Q3 2020 Enel Americas SA Earnings Call
[music].
During this conference call, we may make statements that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 995. These statements could include statements regarding the intent belief or current expectations and now in maritime.
And its management with respect to among other things no Americas business plans no Americas.
Cost reduction plan.
Trends affecting in Americas financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere.
Religion, and regulation of the electricity sector in Chile, or elsewhere, where on the future effects of any changes in the laws in regular regulations applicable to know Americas or its affiliates 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. These factors include a decline in the quality or pardon me the equity capital markets.
I did state of Chile, and an increase in the market rates of interest in the United States or elsewhere.
Adverse decisions by government regulators in Chile.
Late or elsewhere and other factors described in <unk> ml Americas, and Rockport on form 20, dash s., including under risk factors.
You may access our 20, such as on the Fccs website Www dot.
You see dot Gov readers are cautioned not to place undue reliance on those forward looking statements.
Speak only as of their dates and the Americas undertakes no obligation to update these forward looking statements or to disclose any development as a result of which these forward looking statements become inaccurate.
I would now like to turn the presentation over to Mr. Rafael do the Hamzah I know Americans head of Investor Relations. Please proceed.
Well I think you would not see this afternoon I'd suggest that there really isn't there.
Hi, there good day, they loved it seems like they did they fetch person patients I guess I'm sure that if if independent agents like having your knees. So do you feel when you said in public CFO.
First of all they had to pay you anything so you'd have anybody can say [laughter] before this data can be school British game, Let me remind you that this presentation. We fall will be a slight that's kind of you know where do you go looking through the company's website.
But it wouldn't give it some day she'll <unk> coffee <unk> tea on a sales him how do you feel like the NDP. When you got to be refutes Liftings from this is very painful they got to be no. What we saw this quarter at least on Fourg.
Well get made a deal between ended up maybe go up I mean, it would be by what did they do of course actually but probably taught me put against it. So we try to be specific goals in school, you know baby fueling [laughter] funnels syndication policemen for names with you on that can be made only for the family for like let.
Let me remind you that they need to be up you can be funny to both the presentation from the Q I know you said to me.
Now, let me hand older vehicles go really well when it started by outlining the main highlights of the video we're putting it out maybe got finished like I'm Becky.
Thank you Alfredo good afternoon, good morning, everybody.
During this quarter, we have seen an important big corporate compared with the second quarter in terms of the man and collection.
19 need back at its peak during the second quarter and in the last month, we have seen that the but it wouldn't have had the Baltic these trends and almost reaching their normal level by September.
Yeah, we can see them doing our best to help Oh, we're communities said to face these difficult times.
In this context it'd be done for the third quarter, reaching 725 newly in U.S. dollar degrees up 20% compared to the third quarter opinion 90.
These significant reduction is mainly explained by the currency devaluation in the four countries nippy, operator and to lower energy demand that seem to either period without considering defects you impact it'd be that would have decreased by 2% in the quarter.
It is important to highlight that despite these difficult scenario. We have we have what we were able to significantly improve our cash flow and disputed mainly due to the positive impact of the coffee that count in Brazil that they do could do in a in July.
A briefing the after four weeks 60%.
Compared to the Juda nine bounced off the previous year.
Regarding the merger we debuted the Americas posted a few months ago let.
Let me tell you that the Brexit is well on track.
End up these presentation will reveal the main milestones.
I mean I had on the on the next slide.
We will see.
Yes summary, I'll, probably 19, many main embarks on our people [noise].
[noise] local currencies have suffered significant depended lesions against U.S. dollars duty this year, but.
But as you know <unk> has the queen 40%, while gentium deal for London bids went the route in Seoul drop it by 287%, 19% and 9% respectively regarding electric <unk> electricity demand to distribute it.
We had reductions are in four countries, where we operate compared it to should nine months up to 80 to 80, we just think they don't have to eat an idea we can see that the room, what's the most effective concession we did agree its up 9% as.
It's into mining industries do you, partially affected why Brazil, Colombia, Argentina decreased by 5% finally.
Finally in terms of collections we.
We have seen that the rule, what's the most affected country would have dropped by 7.9 percentage points.
