Enel Chile S.A. Price & Performance (ENIC)

Enel Chile undertakes no obligation to update these forward looking statements or to disclose any development as a result of which these forward looking statements becomes inaccurate except as required by law. I would now like to turn the presentation over to Ms. Isabella Clemes, Head of Investor Relations of Enel Chile. Please proceed. Guendia good morning and welcome to Enoch Chile twenty twenty four Fourth Quarter and Full Year Results Presentation. Thanks you all for joining us today. My name is Isabelle, Isabela Clemes. I am the Head of Investor Relations team. Joining me today are our CEO, Josette Purtialelli and our CFO, CFO, Simone Conticelli. Our presentation and related financial information are available on our web site, www.nl.cl in the Investors section and on our app investors. In addition, a replay of the call will be soon available. At the end of this presentation, there will be an opportunity to ask questions via phone or webcast chat through the link Ask a Question. Media participants are connected only in Eastern And Mould. Giuseppe will start the presentation by covering key highlights of the period. He will then discuss our portfolio management actions, provide updates on regulatory context and share our guidance at Following that, Simone will walk on an overview of our business economics and financial performance.

Thank you for our attention. Giuseppe will now take over the call. Thank you, Isabela.

Good morning and thanks for joining us. Let's start the presentation with our main highlights of the period on Slide our hydro portfolio performed exceptionally well. With hydro generation increasing by 12 This performance was a result of a higher reservoir level at the beginning of the year. Influenced by Lino phenomenon observed in 2023 Enel a solid rainy season during 2024. Also on hydro, we are pleased to announce that the Los Condres Hydro Power Power Project has finally been connected to the system. [indiscernible] is already in full capacity mode generation. All the tests were concluded and we are now expecting to receive the COD in the next [indiscernible] As we reviewed last quarter, the first major climatic event on August severally impacted our distribution concession area. In this presentation, I would like to provide you with some updates on the additional measure we have been taken to prepare for the future climate events changes in distribution regulations. Regarding the August event, I would like to emphasize that annual distribution was the first distribution company to request on a voluntary compensation plan for its clients impacted by the fourth major events in August. Also, I will give you more color on how we are in terms of BAD twenty twenty four-twenty twenty eight process?

And the PEC situation considering the publication of PNP [indiscernible] consumer target during January. Regarding the business profitability, I'd like to remind you that we changed the company functional currency during the fourth quarter. This led to a no cash impact of $657,000,000 at EBITDA EBITDA level. [indiscernible] We have emphasized before these will not affect the dividend distribution for our shareholders. Throughout the presentation, we will discuss adjusted EBITDA and net income excluding this impact. Taking the adjustment, I'm pleased to announce that our adjusted EBITDA and net income results were fully in line with the 2024 guidance reaffirming the confidence in our strategic plan. In terms of FFO, we see an important improvement versus last [indiscernible] Coming mainly from our EBITDA and the peso factoring executed in the fourth quarter. I will provide more detail on this later. Now let's review some update regarding our generation source hydro and natural gas situation as outlined on Slide The positive hydrological condition during 2023 which led to a greater water availability from the beginning of twenty twenty four coupled with higher than expected rainfall recorded in 2024. Allowed us to increase our hydro production. This resulted in a 12% increase compared to the 2023 period equivalent to 1.5 terawatt hour of additional hydro generation.

The hydrological situation in our reservoir continued to be comfortable year to date compared to the last year figures. Despite experiencing alanine phenomena, However, for the year, we have chosen to adopt a conservative strategy and set our hydro condition target. For our hydro fleet close to the average of the last ten years key volume to 10.7 terawatt hour To strengthen and diversify our portfolio, we have strategically secured comp natural gas provider for 2025. Unlike previous years, this agreement covered the entire not just the winter and summer period. This approach enhanced our visibility of both prices and quantities, providing us with a more stable and predictable supply for the year. Furthermore, While Argentina and Gas remain highly competitive our strategy continued to be anchored to our long term and firm LNG contract with Shell. This dual sourcing strategy ensure the security of our required volumes and offer the flexibility to explore trading opportunity in both internal and external markets. This proactive measure position as strongly to navigate market and fluctuation and capitalize on opportunity Let's continue discussing our generation sourcing with the focus on the development of our portfolio on generation assets now on Slide [indiscernible] I would like to start emphasizing that in 2024, we successfully completed the expansion of our renewable portfolio across the country.

