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January 30th 2015
Credicorp Capital Research
Andean Daily Report
CREDICORP CAPITAL RESEARCH
Chile: +(562) 2450 1600
Colombia: +(571) 339 4400 Ext. 1505
Peru: +(511) 205 9190 Ext. 36070
V a lua tions
P / E
CHILE
EV / EBITDA
P / BV
2 0 14 E 2 0 15 E 2 0 14 E 2 0 15 E
LTM
Country
 Unemployment reaches 6.0% in October-December
Chile
18.7x
16.1x
9.3x
8.6x
1.7x
 Endesa Chile 4Q14 Results: EBITDA in line, while EPS below our
forecast due to provision for HidroAysen and Punta Alcalde’s write-offs
Colombia
19.2x
22.0x
8.1x
8.4x
1.4x
Peru
15.3x
13.9x
8.0x
7.3x
1.3x
 Endesa Chile announces provisions associated to the write-off of
HidroAysen and Punta Alcalde
 Enersis 4Q14 Results: strong results above our estimates driven by
Dx business
COLOMBIA
 National unemployment increased in Dec-14 while the urban labor
market remained strong
 Imports increased by 6.4% y/y in Nov-14, deteriorating the trade
balance further
 Cemex Latam Holdings to report fourth quarter 2014 results on
February 4, 2015
 Pacific Rubiales clarified that has no additional information regarding
to its stock price
PERU
 AIH issues PEN10mn in commercial paper in Peruvian capital markets
 Southern Copper Corporation awaits the government's approval of
construction permits for the Tía María project
Index
Last
S&P MILA 40
S&P INDEX
Chile
Colombia
Peru
Mex ico
Brazil
Equities Latam
598
2,021
3,840
1,408
13,465
41,862
47,762
2,652
Fx Rates
Last
CLP / US$
UF / CLP
Peru / US$
Colombia / US$
Brazil / US$
CLP / Euro
Euro / US$
628
24,564
3.02
2,412
2.61
710
1.13
Commodities
Last
Copper (US$/lb)
Gold (US$/oz)
Silv er (US$/oz)
Brent (US$/bbl)
Pulp (US$/MT)
WTI (US$/bbl)
245
1,256
16.8
47
930
45
D/D %
YTD%
Local USD
Local USD
-0.9% -0.9%
-6.1% -6.1%
1.0%
1.0%
-1.8% -1.8%
-0.2% -0.9%
-0.3% -3.6%
0.0% -2.0%
-6.9% -8.2%
-1.2% -1.2%
-9.0% -10.3%
-0.7% -1.9%
-3.0% -3.8%
0.1% -1.2%
-4.5% -3.2%
-0.8% -0.8%
-2.8% -2.8%
D/D %
YTD%
0.8%
0.0%
-0.3%
2.0%
1.2%
1.1%
0.3%
3.4%
-0.3%
1.5%
1.5%
-1.5%
-3.1%
-6.4%
D/D %
Local USD
-1.1%
-2.4%
-7.3%
1.3%
0.0%
0.2%
YTD%
Local USD
-13.2%
6.0%
7.5%
-16.0%
-0.2%
-16.4%
This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A Sociedad Comisionista de Bolsa and/or Credicorp Capital S.A.A. and/or its subsidiaries (hereinafter jointly called “Credicorp
Capital”), therefore, no part of this the material or its content, nor any copy of it may altered in any way, transmitted, copied or distributed to any third party without prior and express written consent of
Credicorp Capital. In making this report, Credicorp Capital has relied on information from public sources. Credicorp Capital has not verified the truthfulness, completeness or accuracy of the information
accessed, nor has audit the information in any way. Accordingly, this report does not constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the
information contained herein or any other written or oral information furnished to any person and/or their advisors.
Chile
Economics and Politics
Unemployment reaches 6.0% in October-December
The unemployment rate during the October-December period reached 6.0%, in line with the
market consensus (6.0%). The unemployment rate implies a 10bp decline from the prior
September-November read (6.1%).
