Skip to main content


Showing posts from April, 2009

Chile’s Endesa Plans to Invest $1 Billion in 2009

By Nathan Gill April 30 (Bloomberg) -- Empresa Nacional de Electricidad SA, Chile’s biggest power generator, said it plans to invest about $1 billion this year to expand capacity.
The Santiago-based company known as Endesa will invest in wind farms, a natural gas plant and a coal steam plant, adding 680 megawatts of capacity, Chief Financial Officer Manuel Irarrazaval said during a conference call today.
Endesa, which also operates in Brazil, Peru and Colombia, is expanding in Chile after sales there helped drive first-quarter earnings growth. Fuel costs fell in Chile and hydropower capacity rose after rainfall returned following a drought that hurt generation last year. 
Regulations in Chile “were adopted to be more pro investment,” Francisco Errandonea, head of research at Santander Investment, said today by phone from Santiago. “Chile has not only growth in demand, it is also in a process of replacing the natural gas plants that they don’t now expect to use in the long term.”
Net …

Endesa Chile First-Quarter Profit More Than Doubles

By Nathan Gill and James Attwood April 29 (Bloomberg) -- Empresa Nacional de Electricidad SA, Chile’s biggest power generator, said first-quarter profit more than doubled as revenue rose in Chile.
Net income rose to 166 billion pesos ($283 million) from 68.4 billion pesos a year earlier, the Santiago-based company said today in an e-mailed statement. Revenue jumped 24 percent to 660.8 billion pesos. 
“We’ve seen an increase in generation in the first quarter” in Chile, Pamela Auszenker, an analyst of BCI Corredor de Bolsa SA said in a telephone interview today. She has a “buy” rating on the stock. 
Fuel costs fell in Chile and hydropower capacity rose after rainfall returned following a drought that hurt generation last year. Rising energy prices also increased profit in Colombia and Peru, the company said. 
Net income beat the 126 billion peso average estimate of four analysts surveyed by Bloomberg. Endesa rose 11.85 pesos, or 1.6 percent, to 754 pesos in Santiago trading.

Lan Airlines Profit Falls 35% on Fuel-Hedging Loss

By Nathan Gill April 28 (Bloomberg) -- Lan Airlines SA, Chile’s biggest carrier, reported a 35 percent drop in first quarter profit after losing $57.9 million from wrong way bets on fuel prices.
Net income slipped to $65 million from $99.6 million a year earlier, the carrier said in an e-mailed statement today. The airline reported earnings under International Financial Reporting Standards for the first time. Operating revenue fell 15 percent to $882.2 million.
Carriers worldwide including Cathay Pacific Airways Ltd. and Delta Air Lines Inc. have posted fuel-hedging losses after oil prices tumbled from a record last year. Lan’s sales fell as lower fuel-surcharges eroded gains from an 8.9 percent increase in passenger traffic.
For the full year, the company said it expects passenger traffic to grow 10 percent, mainly from rising demand on domestic routes in Chile, Peru and Argentina. First-quarter profit was in line with the $67.6 million average estimate of four analysts surveyed by …

Chile Tests Suspected Swine Flu Cases; No Cases Registered

By Nathan Gill April 28 (Bloomberg) -- Chilean health authorities are investigating 24 possible cases of swine flu, according to a statement posted on the health ministry’s Web site.

Five suspected cases have been ruled out while no cases have been confirmed in the country, Alvaro Erazo, Chile’s Minister of Health told reporters today.

Chile’s Pinera Transfers Assets, Seeks Advice on Lan Airlines

By Nathan Gill and James Attwood
April 27 (Bloomberg) -- Sebastian Pinera, the presidential candidate for the Alliance for Chile coalition, said he’s taking advice on how to sell his stake in Lan Airlines SA and placed shares of other companies he owns in a blind trust.

Pinera, who lost the last presidential election in 2005 to Michelle Bachelet, transferred control of his other stock holdings to brokerages Banco BICE, Celfin Capital, Larrain Vial and Moneda, according to a speech posted today on his Web site. Pinera also commissioned studies into unloading his Lan stake before Chile’s next president is scheduled to take office.

