ENIC - Earnings call transcript Q3 2021

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Operator

Good day, ladies and gentlemen, and welcome to Enel Chile Third Quarter and 9 Months 2021 Results Conference Call. My name is Victor, and I will be your operator for today.

During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors. in X press months described third reporting are and quarter XXXX factors Enel release Chile's its These results. include The and presentation risk XX-F Enel call factors. under Chile's annual accompanying report on this conference Form

undertakes a dates. quarter these third presentation statements as proceed. development statements, become undue of the no Chile Ms. will reliance to and these website, Enel SEC's to or to our access Klemes, www.sec.gov. forward-looking our of except speak may over and I Isabela months only are obligation to Relations result press Enel update Head on now XX-F XXXX our Chile. disclose any and forward-looking place Readers presentation on which X Investor as www.enel.cl; turn website, required those release inaccurate, forward-looking results Please as on by their not law. which the of You statements of cautioned

Isabela Klemes

Good Results Klemes, Chile's of morning, am Enel Isabela Relations. and the to to Thank us I joining Thanks you, for Investor Presentation. Victor. today. welcome XXXX Head Quarter Third all

that presentation Let in you Investor investors. and are www.enel.cl in our our remind and the section information related our Instructions]. [Operator available me on financial website,

need. Thank through to as Turchiarelli. all our continue to following any let performance of Paolo the available Paolo. replay And that CEO, other and me morning, with of will be over financial our operational [Operator and will with hand of our you A IR provide team this available. go strategy Instructions] results. the Joining call our Paolo? the patience. quarter. be slides, you will presentation always, this Giuseppe our for In me CFO, also open you And Pallotti; disclaimer we Giuseppe the Paolo, main will highlights Then

Paolo Pallotti

thanks and morning, Good us. for joining Isabela. you, Thank

start highlights on with X. the of number me main period Slide the Let

the market. comment new of situation me let about First, usual the Geneva

thermal as And of end calendar an the suffered hydrology, still a history. of Chile LNG is lack natural of in of to by and since XXXX, Considering required and the the we time, generation. buying rise system Argentinian of the first country price. the in actions gas is to month spot to year is resources by month the its plants this the a same additional of system. the support consequence, first first the to and of XXXX, facing At terms requiring from driest in the In availability, gas, the our shortfall XXXX important supply sell put LNG system place some gas current cost improve followed then of the

X.X XXXX. a operate gas conditions. exposure we to the Consequently, in constructions scenario, first the a force reduce this construction, put are And the with During plants hydrology bring of the electric in our hydrogen the an last of priority. a agreement pilot to in start first under project the with the investing be Enel projects importer the Chile same within Especially the first our during located truck. August, where also today's worsened to of rationing Electric of mining actions our in are Magallanes. performance place place confirmed Despite renewables the of of in At to power to period to signed of last scenario been put of March the Chile half authority first and largest preventive to hydro time, LNG celebrated week, the quarter, all escalation in matrix, we in hydrology. to reference gigawatt Latin leaving challenging during has key in With Within been the green XXXX, affected. America, to very launched diversify our and we commodity and have mobility, commodity construction improve X July external minimal our new we remained the bad XXXX advancing. to decree the margin country. also prices

have our today, system replaced cleaner contamination technology we heating efficient more the support XX,XXX safer, than to as part effort with and cities. of wood Additionally, the of

develop ESG continue actions expansion to We SDG-linked our allowing us instance, financial our on through to based for standard, leverage instruments.

our X, Page on moving construction. Now capacity in

pillar in towards to for market. catalyzer energy strategy the the generation is an and our the transition develop cleaner for continue energy our Renewable positioning markets. We a essential

