Pg. 25
CONSOLIDATED CASH FLOW UNDER CHILEAN GAAP, MILLION CH$ Table 9
Pg. 26
UNDER CHILEAN GAAP, THOUSAND US$ Table 9.1
Pg. 27
CONSOLIDATED CASH FLOW ANALYSIS During the period the company generated a positive net cash flow totaling Ch$78,559 million, which can be broken down as follows: Table 10
Table 10.1
As of June 30, 2008, operating activities generated a positive net cash flow of Ch$747,348 million, which represents a 74.7% increase over last year. This flow is primarily made up of the following: Net income of Ch$155,940 million, plus
The above was partly offset by:
Financing activities generated a negative net flow of Ch$286,810 million due to loan payments for Ch$381,018 million, dividends payments for Ch$278,054 million, public debt payments for Ch$108,627 million, documented loan payments from related companies for Ch$1,263 million, and other disbursements for Ch$5,346 million. The latter is partly offset by loans secured for Ch$454,057 million and bond floats for Ch$33,440 million. Investment activities generated a negative net flow of Ch$381,979 million, which, when compared to the same period last year, represent a greater cash contribution equal to 13.7% or Ch$46,162 million. These disbursements correspond in part to the incorporation of fixed assets for Ch$350,598 million, Pg. 28
permanent investments for Ch$8,858 million, other loans to related companies for Ch$26,691 million, and other disbursements for Ch$5,574 million, which are partly offset by Ch$7,532 in sales collected on permanent investments, Ch$1,788 million in sales collected on fixed assets, and other investment income for Ch$422 million. CASH FLOW RECEIVED FROM FOREIGN SUBSIDIARIES BY ENERSIS, CHILECTRA AND ENDESA CHILE Table 11
Table 11.1
Source: Internal Financial Report Pg. 29
CAPEX AND DEPRECIATION
Table 12.1
(*) Consolidated by Enersis through Endesa Brasil since October 1st, 2005. Pg. 30
ANALYSIS OF THE INTEREST AND THE EXCHANGE RATE RISK The Company holds a portion of its debt in dollar-denominated instruments, due to the fact that some of its sales in markets where it operates are indexed to this currency. However, dollar indexation is greater in the Brazilian, Colombian, and Argentinean markets, and accordingly subsidiaries in these countries prefer to borrow in local currency. In the case of Argentina, dollar-based financing has gradually been replaced by financing in local currency to the extent that conditions governing terms and market rates allow for it. Notwithstanding this natural exchange rate hedge, when facing a scenario in which the dollar is extremely volatile, the company has continued to follow a strategy of partially hedging its dollar-denominated liabilities in order to mitigate the impact of exchange rate fluctuations on its bottom line. Bearing in mind the significant reduction of accounting mismatch in recent years, which has reached sensible levels, the company has made changes to its dollar-peso hedging policy with a view to establishing a cash flow hedging policy, along with the greatest degree of accounting mismatch allowed, in order to guide its hedging operations. As of June 30th, 2008, the company’s consolidated hedged indebtedness in Chile amounted to US$ 600 million and US$ 125 million in dollar/UF and dollar/peso swap contracts, respectively, thus enabling the company to comply with the aforementioned hedging policy. As of the same period in 2007, the company already had dollar/UF swap contracts for US$ 600 million and dollar/peso swap contracts for US$ 125 million as part of the previously-mentioned new hedging policy it had begun to enforce. Regarding interest rate risk, the company’s consolidated debt is broken down into fixed and variable rates at approximately 67% and 33%, respectively, as of June 30th, 2008. The fixed-rate percentage of its indebtedness has decreased slightly when compared to the last year’s ratio of 71.8%:28.2%, as a result of refinancing new debt at a variable rate. Pg. 31
