chilean company for civil works and more · 7% decrease in operating income and a loss of clp...

ConstruccionesMaquinariasInmobiliariaConcesionesEnergía RenovableMD MontajesBesco (Peru)Kipreos

Quar ter lyFINANCIAL REPORTseptember 2014

CHILEAN COMPANY FOR CIVIL WORKS AND MORE

2

QUARTERLY F INANCIAL REPORT I SEPTEMBER 2014

4besalco group

CONSOLIDATED STATEMENT OF EARNINGS (CLP million)

CONSOLIDATED BALANCE SHEET

September 2014 September 2013 Variation III Q 2014 III Q 2013 Variation

Ordinary incomes 247,063) 265,239) -7% 71,262) 96,641) -26%

Cost of sales (251,398) (244,859) 3% (91,310) (90,350) 1%

Gross profit (4,336) 20,380) -121% (20,047) 6,291) -419%

Administrative expenses (12,437) (13,271) -6% (4,469) (5,334) -16%

Net financial expense (5,553) (2,954) 88% (575) (1,089) -47%

Net profit in associated companies 1,296) 3,394) -62% 997) 653) 53%

Others 4,658) (300) - 7,286) 1,042) 599%

Profit of the period (16,371) 7,249) -326% (16,808) 1,563) -

Stockholders' profits (15,770) 7,028) -324% (17,869) 1,508) -1,285%

ASSETS (CLP million) September 2014 September 2013 Variation

Current assets 395,819) 243,184) 63%

Non-current assets 223,032) 254,607) -12%

Total assets 618,851) 497,791) 24%

LIABILITIES AND EQUITY (CLP million)

Current liabilities 325,697) 163,672) 99%

Non-current liabilities 128,373) 147,590) -13%

Shareholders' equity 156,792) 172,294) -9%

Minority interest 7,990) 14,236) -44%

Total liabilities and equity 618,851) 497,791) 24%

PERFORMANCE OF BESALCO STOCK PRICE (CLP)

2012 2013 2014jan mar may jul sep nov jan mar may jul sep nov jan mar may jul sep nov

BesalcoIPSA (indexed to Besalco stock price)

CLP 1,100

CLP 1,000

CLP 900

CLP 800

CLP 700

CLP 600

CLP 500

CLP 400

CLP 300

CLP 200

CLP 100

3


We are not satisfied with the results obtained at the end of the third quarter of this year. Cumulative numbers as of September show a 7% decrease in operating income and a loss of CLP 15,770 million attributable to the shareholders as of September 30, 2014. Last year, on the same date, there was a profit of CLP 7,028 million.

Cumulative loss occured due to the consolidation of the profits of the Besalco Construcciones subsidiary, which generated CLP 25,348 million of loss attributable to the shareholders as of September of this year. This subsidiary has recognized the higher costs in contracts which have been completed and/or are being finalized to date in its results.

At the same time, Besalco Maquinarias has contracts with Minera de Hierros Taltal, which have been stopped due to the principal’s default on payment for the services rendered. As a result of this, and in the face of indications of impairment, provisions have been recognized for this principal.

The company’s other business areas have shown positive results, particularly in the Besalco MD Montajes, Kipreos, Energía Renovable, and Besco (in Peru) subsidiaries. The loss reported by Besalco Inmobiliaria is justified by the accumulation of works with municipal use permits and registration of deeds during the fourth quarter of the year.

4besalco s.a.

STOCK EXCHANGE PRECEDENTS September 2014 September 2013

Stock price (CLP) 415 681

Book value per share (CLP) 272 299

Number of shares (million) 576 576

Equity market value (CLP million) 239,083 392,281

Earnings per share (CLP) -18 37

Price to book value 1.5 2.3

P/E price earning ratio -23.4 18.5

RATINGS Fitch-Ratings Feller Rate February 2014 February 2014

Long term debt rating BBB+ A-

Equity rating 1st Class Level 3 1st Class Level 2

Commercial papers N2 / BBB+ A- / Level 2

Outlook Negative Negative

4


We have a significant stock of works in progress –backlog– which amounts to USD$774 million. Backlog corresponds to the company’s load of works to be executed in a specific point in time, which is calculated as the sum of the balances to be executed of the contracts proportional to Besalco’s share participation in the executing company or consortium. This does not include income stemming from concessions or real estate sales, it only includes construction contracts.