Increasing our exposure to battery energy storage. This milestone represents a crucial step in our strategy to diversify and make our portfolio more flexible. Our ongoing effort to advance battery regulation ancillary services are vital for boosting market competitiveness reducing system cost. In 2024, we received authorization for from the national electricity coordinator to begin commercial operation Enel a total of six ninety three megawatt. These include three eighty five megawatt of solar, two zero two megawatts of battery storage and 106 megawatts of wind Additionally, successfully connected four zero four megawatt of renewable capacity in 2024. Bringing our total capacity to 8.9 gigawatt. Today, [indiscernible] 80% of our total capacity is renewable As anticipated in the fourth quarter, we connected Los Condore Hydropower Plant into the grid. The plant is already operating in a testing mode until we receive approval for the combination to commence commence commercial operation. The good news is that we are generating at high levels To date, we have received approval by the system coordinator Enel, and have sent a letter formally requesting approval for commercial operation last week. Therefore, it is reasonable to anticipate authorization by March. Now on the next slide, we will review the performance of our generation KPI.

Net electricity generation totaled 24.6 terawatt hour as of December 2024. Exceeding by 2% the production during 2023. Mainly due to higher hydro and renewable generation resulting from the improved hydrology this year and the operation of new projects. During the fourth quarter of twenty twenty four, net generation decreased 8% to CHF6.1 Tower, mainly due to lower thermal dispatch during the fourth quarter twenty twenty four lower other renewable production and slightly better hydrology recording during 2023. Our energy sales totaled 33.4 terabas tower during 2024. 8% higher than the level recorded in the previous year. Resulting from higher sales to both regulated customers and free cash. Our commitments with our clients were fulfilled with a higher portion of our renewable generation coupled with an efficient portfolio of purchases for Regarding the latter, In terms of our balance, during 2024, we increased our purchases from third parties by 2.3 terawatt hours. As part of our CONCHIN [indiscernible] to diversify and optimize our energy sourcing. During the fourth quarter twenty twenty four, physical energy sales grew by 6% to 8.1 Travastava, mainly due to higher sales to regulated customers. Now I would like to take a few minutes to talk about the ex extraordinary weather events of last I would like to provide updates on the extreme weather events that impacted our concessionaire in August 2024 and discussed our preparation for future events.

Just to recall, on August, an extraordinary [indiscernible] [indiscernible] [indiscernible] of up to 124 kilometers per hour, impacted the metropolitan region causing extensive damages. This storm severely affected our electricity distribution network resulting in widespread power outages and making system restoration extremely challenging. We request the local regulator to declare the August 2024 storm as the fourth major event It was a reject In response, we filed a reclamation remedy with the Santiago Court of Appeal to overturn [indiscernible] On 09/30/2024, the Santiago Court of Appeal accepted our reclamation remedy requiring the effect to provide substantial information about our claims. As anticipated on November 2026, [indiscernible] [indiscernible] recommended rejecting our claim. We are now awaiting a court filed resolution, which remain pending and we stand confident in our position Still related to the event in August, the SEC imposed a $20,000,000 fine on NLD's division. This fine is the largest ever imposed on electricity provider in Chile for service disruption among other identified by the SEC. NL distribution booked 100% in December 24 of the fine but filed and administration Remedy, reiterating that August climate event was an unforeseen and [indiscernible] under Chile current legal and regulatory framework. We are awaiting the SEC Pharma response to our appeals On February 4, 2025, [indiscernible] as part of a voluntary collective procedure, became the first distribution company in Chile to reach voluntary agreement with the National Consumer Services To establish an extraordinary compensation mechanism for retention customers affected by the prolonged power outage in [indiscernible] includes a top up voluntary agreement of approximately 80,000,000 benefiting around 800,000 customers.

This amount is divided into first compensation of interruption, Second, compensation for claims. And compensation for the loss of food, medicine, and similar items. This agreement is separated from the legal compensation that are pending the resolution that the fourth major and aggravated abnormal state of reclamation remediates. The impact of this voluntary agreement program was also recorded in our 2024 financial results. As Simone will show you later, despite several regulated regulatory and legal discussions surrounding in the August event we have introduced many initiatives to improve the response our parties involved in the future climate events We believe that climate changes will make such events always more frequent. Therefore, it is essential for all parties to act promptly and effectively to ensure the proper functioning of the networks. Let me provide you with some examples. We agreed on operational emergency guidance with the municipality, to better coordinate with our operational teams during climate events. We signed a collaboration agreement with the electrodependent group to ensure backup for medical devices and to provide training on the correct use of the key We accelerate the rollout of the Smart Meter program for electrodependent clients and we conducted through preventive aerial inspection of the grid in preparation for the upcoming winter [indiscernible] to identify any potential additional damage from the August event and to address any further needs [indiscernible] Part of this action were already included and presented as part of Enel Decibos was submitted to the SEC.