The billionaire politician handed over management of stocks and resigned as a director on company boards as Chile’s congress continues to debate a bill that would establish rules for politicians putting investments into blind trusts to prevent conflicts of interest.

“I got tired of waiting,” Pinera said. The ruling coalition parties “have been saying they wou…

Chile Police Use Teargas to Break Up Strike Protests

By Nathan Gill and Sebastian Boyd
April 16 (Bloomberg) -- Chilean police used teargas and water cannons to break up demonstrations in Santiago as unions called a national strike to protest layoffs and demand higher taxes on the rich.

About 12,000 people marched today in support of the strike, according to Radio Cooperativa. Chile job losses may reach 250,000 this year and the unemployment rate may rise above 12 percent for the first time in 20 years, according to Santiago-based bank Grupo Security SA. Chile’s economy is shrinking at the fastest pace since 1999 as the global economic slowdown crimps demand for its exports.

Companies are firing more workers than necessary to weaken unions and undercut pay demands, Cristian Cuevas, a national secretary of the union umbrella group called Central Workers’ Unit said in a telephone interview.

“Workers shouldn’t pay for the crisis because the workers didn’t start it,” Cuevas sad. “Financial speculation” triggered the global economic crisis…

Chile’s Pharmacy Fasa to Reimburse Customers for Inflating Drug Prices

By Nathan Gill and James Attwood April 16 (Bloomberg) -- Farmacias Ahumada SA, Chile’s second-biggest drugstore chain known as Fasa, will reimburse customers hit by inflated medicine prices.

Fasa plans to return 2.5 billion pesos ($4.3 million) through refunds or credit for new purchases, Alejandro Rosemblatt, the company’s chief executive, told reporters in Santiago today.

Fasa said last month it joined with rivals to raise prices of 222 medications. The Santiago-based company agreed with regulators to pay $1 million in the case involving drugs sold from December 2007 to March 2008.

“Farmacias Ahumada will compensate the difference produced in prices during this period, in these products, through a mechanism that will hopefully reach the largest number of people possible,” Rosemblatt said to reporters today in Santiago. “We are convinced that this is an adequate way to respond to this issue.”

Chile's Vapores Rises Most in Six Years on Financing Talks

By Nathan Gill and James Attwood
April 14 (Bloomberg) -- Cia. Sudamericana de Vapores SA, Latin America’s largest container ship company, rose the most in six years in Santiago after saying it’s in talks to raise $750 million to turn around unprofitable shipping operations. 
The Valparaiso, Chile-based company plans to sell about $350 million in new shares and may raise $400 million from companies it leases ships from, it wrote in a statement on Chile’s securities regulator’s Web site.

The shares jumped 14 percent to 373 pesos, the biggest gain since April 2003. Before today, Vapores was the worst performer in Chile’s Ipsa index in the last six months, losing a third of its value compared with the index’s 12 percent gain. 
“It’s not surprising stocks are rising with a small glimmer that the company won’t go broke,” Cristina Acle, head of research at CorpResearch SA, said by phone from Santiago.
Chairman Jaime Claro is seeking funds after Vapores reported a $38.6 million net loss for 2…

Chile’s Pinera to Transfer Stock Holdings This Month

By Nathan Gill and James Attwood
April 8 (Bloomberg) -- Sebastian Pinera, the presidential candidate for the Alliance for Chile coalition, said he plans to begin handing over control of his stock holdings before this year’s elections.

“In April I’m going to transfer voluntarily the administration of all investments in public companies to Chilean financial institutions,” Pinera told reporters today in images broadcast by the Catholic University station.

The entrepreneur-turned-politician, who lost the last presidential election to Michelle Bachelet, will place shares in a blind trust to avoid the appearance of a conflict of interest, newspaper La Tercera reported today.

Pinera controls the country’s biggest air carrier, Lan Airlines SA, via an agreement with Chile’s Cueto family. He was fined almost $700,000 in July 2007 for buying Lan shares prior to the release of quarterly earnings.

