AES Gener profits slip 59% in H1

Chilean generator AES Gener posted consolidated earnings of 12.4bn pesos (US$19.6mn) in the first half of 2004, down from profits of 30.3bn pesos in 1H03, due to lower hydrology in Chile and gas export restrictions imposed by Argentina, the company said in its earnings statement Thursday. Operating profits fell 11% to 52.4bn pesos in the first half from 58.3bn pesos in the same period of 2003 due to the higher dispatch of AES Gener's thermoelectric plants, which increased fuel consumption costs. But output at the 379MW Nueva Renca plant fell - because of the Argentine gas restrictions - therefore increasing power purchase costs. Total operating costs increased 4% to 128bn pesos from 123bn pesos in 1H03, while revenues fell 0.3% to 189.7bn pesos from 190.3bn pesos. Non-operating losses increased 81% to 33.1bn pesos from 18.3bn pesos in 1H03 due mainly to lower financial income earned from the company's US$298mn loan to holding company Inversiones Cachagua due to Cachagua's repayment of this loan in February 2004, the statement said. Cachagua, which owns 98.65% of AES Gener, is in turn owned by US-based AES Corp (NYSE: AES). Despite the higher non-operating losses, AES Gener's earnings started to reflect the positive impact of the financial restructuring carried out in the first half, which reduced debt by US$302mn and extended the terms of the company's main liabilities until year 2014. The restructuring lowered financial expenses in the first half, but the positive impact was more than offset by an extraordinary payment in April as part of the refinancing of the liabilities of its Argentine subsidiaries TermoAndes and InterAndes. During the first half of 2004, AES Gener and its subsidiaries generated 26% of power in the central grid SIC and 20% of power in the northern grid SING.