Contracts have an average duration of 30 months and the portfolio is distributed among 76 contracts: 33 for civil works and assembly, 25 for machinery services, 14 for real estate construction, and 4 for real estate development in Peru.

43% of these projects will be carried out during 2015, with a wide diversification in our principal’s different business areas, such as forestry, copper mining, and health, among others. In addition to an 11% of the total contracts which have the Ministry of Public Works as principal.

Last September, the market was informed of the beginning of the sales process for the hydropower projects Los Hierros I and Los Hierros II, located in Colbún in the VII Region, through an Essential Fact sent to the Securities and Insurance Commission. BTG Pactual Chile’s financial advice services were hired to assist with this process. On that basis, the total assets and liabilities of the Empresa Eléctrica Aguas del Melado S.A. and Empresa Eléctrica Portezuelo S.P.A. subsidiaries, have been reclassified as assets and liabilities available for sale. To date, this operation is in the due diligence stage by the interested parties.

841

949

900

1,03

9

954

BACKLOG (USD million)

'09 '10 '11 '12 '13 sep 14

774

BACKLOG DISTRIBUTION BY MARKET SEGMENT AT SEPT 2014

USD774million

15%forestry

9%energy

8%health

8%public works

direct government contracts

3%public worksconcessions

9%mining, other

6%other civil works

12%retail

2%transport

11%iron ore mining

17%copper mining

TOTAL BACKLOG USD million

Health 63

Public Works -Direct Government Contracts 58

Public Works - Concessions 26

Copper Mining 132

Iron Ore Mining 88

Mining, other 69

Other Civil Works 48

Retail 95

Transport 13

Forestry 114

Energy 68

TOTAL 774

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4financial analysis

59% of total revenue was contributed by the civil works and assembly areas, 32% by the machinery services area, 8% by real estate developments in Chile and Peru, and 1% by the concessions subsidiary.

Ordinary income as of September 2014 was of CLP 247,063 million, 7% less than what was achieved during the same period of the previous year. During the third quarter of 2014, revenue amounted to CLP 71,262 million, which compares unfavorably to the CLP 96,641 million registered during the same months of 2013.

The decrease in billing as of September 2014 –compared to the same period of the previous year– involves mainly the Besalco Construcciones (16%), Besalco Inmobiliaria (50%), and Besalco MD Montajes (10%) subsidiaries. On the other hand, the Maquinarias, Kipreos and Besco (in Peru) subsidiaries reported a significant increase in sales.

59% of total income was contributed by the civil works and assembly areas, 32% by the machinery services area, 8% by real estate developments in Chile and Peru, and 1% by the concessions subsidiary.

Both the operating income and the operating margin –calculated with the results of the first 9 months of the year– were negative. They reported rates of -1.8% for the former and -6.8% for the latter.

Cumulative loss for the shareholders as of September 2014 was of CLP 15,770 million, which compares unfavorably to the CLP 7,028 million gain raised during the same period of 2013. At the same time, the third quarter of this year had losses for CLP 17,869 million versus a gain of CLP 1,508 million obtained during 2013.

248,

901

251,

563

321,

612

385,

789

ORDINARY INCOME (CLP Mill)

265,

239

247,

063

'09 '10 '11 '12 '13 sep 13 sep 14

392,

301

STOCKHOLDERS' PROFITS(CLP Mill)

Stockholders' profits (CLP million)Net margin

17,1

36

17,0

62 19,5

01

25,6

17

12,5

67

7,02

8

-15,

770

'09 '10 '11 '12 '13 sep 13

sep 14

6.9% 6.8%6.1%

6.6%

3.2%2.6%

-6.4%

6


Ebitda as of September 2014 –including within its calculation the results of consortia accounted for in non-operating profit– amounted to CLP 2,108 million in comparison to the CLP 29,513 million raised during same period of 2013. On the third quarter of 2014, Ebitda showed a negative result of CLP 17,324 million, which had a significant impact in the aggregate value.