And we have Argentina, we 7.3 percentage point, Colombia, we 2.5 percentage points in Brazil, We 2.514, sorry, I present data point. It is important to highlight that despite this negative impact both demanding collection happening do they compare to the second block at all this year as we will see either.
Coming either in the next slide.
Here you can see you put himself electricity sales, Brazil, Colombia, and Peru show a positive trend since April.
In September we already did reach the same level off of the last year and what's up the beginning of this year also ER and even death or NK cell bridges in case, if Argentina did trend has has it been different due to its lower because economic recovery in particular in danger.
This this extra sector.
Intensified collection the positive trend, it's not it's a few you're asking the main shorts.
But anyway, we are in a much better position compared to the second quarter. As you can see that the September collection has been better than them last year now.
Now, let's have a loop or not where investments for the Buda in slide number five.
Looking at the third quarter up this year, our capex increased by 3.4% compared to the third quarter of last year.
This includes a negative impact coming from currency devaluation of $84 million without these effects capex would have increased it by 25% reaffirming our commitment to continue investing according to our strategic plan stuff that despite the current personnel.
I really couldn't situation.
Considering the first nine months off the it capex amounted by $981 million a.
Degrees of 80.8, 0.9% compared to the same Buda adopt last year you would.
Action. However, it's also expanded by devaluation of the currency of local currency without considering this FX effect, our investment degrees it by 14%.
Oh, what divestments, so when they mainly devoted to maintenance capex and Fox focusing network business, especially booby quality indicators from a geographical point of view, most see almost 60% of the investment.
He is indeed squat there when they were made or on our subsidiaries in Brazil with a significant increase in our four distribution company, especially in <unk> and it'll go yes, no on the following slides, let's see the main.
Yes, Gee educators.
Following our fault, we oh contributing we the United Nations Sustainable development goals, we have been supporting our community with more than 460 Bridget.
Which in total have Baltic beginning back in 1.4 million people in the countries in which we are present.
At the same time, we are doing our best therefore in order to help our society in these difficult times and Danny.
We are implementing more than 100, <unk> initiatives, which aim to help mainly healthy situations and people with economic needs [laughter] gardening.
Especially that Barbara today energy poverty that we have in the in the region.
Four countries, where we operate we have made several donations, including electricity generators food supplies and medical equipment and supplies among other initiatives.
We will continue to be only spent as long as he takes hoping that we can collaborate Gilbert companies discrete describes it all together now I will comment about the financial results for the Buda in the coming slides.
[noise] as mentioned before globally in fact had its be during the second quarter, helping to doing but during the third quarter. We continued on being affected mainly by a lower demand season. The there is a low we crawford alfie economies in the country.
Simply agree deduction, Oh for electricity demand to do coffee had any backed up $195 million and $50.
While back that's impacted by $19 million at net income level, both impacts were $53 million and $6 million respectively.
After the deduction defects ER and coffee didn't back so we get well not just in it'd be down 3 billion almost.
Almost every deal in the U.S. dollar sales for the first nine months healthier and 1 billion for the third quarter, while adjusted net income reached it wouldn't be $1.1 billion, and ER and $396 million, respectively, and they're coming to light.
The number of number nine wheel or we will see the main financial indicators for these four dispute [noise].
The third quarter reported EBITDA, reaching $725 million and 19.5 degrees presented degrees compared to the same period of last year.
Yeah. This is mainly explained by the negative impact of currency devaluation in four countries.
We are up rates, especially in Brazil.
At <unk>, when I I laughed at Columbia, but mainly in Brazil without considering these effects it'd be that degree that 2.2% as a consequence of lower energy sales both in networks in generation businesses.
If we were if you look at the first not from the first five months of you give me, let either did not reach up to 2190 $6 million at 26.1% decrease compared to the nine for the same period of last year, mainly explained by the.
Bob mentioned FX effect and also by Baltic. These one off of 240 80 medium U.S. dollars, which used to last year in Argentina, due do Ed it's true liabilities ribs and resolution.
Without these effects it'd be that would have decreased by 1.1%.
And a good net income in the third quarter decreased by 31.6%, reaching $190 million, while on a cumulative basis you'd decreases by a 40.8% reaching $487 million.