X.X last some associated into border. which connected the [indiscernible] least Nevertheless, displacement have around with been Cóndores us we closing the the megawatts already worker the gigawatts including X.X effort we by the to have the the without And of the this in projects to of they connected pandemic expecting XX brought the XXX under to gigawatts instance. Los During September. at of By today, the headwinds through to the remaining end of and are constraints into construction, reach project, months, be COVID-XX of our advancing we end went system year, as grid. maximizing construction of for

by be reference from with started first Additional construction considering their recently XXXX facilities this location. site to second in Renaico the to our and construction most the wind be other we projects. the expect first will production operational II part to XXXX, Chile. we wind quarter the green and connected port XXXX. AME the XXX With of have will project pilot be to of on move the finalized by JV full megawatts partners, And to of will hydrogen of quarter components for be during by The half to first the grid effort finalized XXXX, farm

and renewable essential be that decarbonization ally industries. convinced the along transition green the fully energy faster in into hydrogen hard-to-abate are will the process energy, We

implementation agenda let's transportation tons an that with as accelerating mining SQM, together leadership the we transport XX%. in share reinforcing is this consumption, in electrification the industry expanding allows process private use with displace of Now transport. for partner, intensive Enel X sources to committed of In market a launched and as replace Enel energy Under being have the public awarded, of energy move industrial step action reaching measures polluting the public tender with the is mining and together and well is in efficiency XX early the the XXX% complement of buses, Chile, electric complete buses of private process charging the electrical mitigating Along is mining the the truck, government XXXX, X emissions the great fleet the buses operations. mining presented in in core the with of participating XXXX. a mobility sector for necessary X, This Chilean private Enel field effort employees. a public position of is implementing to been company, made also in transport for where final and this in X,XXX have important we Page to public X its operations. decarbonization XXX with of electric by buildings. our Chile at with an our of the the in and are electric to X. promote plan, incorporation public in electricity fleet, sectors, infrastructure processes, the first public

in achieved cities milestone improved conditioning consumer, the people. emissions we Regarding Chile. replacing more initiative final of stoves have our an benefiting and efficient and wood COX than XX,XXX homes of This with well-being and the the equipment communities, recognization reduced of XX,XXX electrical

in consolidate of light, system Finally, lighting Santiago, more citizens. the the allow points X than municipalities projects cities, XX% lighting us out our to efficiently and XX,XXX lighting public lighting reach of in the carried maintenance which, city the and of that of Enel service face in increasing XXX,XXX with corresponds our of the the to with of efficient safety outside public regions in presence Temuco expand its of award

Now partial the the improvement X. let's to go year. of recovery to comparing using showing recent Energy sanitary previous the Page when a conditions, networks, reflects Distribution

efforts and investments service, allowed SAIDI Our lowering our of to resulting increase the quality XX%. have by in

improve clients channels. this our XX% Our through with In period, channels been with clients. executed these the our investment to continues in has our almost contact of contracts digitalization

basic the move of its debt. until a to With such service -- law. now expansion December XXst this level application the of overdue law affecting Let's still XXXX, the extension with is

law. In the with $XXX September, to XXXX. reducing to of more than In promote overdue X at with more reached the have of by corresponds our As we minimize aim basic continue payment which impact, we agreements payment year, order this million. overdues reached debt service the XX,XXX September XX% the to overdue accounts than clients,

working to quarters. The the collection. the transformation process lower as billing ongoing to process company versus update lead was our of in an fees stop KPI important fees for our Moving digital previous temporarily or

we A next final the presented. expert reference were on final could final challenge the the be tariff be phase. the the expect November. if early potential rate year. during regulatory on a expect This on expected the the We On report collection distribution date into during system transmission regulation. final Considering to during All regulator's [indiscernible], distribution, XXXX-XXXX referring the quick issued model quarter. decrease update entered released normalization the is we discrepancies confirmed, is be On the transmission, consultant to this the period already have next released of will -- for report mid-XXXX. of that effort

And will in XXXX. result, hand to published that I we expect early new over charge the As VAT Giuseppe. a shall you. be Thank now

Giuseppe Turchiarelli

Paolo. Thanks,

of summary financial highlights Slide on the Let me our start with X.