Profit before tax for the first nine months of the year amounted to a loss of CLP 24,795 million compared to the CLP 7,008 million gain obtained during the same months of 2013. When comparing September 2013 and September 2014 the main effects were the following:

_A negative operating result of CLP 16,773 million in 2014 and a profit of CLP 7,110 million in 2013._An increase in net financial expenses (income minus financial costs): from CLP 2,954 million to CLP 5,553 million._A decrease in the gain of associates: from CLP 3,394 million to CLP 1,296 million._An increase in accounts, exchange differences, and results stemming from adjustment units: from a CLP 1,213 million loss to a CLP 4,299 million loss.

EBITDA

Ebitda (CLP million)Ebitda margin (%)

46,4

50

46,1

81

53,5

83

64,4

66

42,7

85

29,5

13

2,10

8

'09 '10 '11 '12 '13 sep 13 sep 14

18.7% 18.4%16.7% 16.7%

10.9%

11.1%

0.9%

FINANCIAL DEBT AT SEPTEMBER 2014

CLP million

Short Term Banks 63,828

Long Term Banks 30,684

LT Public Concessions Projects 25,766

Real Estate Bank Projects 57,613

Machinery Leasing 47,665

TOTAL 225,556

CLP225.556

million

21%machinery leasing

28%short term banks

26%real estate

bank projects

11%long term public

concessions projects

14%long term banks

7


FINANCIAL NET DEBT / EBITDA

Financial net debt / Ebitda

0.90.6

1.5 1.8

14.7

4.7

'09 '10 '11 '12 '13 sept 14

LEVERAGE

Total leverageFinancial leverage

'09 '10 '11 '12 '13 sept 14

1.21.3

1.6

1.4

1.8

2.8

0.6 0.6

0.80.7

1.1

1.4

In terms of indebtedness as of September 2014, total leverage was 2.8 times and financial leverage was 1.4 times.

Financial debt as of September 2014 amounted to CLP 225,556 million in comparison to the CLP 218,145 million recorded in December 2013. This increase occurred mainly due to the real estate subsidiary’s demand, because of the needs of the construction of projects in progress, and due to capital requirements to address Besalco Construcciones’ deficit.

In order to attain the latter objective, Besalco Construcciones took a loan with a maturity period of six years for CLP 16,000 million. At the same time, Besalco S.A. has drawn down on the bank credit lines to inject liquidity to said subsidiary.

From the total financial debts, CLP 57,613 million correspond to Besalco Inmobiliaria, CLP 25,766 million to long term concession projects, CLP 47,367 million to machinery leasing, CLP 13,337 million to funding required by construction consortia with core business third parties, CLP 31,578 million to long term bank funding, and CLP 49,895 million to working capital bank debts bank debts that are not related to specific projects.

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At the end of September 2014, this company holds 18 contracts in progress, from which 10 are carried out through consortia with different companies and 8 are being carried out in their entirety by the subsidiary.

Major budget slippages have been recorded during the development of certain projects. These slippages occurred mainly due to an increase in labor costs and due to significant and repeated interferences and modifications on the projects by the clients. The latter has translated into a complex works planning. The projects that have suffered the consequences the most have been Mall de Copiapó and Copiapó and Talca hospitals. Having reached a high level of progress in these works, there is a higher certainty regarding final costs, and therefore the company recorded an amount that reflects the loss considered for the completion of these works at the end of the quarter. Mall de Copiapó is in its final phase, while both the Copiapó and Talca Hospitals will be completed on the first quarter 2015.

The cumulative loss attributable to the shareholders as of September of this year was of CLP 25,348 million.

4construcciones s.a. (civil works)

Improvement works for Ruta-7 in the La Junta-Puyuhuapi area and for Clínica Cruz Blanca Salud began during the quarter.