Company News
Endesa Chile 4Q14 Results: EBITDA in line, while EPS below our forecast due to provision
for HidroAysen and Punta Alcalde’s write-offs
(ENDESA CHILE: HOLD; T.P.: CLP 950)
Endesa
Y/Y
A/E
(%)
(%)
4Q14A
4Q13A
4Q14E
Rev enues
636,648
567,344
577,996
12.2%
EBIT
253,407
254,331
264,972
-0.4%
EBITDA
323,795
305,224
329,970
Net Income
146,438
141,899
184,420
EBITDA Mg. 50.9%
53.8%
57.1%
Net Mg.
25.0%
31.9%
(CLP mn)
23.0%
Endesa
2014
2015E
10.1% P/U
23.1x
18.1x
-4.4% EV/EBITDA
9.3x
10.5x
6.1%
-1.9% P/BV
2.7x
2.4x
3.2%
-20.6% Div . Yield
5.0%
2.7%
Endesa posted 4Q14 results with revenues slightly above our estimates, while EBITDA came
mostly in line. Positive results were led by Chile, which showed a 22.5% y/y increment in
operating income during the period. The latter was partially offset by weak results in Colombia
and Argentina, which posted decreases of 8.6% and 75.3% y/y in operating income, respectively.
EPS came in 20.6% below our forecast, largely due to provisions of CLP 78,251 mn made during
the period, associated to HidroAysen and Punta Alcalde’s write-offs, which were announced only
yesterday by the company and were not part of our estimates. Without this impact, Endesa’s net
income during the period would have increased 58.3% y/y, 21.8% above our forecast.
2
Endesa Chile announces provisions associated to the write-off of HidroAysen and Punta
Alcalde
(ENDESA CHILE: HOLD; T.P.: CLP 950) / (COLBUN: BUY; T.P.: CLP 196)
Through a material fact, Endesa informed yesterday that provisions of USD 121 mn and USD
22mn, associated to the write-off of
HidroAysen and Punta Alcalde, respectively, will be accounted in this year’s results. The latter is
explained by the risks associated to both projects, since the construction of HidroAysen or Punta
Alcalde is not a decision that depends only on Endesa. The stock fell 3.2% yesterday, as the
market reacted negatively to this news. As a reminder, Colbun has activated roughly USD 140 mn
of HidroAysen on its balance sheet. Colbun has not indicated yet if it will provision a write-off or
not. In addition, on another material fact, Endesa Chile informed that it reached an agreement
with the engineering and construction companies Tecnimont and SES, both involved in the
expansion project of the Bocamina complex, to settle an arbitrage process . The mentioned
agreement will translate into a higher capex in Bocamina, which is estimated to reach USD 125
mn. We view this news as negative for Endesa.
Enersis 4Q14 Results: strong results above our estimates driven by Dx business
(Enersis: BUY; T.P.: CLP 215)
Enersis
(CLP mn)
4Q14A
4Q13A
4Q14E
Y/Y
A/E
(%)
(%)
Enersis
2014
2015E
Rev enues 2,044,613 1,670,991 1,824,297 22.4%
12.1%
P/U
16.1x
14.7x
EBIT
627,069
492,380
547,023
27.4%
14.6%
EV/EBITDA
6.0x
6.3x
EBITDA
778,906
617,344
685,550
26.2%
13.6%
P/BV
1.6x
1.4x
Net Income 338,026
190,614
245,608
77.3%
37.6%
Div . Yield
3.6%
2.7%
EBITDA Mg. 38.1%
36.9%
37.6%
Net Mg.
11.4%
13.5%
16.5%
Enersis posted 4Q14 results with revenues, EBITDA and net income above our estimates. Strong
results were driven by the distribution segment, with a 75.6% y/y increment in operating income.
This is explained by better results in Chile (+27% y/y), Argentina (+258% y/y) and Brazil (+174%
y/y). We highlight better results in Brazilian distribution companies is largely explained by an
increased regulatory revenue approved by the government in December 2014. In the Gx
business, results were roughly plane y/y, as positive results in Chile (+22.5% y/y) were offset by
weak results in Argentina (-75.3% y/y) and Colombia (-8.6% y/y). EPS increased 77.3% y/y,
37.6% above our forecast.