Before effect in program $X In the The million effect me million voluntary respectively, the income had figures. and to EBITDA Bocamina extraordinary retirement and quarter $XX the stock the stock the the starting, $XX in of million announced amounted impairment associated effect in coal XXXX, last EBITDA the stock third impairment voluntary at aggregated of million, bottom and quarter. and to cumulative an the XXXX net arising adjusted in net income. and coal and from group program line $XX the considered the of explain impairment retirement let period. coal X EBITDA

the line. are of the the adjustment the in the this And Bocamina X For is things cumulative the coal coming slide. effect in bottom million is impairment XXXX, of net $XX figures impairment described at bottom in of EBITDA. stock the $XXX million All from

on implementing commercial to build million, capacity. our $XXX new mainly accumulated Now allocated $XX into Customer CapEx totaled to on million, XXXX Slide CapEx system. reached CapEx renewable commission devoted X. construction new the new the deployment largely of

higher digitalization due high our $XX to $XXX mainly new the reached business months program driven project. contain awarded reached development in of the distribution million, digitalization of by our XXXX XXXX, and XX% Development CapEx expansion voltage Asset to the project than million, maintenance renewable largely management network. of CapEx our X and other

new and breakdown the mainly due a figures, year. indexation beginning lower XXXX last PPA Enel the agreement the third that started the $XX prices accounted Q BHP. the companies, in of portfolio versus of AngloAmerican start of from gas now increase The international LNG variances XX% with year. that Slide the Q create XXXX new to adjustment on explained XX the and EBITDA at mining in Hydrology, to demanded purchases due prices volume lack Let's the coming Distribution explain with XXXX, adjusted quarter us primarily higher by this third Argentinian million, contract higher main sales and customer the versus at of higher to

represented around increase aging $XXX natural activity in lower for me cost represented variance million costs, each of of by of represented Spot million. mainly Spot in positive production around trading partially variance $XX EBITDA our a offset purchases the of the as our volume that increase by margin Let an of an represented are the explain almost hydro contracted variation $XXX the million. a $X gas market. element included million, Gas year, purchases Variable in the slide. a explained generation.

the restriction. government the should we transmission have due November provision distribution recovery lower XXXX related Network third on XXXX lower the of distribution release tariff. the the to planner. in million, and Other chart, also quarter, penalty business. of 'XX to as mainly retroactive distribution X of result compensation remuneration EBITDA during measures costs in be the which to accounted business, coming and the to the mainly the public mainly tariff, for lighting remuneration, logistic step-by-step the the a $XX due third higher Enel temporary of Q Lower to the aspects business indicators costs the to the to regulated remuneration Following in from tariff effect on of in due and in a better demand the in mainly variances indexation related raising indicated Q quality customer services lockdown on due a

million, EBITDA now for $XXX lower XX% X figures. to summary Let's Slide we move versus have XXXX XX, where the month of breakdown accounting adjusted

main effect commodity the million X million gas lower are to coverage million. the positive the of due million mainly Higher had results, the represented $XXX lockdown and wholesales with accounted has million. a new sales the an unions. total in in commodity The spot started to impact distribution other of which XXXX with offset The first distribution contract international demand the distribution The around see, EBITDA due and during of an due market commodity business the mentioned, the Q in effects the mentioned of spot As higher availability booked in doubt agreement negative of agreement tariff flexibility expected for million. new in third with Q. generation same effect to the months was presented The the an to the you and a $X, increase volume the PPA XXXX million already $XX due the $X $X to factor million already by distribution can the impact period. months $XX the that lower and you transmission related on impacted other in variable network tariffs, remuneration Enel and purchases with for in Higher X in EBITDA the quarter cost, recovery $XXX mainly prices $XX third of price the the by in XXXX.

expense related net of million, to Slide lower to mechanism $XX costs, Generación debt quarter go and million, Income on XX, to higher tax on bad Enel the Now D&A executing our related higher due higher million, credit flow let's in in sales the higher factoring variance D&A the $XXX main and of through capitalized $XX drivers mainly the monetary correction group X a higher made lower in lower reached impact to assets the due in agreement impairment stabilization pesos the due mainly income. XXXX of due reflects tax during client period. D&A EBITDA. account, in basic totaled $XXX and increase to results financial generation million an Net Higher of Bocamina in Chilean mainly the financial mainly EGP related the the XXXX. of and to in expense due the expense financial business period. depreciation to an to