As of September 2014, the following can be highlighted from the backlog which amounts to USD$195 million: MOP works with a 30% of the total; works for EFE and it "Santiago Rancagua Express" project which amount to a 6%, and the newly awarded project for the Aura Observatory in the IV Region with a 13%.

Improvement works for Ruta-7 in the La Junta-Puyuhuapi area and for Clínica Cruz Blanca Salud began during the quarter. Both sustain a total backlog of USD$65 million to date, with the completion of works expected for October 2015 and May 2016, respectively.

Furthermore, at the end of September, Besalco Construcciones S.A. was awarded the works


Dec 10 Dec 11 Dec 12 Dec 13 Sep 14

379 458

373

223

195

for the "Gran Telescopio de Exploración Sinóptica LSST - Edificio de Mantenimiento, Control y Base de Cúpula [Large Synoptic Survey Telescope LSST - Maintenance and Control Building and Base of the Dome]" project in Cerro El Peñon - IV Región, for the Aura Observatory in Chile. This construction opens a new niche market for the construction sector.

All values according to IFRS standard.

(*) Under IFRS it corresponds to Gross Profit less Administration Expenses.

Ordinary incomes / CLP million 79,391) 94,041) -16% 26,620) 34,793) -23%

Gross profit / CLP million (28,174) (2,590) - (24,322) (4,243) -

Gross mar. less selling exp.(*)/ CLP mill. (29,576) (3,942) - (24,679) (4,567) -

Net financial expenses / CLP million (975) (141) - (295) (94) -

Profit of the period / CLP million (24,894) (3,276) - (18,982) (3,514) -

Controllers profit/loss / CLP million (25,348) (3,366) - (19,271) (3,455) -

Ebitda / CLP million (28,254) (2,145) - (23,814) (3,671) -

Financial leverage (5.3) 0.5)

Liquidity ratio 1.1) 1.1)

Total employees 3,404) 3,811)

Besalco Construcciones Sept. 2014 Sept. 2013 Variation III Q 2014 III Q 2013 Variation

9


The company has been very active when it comes to hiring new services; it has 23 contracts with ten different clients, without taking into consideration any activity related to iron. The markets in which this subsidiary operates the most is forest harvesting and copper ore crushing and transport services for two of Codelco’s divisions, among other activities.

During October, works in Minera de Hierros Taltal were stopped due to the client’s default on the payment of the production carried out by the company. The job consisted on the crushing of iron ore as well as internal transport and transport to the port. At the same time, it provided electric generators to complement the works. The contracts celebrated at the beginning of 2013 managed to produce an average of CLP 1,800 million a month, whose completion date was expected for April 2017. This translated in a decrease in the backlog of USD$80 million. There is a USD$2.2 million loss provision incorporated in the parent company Besalco S.A. due to the events that occurred immediately after the closure of the Besalco Maquinaria financial statements and before the closure of the parent company.

As of September 2014, ordinary income increased by 28% with respect to the same period of 2013. At the same time, the shareholder’s profit rose by a 6%.

4maquinarias s.a. (machinery services)

As of September 2014, ordinary income increased by 28% with respect to the same period of 2013. At the same time, the shareholder’s profit increased by a 6%, going from CLP 5,902 million to CLP 6,248 million in 2014. However, this result does not take into



435

335

519 547

412



Ordinary incomes / CLP million 79,452) 61,998) 28% 22,748) 23,629) -4%

Gross profit / CLP million 10,888) 8,663) 26% 1,837) 3,613) -49%

Gross mar. less selling exp.(*)/ CLP mill. 8,677) 7,353) 18% 1,154) 3,135) -63%

Net financial expenses / CLP million (1,345) (597) 125% (433) (238) 82%

Profit of the period / CLP million 6,265) 5,958) 5% 1,153) 2,520) -54%

Controllers profit/loss / CLP million 6,248) 5,902) 6% 1,135) 2,515) -55%

Ebitda / CLP million 21,085) 16,696) 26% 3,565) 6,628) -46%

Financial leverage 1.1) 0.6)


Total employees 1,685) 1,911)

Besalco Maquinarias Sept. 2014 Sept. 2013 Variation III Q 2014 III Q 2013 Variation

consideration the aforementioned loss provision, which reduces this result by USD$2.2 million.