OTHER RISKS As is customary for certain credit and capital market debt facilities, a portion of Enersis and Endesa Chile’s financial indebtedness is subject to cross default provisions. Any matured default by any of the relevant subsidiaries could result in a cross default to Enersis and Endesa Chile, in which case, certain indebtedness held by these companies could potentially become due and payable. Any default on debt exceeding an equivalent of US$30 million on an individual basis—after expiration of grace periods if applicable—by these companies or by any of their relevant subsidiaries could give rise to the prepayment of syndicated loans subscribed in 2004. Loans subscribed by Endesa in January and December 2006 and by Enersis in December 2006 contain US$50 million thresholds. Similarly, any default on loans exceeding an equivalent of US$30 million on an individual basis—after expiration of grace periods if applicable—by these companies or any of their subsidiaries could give rise to the prepayment of Yankee bonds. Furthermore, some financial covenants contain provisions according to which certain default events, in these companies or any of their relevant subsidiaries, such as bankruptcy, insolvency, adverse legal rulings and rulings for amounts exceeding US$ 50 million, and asset expropriation, could trigger the acceleration rights of such indebtedness. The financial covenants do not contain clauses requiring the mandatory prepayment of indebtedness due to changes in control or the debt rating of these companies by risk classification agencies. However, a change in foreign-currency debt rating by the risk classification agency Standard & Poor’s (S&P) may give rise to a change in the margin applied when determining the interest rates of the syndicated loans signed in 2004 and 2006. As of June 30, 2008, these obligations and restrictions have been complied with in full. Pg. 32
ARGENTINA GENERATION In Argentina, our Operating Income reached Ch$13,001 million, compared with the Ch$18,965 million recorded during the first half of 2007, represents a decrease of 31.4% . COSTANERA Less hydraulic availability translated into greater use of thermal facilities which use costly liquid fuels. The Operating Income of Endesa Costanera improved by Ch$7.340 million, coming in at Ch$10.347 million, due to a 36.0% increase in revenues and a 29.9% hike in operating costs. More efficient managerial practices and a sound commercial policy made it possible for Endesa Costanera to boost its operating income considering that its physical sales increased by 10.8% along with a hike in average tariffs.
Additional Information Table 14
Pg. 33
CHOCÓN El Chocón recorded a Ch$13.304 million decrease in its Operating Income for a total figure of Ch$2,654 million for first semester 2008, as a result of a 50.3% drop in physical sales compared to the previous year resulting from water flow management on the Limay River in addition to a poor hydrology.
Additional Information Table 16
Pg. 34
DISTRIBUTION EDESUR In Argentina our subsidiary Edesur recorded a Ch$5,133 million reduction in its Operating Income from Ch$16,016 million for first semester 2007 to Ch$10,883 million for the current period. The latter is primarily due to an increase in fixed costs that was partially offset by greater demand and more customers. The increase in demand was triggered by greater economic activity and higher temperatures, which boosted physical sales by 2.1% for a total of 8,050 GWh for first semester 2008. Energy losses remained stable at 10.5% for both periods and the number of customers increased by 36,000 for a total of 2.24 million.
Additional Information Table 18
Pg. 35
 BRAZIL GENERATION CACHOEIRA DOURADA Operating Income in Brazil from our subsidiary Cachoeira Dourada for first semester 2008 amounted to Ch$72.462 million, which is much higher than the Ch$26.928 million recorded during the same period in 2007, representing a 169.1% increase. The latter is the result of a sound business policy of adjusting energy sales contracts to fit high prices on the energy market during the first months of this year. These price increases were triggered by a 9.2% increase in physical sales which amounted to 2,134 GWh (compared to 1,955 GWh in 2007).
Additional Information Table 21
FORTALEZA Endesa Fortaleza’s Operating Income totaled Ch$15.385 million, a 36.6% decrease compared to the same period in 2007 when the company’s operating income was Ch$24,277 million. This reduction is primarily due to lower energy purchase/sales margin for the period given high spot prices for energy. Physical sales amounted 1,388 GWh as of June 2008.