Both gates disease, mainly explained by a lower EBITDA, partially offset by a bad as financial <unk> financial results and lower Capex payments.
Afxtwo as I said in the first nine months reached 1200, then and $76 million an increase of 60% almost 60 per cent compared to last year, while net that's degrees it by 1% reaching $4.2 billion.
We went on like I said that they were cash flow and that's really in that that's later in December he did the presentation and they can connect them as like lets them, we'll see baby diaper Lucerne and breakdown.
Starting from $901 million or 50 folks would be down off that third quarter of two in the 19th we see a decrease of eight eight he is $18 million in thermal generation business due to a lower dispatch while hydro generation decreased by only 1 million.
Those networks a business.
Worse affected by lower demand in the Beatles showing.
A reduction of $41 million, while retail business increased by $3 million, and then ex that $35 million.
The main impact of these for the speed it what's occurring.
Devaluation, which had a negative impact of $153 million blown members, who represent a 40% of total EBITDA finally by the rule, we've done 15% or antigen Tina five for instance in terms of business lines networks represent 47 for.
Sensipar EBITDA, while generation contributes we'd 42%.
From a week, 30% Isa like either with the U.N. NLX.
Represents a 6% and 5% respectively.
Regarding the cumulative it'd be dying to first nine months of the year and just starting from 2970 $1 million from the savings from the city Buda, let's see it that May decrease comes from the currency devaluation of thought, though a built off $489 million thermal generation networks in but.
So if there are separate that significant degrees, where hydro generation in NLX performed better than last year.
Colombia is the maybe back went to <unk> for the period and half of totality that comes from network.
And any frac structures business, let's.
Lets now analyze our operating highlights on the following slides.
In generation business already stuck a pass it to remain the same as last year, reaching 11.2 Gigawatts from reached 55% is hydro generation net production in the third quarter, reaching 11 or Ted I bought tower.
Degrees of 9% compared to the same period last year due to a lower production in Colombia, and Argentina in cumulative terms net prediction reach at 30.2 Terawatt hours in the first nine months off the off the year, which means a 4% the degrees of that total production up this quarter.
65% corresponded to hydro generation.
Our energy sales decreased by 10% in the third quarter.
Due to a lower sales in the four countries reaching.
The 17.6 that up hours in cumulative dirhams did decrease was 9% explain it by reductions in the room, Brazil, and Colombia, let's analyze networks business in slide 12 that.
Third quarter distributed energy Richard do any age point night, then about towers decreasing by 4%, mainly as a consequence of the pandemic and really they related reduction in economic activity.
In cumulative therms used to get the advantage of reaching 80 84.
Well, the nice thing about towers, which means a 6% the degrees compared to the same period of up to 80 90.
He got the number of customers, we have any bleeds off around 440000 a day.
Clients are mainly explained by an increase in in some boundary and et cetera, and Android OS and not an adequate density in Colombia wanted to indicate there is improvement in almost oh.
Our subsidiaries with the only exception off and it's set up which we suffered the heavy rainy season and have the morning disruptions due to maintenance works.
On the following slides, both see NLX and retail businesses.
You didn't elect business, we had solid growth in charging stations photovoltaic advantage and credit card businesses, while the public life in micro insurance is likely degrees.
We continue with our focus on developing new solution in order to improve our customers' lives.
Well I'll repeat.
To help in the transformation of Cds into Smart cities, you probably could qualify.
Life indices.
Regarding retail business.
The number off the leverage points increased by 23%.
[noise], reaching 3200 and then.
Duty dispute and then it just sold a a mounted <unk> 11.2, terawatt hours, which means that a a 99% of degrees F. a consequence of the fund dynamic and the related reduction off the demand.
Let's move to account by account analysis on that companies like.
Beginning we'd that we are Argentina.
In a in the next slides in this life or 15.
EBITDA in Argentina.
Okay, but then I think you know during the third quarter increased it by.
A 37% or $11 million compared it to 10 o'clock and doing nothing reaching 40 million U.S. stones is this June due to the fact is that in the third quarter off last year. We did as you said it had a negative impact so often $22 million in distribution.
And just as a quick myself hyperinflation.
Currency devaluation had a negative impact of 11 million newest dollars you'd be in this third quarter and.