February, nineteen, twenty twenty five, In the distribution sector, remain committed to promoting reform and modernizing the regulatory framework Asset resilience. This effort will enable us to optimize the value of our distribution network fully meet our clients' needs and ensure long term sustainability. Talking about regulation, let's take a look. At the main update on the next [indiscernible] Regulatory framework is crucial for attracting investment necessary for the energy transition and providing resilience against increasingly extreme Effreguin. Event to climate change. Therefore, we continue to advocate for a new model based on real assets that addresses factors such as proper remuneration rates, and incentives mechanisms resilience, Quality and performance improvement. We appreciate the consensus among academia the electrical industry and the Congress on the Ugency of the distribution reform and hope it will soon be part of the legislative agenda one. The legislative member returned in March. The process for the twenty twenty four-twenty twenty eight VAD has started using the same methodology applied for the 2020, twenty twenty four cycles the reference mobile company. The delivery and official obligation of the Consultant Planning Report are expected by the March. And we estimate that by the second quarter, of 2025, the regulator will publish the preliminary technical report on this new cycle We expect an improvement in remuneration for this new process.

Considering the newly approved [indiscernible] and all economic and technical assumptions of the December 2022 included in the report. We believe that this factor will be [indiscernible] the values stages of this process. [indiscernible] Since October, of the last year, we have not accumulated additional receivables. As the client tariffs now reflect the real contract price. In December 2024, The decrease for the first half of twenty twenty five P and P was published and the regulated tariff was updated. In this process, the average residential consumer in the metropolitan region of Santiago experienced average increase of around 12% mainly due to the integration of the client protection mechanism MBC into their tariff This mechanism allows for the gradual repayment of accumulated debt to the generator and the [indiscernible] a transitional [indiscernible] for the most vulnerable clients. On the other hand, client with consumption higher than three fifty kilowatt hour that they've been paying for this mechanism since last year. So decrease of approximately compared to their start from the last [indiscernible] Related to the PEC accrual, as of December 2024, we had an account receivable related already net of factoring and including or adjust of around $500,000,000 showing a reduction of around 40% versus 2023.

This reduction is mainly due to the factoring executed last October 2024, we expect to execute a new factory during the second quarter twenty twenty five of around $250,000,000 Let's move to the right side of the slide where we will review the key points of the government proposed law to expand subsidies which currently benefiting benefit around 1,800,000 families. The new proposal aims to extend coverage to approximately 4,700,000 families targeting the 40% most vulnerable household in Chile. In January 2025, the chamber of deputies approved the government proposed tax with some changes. The proposal will now move to the Senate for a second legislative stage includes various to fund the subsidies. The key instruments to found the subsidies are as follows: Allocating the additional DTE revenue that the treasury is collecting due to the increase in the tariff Implementing a temporary surcharge on the green tax emissions increasingly from the current $5 per tons of CO2 emitted Also in this project, the chamber of depot is has approved the following increasing the amount of compensation that the distribution company must pay to clients in case of distribution power outages and for what concern the small and medium companies replacing the price of electricity currently provided through the regulated contract with a price that includes a reduction coming from the electricity prices of [indiscernible] In order to offer a tariff discount to this client.

Limited to 500 gigawatt hour per year. Enel we support the government effort to assist the most vulnerable families amid potential economic challenge. While the solution aimed to provide necessary support it is important to ensure that they do not disrupt the market. As of course since 2019, [indiscernible] [indiscernible] long term investment [indiscernible] the energy sector. We believe that allocating additional VAT revenue could be a viable and sustainable option among the proposed measures. I will now conclude with our commitment on deliverable Slide nine, Let me point out that we have reached our main financial targets for the year 2024. Our results adjusted for the non cash effect of the change in functional currency show an EBITDA of $1,400,000,000 a net income of $600,000,000 These achievements reflect our ability to generate value in a resilient and flexible manner. Even in a challenging environment, a more efficient portfolio mix driven by improved hydrology condition allowed us to meet our EBITDA net income commitment of our guidance announced during twenty twenty four Investor Day. Simone will provide details on our performance on EBITDA and net income in the following slides. The action taken during 2024 have ensured the fulfillment of our leverage And net debt to EBITDA commitments.

Allowing us to recommend maintaining the committed payout in our guidance. This recommendation was also endorsed by the company Board of Directors and will be submitted for approval at the [indiscernible] Now will hand over to our CFO, Simone Foncichel. Simone de Floreijo. Many thanks, Giuseppe, and good morning, everyone. I will start my presentation with a summary of our main results [indiscernible] better evaluate our company's earnings performance, we present the 2023 and 2024 figures adjusted by the following one time effects. For 2024, full year and fourth quarter EBITDA and net income have been adjusted by the non cash asset of the change in the functional currency. Respectively amounting to $6.57 $468,000,000 For 2023, the full year and fourth quarter net income exclude the capital gains obtained from the sale of Arcadia executed last year. And amounting to $163,000,000 and the full year FFO screwed the taxes paid on capital gains obtained from the sale of Enel Transmission amounting to $310,000,000 Considering this adjustment, let pass to the analysis of economic and financial performance starting with a quick overview of the key figures which I will detail in the following slides. Adjusted full year 2024 EBIT and net income recorded significant improvements when compared to the previous year indicators.