The average Ebitda margin for the last four years was of 26.1%, achieving a 30.9% on the first six months of the year. If the results are adjusted to September 2014 –due to the provision carried out with regards to Minera de Hierros Taltal– this margin reaches a 24.7%.

Since June, there is a new contract with Minera Escondida for drilling and mining equipment services, which will contribute incomes of approximately CLP 6,000 million annually during four years.

10


Currently, the balance of works to be executed –where only the construction value is taken into consideration– amounts to USD$70 million, which corresponds to twelve real estate projects and two strip centers.

4inmobiliaria s.a. (real estate)

As of September 2014, the total aggregated sales (promises) amounted to UF2,056 thousands (568 units) and in the same period during 2013 it reached UF1,763 thousands (564 units).

Registration of deeds increased cumulatively to UF828 thousands, 24% lower than what was accounted for in September 2013. It is worth remembering that only deeds can be accounted for as operating income.

The municipal use permit and registration of deeds for the Las Dalias building in Providencia (40 apartments with a sales total of UF253,554) and the Espacio El Llano Sur building in San Miguel (162 apartments with a sales total of UF293,515) are expected for the last quarter of the year. These two projects recorded a total of UF392 thousands in signed promises in September. In addition, the fourth stage of the Haras de San Bernardo project in San Bernardo (77 houses with a sales total of UF192 thousands) is in the process of obtaining a municipal use permit.

Currently, the balance of works to be executed –where only the construction value is taken into consideration– amounts to USD$70 million, which corresponds to twelve real estate projects and two strip centers.

During October of this year, the deed of sale for the strip center located in the Travesía project in Viña del Mar was signed. These works consider two apartment building towers in addition to the strip center. The municipal use permit for the first building is expected for the first quarter of 2015.

As of September of this year a shareholder’s loss of CLP 884 million was recorded, compared to the CLP 403 million profit obtained during the same period of the previous year.

A significant registration of deeds is expected during the fourth quarter of 2014 which should affect the results significantly.

Financial leverage, which amounts to 2 times, is funding the projects in construction or the ground being developed in its entirety.

Financial debts as of September 2014 amount to CLP 57,613 million, from which CLP 20,300 million correspond to the funding of projects whose deeds will be registered and paid within a year; CLP 32,138 million for the funding of works for projects that were issued a municipal use permit prior to September 2015 or land storage, and the balance of short term instalments for land funding.



42

23

35

59

70



Ordinary incomes / CLP million 12,015 24,269 -50% 3,846 7,623 -50%

Gross profit / CLP million 1,562 2,928 -47% 417 950 -56%

Gross mar. less selling exp.(*)/ CLP mill. -177 1,306 -114% -217 401 -154%

Net financial expenses / CLP million -1,363 -1,430 -5% -424 -512 -17%

Profit of the period / CLP million -1,485 207 -816% -317 205 -254%

Controllers profit/loss / CLP million -884 403 -319% -95 328 -129%

Ebitda / CLP million 373 1,676 -78% 143 750 -81%

Financial leverage 2.0 1.2

Liquidity ratio 1.7 3.5

Total employees 902 692

Besalco Inmobiliaria Sept. 2014 Sept. 2013 Variation III Q 2014 III Q 2013 Variation

Type N° N° Total sales Sold (UF Thd.) For sale Notarial deeds Notarial deeds to be signed to be signedof dwelling projects units (UF Thd.) sales pre sales (UF Thd.) Dec 2014 2015

Housing 8 632 3,035 433 1,455 1,146 113 1,274

Apartments 6 603 2,373 45 1,118 1,255 412 706

Total 14 1,235 5,408 478 2,573 2,401 525 1,980

11


Works for the Edificio Bodegas Sur Aeropuerto Arturo Merino Benítez [South Warehouse Building for the Arturo Merino Benitez Airport] project consider the construction of two buildings for a total of 22,703 m² and operations are expected to begin in June 2015.