registered monetary As result in for $XXX mainly a X a lower XXXX by in reached in lower of The months inflation $XX the tax, the higher million, previous net Q due income result, reasons the losses by tax the adjustment due explained to million. quarter settles income mentioned versus the third partially to the offset the before EBITDA adjusted XXXX, mainly slide, last earnings correction out and the country period. the the

already a and XXXX, versus EBITDA, this cash factoring by reached the higher lower XXXX, actually almost than resulting of during XXXX business with factoring impact $XXX the by the XXXX previous by of in -- tax Chilean temporary partially sales distribution to depreciation lower months XXXX mentioned tax XXXX a higher impact all in payment and of to during due both explained XX. in A figures, during fiscal to Slide effect generated lower year part on XXXX year. COVID-XX to higher due the months line account. in tax of to networking mainly of mechanism X for due in mainly FFO stabilization offset XX% effect, X this versus $XX systems. e-buses mainly mechanism million months Moving corporate payment million, postponed X price to stabilization in were lower during to sales flow the mostly related payment sharp that the mentioned the depreciation and spot commercial hydrology by in of in $XXX capital Chilean And cash in million. of peso effects cost expense, offset XXXX; the XXXX; during the XXXX, new end financial collection mainly XXXX transmission Higher implementation of gains tax XXXX, that of XXXX pesos, price higher the due income accounted explained paid generation

on Slide now Let our XX. debt me go

million International increased parties. new debt and period insurance new The by a around basis with to in issuance the of as third gross considered all December CapEx KPI, XXXX, result our XXXX Finance $X.X gross billion amounting SDG XX% of which the emission Our fleet linked. related $XXX versus plan are execution. COX the as Enel we by total Linked, to now have generation our mainly debt SDG Therefore, of

debt line is pursue Our this awarding to toward cleaner movement of plan kind is a continue metrics. that our to

the an substantially and schedule cost of terms the remains last aligned year In X years of average with amortization, sustainable with figures. with our debt

of liquidity, internal potential market. Chile. face the to headwinds on now our in terms hydrology in been we of give quarter the have first this anticipated Finally, for Since flexibility of us And view XX. figures year, our the Page

believe variables. As natural higher idle significant coped to figures in versus a around deployed our year's being see us around we the noncompetitive part faced development the the with lack of implying to in there's And generation strategy XXXX demanded reported million deviation this have a I for last Tied ourselves We the our of generation gas between view, reduce quarter. hydro prices. we correlated This much closing million a to the of sharp the this for expose far capacity CapEx last no evolution will LNG that we Chile. adjusted more strongly much express to will the show year. performance update significantly several mix $X.X the figures. scenario, over our CapEx in thermal the Paolo, is reflect from to million, to exposure to raising perspective the increasing number essential don't guidance remarks. EBITDA months. increase driest and Argentina as $X.X XXXX one. this the revised structural scenario and adjustment our to slide, commodity as renewable of the have level, following national period We of study Therefore, scenarios $XXX is prices in spot following predict not in an In the of very of and drove our you higher of evaluation and hand which some

Paolo Pallotti

the and plan portfolio. on resilience for additional the feedbacks next system. the current their framework regulation, an this Giuseppe. and version new a resilience expected month. and storage published our will the -- to presented our month, priority This into to important and investment Executing you, effective in in flexibility submitted the technology, define proposal, use to we the remain Thank regulator remuneration final improvement create proposal having waiting our bring associations for Companies Last is and step ahead for are the of the system. of flexibility to of be electrical

communities the the and clients electrification reach our support energy ambition. to the accelerate net to to use order continue will zero in We of

Our the strategy will continue ESG to standards. be highest deployed under

a For in in recognition best of governance you example, Thank the as best reporting XXXX one for with the in attention. former corporate we your terms study companies been company and purpose, a as awarded in PwC of report and practice in have the of Chile.

into Q&A let's Now move the session.