3
Colombia
Economics and Politics
National unemployment increased in Dec-14 while the urban labor market remained strong
In Dec-14 national unemployment stood at 8.7%, 0.3pp above Dec-13’s figure (8.4%). However,
this is second lowest unemployment rate for a month of December. The increase of national
unemployment came after the reduction of the employment rate from 59.1% in Dec-13 to 58.9%
in Dec-14 while the participation rate remained unchanged at high levels (64.5%). In general,
unemployment fell in 16 out of the 23 cities of the sample, with 12 of those cities posting a single
digit rate.
On the contrary, the urban labor market remained dynamic, with its unemployment rate
decreasing by 0.4pp from 9.7% in Dec-13 to 9.3% in 2014 amid a significant increase in
employment rate from 61.1% to 62.2% and even when the participation rate reached a new
record high (65.8%; +0.9pp).
Consistently, the sectors that led jobs creation in the last month of 2014 were real estate (+9.9%
y/y), transportation (7.5%) and industry (5.5%). On their part, agriculture and ‘other sectors’
(which includes oil and mining) cut jobs by 1.4% y/y and 0.7% y/y, respectively.
Imports increased by 6.4% y/y in Nov-14, deteriorating the trade balance further
According to DANE, Colombia’s external purchases grew by 6.4% y/y during Nov-14(from USD
5,033 MM in Nov-13 to USD 5,354 MM). This behavior was mainly explained by an expansion of
manufacturing goods (12.1% y/y), while the groups of ‘fuels and extractive industries’ and
’agricultural products, food and beverages’ decreased by 11.2% y/y and 13.1% y/y, respectively.
Thus, imports have gone up 7.5% YTD.
With this result, the trade balance’s deficit stands at USD 4.6 bn YTD (Nov-13 YTD: USD +1.6
bn). We think this large deficit is mostly explained by the Cartagena’s refinery expansion process,
which has caused a relevant deterioration of the refined oil products component.
Company News
Cemex Latam Holdings to report fourth quarter 2014 results on February 4, 2015
(CLH: HOLD; T.P.: COP 20,100)
CLH will host a conference call and webcast presentation on February 4th 2015 (next
Wednesday) at 10:00 AM Bogotá time to discuss these results. The live presentation can be
accessed at www.cemexlatam.com, or interested parties may access the audio-only conference
call by dialing +1 847 585 4405 and entering the passcode 38818308.
4
Pacific Rubiales clarified that has no additional information regarding to its stock price
(PREC: UPERF; T.P.: COP 11,400)
The company was required by the Financial Superintendence of Colombia to tell the market that
they do not have additional information about the recent stock price plunge beyond the
international crude price that affects the whole industry.
Peru
Company News
AIH issues PEN10mn in commercial paper in Peruvian capital markets
(AIH: BUY; T.P.: PEN 3.30)
Through a company release, Andino Investment Holding announced the issuance of PEN 10mn
(~USD 3.3mn) in commercial papers for a year, with an interest rate of 2.75%.
Southern Copper Corporation awaits the government's approval of construction permits
for the Tía María project
The construction of the USD 1,200mn and 120,000 MT Cu/year Tía María mine from Southern
Copper Corporation, subsidiary of the México Group, has received its Environmental Impact
Assessment approval, but still lacks the treatment plant approval from the Government as
authorities of the Ministry of Energy and Mines said to local press.
5
Trading Information
Traded Volume
Country
Vol. (USDmn)
Best sector
Worst Sector
Chile
93.7
Retail / +2.55%
Utilities / -1.36%
Colombia
59.9
-
-
Peru
12.5
Serv ices / +1.22%
Others / -9.89%
Volume Leaders
Chile
USD Th.
Colombia
Clp. %
USD Th.
Peru
Cop. %
USD Th.
