Annual Report 2009 - Isagen

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ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.80FINANCIALRESULTSMACROECONOMIC AND FINANCIAL CONDITIONSThe beginning of 2009 was fraught with uncertainties: the end of the international financialcrisis and its real impact on Latin American economies kept Colombia’s economy in permanentrestlessness, in addition to the troubled trade relations with Venezuela that endedup restricting business flow with the neighboring nation.Inflation in the country closed the year at 2%, one of the lowest in the country’s history andproduct of lower demand, economic deceleration and revaluation of the Colombian Peso.The productive activity was affected not only by a diminished internal demand, but alsoby the fall in exports , in particular to Venezuela; however, it must be highlighted herethat the last two quarters of the year showed lower reduction of industrial output thanprojected by experts, with the last quarter even reaching significant growth.CORPORATEVALUE RESULTSOPERATINGAND NON-OPERATING RESULTSBALANCE SHEETISAGEN STOCKPERFORMANCEThe price of the US Dollar closed the year 2009 at $2,043 (9.4% revaluation), making itthe third Latin American currency with the highest appreciation after the Brazilian Realand the Chilean Peso, with monetization of the non-financial public sector, the expectedhigher flow of Dollars explained by the indebtedness of some entities, and the announcementof higher oil reserves standing out as the main reasons for revaluation.Banco de la República kept an expansive monetary policy along the year, and as a consequenceof such, the intervention interest rate reached an all-time low, closing at 3.5%,explaining to great extent the ample liquidity enjoyed by the economy, in particularColombia’s financial system, which showed solidness in spite of the financial crisis andeconomic deceleration.Despite the uncertainty of international markets, the Colombian Stock Exchange presentedexcellent results with the IGBC appreciating above 53%, a situation that was therule in the main exchanges in the region like Argentina, Brazil, Mexico and Chile.Likewise, the fixed-income market exhibited very good performance with the low interestrates and low inflation having a direct effect on the appreciation of Treasuries.As regards to issuance of securities in the Stock Exchange, underwriting of debt securitiesworth $13 trillion, a Stock Exchange all-time high, stands out as a reflection of theContents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management
ANNUAL REPORT 2009 / ISAGEN S.A. E.S.P.81abundant liquidity enjoyed by the countryalong the year.There are high expectations for the year2010 when the world economy is supposedto enter a new expansion phase, and definitiverecovery will depend on the reaction ofthe USA economy as well as the behavior ofsome European countries whose fiscal situationis not well known. For Colombia, thebig challenges are: finding markets differentfrom with whom it has traditionally kept traderelations, a monetary policy that contributesto economic growth, and fiscal adjustmentby the Government.Relevant FiguresTABLE 20.RELEVANT FIGURES2009 2008 Variation(%)Revenues 1.410,552 1.231,700 14,5Costs of Sales 805,946 770,621 4,6Administration Expenses 85,568 73,191 16,9Operating Income 519,038 387,888 33,8EBITDA 622,513 493,986 26,0Income before Taxes 524,609 363,714 44,2Income Tax Provision 138,858 103,392 34,3Net Income 385,751 260,321 48,2TABLE 21.FINANCIAL INDICATORS2009 2008Profitability, return of EVA capital 9,93% 8,10%Profitability, return on equity 16,7% 12,4%Debt Service Ratio 9,02 5,83Leverage 0,77 0,50Financial Debt / EBITDA 1,57 1,09Delta EVA* 51,695 57,362* 2009 pricesContents Letter from the CEO Achievements2009Good GovernancePractices EvaluationCorporateManagementFinancial Management
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