Our generation business it'd be that decreased by 26%, reaching 38 million new installs is it mainly explained by lower revenues due to the basic education of tariffs and no inflation adjustments and due to lower physical sales up 8% as a consequence of lower demand.
In that distribution and that the network business they'd be die increased it by $27 million, reaching 5 million U.S. dollar school embedded should the negative results of $22 million of third the wahpeton up doing today. Despite this increase.
Our beaches and its units do you affected by frozen pads. He turns off demand or anything that has been very back they'd be sparked a bike coffee and we had a 11% lower given the demand compared to last year. In addition, currency devaluation had a negative impact of 281 million.
Carlos for these disputes.
Capex in Argentina increased by $23 million compared to last year expanded by a higher investment both in generation EPS and network businesses.
Let's continue to leave with that with Brazil in the next slide.
In Brazil overall I did not.
Indeed, squat their degrees by 32% or $137 million, including $104 million up negative impact coming from FX effect without these effects EBITDA would have decreased by 8%.
It'd be dying generation business decreased by 7%.
Or a 4 million U.S. dollars, which is mainly explained by currency devaluation, which had a negative impact of $14 million. This was partially offset by a better operational results due to higher energy price.
He died networks business decreased by 36% or $138 million you. If you don't want to see the they affects the FX effect it'd be that'd be greeted by 12%. This reduction is mainly explained by lower electricity sales. You then have some follow in a real and and et cetera.
Capex in Brazil decreased by 10% compared to last year, which had $280 million. However, these degrees east only due to currency devaluation isolating that effects.
Our investment increased by 49% or $997 million due to increases in our four distribution centers, he just especially in glass.
I specially focusing improving into the results I can I mean, especially in a while if he plans regarding go yes, that's moved to Columbia into its always like it'd be bancolombia decreased by $32 million or 9.8% compared to that took wipe it off last year.
Currency devaluation had a negative impact of $34 million in the British pound up their arms it'd be die increase it by 1%.
In generation business it'd be die degraded by 11% or $281 million, if we don't come see the.
The FX effect, we had that degrees degrees of only 1%. These.
This was mainly due to lower energy sales.
Due to lower demand.
In the in the country the distribution business in the generation business in.
The distribution business it'd be that decreased by 80% or $7 million.
And this is explained if I could just devaluation would have a negative impact of $14 million in operation I know terms EBITDA decreased increasing by 3% mainly explained by the introduction of the new data in April Green and 19.
And also it's important to highlight that the new regulation scheming balloon based revenue can mean that there's a lot of demand it does not affect substantially our our revenues.
Capex in Colombia decreased by 16%, mainly explained by FX effects are and without a without these without this effect the effects defects. It would have decreased by 5% or 5 million daus lets on her life through on that slide 18 it.
The Doctor, who reach its a $112 million, which means that degrees or 40% or $18 million compared to the third quarter of 2019.
Currency devaluation had a negative impact oh $7 million in operational terms it'd be that decreased by 9% or $12 million.
In generation business it'd be that degrees it by 7% the $5 million. This was mainly due to a reduction of 5% and then it just sales partially offset by higher sale sales price in network networks business it'd be that degree.
By 24% or $16 million in operational terms, it did that decreased by $9 million or 14%, mainly due to lower energy sales or 4.1%.
The total capex decreased by 37% compared to let's see it was due to a lower investments in both the generation and distribution business, especially her to a a delayed the activities that due to the pending like no. Let me know if our cash flow and.
Main indicators in the coming in the coming slides.
Referring to slide between seats.
FX for funds from operation for the first nine months of 29, Twentytwenty amounted to 1370 $6 million.
Are you starting from my Baby Doll do Oh 2190 $6 million. This result includes a negative net working capital either beat at the foot on Mount an amount of $246 million, 79% lower.
Sorry, higher no higher than than a than last year.
ER <unk> are higher than last year due to difficult condition enough, becoming funds, we see a good from call. It feeds a accounting in Brazil in July and this is very important to emphasize that depth or did I. What I said before had that increase the duty this beautiful, especially due to these compensate.
And in the Brazil.
ER Okuda in July that space or duty disputed amounted to $404 million, while net financial expenses amounted to $169 million Capex amounted to 974 million us dollars as indicated in the previous lights and net.
