Bloomberg News

Colbun Falls as Santander Removes ‘Buy’ on Project Delays

October 03, 2011

(Updates with closing share price in second paragraph.)

Oct. 3 (Bloomberg) -- Colbun SA, Chile’s second-largest power producer, fell for the first time in three days after Banco Santander SA cut its rating to “hold” from “buy,” citing results that missed estimates and project delays.

Colbun retreated 2.5 percent to 126.53 pesos at 3:15 p.m. New York time in Santiago trading, erasing gains in the previous two sessions.

Santander analysts Cristian Jadue, Francisco Errandonea and Marcio Prado set a 2012 price estimate of 145 pesos for the company controlled by Chile’s Matte family, according to a note to clients distributed by e-mail.

Colbun’s first-half profit was affected by higher operating costs and “lower hydro conditions than we had expected,” the Santander analysts said. They cut their 2011 forecast for earnings before interest, tax, depreciation and amortization by 47 percent to $141 million from $266 million.

The estimated start of the company’s 309-megawatt Angostura hydroelectric project was pushed back to 2014 from 2013, Santander wrote.

Colbun had a net loss of $45 million in the first six months of the year compared with a profit of $78.3 million a year earlier, according to data on the Chilean securities regulator’s website. Sales rose to $651 million from $490 million over the same period.

Colbun, based in Santiago, is Chile’s biggest electricity generator by market value after Empresa Nacional de Electricidad SA.

--Editors: James Attwood, Richard Richtmyer

To contact the reporter on this story: Eduardo Thomson in Santiago at

To contact the editor responsible for this story: David Papadopoulos at

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