Pen %
Enersis
$ 14,453.2
-1.02%
Bancolombia
$ 15,921.8
0.28%
Luz del Sur
$ 1,470
Endesa
$ 8,293.3
-3.26%
Ecopetrol
$ 8,595.6
-0.51%
Minsur
$ 1,463
2.94%
Colbun
$ 6,489.6
-1.36%
PFGrupsura
$ 5,695.0
0.87%
Volcan-B
$ 1,447
-8.16%
COP
Cop.%
Top Winners
2.00%
Top Winners & Losers
Chile
Top Winners
Cencosud
CLP
Colombia
Clp.%
Top Winners
Peru
PEN / USD
%
$ 1,401
3.94%
Grupo Argos
$ 19,200
2.56%
Alicorp
$ 6.85
3.01%
Besalco
$ 315
3.45%
Bogota
$ 64,360
1.19%
Minsur
$ 1.75
2.94%
Falabella
$ 4,135
2.86%
PFGrupsura
$ 34,900
0.87%
Ferrey corp
$ 1.46
2.10%
Top Losers
COP
Cop.%
Top Losers
PEN / USD
Casa Grande
$ 6.65
-8.90%
Top Losers
CAP
Salfacorp
Entel
CLP
Clp.%
%
$ 1,598.1
-5.82%
Pacific Rubiales
$ 5,450
-13.49%
$ 423.0
-3.86%
Canacol
$ 6,250
-3.40%
Aceros Arequipa
$ 0.42
-8.70%
$ 6,017.1
-3.33%
CLH
$ 15,500
-3.13%
Volcan-B
$ 0.45
-8.16%
Sources: Bloomberg & Credicorp Capital
6
Economic Calendar
Chile
Date
28-Jan
29-Jan
29-Jan
30-Jan
Time
8:30
9:00
9:00
9:00
Indicator / Event
Manufacturing Index YoY
Retail Sales YoY
Unemployment Rate
Period
Consensus
Central Bank´s Traders Survey
Dec-14
Dec-14
Dec-14
6.0%
Credicorp
Capital
-
Actual
Previous
3.1%
1.9%
-
-1.1%
0.4%
6.1%
Actual
Previous
-
8.7%
7.7%
4.50%
Actual
Previous
-
0.23%
3.22%
-0.31%
Colombia
Date
30-Jan
30-Jan
30-Jan
Time
13:00
13:00
-
Indicator / Event
Urban Unemployment Rate
National Unemployment Rate
Reference Rate
Period
Dec-14
Dec-14
Jan-15
Consensus
8.8%
4.50%
Credicorp
Capital
-
Consensus
-
Credicorp
Capital
-
Peru
Date
1-Feb
1-Feb
1-Feb
Time
2:00
2:00
2:00
Indicator / Event
CPI MoM
CPI YoY
Wholesale Price Index MoM
Period
Jan-15
Jan-15
Jan-15
Sources: Bloomberg & Credicorp Capital
7
Important Disclosures
This report is property of IM Trust S.A. and/or Credicorp Capital Colombia S.A. Sociedad Comisionista de Bolsa and/or Credicorp
Capital Perú S.A.A. and/or its subsidiaries (hereinafter jointly referred to as “Credicorp Capital”), therefore, no part of this the material
or its content, nor any copy of it, may be altered in any way, transmitted, copied or distributed to any third party without prior and
express written consent of Credicorp Capital.
In making this report, Credicorp Capital has relied on public information. Credicorp Capital has not verified the truthfulness,
completeness or accuracy of the information accessed, nor has audited the information in any way. Accordingly, this report does not
constitute a statement, assertion or guarantee (express or implied) as to the truth, accuracy or completeness of the information
contained herein or any other written or oral information furnished to any person and/or their advisors.
Unless otherwise stated, the information used in this report is not confidential, nor constitutes privileged information that may mean
the violation of the rules of the stock market, or that could mean failure to comply with copyright legislation.
This report is not intended and shall not be understood in any way as to: a) predict the future or guarantee a specific financial result;
b) ensure the fulfillment of the scenarios described in it; c) be an investment advice or opinion that could be considered as Credicorp
Capital recommendations.
The information contained in this report is only for referential purposes. While reading it, you should consider that the information
contained in this report may be oriented to a specific segment of clients or investors, with a certain risk profile that may not be yours.