Despite the negative impact of the first major event of August 2024 This is mainly explained by a more efficient sourcing mix boosted by a better hydrological situation and an increase in our energy sales and better pricing These results demonstrate the resilience of our business and the solidity of our strategy. Furthermore, the full year 2024 figure show an important FFO increase versus previous year mainly due a better EBITDA and the PEX factoring operation with a significant impact on the fourth Now on the next slide, let's review the progress on CapEx. Our total CapEx reached $583,000,000 during 2024, 90% lower than the previous year. Considering the conclusion of several renewables and storage projects over the twenty twenty three twenty four period. 61% of the total CapEx amounting to $355,000,000 was mainly related to renewable and storage deployment CapEx.

And 22% equivalent to $130,000,000 was related to Greece. Asset management CapEx reached $2.00 $3,000,000 which represents 35% of our total CapEx. It increased around 77% compared to 2023 figures mostly due to the following facts in both businesses.

In the generation business, an increase of $58,000,000 more mostly related to maintenance activity in Battagama CCGT power plant.

And also in the solar and wind assets.

In the distribution business, an increase of $30,000,000 due to climate event emergency and maintenance activities related to the line failures. Finally, the development CapEx reached $318,000,000 a decrease of 40% compared to 2023 figures mainly due to the conclusion of renewable and best projects.

So let's move to the next slide where we a best summary of the quarter EBITDA breakdown. During the fourth quarter, 2024, our adjusted EBITDA reached $424,000,000 excluding as anticipated the one time and non cash effects of the change of functional currency. A $5,000,000 increase compared to the same period of 2023 is primarily due to the following effect. In the generation business, we recorded $71,000,000 increase due to a significant contribution from PPA sales This growth is mainly related to price and FX, primarily due to contract indexation in the free market, and higher volumes, especially in the regulated market. Additionally, we recorded an increase of $33,000,000 due to positive performance in our generation. This is mainly explained by lower production cost resulting from reduced thermal generation dispatch partially offset by higher commercial [indiscernible] The positive performance of generation business was reduced by $16,000,000 mainly due to redirect reduction of gas trading margin given the 2023 outstanding Regarding Grize, we recorded a $9,000,000 positive impact mainly due to an increase in remuneration associated with the rise [indiscernible] [indiscernible] However, this margin was more than offset by the impact of last year extreme weather events. Including the first major event The impact amounted to $41,000,000 including fines and clients voluntary compensation program So let's move to the next slide to review the full year EBITDA breakdown In the full year of 2024, our adjusted EBITDA reached $1,421,000,000 dollars not considering the impact of functional currency change.

The increase versus 2023 amounts $320,000,000 primarily due to a significant contribution of $321,000,000 from PPA sales in the generation segment mainly explained by higher volume, especially in the regulated market. And pricing effect related to the contract in the excession in the free market Deposci DB impact of $2,027,000,000 dollars from the generation sourcing activity mostly due to lower variable production costs resulting from lower thermal generation, thanks to the remarkable hydrology during the year. And lower price in spot market post season, partially offset by higher purchases from the third parties.

Reduction of gas trading margin compared to 2023 outstanding performance amounting approx $200,000,000 Finally, regarding Greece Enel, we recorded $31,000,000 positive effect for the full year, primarily due to the increase in the remuneration linked to publication of BAD twenty twenty twenty twenty four regulatory report [indiscernible] and the tariff index session partially offset by higher technical losses and the negative impact of inflation on our costs. These results were more than offset by the impact of extreme weather events that amounted to $62,000,000 for the full year including fines and clients voluntary compensation program. And now let's move to the next slide, where will review the net income evolution Al Furrier 2024 net income amounted to $622,000,000 22% higher than last year figure mainly explained by the already commented EBITDA improvement So now let's comment the additional effects for this year. Referring to depreciation and amortization impairment [indiscernible] recorded higher costs for $81,000,000 mainly resulting from higher depreciation in the NLDs [indiscernible] due to new added renewable capacity and PDL devaluation in the period. An impairment made in December 2024 related to Braselina Estesion projects higher debt debt accrual in grades due to a worsening in clients' payments behavior and higher tariffs.

Regarding financial results, equity investment, we recorded a $75,000,000 negative variation versus last year mainly explained by positive exchange rate differences in 2023 and higher financial expenses mainly due to FX variation and higher amount of PEC receivable also in 2023. Finally, on income taxes, we recorded a $39,000,000 increase mainly to due to better results in the period. Focusing on the core our adjusted net income decreased by $37,000,000 This is mainly expounded by first, the difference of impairment accounted in the period for $29,000,000 Second, the higher financial expenses for $10,000,000 mainly due to lower interest recognition related to PEC2 in the fourth quarter twenty twenty four partially offset by positive exchange rate differences in 2023.