Pg. 36
Additional Information Table 23
TRANSMISSION CIEN CIEN’s first semester Operating Income reached Ch$10.496 million, which was Ch$11,689 million greater than the same period last year when the company recorded a loss of Ch$1.193 million. During this period, the company signed a contract with CAMMESA to export energy from Brazil to Argentina for seven months beginning in May thus providing the company a fixed income from tolls. Although the Brazilian government does not provide ANEEL the guidelines for determining the retribution value for energy transportation services, as of this year this has become the company’s focus. Physical sales for the period amounted to 1,043 GWh (2,295 GWh for June 2007).
Additional Information Table 25
Pg. 37
DISTRIBUTION AMPLA In Brazil, Ampla’s Operating Income was Ch$103,515 million which represented a 32.1% increase or Ch$25,151 million more when compared to last period. These greater results are primarily due to a better energy purchase/sales margin resulting from greater sales prices. Physical sales also went up 1.7% amounting to 4,597 GWh for this period. Energy losses dropped 1.7 percentage points (p.p.) reaching at 20.6% (compared to 22.3% for the same period in 2007). Ampla’s customer base increased by 59,000 clients for a total of 2.43 million customers.
Additional Information Table 27
Pg. 38
COELCE Coelce’s Operating Income increase by Ch$10.038 million for a total of Ch$59,805 million for first semester of 2008. This increase in operating income is primarily due to a 128-GWh or 3.7% increase in physical sales as well as a reduction in energy losses which fell from 12.6% in June 2007 to 11.6% in June 2008 and lower expenses for the unrecoverable funds reserve for this period. The latter is partially offset by a lower purchase/sales margin during the period due to a tariff adjustment in April 2007 and a greater energy purchase price. Coelce added 139,000 new customers during the 2008 period, representing a 5.3% increase over 2007 for a total of 2.76 million customers.
Additional Information Table 29
Pg. 39
 CHILE GENERATION ENDESA CHILE Consolidated Income Statement of Endesa Chile
Chilean Operations In Chile, Operating Income reached Ch$161,234 million—1.7% higher than the $158.531 million recorded at the end of first semester 2007—even though revenues from operations amounted to Ch$595,776 million, which represented a 35.6% increase compared to Ch$439,455 million from the same period last year. This increase was brought on by first semester increases in the average node price (reaching close to US$130 per MWh), along with high spot prices, which were greatly offset by greater operating expenses that underwent an increase of 57.1%, totaling Ch$425,415 million, Ch$166,745 million of which corresponded to greater fuel and lubricant costs given the increased use of oil-fired thermal generation at high production costs. The latter was caused by low hydrology until May of this year, among other aspects. It is worth mentioning that foreign policy has enabled Endesa Chile to sell on the spot market even when the 9,211 GWh of production recorded at the close of June 2008 translated into a 3.6% decrease. Pg. 40
Additional Information
Pg. 41
DISTRIBUTION CHILECTRA In Chile, our subsidiary Chilectra recorded Ch$69,096 million in Operating Income which represented a Ch$2,123 million or 3.2% increase over last period’s figures. The latter is due to a decrease in overhead offset by less demand of energy during the period. As a result of the latter, physical sales amounted to 6,249 GWh, down 3.1% when compared to the same period in 2007. This was due to the energy savings plan launched by the Chilean government, which had the desired effect. The number of customers grew by 47,000 for a total of 1.5 million as of June 2008.
Additional Information
Pg. 42
COLOMBIA GENERATION EMGESA The operating income of our subsidiary in Colombia, Emgesa, came in at Ch$111,620 million at the close of first semester 2008, which represents a 29.5% increase when compared to the same period in 2007. These improved results are primarily due to an 18.5% increase in revenues from operations resulting from greater average sales prices triggered by reliability, appreciation of the Colombian peso, and a 9.2% boost in physical sales volume, all of which contributed to the 7,891 GWh with greater hydraulic dispatch given the improved hydrology. Likewise, operating costs underwent a 7.8% increase mostly due to greater tolls. Production increased by 8.9% reaching a total of 6,004 GWh, thus revealing the good performance of our operations in this country.