Operator

Instructions]. [Operator

from from Mediobanca. come Javier the will question Our Suarez of line

Javier Suarez

I have X questions.

the obviously, I -- company is Argentinian lack on international guess The And been the that, hydro. also a of on very taking the for margin by on generation activity and that, this that gas prices. the care, affected by quarter -- and the that gas high one first has is

strategy of to gas continues to going if on profitability the -- outlook your obviously, very gas give couple difficult. natural is your for and because, of for supply conditions be relevant next be in wondering hydro case an supply was quarters can I us update So you that

during gas managerial any There So to quarter. collection. supply next negative for second is the natural maybe on the deterioration the be on and has the quarter KPIs guidance helpful. mitigate question been could third Then that improve some action impact, on

that think presentation. the during you mentioned I

collection. your the mechanism, kindly to and -- how of factoring factoring can and elaborate the third number the the your you can And accounted. on us -- So is stabilization on help Slide reason this how on is for that XX the for if XX on question understand the or strategy is deterioration you XX working

Paolo Pallotti

manage I you, Giuseppe. questions. and Javier, Okay. the we for one, will the and Thank your X together, Giuseppe second first -- Turchiarelli take

an gas Regarding I say, on September, update to end has gas -- available market. of October, the from the strategy, starting the situation, very just the for give early would been Argentina you gas Chilean

to import little amount mention million flow clearly, to And at say, can But let's that is meter per that as pipes have of the started day. until we certainty an bit. gas, is started just I Argentina today, now XXX%. we cubic analysis, then an beginning X.X now. don't October of increasing with So it a continuing And

This we gas. are the contract period important order we at including working LNG see in if with of We define the, little only to and bit and Brazil. Chilean to together is you to the counterpart from a the year, Argentinian maybe demand energy pressure our from impact look during to, we're situation It's burn analyzing this say, will growth We current the it but in recent the is Argentina Argentina the how hard say, for the for of a the we where period, And gas cover considering years standard to upside, the used because let's lower, so have Argentina importing other let's the are the counterparts. starting of usually, say let's Brazil this it contract months additional whole higher. within situation. is, stability XXXX, for availability from relief delivery for have elements gas. in And more -- end, early with early times, our -- for some availability market, with mention XXXX. And vessels demand the firm we sector the negotiation for next on is in in player a considering that the during

availability. a looking say, more calibrated elements we availability. of terms are doing, let's other approach in this also are gas we Maybe on Now

in would also the -- a to basin agreement by of the I let's mentioned. with with like of level, our And basins mention availability that other the The the us community signed decree keep I to Argentinian have higher Minister. is that the issuing as we water local rationing the that element allow water of the say, in also level consider gas, some

the outlook is negative month. month, of XXXX. next high, the So to give let's melting in even the the of the say of some, next remain would for and Considering if very rain based that next us the on price forward let's evolution. say, year, commodity -- I -- the snow curve the month's let's say Clearly, very, at the contribution everything limited, is a also view the say, not early be still end for looking --

are as myself, our collection, systems. mentioned, we process Regarding of in the we Giuseppe upgrading and

to and a working So system gain let's in everything clients one the it terms to is requiring in at and will line Clearly, And regime, the adequate keep another. of precision so say, migrate lot properly. from time on. and, put X we speed million

the the have, And quickest, adequate of way. elaborating, let's we can issuing so precise, more in a capability more say, bills

working We elaborate transition. For being, the the for bid finalizing of the for month finalizing for issued September. we this time and are

of We October. are finalized the month in

that November delay weeks having are still So we and will covering December. during of some we

I to answer Regarding the leave Giuseppe. would factoring,

Giuseppe Turchiarelli

up million sell sold an to around $XXX million. from we stabilization have to the And agreement we $XXX Yes. all, Well, up first now, receivables let coming of me mechanism. to say, price of that

exactly to I part bank we issue high loss each times, we assuming sold made the a much be the pretty of is So the the that, the in once only receivable discount has regulator discussed the have equity in decree and release because of XXXX. impact credit we sell of profit stating it receivable are According have in Having can will that of is a -- we receivable last several of going the the the that the how the decree moment said cash the future. in in the still portfolio. because as to the

timing level from And XXXX the year the year high made expense reason. of that because interest $XXX that important. reason is this is such This have of this we means it money So the the million of is pretty a we factoring. till in

general, We have the of in those such reason on paid this is be have based an an certain agreement we if sharing. will interest because in have in profit we important which so expense. average the amount the advance, But