Diffidence they were.
Minus of course itself, it's a outflow of 977 million U.S. dogs with these we get the net free cash flow off of mine those $574 million.
Their financial receivables are in that age extraordinary operations for.
Minus 39 million any effects.
FX effect of 655.
And 50, sorry, 56 million the total net debt increased by EUR $40 million compared to last year and he is very important to emphasize that on one hand, we are of course independent countries. Our revenues are in mainly.
In local currency, but also the debt you look in the countries are also in local currencies, which means that.
Our.
Exposure do effects I read the news.
It's Matt should do the data that we have in the <unk> in the countries, which gives us a comfortable situation in terms.
Of Ah, that's and if I may show structure.
So this comes to the next slide when I will give you more color regarding.
That that's off the company as you can see the gross debt amounted to 5.9.
Only on the U.S. dollars, a decrease of 5.7% versus December.
Great and I see the effects that the FX effect account so for us that's a reduction from more than 1.1 billion U.S. dollars due to the fact that most of our debt as I explained it is in local currency. This is partially offset by a <unk>.
That's increases mainly nail Americas, holding I mean, not that you anticipate the dividends.
And for this year and also in Codensa and got some follow and El Salvador.
Let me emphasize that thing in their last walked off the year.
Yes, the major to receive for the rest of dividends from the continuing to Amedica in order to reduce the debt at the holding level in terms of currency and country in country, our debts in U.S. dollars ending the holding company increased due to the debt issued in a in an l. amedicas indices.
Second quarter on there on the other hands, our exposure to Brazil in various degrees.
Finally regarding the cost of debt, we can see a reduction for disputed going from 7.1% in 2009 seemed to 4.8% for the third quarter to anything.
This is mainly explained by a decrease in the weight of the debt's coming from the acquisition enough and if somebody better.
Better conditions to refinance that in Brazil, with the interest rate the reduction there, especially the better margins that we got the performing do would find a liability management in the Companys, Colombia to ER and holding company and law provided both the ER rates in Brazil.
[music].
We live in general that tax reduction.
Of the of the country.
Now in the in the following his life I will show you a brief summary of the coming steps of the proposed merger with NL Grease Boulware Americas.
That's our target for these Ford beside transaction.
After we announced Sid.
They propose that operation back on on September and September.
The independent evaluators in the appraisal began working on their reports once we receive those reports we choose the cure by early November.
Our board will analyze them and we'll call to an extraordinary chair holders meeting.
Vote on these operation this meeting should be around to the third week on before December.
Once the board set the conditions of the operation in Kohl's the shareholders meeting, we'll have a conference call to give more details of this transaction.
Now let me conclude this presentation with some closing remarks.
On the slide.
23.
With a difficult or within the difficult times that we are facing we are actively working to mitigate any potential impact and doing our best to help our commute the communities.
The last quarter, we saw some recovery the recovery signs.
Turns up demand in collection as you saw a compared to last quarter.
But we are still suffering they backed off recovery devaluation because of currency devaluation. Despite.
Despite this difficult environment, we have been able to improve our cash flow in a significant way.
Finally regarding days you'd be merger proposal, we are waiting to devaluate. There's reports you know one of the two cents the conditions of the transaction and call. The shareholders meeting, we'll have more information in a in a few days.
Well. Thank you for a four year old patient and that's a I festival Rafael for the closing for the information.
Yeah, No we moved to the Kiani said so please operator.
Ladies and gentlemen, I guess the question at this time to assess the star and the number one key on your telephone.
Once again Thats Star then one to ask a question to remove yourself from the queue. Please press the pound key.
Our first question comes from the line of business.
Okay.
With Mediobanca your line is open.
Hi, Good morning, and thank you for taking my questions I have two the first one is on the on the slide number 20 on your cash flow has hurt you know they sound, but obviously that is a significant improvement in the net working capital absorption during during the year.
That has been explained by the by the public accounting Nikolic said about the great accounting, but I've seen.
But I was wondering if you can.
Help us understand plan driving that improvement would be the amount.
But the improvement that they relate that to the collection of that covered the town embodied or any or the element that kind of thing that that significant improvement in the in the networking capital on their floor and be careful of the company, but he is the first question and the second question any somebody like them, but then I'm looking at the EBITDA evolution.