Additional Information
Pg. 43
DISTRIBUTION CODENSA Cadensa’s operating income totaled Ch$111.824 million as of June 2008, which represents a Ch$30.820 -million or 38.0% increase over last year’s figures. This increase is primarily the result of a 5.1% increase in energy demand (totaling 5,845 GWh) and a 1.3 percentage point drop in energy losses—falling from 9.0% in June 2007 to 7.7% for the current period—in addition to the impact of a higher purchase/sales margin during the period. The number of customers also increased by 69,000 for a total of 2.25 million as of June 2008.
Additional Information
Pg. 44
PERU GENERATION EDEGEL Edegel, recorded Ch$24,484 million in Operating Income, , which represented a 31.8% decrease vis-à-vis the Ch$35,888 million recorded for first semester 2007. Production was up by 4% totaling 4,119 GWh; however, revenues from operations recorded a 5.1% decrease, dropping from Ch$94,649 million to Ch$89,864 million, while costs of operations jumped 14.8% for a total of Ch$60,507 million. The reduced revenues are primarily attributable to lower physical sales on the spot market as well as lower average prices at around 10%. Likewise, the greater costs are due to the higher variable cost of fuel for diesel-fired thermal generation given the costs to maintain Camisea’s pipes and greater energy purchases when compared to first semester 2007.
Additional Information
Pg. 45
DISTRIBUTION EDELNOR Our subsidiary Edelnor recorded Ch$30,044 million in Operating Income, which is Ch$5,598 million more compared to 2007 when the company’s operating income amounted to Ch$24,446 million. This is primarily due to greater demand for energy and a higher sales margin. The increased demand, especially a spike in sales to medium-tension regulated customers, contributed to the company’s greater sales margin. The significant increase in energy demand triggered a 7.6% increase in physical energy sales which topped off at 2,777 GWh for the period. The number of customers also increased by 35,000 for a June 2008 period-end total of one million customers. Energy losses went up by 0.3 percentage points, totaling 8.5% during the period, compared to 8.2% for the same period last year.
Additional Information
Pg. 46
PARTIALLY CONSOLIDATED INCOME STATEMENT UNDER CHILEAN GAAP, MILLION CH$
Pg. 47
UNDER CHILEAN GAAP, THOUSAND US$ Table 42.1
Pg. 48
OWNERSHIP OF THE COMPANY AS OF JUNE 30, 2008
CONFERENCE CALL INVITATION Enersis is pleased to inform you that it will hold a conference call to review its results for the period, on Friday, August 01, 2008, at 11:00 AM EST (Eastern Standard Time) (11:00 pm Chilean time). To participate, please dial +1 (617) 213-4863 or +1 (888) 713-4209 (toll free USA), approximately 10 minutes prior to the scheduled start time, Passcode ID: 23355792. The phone replay will be available between August 01, 2008, and August 08, 2008, dialing +1 (617) 801-6888 or +1 (888) 286-8010 (toll free USA) Passcode ID: 94297151. To access the call online, or to access the replay, go to: http://www.enersis.com Investor Relations. Pg. 49
CONTACT INFORMATION For further information, please contact us:
Susana Rey
María Luz Muñoz DISCLAIMER This Press Release contains statements that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this announcement and include statements regarding the intent, belief or current expectations of Enersis and its management with respect to, among other things: (1) Enersis’ business plans; (2) Enersis’ cost-reduction plans; (3) trends affecting Enersis’ financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere; (4) supervision and regulation of the electricity sector in Chile or elsewhere; and (5) the future effect of any changes in the laws and regulations applicable to Enersis’ or its subsidiaries. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those 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 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. Readers are cautioned not to place undue reliance on those forward-looking statements, which state only as of their dates. Enersis undertakes no obligation to release publicly the result of any revisions to these forward-looking statements. Pg. 50
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 01, 2008
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