Annual Report 2017
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Annual Report 2017 www.iam.cl Inversiones Aguas Metropolitanas 1 Annual Report 2017 1. 2017 Highlights 5. 2017 Financial Year Statistics and Indicators .................................................4 Planning a Sustainable and ........................................30 Index Financial Summary ............................................................4 Long-Term Management Operating Background Information ............................4 Comprehensive Water Cycle Management ...........31 2017 Revenue Distribution ..............................................5 Annual Investments ...................................................... 35 Stock Exchange Performance .......................................5 2017 Clients ....................................................................... 36 Ebitda - Ebitda Margin .....................................................6 Workforce ...........................................................................37 2017 Investments ...............................................................6 Safety Indices ................................................................... 38 Accident Rate ...................................................................... 7 Environment ...................................................................... 39 2. Letter from the Chairman 6. Financial Management Strength and Stability ....................................................41 3. The Company Risk Factors ....................................................................... 42 Inversiones Aguas Metropolitanas, IAM .................. 12 Main Suppliers.................................................................. 45 IAM’s History ......................................................................13 Dividend Policy ................................................................ 46 IAM Management Milestones ..................................... 15 2017 Distributable Profit ................................................47 Ownership of the Company .........................................16 Summary of distribution to shareholders ...............47 Board of Directors ............................................................18 Shares Transactions ....................................................... 48 Alternate Directors ......................................................... 20 The Administration .......................................................... 21 7. Corporate Governance Board of Directors ............................................................ 51 4. Company Operation Directors’ Committee ................................................... 54 The Company ................................................................... 23 Remuneration and Expenses .......................................57 Operations ......................................................................... 24 Other Corporate Governance Instances ................60 Clients ................................................................................. 26 Material Events .................................................................61 Our Coverage.....................................................................27 Non-Regulated Companies ........................................ 28 8. General Information Company Identification ................................................ 63 Sanitation Regulation .................................................... 64 Responsibility Statement ............................................ 65 9. Financial Statements Inversiones Aguas Metropolitanas 2 Annual Report 2017 2017 Highlights Inversiones Aguas Metropolitanas 3 Annual Report 2017 Statistics and Indicators CONSOLIDATED FINANCIAL SUMMARY OPERATING BACKGROUND INFORMATION FOR IAM’S SUBSIDIARIES (In Millions of Pesos) As of December 31st, 2013 2014 2015 2016 2017 As of December 31st, 2013 2014 2015 2016 2017 Potable water revenue 157,307 171,488 180,937 190,400 195,091 Total potable water clients 2,039,298 2,096,999 2,149,673 2,213,869 2,259,245 Sewage revenue 184,299 202,001 220,706 235,459 240,399 Total sewerage clients 1,999,419 2,045,634 2,096,347 2,160,473 2,205,940 Other regulated revenue 16,557 20,282 18,015 17,161 18,408 Total invoiced water (millions 548.9 558.6 562.2 569.2 575.0 Highlights 2017 of cubic meters) Other non-regulated revenue 45,884 47,085 53,739 49,225 55,638 Invoiced sewage collection 534.1 540.5 542.9 549.5 554.3 Total revenue 404,047 440,856 473,397 492,245 509,536 (millions of cubic meters) Operating income (1) 182,948 206,460 212,999 223,334 222,990 Invoiced sewage treatment 466.9 473.7 472.7 479.0 484.3 and disposal (millions of Net income for the period 57,648 58,711 63,283 74,289 68,719 cubic meters) Total assets 1,850,756 