Greetings, welcome to Colbún's First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Miguel Alarcón. Please go ahead.
Hello, everyone, welcome to Colbún first quarter 2019 earnings review call. My name is Miguel Alarcón. I'm the Deputy CFO of the company, joining me today are Soledad Errázuriz and Isidora Zaldívar from the investor relations team. I hope that you have received our earnings report and an earnings review presentation that we have prepared to complement the analysis of our figures. Otherwise, you can download them at the investor section of our website. Agenda for today on slide three is as follows. We will begin talking about the highlights of the quarter, to then analyze in detail this quarter's results. After that, we will provide an update on our growth opportunities. Following the presentation, there will be time to participate in a Q&A session. Now, please go to slide number four to review the highlights of this quarter.
First, on April 25, the ordinary shareholders meeting approved the distribution of, first, a final dividend of $156 million, which added to the $84 million paid on December last year, will reach 100% of the distributable liquid income for the year 2018. Second, an additional dividend of $100 million charged to the accumulated income of the previous years. These dividends will be paid from May 7 of 2019 onwards. Second, regarding growth, on April 25 of this year, Colbún made public the acquisition of the projects Diego de Almagro Sur I and II in connection with the company's strategy to increase the share of renewable energies from variable sources in the generation mix. These projects are located in the Atacama Region, 27 km south of Diego de Almagro, and consider an overall capacity of approximately 210 MW.
Finally, regarding commercial strategy, during this year, the company has contracted approximately 300 GWh per year of its generation with new and regulated customers. Now, please go to slide number five to review the main consolidated figures of the company. Consolidated EBITDA for the first quarter of this year reached $162 million, in line with the EBITDA of $164 million for the first quarter of 2018. Consolidated net income, on its part, reached $66 million, 3% higher than the first quarter of 2018. Financial investments totalized $816 million, and net debt to EBITDA ratio is at 1.2 x. The average long-term financial debt interest rate in US dollars is 4.5%. Colbún has a total installed capacity of 3,893 MW, comprised of 2,250 MW in thermal units, 1,634 MW in hydraulic units, and 9 MW from the photovoltaic power plant, Ovejería .
In terms of transmission assets, it has 941 km of transmission lines and 28 substations. I will turn to Soledad, who will speak about the main drivers of last quarter's results.
Thank you, Miguel, and hello to everyone. Please continue to slide seven for our physical sales and generation balance analysis in Chile. Total generation for the period decreased by 3% compared to the first quarter of 2018, reaching 3.3 TWh, mainly due to lower hydro and coal generation, partially offset by an increase in gas and diesel generation. Physical sales during the first quarter of 2019 reached 3.2 TWh, 5% lower than the first quarter of 2018, mainly explained by lower sales to regulated customers. Spot market balance during the first quarter of 2019 recorded net sales for 673 GWh, higher compared with net sales for 525 GWh in the first quarter of 2018. Please continue to slide eight to analyze the EBITDA from the generation business in Chile for this quarter.
EBITDA for generation business in Chile reached $129 million this quarter, decreasing 6% compared to the same quarter of the previous year. The lower EBITDA of the quarter is mainly explained by the decrease in revenues due to lower sales to regulated customers, partially offset by higher energy and capacity sales in the spot market and to unregulated customers. The lower sales to regulated customers reflect the migration of consumption from regulated customers to free customers as a consequence of the price differential between both segments. Please continue to slide nine to analyze the EBITDA from the transmission business for the first quarter of 2019. EBITDA for transmission business reached $20 million in the first quarter of 2019, increasing 21% compared to the same quarter of the previous year, mainly explained by the higher operating income due to an increase in the revenues from zonal transmission assets.
Please continue to slide 10 for our physical sales and generation balance analysis in Peru. Total generation of the period increased by 54% compared to the first quarter of 2018, reaching 932 GWh, mainly explained by the scaled annual maintenance, which in 2018, was carried out during the months of January and February, while in 2019, the maintenance occurred between March 19th and April 19th. Physical sales during this quarter reached 942 GWh, 6% higher than the first quarter of 2018, mainly explained by higher sales to the spot market. Spot market balance during this quarter recorded net sales for 156 GWh, compared to net purchases of 154 GWh during the first quarter of 2018, due to the lag in the scale maintenance dates previously explained.
Now, please continue to slide 11 to analyze the EBITDA for the generation business in Peru for the first quarter of 2019. EBITDA in Peru reached $13 million this quarter, 28% higher than the EBITDA of $10 million recorded in the first quarter of 2018 due to lower costs in raw materials and consumables used, mainly explained by the higher energy and capacity purchases registered in the first quarter of 2018 due to the maintenance of the power plant carried out during the months of January and February, while the annual maintenance of 2019 was carried out between March and April. Additionally, the marginal cost of energy purchases during the maintenance of 2018 was $29 per megawatt hour, higher than the cost of $9 per megawatt hour during the 2019 maintenance as a result of the failure in the TGP gas pipeline in February 2018.
Now, please continue to slide 12 for the consolidated non-operating income and net income analysis. Non-operating income in the first quarter of 2019 presented losses of $15 million, 10% lower than the losses of $17 million in the first quarter of 2018. The lower losses are mainly explained by, first, a positive effect of the variation of the sol to U.S. dollar and Chilean pesos to U.S. dollar exchange rates on temporary items of the balance sheet in local currency during this quarter. On the other hand, in the first quarter of 2018, this effect was negative. It is also explained by higher financial income as a result of higher investment rates of cash surpluses during the quarter, partially offset by a decrease registered in the line profit loss of companies accounted for using the equity method.
