6-K 1 d52863_6-k.txt FORM 6-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of November, 2002 ---------- PEHUENCHE ELECTRICITY COMPANY INC. (Translation of registrant's name into English) Santa Rosa 76 Santiago, Chile (Telephone: 562-6309000) (Address and telephone number of registrant's principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F |X| Form 40-F |_| Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes |_| No |X| If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_________. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EMPRESA ELECTRICA PEHUENCHE S.A. By: /S/ LUCIO CASTRO MARQUEZ Lucio Castro Marquez Chief Executive Officer Date: November 27, 2002 EMPRESA ELECTRICA PEHUENCHE S.A. Financial Statements September 30, 2002 and 2001 Contents: Balance Sheet Income Statement Statement of Cash Flow Management Analysis of the Financial Statements as of September 30, 2002 Ch$ : Chilean pesos ThUS$: Thousand of United States dollars Exchange rate: US$ 1 = Ch$ 748.73 EMPRESA ELECTRICA PEHUENCHE S.A. BALANCE SHEETS

EMPRESA ELECTRICA PEHUENCHE S.A. BALANCE SHEETS

EMPRESA ELECTRICA PEHUENCHE S.A. INCOME STATEMENTS Sept 30, 2002 Sept 30, 2001 Th Ch$ Th Ch$ -------------------------------------------------------------------------------- Operating Income -------------------------------------------------------------------------------- Operating revenues 66,589.1 69,203.8 Operating expenses (23,611.0) (40,116.3) OPERATING MARGIN 42,978.1 29,087.5 Selling and administrative costs (230.6) (214.8) -------------------------------------------------------------------------------- OPERATING INCOME 42,747.5 28,872.7 -------------------------------------------------------------------------------- Non-Operating Results -------------------------------------------------------------------------------- Interest income 3,128.9 394.5 Income on investments in related companies 2.3 1.9 Other non-operating income 2,195.5 215.2 Interest expense (16,716.9) (17,094.9) Other non-operating expenses (3,500.7) (233.4) Price level restatement (241.2) (184.9) Exchange differences (13,226.7) (17,531.0) -------------------------------------------------------------------------------- NON OPERATING RESULTS (28,358.9) (34,432.6) -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Income before income taxes 14,388.7 (5,559.9) -------------------------------------------------------------------------------- Income taxes (2,641.6) 0.0 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- NET INCOME (LOSS) 11,747.1 (5,559.9) -------------------------------------------------------------------------------- EMPRESA ELECTRICA PEHUENCHE S.A. STATEMENTS OF CASH FLOWS For the period from January 1 through September 30, 2002 and 2001

EMPRESA ELECTRICA PEHUENCHE S.A. MANAGEMENT ANALYSIS OF THE FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2002 The Company's Financial Statements for the period January-September of 2002 show a net income of ThUS$ 11,747.1, explained by an operating income profit of ThUS$ 42,747.5 and a non-operating results loss of ThUS$ 28,358.9. For the period January-September of 2001 the company's financial statements showed a net loss of ThUS$ 5,559.9. ANALYSIS OF THE INCOME STATEMENT (Figures in thousands of US dollars as of September 30, 2002) Operating Revenues for the period January-September of 2002 reached ThUS$ 66,589.1, which is 3.8 % lower than that of the period January-September of 2001. Operating expenses for the period January-September of 2002 reached ThUS$ 23,611.0, which are 41.1 % lower than those of the period January-September of 2001. Administrative and selling expenses for the period January-September of 2002 reached ThUS$ 230.6, which are 7.3 % higher than those of the period January-September of 2001. Operating income for the period January-September of 2002 reached ThUS$ 42,747.5, which is 48.1 % higher than that of the period January-September of 2001, basically explained by lower energy purchases in the year 2002. Non-operating results for the period January-September of 2002 reached a loss of ThUS$ 28,358.9, compared to the loss of ThUS$ 34,432.6 in the period January-September of 2001. This is primarily explained by higher interest income that amounted ThUS$ 3,128.9 in the period January-September of 2002, compared to ThUS$ 394.5 in the period January-September of 2001, as well as a smaller exchange differences loss in the period January-September of 2002, compared to the figure for the same period of 2001.

The operating revenues comprise the energy generation that is its line of business. The company's business was developed in the Chilean market and more specifically in the Central Interconnected System (SIC). The operating expenses are basically comprised of tolls of energy transmission, depreciation of fixed assets, energy purchases and expenses characteristic of the operation of the hydroelectric power stations. -------------------------------------------------------------------------------- Profitability Sept 30, 2002 Sept 30, 2001 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Return on total assets 2.28 -1.13 -------------------------------------------------------------------------------- Return on shareholders' equity 5.57 -2.91 -------------------------------------------------------------------------------- Return on operating assets 9.67 6.23 -------------------------------------------------------------------------------- Earnings per share (Ch$) 14.36 -8.09 -------------------------------------------------------------------------------- Return on dividends 3.93 -- -------------------------------------------------------------------------------- PRINCIPAL ASSETS The company's assets are shown in accordance with generally accepted accounting principles in Chile and the regulations and instructions of the Superintendence of Securities and Insurance in Chile. Significant differences compared with market values are not shown. TARIFFS Finally, regarding the tariff setting of node prices for regulated customers on the Alto Jahuel node on the Chilean SIC that is in force from May 1, 2002, this represented a 3.4 % reduction in dollar terms. The Chilean electricity Law, that was amended in 1999, established the security of the system in any event and forced Pehuenche to redefine its commercial policy for avoiding risks not offset by the tariff settings. CASH FLOW ANALYSIS During the period January-September of 2002, the company's cash flow from operating activities totaled ThUS$ 40,393.2, which basically results from the difference between sales and financial and operational expenses of the period, but also considering the effects of the decrease in current assets for ThUS$ 5,918.0 and the decrease in current liabilities for ThUS$ 4,971.2. The difference between the operational flow and the net income for the period is basically explained by the exchange differences loss of ThUS$ 13,226.7 and the depreciation for the period of ThUS$ 11,850.3. Cash flow from financing activities during the period totaled ThUS$ (40,399.2), which basically resulted from proceeds from loans with related companies of ThUS$ 104,373.5, proceeds from capital increase through the issue of shares of ThUS$ 2,424.6, payment of loans with related companies of ThUS$ 107,230.3, payment of loans of ThUS$ 31,858.3 and payment of dividends of ThUS$ 9,888.0. MARKET RISK o The company has a high percentage of its credits denominated in dollars, because in the Chilean electric legislation energy prices are strongly correlated with this currency. Nevertheless this natural covering of economic nature, in a scenario of high volatility of the dollar during the year 2002 the company continued with its policy of partially cover its liabilities denominated in dollars, in order to attenuate the fluctuations that generate in the results the variations of the exchange rate. As of September 30, 2002, the company has covered by future contracts Dollar-UF an amount of US$ 195 million, compared with US$ 223 million of the same period of 2001. The company's hedging policy is to hedge from 60% to 70% against accounting exposure. o In terms of interest rate risk, the company has 100 % of its credits in fixed rates. o The company's contribution margin is directly affected by the hydrological condition of the year. Basically, in extreme dry years the generating cost and the spot market price can be instantly increased by more than 6 times. The average energy generation of Pehuenche is 3,500 GWh, that diminishes to approximately 2,050 GWh in an extremely dry year.

PEHUENCHE ELECTRICITY CO INC 6-K