Unless otherwise stated, this report does not contain investment recommendations or other suggestions that may be understood to
be given under the stock market intermediaries’ special duty to clients classified as investors. When recommendations are made, the
report will clearly specify the investors risk profile to which the recommendation is intended. Credicorp Capital can seek and/or
conduct business with companies that are mentioned in the report, and they can also execute buying and selling transactions of
shares that are mentioned.
It is important to state that the fluctuation in exchange rates can have adverse effects on investments values.
It is client responsibility to determine how to use the information contained in this report. Hence, the client is the sole responsible for
investment decisions or any other operation he/she might perform in the stock market based on this report. In other words, the
investment or operation result made by the client using the information contained in this report is of her/his sole responsibility.
Credicorp Capital does not assume any responsibility, obligation or duty for any action or omission derived from the use of this
document.
Credicorp Capital recommends to their clients to ask for professional advice from financial, legal, accounting, tax experts before
adopting an investment decision. Under no circumstances the information contained in this report may be considered as a financial,
legal, accounting or taxation opinion, neither as a recommendation or investment advice.
Rating System
N° of Companies
Companies covered
covered with this rating with this rating (% )
Rating
Definition
Buy
Expected returns of 5 percentage points or more in excess over
the expected return of the local index, over the next 12-18 months.
35
43%
Hold
Expected returns of +/- 5% in excess/below the expected return
of the local index over the next 12-18 months.
35
43%
Underperform
Expected to underperform the local index by 5 percentage points or
more over the next 12-18 months.
10
12%
Under Review /
Restricted
Company coverage is under review or restricted.
2
3%
82
100%
Total
CONTACT LIST
ANDEAN RESEARCH TEAM
SALES & TRADING
Heinrich Lessau
Hugo Horta
Director of Research
hlessau@credicorpcapital.com
Director of Sales & Trading
hhorta@credicorpcapital.com
EQUITY RESEARCH
EQUITY SALES & TRADING
CHILE
COLOMBIA
PERU
Hernán Arellano
Francisca Manuschevich
César Cuervo
Héctor Collantes
Head of Equities
harellano@credicorpcapital.com
Head of Equity Research
fmanuschevich@credicorpcapital.com
# (562) 2446 1798
Head of North Andean Equity Research
ccuervo@credicorpcapital.com
# (571) 339 4400 Ext 1012
Head of Equity Research
hcollantes@credicorpcapital.com
# (511) 205 9190 Ext 33052
Javier Günther
Marilyn Macdonald
Cristián Castillo
Christopher DiSalvatore
Jaime Pedroza
Fernando Pereda
Associate: Retail & Financials
cdisalvatore@credicorpcapital.com
# (562) 2446 1724
Senior Analyst: Utilities
jpedroza@credicorpcapital.com
# (571) 339 4400 Ext 1025
Senior Analyst: Cement & Utilities
fpereda@credicorpcapital.com
# (511) 205 9190 Ext 37856
International Equity Sales
jgunther@credicorpcapital.com
# (562) 2450 1695
International Equity Sales
mar_macdonald@btconnect.com
# (4477) 7151 5855
International Sales Trader
ccastillo@credicorpcapital.com
# (786) 999 1633
CHILE
PERU
COLOMBIA
Arturo Prado
Juan C. Domínguez
Iván Bogarín
René Ossa
Rodrigo Zavala
Juan A. Jiménez
Senior Analyst: Natural Resources
aprado@credicorpcapital.com
# (562) 2450 1688
Senior Analyst: Banks
jcdominguez@credicorpcapital.com
# (571) 339 4400 Ext 1026
Senior Analyst: Retail & Others
ibogarin@credicorpcapital.com
# (511) 416 3333 Ext 33055
International Equity Sales
reneossa@credicorpcapital.com
# (562) 2651 9324
Head of Equity - Peru
rzavala@credicorpcapital.com
# (511) 313 2918 Ext 36044
Head of International Equity Sales
jjimenez@credicorpcapital.com
# (571) 339 4400 Ext 1701
Andrés Ossa
Sebastián Gallego
Tamara Vasquez
Christian Munchmeyer
Ursula Mitterhofer
Santiago Castro
Analyst: Utilities, Telecom & I.T.