As a result of revaluations of lands owned by HidroAysén during the first quarter of 2018, due to its accounting at liquidation value. Tax expenses amounted to $20 million this quarter, 15% lower than the tax expenses of $24 million in the first quarter of 2018. The lower expenses are mainly due to, first, a tax profit registered this quarter in Peru, driven by the appreciation of the Peruvian sol during the period, given that the tax accounting of Fenix is carried in Peruvian soles. Second, a lower profit before taxes recorded during the first quarter of 2019 compared to the same quarter of the previous year. The company recorded in the first quarter of 2019 a net income of $66 million, higher than the net income of $64 million in the same quarter of the previous year. The increase is mainly explained by the lower tax expenses.
Now, continuing with this conference call, please go to slide number 14, where Miguel will give you an update on the status of our growth opportunities.
Regarding our growth opportunities in Chile, we have focused our growth in renewables, meaning hydro, solar, and wind, based on three pillars. First, developing a pipeline of projects. Regarding incorporation of renewable energy from variable sources, Colbún has been able to complete a portfolio of locations for wind and solar projects, which are in different stages of studies and development. Horizonte, a wind farm of 607 MW located in the Atacama Region. Diego de Almagro Sur I and II, which are two photovoltaic projects of an overall capacity of 210 MW located in Atacama Region. Sol de Tarapacá, a photovoltaic project of 200 MW located in Tarapacá Region. Additionally, at the end of this quarter, Colbún has completed a portfolio of locations for another four wind and solar projects, with total capacity of approximately 800 MW. These projects are in early stages of development.
For more details on this slide, you can see the list of our current portfolio of projects, or please refer to the latest earnings report available at our website. Second, the company does not rule out the purchase of renewable assets in operation. Finally, the third pillar of our growth in renewables is acquiring energy from third parties. Regarding the transmission business, Colbún has several projects for the expansion and enhancement of the company's current transmission assets, with a total investment value approximately $50 million. In terms of our international expansion strategy, as we have mentioned before, we continue searching for growth opportunities in Peru, Colombia, and Argentina in order to maintain a leading position in the power generation business and to diversify our sources of income. With this, we conclude Colbún's first quarter 2019 results review. Thank you for listening, and now we're open to answer your questions.
Thank you. At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we poll for questions. Our first question comes from line of Ezequiel Fernandez with Credicorp . Please proceed with your question.
Hi. Good day, guys. Thank you for the presentation. I have four questions. I would like to go one by one, if you don't mind. The first one is related to the gas output. If I'm right, you generated one point four terawatts during the quarter, and I wanted to get an idea of how much of that is Argentinian gas, how much of that is through your usual local agreements, or if that includes also some LNG, some own LNG vessel.
Ezequiel, this is Miguel. Hi. Can you please also ask your second question, then we'll answer those one by one?
Okay. It's four questions, actually. Okay, I'll go with the four, no worries. The first one was related to the gas supply. The second one is related to the regulated sales. They dropped 23% year-over-year. I wanted to know if there is any contract maturing in that period or if it's entirely related to customer migrations and the sort of over-auctioning process by CNE. The third question is related to overall OpEx or SG&A. Any costs that are not related to fuel, emission taxes, LNG, transmission overhead, I mean. It's down materially year-over-year and quarter-over-quarter. I wanted to know if you are engaged in some sort of cost-cutting initiative. The last question is related to the new 0.3 GW in Oh, sorry, terawatt in contracts that you closed this quarter.
If those are new customers or renegotiations, what is the average duration for those new contracts? Thank you.
It's Miguel here. Thank you for all those questions. The first question related to gas. The Argentinian portion, it's only 50 GWh throughout the quarter. The reason for that is that basically, as you know, we try to contract in advance, enough supply for the first quarter of this year, in which we typically know it's the end of the melting season. Because of that, we need to rely on full certainty about the availability of the gas. Because of that, as mentioned, we only have a smaller percentage of gas coming from Argentina in the quarter. The second question regarding the decrease in related sales. It basically, as you mentioned, has to do with a 23% reduction compared to the previous quarter of last year. Those are around 300 GWh . There's actually two reasons within that reduction.
The first one is that you have to remember that as a system, there were new contracts that were tender in 2014 that become available starting this year, that's one effect. The other, as you mentioned on your question, is the migration of clients due to the new legislation that they can opt to be free customers or unrelated depending on their own consumption. Going forward to your question, there was no maturity in any of those contracts within the period. Your third question regarding SG&A, as I think we've mentioned before, I think we did this in our earnings report in the end of last year. We are in the process of optimization of some of our cost structures regarding SG&A. That has to do with the maintenance, operations, and other contracts.
Because of that, we reduced actually our SG&A amount last year of about $14 million, I think, compared to 2017. Finally, regarding our customers, the increase in the volume sales to the free segment is 100% new customers, no renegotiation of existing contracts.
Okay. That's great. Two small follow-ups on the gas supply. You said 50 gigawatts coming from Argentina. The rest is part of your agreement with ENAP, or do you have any LNG cargo that came in?
No. Both with ENAP and Metrogas, the local suppliers.
Okay, perfect. Yeah, that's all from my side. Greatly appreciate it, guys.
You're welcome.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for more questions. Ladies and gentlemen, we have reached the end of the question-and-answer session, and I would like to turn the call back to management for closing remarks.
Okay. Thank you everyone for attending, for joining this conference call, and hope to see you again for the next quarter review. Have a great weekend. Bye-bye.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.