These effects were partially offset by lower tax expenses of $2,000,000 mainly due to lower EBIT in the fourth quarter twenty twenty four And now let's move to the FFO analysis on the next slide. Let's analyze the FFO composition for 2024 and the main FX when compared to 2023. It is worth mentioning that the 2023 FFO figures have been adjusted by $310,000,000 related to taxes paid on capital gains from the sale of Enel Transmission Chile in December 2022. 2024 FFO reached $12.00 $9,000,000 it means an improvement of $32,000,000 versus 2023. As a result, of the following factors First, the adjusted EBITDA amounted to $1,400,000,000 with the already explained positive variation of $320,000,000 versus 2023 Second, the cumulative negative impact of the stabilization mechanism amounted amounted to $310,000,000 which was more than offset by the execution of the IDB factoring related to PECS-two and PECS-three amounting to $697,000,000 If we compare the 2024 total FX of the PEC net of factoring versus 2023, we see an increase of $393,000,000 Third, the increase of net working capital equal to $153,000,000 mostly due to CapEx payment related to renewable development in the second half of twenty twenty three. Compared to the last year figures, the impact of working capital on FFO was negative $433,000,000 mainly due to CapEx payment related to 2023 renewables collection impact from distribution business and cash in from the sale of Santa Rosa Building Recipio.

In Fourth, the income taxes that negatively impact our FFO by $05,000,000 primarily due to tax payments related to generation business and to the sales of our Kadia asset. Comparing income taxes paid in 2024, versus paid in 2023, we see a negative effect of $174,000,000 the tax payment of our Kalia transaction in 2024 higher tax payment in the generation business, and lower recovery from previous periods.

And finally, the financial expenses amounting to $241,000,000 mainly due to the debt related expenses. Compared to last year, our financial expenses decreased by $25,000,000 in 2024 This decrease was mainly due to the financial expenses related to PEC one in 2023. So now let's take a look at our liquidity and leverage position.

Our gross debt decreased by 11% to $3,900,000,000 as of December 2024, compared to December 2023. This decrease was mainly due to the optimization on the use of cash from the factory, which took place in October 2024. And the operational cash generation during the year. Devers term of our debt maturities slide slightly increased to six point two years as of December 2024 versus six point one years in December 2023. And the portion of gross debt at fixed rate was 89% of the total debt in December 2024. The average cost of our debt reached five point zero as of December 2024. Slightly above the 4.9% record in December 2023 primarily due to the annual generation Yankee bond maturity in April 2024. $400,000,000 at 4.25%. And finally, regarding liquidity, We are in comfortable position to support our capital needs for the upcoming months and cope with 2025 maturities. As of December 2024, we had availability available committed credit lines for $690,000,000 and cash and cash equivalents for [indiscernible] With the financial debt analysis [indiscernible] comment on the company figures. So [indiscernible] And now I will leave the floor to Josepe for the final remarks. Thank you, Simone.

To conclude my presentation, I would like to give you the following closing remarks.

Despite the very challenging context related to the prior events registered [indiscernible] allowed us to obtain robust results for the year. [indiscernible] To fulfill our commitment to all our shareholders. This year, we have delivered a robust economic and financial performance. Aligned with the target and strategic pillar presented on our last Investor Day. This gives us confidence that Energy Chile is more than prepared to operate in a volatile environment and to take advantage of the new opportunity. For 2025, we will continue to advocate and the modernization of the regulatory framework, to enhance asset resilience. This will help us optimize the value of our asset across both businesses and ensure long term sustainability. Finally, to conclude, on April 28, we will hold our Annual Shareholders Meeting during which the final and extraordinary dividend to be paid in May 2025 will be proposed including the interim eventual dividend total amount will be 4,240,000,000,000.00 per share.

Now let me hand over to Isabella for the Q and A session.

Thank you, Josepe. Thank you all for your attention here. We will now begin with our Q and A session. We received questions via phone and chat in the webcast. The Q and A Thank you so much. And as a reminder to our teleaudience, And it's from Alessandro DiVito with Mediobanca. Please proceed.

Hi, all and thanks for taking my questions. I have three or four. First one is we saw a couple of days ago that you had a big blackout in Chile and it looked like it's was a systemic event. So I wanted to understand whether distribution companies like yourself will be liable for potential penalties or it was more like a systemic event. So no fault on networks.

Is the first question. Second question, I was looking at the hydro output your assumption for 2025 of 10/2007 understand that we come from that the estimate is based on our ten years leverage, but we come from two exceptionally wet years. So would you argue that this estimate could be conservative And maybe it would be interesting to understand if you had moved some maybe a portion of the extra 2024 hydro resources production in 2025?

The third question is more related to batteries. Because we saw that you started operation at of 200 megawatts of batteries wanted to understand whether these were Standalone batteries or they were part of an emberitized renewable plant? And if they are standalone batteries, I wanted to understand which IRR do you see on battery projects in the country? And in general, how do you see the ramp up in the Enel loan battery capacity in the country for the coming years? And the last one, last question is, if you confirm 25 gallons was included in the letter BBB, Thank you.