Operator

[Operator Instructions].

next Our Murilo from Santander. come question will Riccini of the line from

Murilo Riccini

year? about that to natural And of previous past misunderstood Is from it the my deviation I by have any to questions, this your if of The just one, the I and more confirm is, Could side. the end the question could right you answered. repeat you I during this been were not producing estimate? regard? are Are we able they has since gas, it the facilities? year. That's on sorry last solar guidance? already was see any your a some deviation PPAs one lower-than-expected comment gas And get you of most left are production execution you seasonal accordingly here? some CapEx in that from having -- or versus seeing something second expected And CapEx to the

Paolo Pallotti

Murilo, thank you your questions. for

project year, Regarding events me the generation XXXX especially [ production beginning execution at the the of from that has pandemic. comment -- this from is curve there ], the that we I been in see projected the XXXX, the of to affected, beginning expected of let derived of solar if believe the facility, due remodulation relation if in that look we we

we have and regarding in well, working cases, terms all delay on we the the in year, the So the from some we border hydrology. managed -- had this people to to the until onboard sites. of it opening problem very wait And the the managed

peculiarity. at its Now almost if say, are, even has each we site let's regime, clearly,

is already are transferring [indiscernible] the projecting And considering requiring still megawatts remaining least is plant, XXX XXXX. early of of of this south, what at months the The the connected year. connected by XXX the grid. end of remaining one, So because in we have more time the the megawatts to the some remaining, X.X gigawatts,

the We the have, reach So the already is of also of to that megawatts year. let's I started say, as site first take is full would on opening ramp-up areas well advancing. are say, level part XXXX. The, for working CapEx this we new expected limited say, forecast for to, we grid, approximately will that what in clearly, to some let's the let's additional amount that of the are working work And with connected place We for say operate generation. projects. think

So the the cities activity, are advancing.

development. very We and plan we have CapEx this years. CapEx we -- for focused the lower the new year, to following on next And are the preparing for are to expect this for the -- don't

gas, agreed if in look year, the September. you this for contract say, our that plan what happened have is consider dispatching to discussed gas with counterpart, backward, and clearly, we also Regarding let's the

the was it was -- it of Argentinian time, say, anticipate, at that to let's shortage not So possible gas.

resources So every early was Chile, XXXX. to of market a what gas the in that the happened lack player and in energy market, keeping the is in

additional August of XX low where so especially big, the early considering delivery of cover very amount. end delivered to the draft we managed, the to remains gas the August, on of have additional managed to bets much very been be because buy month the April, not from the one and Clearly, -- was have to getting spot gas required days So -- -- July at to been We anticipate very of and deliver was system gas. all there was bought heat the March, in the And the very, lack ship, to able very, of regime. fact, the September. players shale first the starting of still the ship. But

the So this is, backward. let's situation say,

we are the Looking delivery also to with this of have what on XXXX. around equilibrated have global more a forward, This consideration the managing negotiation is take pressure sector level. into and clearly, gas essentially at you to counterpart

all our that an cover XXXX. clearly, needs is that it task cover trying are So is have scope to in because we hard the we to

Operator

any to further for turn in queue. I'd Instructions] any remarks. call [Operator I'm questions not And like back over the the showing Isabela to closing

Isabela Klemes

us today. with here be to attention your for all you Thank

sorry. I questions anticipated, received we As --

or you So But have your thank already you for comments, us let received. please any know. have questions other if that questions any other we

for thanks Bye-bye. patience, for send safe. stay Many team. message a us your Just the IR and

Paolo Pallotti

Thank you. Bye-bye.

Giuseppe Turchiarelli

Bye-bye. you. Thank

Operator

And our this your conference call participation. Thank concludes today. for you for

a disconnect. now You Have day. may great

Enel Chile (ENIC) 1 Nov 212021 Q3 Earnings call transcript