4concesiones s.a. (public concessions)

sociedad concesionaria bas (33.3%)

Concession term 20 years

Operation start up 2006

Concession termination 2026

Total investment (without "claim") (UF) 3,450,000

Subsidy construction incomes 3Q 2014 (UF) 274,950

Subsidy operating incomes 3Q 2014 (UF) 298,767

Average internal N° September 2014 5,770

Equity book (UF) 999,347

Value per DCF (UF) / 100% of the companyd 507,000


Operation start up (Stage I) 2008


Total investment (UF) 5,751,340

Investment to the date (UF) 4,832,305

Subsidy incomes 3Q 2014 (UF) 426,000

Equity book (UF) 543,082

Value per DCF (UF) / 100% of the companyad 847,000

sociedad concesionaria convento viejo (33.3%)


Concession start up 2007

Operation start up 2009


Total investment (UF) 519,066

Equity book & partners' subordin. debt (UF) 74,236

Value per DCF (UF) 265,000

plaza las condes (100%)

At the end of September, there were three concession projects in construction: Edificio Bodegas Sur Aeropuerto Arturo Merino Benítez [South Warehouse Building for the Arturo Merino Benitez Airport], the third stage of Convento Viejo reservoir, and works for the Plaza Sucre parking lots in Viña del Mar.

The operation for the Plaza Sucre parking lots concession is expected to begin on April 2015. The works have a 67% progress and their delivery has been delayed –it was first expected for 2014– due to a municipal use permit issued past the deadline for permits and land by the Viña del Mar Municipality. On top of this, there was a flood produced by problems with the rainwater catchment system and other services, unexpected events for which the construction company is not responsible.

Works for the Edificio Bodegas Sur Aeropuerto Arturo Merino Benítez [South Warehouse Building for the Arturo Merino Benitez Airport] project consider the construction of two buildings for a total of 22,703 m² and operations are expected to begin in June 2015. This concession was awarded to the consortium consisting of the companies Besalco Concesiones S.A. (30%) and Agunsa S.A. (70%) and it takes into account a sub concession with a duration of 15 years for the lease of offices and storage, manly for courier companies or those companies related to airport transport.

The beginning of the Convento Viejo reservoir operation is expected for December 2014, which considers de irrigation of 4,000 hectares in the Lolol area, totaling 21,157 hectares by mid-2017. This third construction stage will imply a total investment of UF1,262 thousands.

The subsidiary remains active when it comes to concession participation and studies, both in the public and private areas, especially those driven by the Chilean state within its Concession Plan 2014-2018, which, includes reservoirs, roads and highways, among others.

12


Eléctrica Aguas del Melado S.A. Company generated a total of 88 GWh in its first semester. On the other hand, Eléctrica Portezuelo will begin operating at the end of the year with an estimated annual generation of 30 GWh.

The company is still focusing on the operation of the first hydroelectric power station, Los Hierros (25MW) and on completing the works for the second project, Los Hierros II (5.5MW). Parallel to this, it has been carrying out environmental studies and it is waiting for the respective permits to be issued in order to start the works for the next projects.

4energía renovable s.a. (renewable energy)

Eléctrica Aguas del Melado S.A. company, which is in charge of the operation of Los Hierros power station, generated a total of 88 GWh during the period between January and September, which was distributed to the market at the electrical system’s marginal cost, so-called "spot". The graph indicates the monthly average variation that this price has suffered recently. During the period, and especially during September, 18 km of the canal had to be cleaned, which translated into a loss of work-days and the preventive maintenance of electric and hydraulic equipment. Both Andritz turbines were in perfect conditions. In the future, the canal will be cleaned in a more efficient way through the use of equipment that allows cleaning without cutting off the water flow. It is estimated that in normal operating conditions 145 GWh will be generated as of 2015. Eléctrica Portezuelo S.A. company, which is carrying out the Los Hierros II project, will run electrical tests with an hydraulic head during December to be able to start providing to the "spot" market in January. This company has an estimated annual generation of 30 GWh.