Thank you, Alessandro, for your question. I will pass to Giuseppe Well, let's start from the blackout. [indiscernible] system and disconnection [indiscernible] which unfortunately affected also our distribution [indiscernible] we are not liable for any any because we are not responsible as distribution company for this interruption. Of course, there will be several analysis that has to be made by the coordinator and the SEC So we're going to see which will be the Enel. But as of our information is that everything is coming from an interruption in the transmission line. So we don't foresee right now any kind of penalty for our distribution cost.

For what concern the hydro output for 2025? As you see in the presentation, we made Maybe conservative assumption using the ten year average historical data, This is our current approach since several year. Because we believe that the hydro is especially volatile. So we prefer to take this kind of conservative approach too early to understand whether there will be an [indiscernible] [indiscernible] We're going to see in the following month as soon as the winter season will start. So basically in May. We are confident to match this hydro production and we're going see and we're going to give you more information in the following month. No. Not before May or June. Talking about the battery, the battery that we have already in operation and the battery that has been present in the last Capital Market Day are [indiscernible] So basically, we are going to build up together with solar or wind project. And for what concern The IRR is double digit Of course, there are depends of each project and the characteristics that the project has and the location that the project have in the system. And finally, the guidance, yes, we confirm the 2025 guidance that we present in the last Capital Market Day.

Thank you, Giuseppe. Thank you.

Thank you, Alessandro. Ready to do we have more questions coming from the line.

Yes. Let me bring the next one to our stage. And it's from Martin Arancet with Balance Capital Enel.

Hi. Well, thank you for the presentation and for taking my questions. I have three questions. First, regarding the distribution business, You mentioned a fine of almost $20,000,000 and voluntary compensation program.

If I'm not mistaken, the government was also as assessing the possibility of revoking the concession. [indiscernible] wondering if that's off the table or if the government is still working On assessing that possibility, My second question, well, regarding CapEx is you can share with us [indiscernible] CapEx plan for this year. And my third question, probably a follow-up of a recent question, I was wondering what is is your strategy, your commercial strategy with If it's just to take advantage of arbitrage opportunities due to low marginal cost during solar hours? Or if you think that you could add the cost of batteries to new PPA prices to give 20 fourseven solution. Thank you. Martin, I will pass over to Josep and then to Simone.

Okay. Well, Talking about the concession, well, first of all, let me remind that the revoking of the process of the concession has not yet started. What's happening is that the mix of energy [indiscernible] the second, the superintending with preparing a technical report on NLDC Busiono concession. And according to the authority, this study could take between six and eighteen months. As of today, I would like to point out that we have not received any notification or communication in this regard. And so no administrative processes pending for the first forfeiture of any distribution electricity [indiscernible] And Under the local laws, the President of the Republic Master declare the forfeiture of the electricity distribution concession through an administrative act. And the second, the superintendent, the Residad, is mandated by law to carry out all necessary step regarding the expiry of the operational concession. But again, it's really important on the line that the low excludes the forfeiture of the electricity distribution in case of force majeure. Duly verified by the superintendency. And as of today, we don't have, as I said, any further update Talking about CapEx.

And the best, the business model, I mean, the best We used to to have intensive business model. Let me remind you the business model. First of all, as of today, we have two revenue stream in our business model. For the best. The first one is the energy shifting So basically, we charge the best during the solar hour and we discharge during the night. [indiscernible] take advantage of the spread that we have in terms of prices. You probably know that in Chile, there are In general, in all the countries, but specifically, in Denmark, there is a very important balances between solar and solar. The second, the revenue stream for the best is the capacity payment. Capacity payment foreseen by the regulation that guarantee a certain percentage of the revenue for the best. Let me say in general, I would say that is around 30% capacity payment, 70% energy shifting. Important point for what is that this year is supposed to be issue A change in the regulation We hope it's going to be issued by the end of this year probably [indiscernible] Based on which there will be a new regulatory stream for the best because they are going to be entitled to receive ancillary services remuneration.

So [indiscernible] I believe that the best business model is very good as of today in Chile. And by the way, the system required this kind of technology. So everything is going Okay. Thank you, Josep. Now on the sorry, Martin. Yes, yes, go ahead.

Yes. Just a small follow-up on that. [indiscernible] that arbitrage is currently like the most important revenue stream. Was wondering if you have, I don't know, an estimate on How that could change with these ancillary service that will be relevant close to arbitrage revenues or what's your expectation there?

Well, the ancillary services remuneration is a very good complement to remuneration of the battle because of course, there will be a moment during the year or in the following year in which the arbitrage is less confident than what we see right now. And even the three cities, we have a very good complement in order to guarantee the remuneration of the battery.

