Interconexión Eléctrica S.A. E.S.P, also known as ISA, is a Colombian firm whose main businesses are electric power, roads, ICT, and telecommunications. In its quarterly report, the firm not only reiterated its commitment to economic revitalization but also to the environment.
One month after the end of its second quarterly exercise, ISA INTERCHILE issued its first green bond for an amount of USD 1.2 million and a maturity of 35 years. The issuance will be used to refinance the debt commitments acquired during the construction phase of the 2x500kV Cardones-Polpaico transmission line, a project that seeks to reduce carbon emissions and stop climate change.
The good news was coupled with its strong consolidated quarterly results.
In this quarter, operating revenues, including construction, totaled 2.8 trillion Colombian Pesos, which represents an increase of 6.0% in comparison to the same quarter in the previous year. As last year, 2021 experienced higher revenues due to an extraordinary event in which the Brazilian Electricity Regulatory Agency (ANEEL) approved the recognition of the cost of capital (ke), as well as the actualization of the financial component of the ISA CTEEP. If these events are excluded, operating revenues would have risen 28.9% compared to 2Q20.
Construction revenues also experienced an increase of 34.7% in comparison to the same period last year. The improvement is attributable to higher revenues in Brazil and Chile and higher construction activity in Colombia and Peru.
Operating income amounted to 1.8 trillion, translating into an advance of 6.1% compared to the same quarter last year. The operating margin stood at its previous levels (62.6%) and if construction is excluded, it went from 72.3% to 73.9%. Accumulated operating income advanced 12.9% compared to the two quarters of 2020.
According to the Firm, EBITDA amounted to COP 1.9 trillion, representing an increase of 3.2% compared to the prior-year quarter. EBITDA margin passed from 69.1% to 67.2%; this percentage reduction is mainly explained by the growth in operating costs. Operating Costs rose 12.5%, essentially due to higher construction activity in Colombia and Chile.
Regarding the accumulated 6M EBITDA, the firm reported an advance of 7.8% in comparison to the first half of 2020, reaching a total of COP 3.4 trillion.
Net income also had a nice quarter, ending up at COP 585.892 million, representing an increase of 6.4% compared to the same period last year. In the same way, the net income margin went from 19.4% to 20.2%.
The reason behind the significant difference between EBT which amounted to 1.3 trillion and net income, lies in the minority interest portion, which represents COP 418.369 million.
Accumulated net income 6M ended at COP 1.1 trillion, going up by 17.8%.
As of June 30, ISA’s total assets closed at COP 62.6 trillion, which represents an advance of 15.9% in comparison to the same period last year. The increase in total assets is attributable to the firm’s growth, mostly driven by new projects in Colombia, Peru, Chile, and Brazil.
Liabilities went up by 20.2% compared to December 2020, reaching COP 40.7 trillion. As it was mentioned before, the whole firm is experiencing an important growth, therefore the increase in its liabilities is essentially due to the financing of this expansion.
Regarding Cash flow, the concept considerably improved as a whole. While net cash flow from operating activities rose 45% compared to the first semester of 2020, net cash flow used in financing activities grew 66%. At the end of the period, cash and cash equivalents ended at COP 4.7 trillion, which translates into an increase of 34% in comparison to the first two quarters of 2020.
As of June 2021, the consolidated financial debt totaled COP 26.4 trillion, representing an increase of 16.1% compared to December 2020. The debt acquisition was mainly used to finance Brazil subsidiary’s growth. Interconexión Eléctrica reported a Debt Net/EBITDA ratio of 3.0 x and an EBITDA/Financial expense ratio of 5.9x.
Intending to continue with the expansion, the firm wants to maintain its current credit rating and possibly continue its leveraging growth strategy.
Finally, at the end of June, the firm achieved an ROE of 16% and a ROA of 6.3%. The former improved 0.4 percentage points and the latter decreased by 0.7.
Aside from its solid quarterly results, the firm took a big step and announced the union with Ecopetrol Group. Both firms are considered among the top 5 biggest firms in Colombia.