1,879,381 1,963,814 2,044,462 2,069,371 Invoiced sewerage system 119.1 119.3 121.8 122.3 123.8 interconnection (millions of Short-term liabilities 221,033 177,518 233,356 212,350 237,819 cubic meters) Long-term liabilities 680,044 763,838 787,470 873,274 866,737 Total potable water coverage 100.00% 1100.00% 100.00% 100.00% 100.00% (2) Minority interest 368,767 360,391 362,362 369,155 371,326 Total sewerage coverage 98.30% 98.40% 98.40% 98.40% Equity attributable 580,912 577,634 580,626 589,683 593,488 Total sewage treatment 100.00% 100.00% 100.00% 100.00% 100.00% to the controlling company Total staff 1,857 1,881 1,953 2,033 2,107 (1) Operating income = Regular revenues – consumption of raw materials and secondary materials – personnel expenses – depreciation and amortization – losses due to deterioration –other operating expenses. (2) Estimate from the Superintendence of Sanitation Services will be published in 2018. Note: All of the financial and operational information in this annual report are consolidated figures of IAM and its subsidiaries. Inversiones Aguas Metropolitanas 4 Annual Report 2017 2017 REVENUE DISTRIBUTION STOCK EXCHANGE PERFORMANCE (1) 3.61% Other regulated revenue 10.92% IAM IPSA Non-regulated revenue 160% 150% 140% 130% 2017 Highlights 2017 47.18% 120% Sewage 110% 100% 90% 80% 1/1/2017 7/1/2017 1/1/2016 7/1/2016 2/1/2017 5/1/2017 3/1/2017 8/1/2017 4/1/2017 6/1/2017 9/1/2017 2/1/2016 5/1/2016 3/1/2016 8/1/2016 4/1/2016 6/1/2016 9/1/2016 11/1/2017 11/1/2016 12/1/2017 10/1/2017 12/1/2016 10/1/2016 38.29% (1) Source: Santiago Stock Exchange. Base 100. Potable water Inversiones Aguas Metropolitanas 5 Annual Report 2017 EBITDA - EBITDA MARGIN (2) (3) 2017 INVESTMENTS EBITDA EBITDA Margin 0.43% 8.29% Non-regulated Other subsidiaries 18.99% activities Potable water production 310,000 100% 297,391 290,351 2017 Highlights 2017 290,000 80% 281,440 61.32% 61.88% 37.78% Sewage 270,000 272,810 60% 59.45% treatment 58.99% 58.37% 247,669 250,000 40% 24.51% Potable water distribution 230,000 20% 220,000 0% 2013 2014 2015 2016 2017 10.00% Sewerage (1) EBITDA: Operating income + depreciation for the accounting period + amortization of intangibles. (2 ) EBITDA Margin: Regular revenue – consumption of raw materials and secondary materials – personnel expenses – other operating expenses. Inversiones Aguas Metropolitanas 6 Annual Report 2017 ACCIDENT RATE* Aguas Andinas S.A. Aguas Manquehue Aguas Cordillera S.A. ESSAL S.A. Non Regulated Subsidiaries 0.72 0 2017 0 1.08 0.22 1.1 0 2016 0 Highlights 2017 0.28 0.73 0.94 0 2015 0.86 1.56 1.01 1.14 10.53 2014 0.81 0.34 2.65 1.47 0 2013 3.89 1.34 1.08 0 2 4 6 8 10 12 * Accident Rate: Number of accidents with time lost / Average number of workers during the period Inversiones Aguas Metropolitanas 7 Annual Report 2017 Letter from the Chairman Inversiones Aguas Metropolitanas 8 Annual Report 2017 Letter from the Chairman Dear Shareholders: Letter from the Chairman from Letter As Chairman of the Board of Directors of Inversiones Aguas Metropolitanas S.A., I have the honor to present you the Company’s Annual Report and Financial Statements for 2017. Felipe Larraín Aspillaga The year was characterized by a good service level to the customers CHAIRMAN of Aguas Andinas, Aguas Cordillera, Aguas Manquehue, and Essal, an adequate coordination with authorities, and by the high level of investment, which reflects our vision of sustainable management, allowing service continuity in the medium and long term. We have always continued to work with our eyes set on the citizen, in order to respond in the best way possible to the new demands of society, and to the climatic conditions facing our concession areas, especially in the Santiago basin. These investments reached 131 billion pesos during the financial year, a historic figure that demonstrates the confidence in the Chilean water utility market and the management’s clear commitment to provide a secure and high quality service to its clients. The investments were mainly destined to the execution of new infrastructure works to insure supply, among which the Pirque reservoir project stands out, consisting of six tanks with an approximate joint capacity of 1.5 cubic hectometers of raw water, which will allow greater autonomy to the potable water system of the Metropolitan Region beginning on December 2019. During the financial year, the corresponding Environmental Impact Study was approved and construction work began. 9 Annual Report 2017 At IAM we will In order to add two hours of additional autonomy in the short term This management’s financial responsibility and commitment to the continue to work with to those already existing, and in response to the massive service environment were also recognized once again. Both IAM and Aguas interruptions due to extreme turbidity