Both companies’ sales process follows its normal course. It is expected that the transaction, which has aroused great interest, is materialized during the first quarter of 2015. As a result of the aforementioned, the balances of Aguas del Melado and Eléctrica Potezuelo have been "deconsolidated" from the balance of Besalco Energia S.A. Its assets and liabilities are recorded in the Assets and Liabilities available for sale accounts and its profit is recorded within the Profit of Discontinued Operations in the Income Statement.



Ordinary incomes / CLP million 2,440) 4,874

Gross profit / CLP million 1,373) 1,047

Gross mar. less selling exp.(*)/ CLP mill. 937) 341

Net financial expenses / CLP million (401) 36

Profit of the period / CLP million 2,113) 405

Controllers profit/loss / CLP million 2,113) 405

Ebitda / CLP million 4,373) 370

Financial leverage -) 4.5

Liquidity ratio 1.0) 0.4

Total employees 67) 51

Energía Renovable Sept. 2014 Dec. 2013

MARGINAL COSTS USD/MWh - SUBSTATION ANCOA 220KV(SPOT PRICE)

2013 2014

jan feb mar apr may jun jul aug sep oct nov dec jan feb mar apr may jun jul aug sep

250

225

200

175

150

125

100

75

50

25

0

USD/MWh

13


This subsidiary is studying several proposals, both in the public and private sectors, highlighting the mining and port areas significantly.

4md montajes s.a. (60% besalco)4(industrial constructions)

At the end of September the company sustained a backlog of USD$5 million which corresponds entirely to the Habilitación Chimenea ex Horno Reverbero [Modification of the former Reverbero Furnace Chimney] project, carried out for Codelco’s El Salvador division.

This project has reached a 10% of progress with an estimate completion date of February 2015. Currently, there are negotiations to modify the scope of the contract per the principal’s request.

On the other hand, this subsidiary studying several proposals, both in the public and private sectors, highlighting the mining and port areas significantly. At the same time, it awaits the client’s resolution with regards to the offers already on the table.

Ordinary income as of September 2014 reached CLP 21,789 million, 10% lower than what was recorded in the same period of 2013. However, the profit and Ebitda of the period increased by 55% and 52% respectively.

To date, the company does not have any financial debs, retaining a high level of liquidity to face its projects.



8

38

14

8 5



Ordinary incomes / CLP million 21,789 24,203 -10% 3,957 10,359 -62%

Gross profit / CLP million 4,758 2,205 116% 2,183 775 182%

Gross mar. less selling exp.(*)/ CLP mill. 3,417 1,077 217% 1,592 462 245%

Net financial expenses / CLP million 40 196 -79% 59 61 -3%

Profit of the period / CLP million 1,775 1,145 55% 1,309 476 175%

Controllers profit/loss / CLP million 1,775 1,145 55% 1,309 476 175%

Ebitda / CLP million 2,085 1,369 52% 1,592 515 209%

Financial leverage - 0.0

Liquidity ratio 3.6 2.0

Total employees 81 1,152

Besalco MD Montajes Sept. 2014 Sept. 2013 Variation III Q 2014 III Q 2013 Variation

14


Ordinary income as of September was of CLP 6,932 million, which shows a 17% increase compared to the same period of the previous year.

4besco s.a. (peru)

A strong boost was given in the last years to the real estate area of this subsidiary in Peru, retaining the vertical development policy in the sense that it integrates land purchase, design, construction, and finally, the sale of departments and housing. This strategy is maintained both for those projects developed entirely by Besco as well as for those in alliance with other real estate agencies.

Construction projects belonging to Besco are Central 10.5, Nuevo Alcázar 2, Zafiro Barranco, Los Prados Chaclacayo, and Condominio Villa Santa Clara, with a total of 1,951 houses from which 1,402 have already been sold.



38

19

12

29

24

increase compared to the same period of the previous year. On the other hand, the shareholder’s profit amounted to CLP 2,338 million within the same nine months, 12% higher than what was recorded in the same period of 2013.