Clearly, it's not going to be a third it's going to be a third remuneration, but not in the same moment. Thank you. And now from the CapEx, I'll pass over to Simone.

Hi, Martin. Thanks for the question. Talking about 2025 CapEx, As we commented during the presentation of the We are focused on obtaining the best mix in terms of generation just to to reduce the cost of generation. So we expect a very intense year in terms of CapEx. In general, we are going to invest something less than million dollars and more or less $500,000,000 are related to development CapEx in new power plant. We are going to focus on new best projects three best projects with a total of more or less four fifty megawatt. This kind of best that Josep described hybrid projects. And the investments are more or less all in this year in 2025. But the best will arrive at beginning of next year. So improving our mix of production starting from 2026.

Thank Simone. Operator, do we have more questions to the line? Thank you, Martin. Yes, we do.

All right. It's from Emmanuel Oguioni with Kepler. Please proceed.

Good morning, everybody. Thank you the presentation and taking my question. I have two left. One is on the regulatory framework. You mentioned in a very detailed slide the next steps expected. My question is about the relative to your target of roughly $150 a million of EBITDA for 20 I along the plan basically yearly in 2026, 2027 Enel. If the current [indiscernible] regulatory framework, the evolution of the regulatory framework, could confirm or or not or improve or not the current targets included in the business plan? This is my first question. And the second one is on the renewable side and the additional capacity. If you remind us the expected additional capacity in 2025 If there is some delay or something to flag Thank you. Thank you very much, Josepe.

Okay. Well, [indiscernible] been made according to the view that we had at the end of the last year that is supposed to be confirmed in these preliminary report that is going to be issued that end on November by the consultant. So everything is in line There could be some smaller improvement and that we are going to see in the the next month, but I mean, it's really to to say whether we are going to have any upside, but the amount that we put in terms of EBITDA for distribution companies in line with most conservative expectation that we have about the new regulatory cycle. And for what concern the renewable capacity, all the CapEx, I will give you the floor to Simon and Buster. All the CapEx are devoted for two capacity that is going to be in operation next year, but if not, please. So talking about the CapEx and complementing our public CapEx. The new project will involve the company basically larger part in the second half of twenty twenty five. And the plants are [indiscernible] today, we don't see any specific reason for a delay. In any case, the impact of these plans, I won't to highlight that are not for this year.

It will improve the EBITDA for twenty twenty twenty six.

Thank you.

Thank you. Thank you, Emmanuel. Thank you, Timone. Operator, if you don't have more questions, I'm from the line. I go to the to the chat questions that we [indiscernible] So a lot of the questions coming from the outages from Chile from last February 25. So we received a question related to it PTG, So the questions are all more or less all the same, okay? So I will read one of these. Regarding the massive power outages in Chile, the Minister of Energy put Enel Chile as one of the company's pointing out in the problem. In this case, for the delay in connected some power plants in the system in order to establish the electricity service in the country. Particularly the hydro power plant RAPEL. Do you think you can see funds for the delay in connecting your plants? How long did it take to activate the plan versus what was requested from the authority? And now so we also received questions about potential impact on the distribution business related to the blackout. So if you see any impact on the distribution as well. So Giuseppe Okay. So in response to the failure of the national system, [indiscernible] mobilized all its procedure and protocol to control and risk restore the operation of generator across the accounts.

Specifically for what concern one of our planes, Rapela, and of our brands, which had several attempts to connect to the nationalistic system, we [indiscernible] that there was no Technical. And availability of the plan. External factor on condition that prevented regular startup. Are being analyzed. Additionally, NL team immediately mobilized all teams proceed on protocol to control and restore the operation for all the counties, in particular, our control room center was operational for corresponding communication with the national And talking about ISO other question about the possible fines. As I said before, it's Too soon to foresee any impact related to it. The incident is under investigation by the system operator and there are a lot of issues regarding the system of patient that must be clarified before assigning any accountability to any company.

And on distribution, you have heard As I said before, distribution is not involved in terms of responsibility. Actually, we made a lot of effort in order to restore the electricity not having any kind of responsibility, we don't believe there will be any kind of liability for the home.

Okay. Thank you, Giuseppe. And now changing the subject received some questions on the extraordinary effect, the one off effect on the functional currency. So questions coming out from [indiscernible] So regarding the change of currency, there is [indiscernible] see any additional adjustments to the one observed in Enel Generacion in the next Also, please could you give further details on the impact on the fact not [indiscernible] To USD. What are the mechanisms behind this move? Good morning. Okay.

So thanks for the question. I will give some detail about this change of currency. First of all, highlighting that given the International Financial Reporting Standards, the change of currency is not like choice of the management. It's something that we have to do. I mean, what IFRS say that the currency should reflect relevant transaction event and condition of the comp. So [indiscernible] between 2024 and 2025 to the three companies that change at the currency.