aossa@credicorpcapital.com
# (562) 2651 9332
Analyst: Oil & Gas
sgallego@credicorpcapital.com
# (571) 339 4400 Ext 1594
Research Assistant
tamaravasqueza@credicorpcapital.com
# (511) 416 3333 Ext 37946
International Sales & Trading
cmunchmeyer@credicorpcapital.com
# (562) 2450 1613
Sales & Trading
umitterhofer@credicorpcapital.com
# (511) 313 2918 Ext 32922
International Sales & Trading
scastro@credicorpcapital.com
# (571) 339 4400 Ext 1344
Tomás Sanhueza
Carlos E. Rodriguez
Analyst: Food & Beverages, Healthcare
tsanhueza@credicorpcapital.com
# (562) 2446 1751
Analyst: GEA & infrastructure
cerodriguez@credicorpcapital.com
# (571) 339 4400 Ext 1365
Pilar González
FIXED INCOME SALES & TRADING
Analyst: Transport
mpgonzalez@credicorpcapital.com
# (562) 2446 1768
Felipe García
Lourdes Alamos
Head of Fixed Income
fgarcia@credicorpcapital.com
Research Coordinator & Holdings Analyst
lalamos@credicorpcapital.com
# (562) 2450 1609
FIXED INCOME & ECONOMICS RESEARCH
CHILE
COLOMBIA
PERU
Gonzalo Covarrubias
Carlos Sanchez
Alfredo Bejar
Head of Capital Markets
gcovarrubias@credicorpcapital.com
Head of Fixed Income
csanchez@credicorpcapital.com
Head of Fixed Income / FX Trading
alfredobejarg@credicorpcapital.com
CHILE
COLOMBIA
PERU
# (562) 2450 1635
# (571) 323 9154
# (511) 205 9190 Ext 36148
Paulina Yazigi
Daniel Velandia
Irvin León
Guido Riquelme
Christian Jarrin
Vallerie Yong
Head of Research & Chief Economist
pyazigi@credicorpcapital.com
# (562) 2450 1637
Head of Research & Chief Economist
dvelandia@credicorpcapital.com
# (571) 339 4400 Ext 1505
Senior Fixed Income Analyst
ileon@credicorpcapital.com
# (511) 416 3333 Ext 37854
Head of Sales
griquelme@credicorpcapital.com
# (562) 2446 1712
RM Fixed Income Offshore
cjarrin@credicorpcapital.com
# (571) 340 2591
Local FI Senior Trader
vyong@credicorpcapital.com
# (511) 313 2902 - # (511) 313 2908
Felipe Lubiano
Sergio Ferro
Alberto Zapata
Belén Larraín
Andrés Valderrama
Evangeline Arapoglou
Senior Fixed Income Analyst
flubiano@credicorpcapital.com
# (562) 2651 9308
Fixed Income Analyst
sferro@credicorpcapita.com
# (571) 339 4400 Ext 1609
Fixed Income Analyst
azapatag@credicorpcapital.com
# (511) 205 9190 Ext 36018
Head of International FI Sales
blarrain@credicorpcapital.com
# (562) 2446 1720
Fixed Income Trader
jvalderramma@credicorpcapital.com
# (571) 323 9163
Senior International FI Trader
earapoglou@credicorpcapital.com
# (511) 313 2902 - # (511) 313 2908
Paulina Valdivieso
Camilo A. Durán
Paz Stepke
José Andrés Riveros
Lizeth Espíritu
Fixed Income Analyst
pvaldivieso@credicorpcapital.com
# (562) 2651 9337
Macro Analyst
caduran@credicorpcapital.com
# (5511) 339 4400 Ext. 1383
International Fixed Income Sales
pstepke@credicorpcapital.com
# (562) 2651 9336
Fixed Income Trader
jriveros@credicorpcapital.com
# (571) 339 4400 Ext 1180
Fixed Income Trader
lespiritu@credicorpcapital.com
# (511) 313 2902 - # (511) 313 2908
Andrés Osorio
Benjamín Diaz
Economist
aosorio@credicorpcapital.com
# (562) 2446 1760
Local Fixed Income Sales
bdiaz@credicorpcapital.com
# (562) 2446 1738