This increase in profits –compared to the same period of the previous year and the prior quarters– occurred due to the significant amount of contracts and sales achieved by the company, which has focused its efforts exclusively on the real estate area since the end of 2013.

This effect could also be seen in the results stemming from the shares participation in associates account, which showed a profit of CLP 1,850 million. It corresponds entirely to the Parque Central project which has 2,112 apartments.



Ordinary incomes / CLP million 6,932) 5,913) 17% 2,923) 1,097) 166%

Gross profit / CLP million 2,476) 1,917) 29% 901) 466) 93%

Gross mar. less selling exp.(*)/ CLP mill. 1,394) 979) 42% 332) 182) 83%

Net financial expenses / CLP million (60) (48) 25% (66) (6) -

Profit of the period / CLP million 2,278) 2,034) 12% 999) 533) 87%

Controllers profit/loss / CLP million 2,338) 2,094) 12% 1,033) 546) 89%

Ebitda / CLP million 2,708) 2,331) 16% 1,269) 564) 125%

Financial leverage 0.2) 0.3)


Total employees 326) 125)

Besco (Peru) Sept. 2014 Sept. 2013 Variation III Q 2014 III Q 2013 Variation

Projects in consortia are Parque Central and Alameda Santa Ana, with a total of 2,376 apartments.

New ground was acquired recently in which 432 apartments are expected to be constructed.

The Parque de Comas project, a joint venture with the Graña y Montero company considers the construction of 10,624 apartments with "Techo Propio y Mi Vivienda" subsidy characteristics and whose construction works are expected to start on the first quarter of 2015.

Ordinary income as of September was of CLP 6,932 million, which show a 17%

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Among its range of projects, the construction of high-voltage power lines –especially for mining and power concessionaries– and the installation of these lines for the real estate stand out.

Kipreos Ingeniería stands out due to its career and its experiences in high, medium, and low voltage electric system design, construction, and maintenance.

Among its range of projects, the construction of high-voltage power lines –especially for mining and power concessionaries– and the installation of these lines for the real estate stand out.

4kipreos (civil works for energy transmission)


Dec 11 Dec 12 Dec 13

10

77

75

Sep 14

68

Currently, its main projects include the construction of high-voltage power lines for the Eletrans S.A. company in the Ciruelos-Pichirropulli (XIV Region) and the Cardones-Diego de Almagro (III Region) works.



Ordinary incomes / CLP million 23,037) 10,742) 114% 5,821) 658) 1,230) -46% 97)

Gross profit / CLP million 3,026) 1,055) 187% 942) 47) 293) -84% (45)

Gross mar. less selling exp.(*)/ CLP mill. 1,905) 176) 985% 586) (29) 159) -118% (73)

Net financial expenses / CLP million (60) (22) 168% (20) (8) (5) 73% (2)

Profit of the period / CLP million 1,353) 3) n.a 388) 37) 114) -67% 1)

Controllers profit/loss / CLP million 1,353) 3) n.a 388) 37) 114) -67% 1)

Ebitda / CLP million 2,244) 490) 358% 714) 81) 345) -76% (16)

Financial leverage 0.0) 0.0) 0.2) 0.3)

Liquidity ratio 1.2) 1.6) 1.8) 1.5)

Total employees 581) 418) 24) 26)

Kipreos Sep. 2014 Sep. 2013 Variation III Q 2014 Sep. 2014 Sep. 2013 Variation III Q 2014

kipreos ingeniería (68% besalco) kipreos aéreos (68% besalco)

On its part, Kipreos Aéreos works in different projects, both for the public and private sector, supported by the use of helicopters.

This company’s backlog amounts to USD$68 million and it has many works in four contracts that will be completed between April 2015 and May 2017.

Profit as of September 2014 was if CLP 1,353 million, far higher than the CLP 3 million obtained during the same period of the previous year. At the same time, the Ebitda increased to CLP 2,244 million in comparison to the CLP 490 million achieved in the same comparison period.

chilean company for civil works and more · 7% decrease in operating income and a loss of clp...

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