It's important starting from Enahenacion because the impact on Chile is related to a change in Enercare in Chile. Has two main forms of revenues. And flows. One are the regulated contracts.

And the other one is the contract on the trade market. The first, the regulated contracts are exposed to the exchange rate among between the U. S. Dollar and the CLP.

On the other side, the three contracts are strictly linked to US dollar. So which was the trigger for the change On one side, the regulated contract volume decrease at the end of twenty twenty four caused some old bid from the past expired. On the other side, linked to our policy to keep on selling on the free market, we increase the volume in the free market contracts. And so as a result, the volume for 2025 is now higher looking at the free market contract. And this is the reason why we add to change the currency. Talking briefly about PUEENCHE, similar, Pwenty had in the past until 2024 a contract that was a big contract with same condition as I [indiscernible] to sell energy spot price and this kind of contract are basically strictly linked to U. S. Dollar. Talking about Enel Chile Enel, Enel Chile received the dividends from its affiliate company. And so the change in Enell Chrysler in Chile changed the flow. And so we had to change also in energy. And this is the start. Now the impact Until 2024, we had two make some reserves related to [indiscernible] to wage this exchange rate with the Luminess Some liability in dollar and following the EF IFRS principle, we had to create this reserve that was negative reserve.

Given the trend of the exchange rate. In the moment in which in the last quarter of twenty twenty, Four, we decide to change the capacity. In this very moment, we have to discontinue the kind of activities. And so take this reserve and bring them today. P and L. And this is the impact that you see in the P and L at Enel of EBITDA at level of net income. And Enel, to finally answer the question, not all the changes were recorded on 2024 and so we will not add any other impact starting from 2025. Thank you, Simone.

So moving on to the questions. Now we have question in terms of the gap trading, not so the following question is coming from Andres Andrew McCartney, La Verintial. And now, So Andres Navarrec from BTG. So the question is, Where and when do you see the most likely gas commercialization opportunities this year? And could you give us some color regarding the gas contracts from Argentina, size, price range, take or pay agreements and also why you there be an extraordinary shareholder meeting on April for the Ninth Chile?

Okay. So during February, we have already traded plus volume for 2025 around six terawatt taking advantage of the current market condition. And we are always looking for new opportunity to improve our financial These trading opportunity was already included in our [indiscernible] at the moment, we cannot share more detail information due to the confidential information at strategic nature of these About Argentina and Gas, we have contracted about 30 TELEBTU distributing in the year 2025 with a competitive price lower than G and L prices. Due to competitiveness what I can say is that is lower than 2024 prices of US dollar per million terabitio. [indiscernible] an extraordinary shareholder meeting will be held to amend by law in order to reflect the new functional currency Changing the capital currently expressing in pesos to move to dollar.

To implement the functional currency currency changes [indiscernible] [indiscernible] perspective it is necessary to amend the company's by law Okay. Thank you, Giuseppe. So moving on the questions, we have questions coming from Fernando Gonzalez from BTG. [indiscernible] The first one is about the fine. So if the $20,000,000 fines were already booked in 2024 numbers, then Fernan have some questions regarding distribution. What makes you think that the debate around the distribution reform can begin in March? The Minister has said that some of your when this is already have been [indiscernible] then he's asking about if our plans in terms of strategic plan, the guidance in CapEx and also EBITDA would be changed considering the less update in terms of the distribution segment. And now, Suwif, we'll keep our plan to invest the free cash flow in the distribution segment in this [indiscernible] if we're seeing any change to regulatory restrictions.

Okay. Well, first of all, as I said in the presentation of all the fines, all the other extraordinary items like the compensation to the [indiscernible] In the closing 2024. As I said in the past, the distribution business is very important for our strategy. We believe that there is a lot of value in the company. So we confirm our CapEx. And our strategy in this segment There is no Reason as of today to change our strategic plan for for what's concerning the distribution company. So we are focused to to spend most part of our cash flow in order to improve our grades in terms of resilience and quality.

Okay. Thank you, Josepe, Espinane. Just another question, Tami, regarding the CapEx and EBITDA for Nelgos. Distribution. We haven't had said, but just to complement according to the guidance that we gave to the market.

Yes. So we can confirm the guidance. So the market that you have seen that we expect an increase in terms of EBITDA in twenty twenty five compared to 2024 and the reason of delta is mainly related to the very negative impact of the climate event of twenty twenty four that amount to four more than $60,000,000 impact. [indiscernible] On the other side, as you know, the evolution of the regulation is giving us a little bit more space. And so it's up to reasons. This plan in our opinion, as of today is quite solid. That's so can be confirmed. Okay. Thank you, Simone. Thank you, Giuseppe.

Just checking if there is any more questions. As we do not have any more question, It conclude the results conference call. Let's me remind you that the Investor Relations team is available for any doubts that you may have And thank you all for participating and you may now disconnect.