Enel Chile SA Q1 FY2024 earnings call

• Hydro generation: Strong start to the year due to favorable hydrology from 2023, with net electricity generation at 6.1 terrawatt hour in Q1 2024.
• Regulatory updates: Chilean Congress approved PEC 03 law, distribution tariff for 2024 expected in second half, with updates on sovereign guarantee decree and P&P decree timelines.
• Profitability: EBITDA reached $293 million in Q1 2024, net income was $157 million (6% higher than last year), and net FFO improved by 34% to $114 million.
• CapEx: Total CapEx was $179 million, with 67% for renewables and storage ($120 million), 22% for grid ($40 million), 30% for asset management ($54 million), and 58% for development ($103 million).

Hydro generation portfolio performed remarkably due to exceptional hydrology from 2023's El Niño and better meltdown season. Renewable investment reached 6.5 gigawatt of net capacity, comprising 77% of the generation portfolio, resulting in 76% CO2-free production (11 basis points higher than Q1 2023). The distribution segment saw growth in distributive energy clients. Net electricity generation totaled 6.1 terrawatt hour in Q1 2024, exceeding Q1 2013 by 19% mainly due to higher hydro renewable generation.

• Conservative hydro projection for 2024 at 9.6 terrawatt hour.
• Expectation of distribution tariff for 2024 to enter force in second half of 2024.
• Guidance confirmed based on Capital Markets Day, with potential upside depending on rainy season performance, but currently maintaining the declared guidance.

• Risks related to regulatory changes affecting receivables and tariff implementations.
• Uncertainty in hydro projections for 2024 despite gas volume certainty from contracts.
• Potential headwinds in the debt market related to economic situations.

Q: Impact of new stabilization mechanism on working capital improvement and cash flow generation in 2024-2026?

A: Expected factoring between $450 million to $600 million in second half, with year-end receivables between $400 million to $500 million.

Q: Expectations on 2020-2024 electricity distribution tariff and upside?

A: VAD 2020-2024 impact already included in P&L, around $20 million difference from previous assumption.

Q: Debt year-end expectation?

A: Expected net debt around $3.6 billion by year-end with net-debt-to-EBITDA lower than 3x.

Q: $25 million negative impact on EBITDA from Metka PPA agreement?

A: One-off effect from 2023 negotiation with Metka, not repetitive.

Q: Thoughts on quotation regulatory change for export market?

A: Still evaluating, more updates to come in following calls.

Q: Potential sale of up to 49% of renewable assets and impact on dividend?

A: Operational phase of minority stake assets ongoing, early to discuss dividend impact with no current updates