Pinera sold his remaining stock in Farmacias Ahumada SA for about $2.4 million on April 3 after t…

Tenaris Falls Most in a Week as Oil Prices Decline

By Nathan Gill April 7 (Bloomberg) -- Tenaris SA, the world’s biggest maker of seamless steel tubes for oil and gas pipelines, dropped the most in a week as the price of crude fell for a third day.
Tenaris declined 4.5 percent to 40.45 pesos in Argentine trading, the steepest fall since March 30.
“There is a high implicit correlation between the price of oil and the shares of petroleum service companies,” Christian Reos, head of research at Allaria Ledesma y Cia., said today by phone from Buenos Aires. “Oil has been falling and the companies in the sector are falling as well.”
Crude oil fell on speculation that a report tomorrow will show U.S. supplies increased as the recession curbs fuel demand. Oil futures also dropped as falling U.S. equities signaled that fuel demand in the world’s biggest energy-consuming country will decline. Oil for May delivery dropped $2.02, or 4 percent, to $49.03 a barrel today. 
Tenaris’s American depositary receipts will probably rise to $38 by the end …

Chile's Vapores Rating Cut to B- From BB- by S&P on Shipping Outlook

By Nathan Gill April 2 (Bloomberg) -- Cia. Sudamericana de Vapores SA’s long-term credit rating was cut three levels by Standard & Poor’s, which cited the outlook in container shipping markets and the company’s “weak” liquidity.

S&P lowered Latin America’s largest container ship company’s credit rating to B- from BB-, according to a statement on the rating company’s newswire.
“Absent a significant restructuring of its business strategy, we expect CSAV to continue posting significant losses that would challenge its credit quality by further eroding its operational performance, its financial risk profile, and its liquidity position,” S&P said.

Chile President Bachelet’s Approval Rating Increases to a Record High

By Nathan Gill
April 2 (Bloomberg) -- Chilean President Michelle Bachelet’s approval rating rose to 62.2 percent in March, the highest since she took office two years ago, according to a poll published today by Santiago-based Adimark Gfk.
Finance Minister Andres Velasco’s popularity also rose, giving him a 57.1 percent backing and making him the most esteemed minister of the president’s cabinet, Adimark said. Bachelet’s approval rating was 58.5 percent in February.
About 56 percent of Chileans approve of the way the president is handling the South American country’s economy, an increase of 25 percentage points since the economic crisis began in September, Adimark said.
Adimark polled 1,020 adults by telephone between March 6 and March 31. The poll has a margin of error of 3 percentage points.

Anglo American to Invest $500 Million in Chile Copper Mine

By Nathan Gill April 2 (Bloomberg) -- Anglo American Plc will invest $500 million in its Los Bronces copper mine in Chile this year, Chilean Mining Minister Santiago Gonzalez said.
An expansion project at the mine could create 4,000 jobs by the beginning of 2010, Gonzalez, chairman of Chile’s state-run mining company, Codelco, said today in Santiago after meeting with Anglo American Chief Executive Officer Cynthia Carroll.
Expanding the South American copper mine will cost $2.2 billion to $2.5 billion, London-based Anglo American said Feb. 20 in its 2008 earnings report. That’s more than the $1.74 billion the company estimated in July. Full production is scheduled to start in 2012.

"The growth plan that Anglo American has in Los Bronces is very important," Gonzalez said. "This year they will invest $500 million and we are optimistic that this will generate a large quantity of jobs."

Chilean Inflation to Slow to 3% ‘Soon,’ Finance Minister Velasco Says

By Nathan Gill      April 2 (Bloomberg) -- Chile’s inflation rate will fall to the central bank’s 3 percent target ‘soon” as prices for energy and food continue to decline, Finance Minister Andres Velasco said.

Chile’s central bank raised its benchmark interest rate to a decade-high of 8.25 percent last year after inflation surged to 9.9 percent. Since then, annual inflation has fallen to 5.5 percent as the global financial crisis chokes demand at home and abroad.

“We started the year with a short-term interest rate of 8.25 percent,” Velasco said today at a copper conference in Santiago. Chilean inflation will “soon return to the levels of approximately 3 percent, the goal of the central bank.”

Policy makers have cut 6 percentage points from their benchmark interest rate in the first three months of this year, including 2.5-point cuts at each of the central bank’s last two meetings, to push the overnight rate to 2.25 percent.