Most of the growth.
During the fourth it and also accumulated through the year you see on a on it and then Ics. So you can help us to understand the dynamics and analytics on what these detract advertising for us on maybe you'll get a piece or.
Like businesses that explain the evolution on the good consumer sentiment and then within and in America. Many thanks.
Well I have yeah, yeah. Thank you for your question well regarding the Quantico visa. They in fact as you know is a is a mechanism that ER inject so let's say that the the funds in the distribution companies right in order to maintain that.
Chain of payments off all the AFFO the change in the in the industry and open beta that does nishan degeneration. The end. So no. It is a mechanism that the already but Brazil do you need that to see.
He is two times in the in the best thing in 2000 and went into 2014.
Something it's going to consolidate that so and they these funds coming from the day energy.
Tender see see no.
And ER it.
It will be paid by the customer base is in five years with a one year of Grace period. Okay.
These figures here, we can see there 400 and that and the 30 million U.S. dollars. Okay. In they are injected this money on July 31st Okay. So.
But only to the cash flow a we draw this money.
And ER, we are not let me anticipate the semi issues that we are still discussing with the regulator.
The older distribution companies.
The possibility another possibility, but their rights to recognize the economic impact right or its still not defined that is probably getting going on in the with the regulators the regulators.
But Ah <unk>.
We see that a part of these figure it out.
We see the Reits do recognize because we see the next that Allergan that effect as I think back then that they cannot make it the bidding off the company so but I think it's a it was a very good the easier because at least the RF Lisa.
The major parties that cash so the cash flow it was partially.
Well compensated a well in the <unk> and the fair no fair compensated by these these mechanism right.
So far in there any leaks Ah, yes, you are right.
We are very let's say confident to see positive but in fact, we decide for us it's a big let's.
Let's take a bigger.
I will not say stop it but thats our vision of the distribution of the future is providing services in bad debt, we the energy right.
We will not failing commodities anymore in the wheel not selling commodities in the future, we'll sell services subscription any leaks come.
Solid base all of his vision of our vision of the utility of the future right.
As you as you see there is that increase it but let me tell you that if you have a very low contribution.
The total EBITDA, we're talking about I left off it'd be Dod that the good ER, but who the who do each.
Not not not much then at least now 60 million.
U.S. dollars.
And but again.
The increase here, it's due to especially being crazy not in the credit cards, especially the business that we are improving in a in Colombia right. So.
So we give a a according to our war score a credit score rating with our customers, we give them a of course with the partnership but with the with the bank, we give them gratitude to birches white goods more efficiency goods and that it's so far away.
Ah to include a a inclusive launch include the people that don't have access to the bank.
To to get credit for it so it's very interesting and its increasing pretty much on the other issues related to the ER electric mobility, we choose that we lounge should the project in a in Colombia is it still is due to <unk> to increase more it's a double dip when picked up but of course, we have not.
Into the person that transportation business, but we are with that partnership but with that.
With the mayor CD and ER visits company and provide all the data electric and said this is not only an electric oh the surface the environment, They eco systems regarding energy and back.
I'd say the stations, we are very very very interesting pieces.
Let me tell you stepped up.
The third one which is we didn't show an increase but I want to like to emphasize that the public lighting is my smart lighting, we are actively participating in the process of Bobby partly sheep, especially in Brazil, that's moving forward and we we are we would oh why or why word.
Wire I wanted to know in some on in some cities.
Of course, it's a new business for us it's not the <unk> that did add to the level that we estimated the but we are moving very fast because it's a learning process and very easy because you provided.
Yeah energy efficiency.
Cities, where the people are in the more and more into Cds, and marine and likely is inclusion likely need to you reduce violence and you provide efficiencies. So we are being not wired. The in seat is out of our concession have yet so she's very interesting despite the.
The lower or if you back.
But we are very confident that the end to end up in the next year, we will.
Show, a very interesting in Korea in the revenues off lease business, which I will be is a new a new beat this brought us a we are we are advancing.
Fast of course, this is a learning process, but again.
And Alex if I come out of business.
But disease, our vision for a part of a big part of our vision of the U.T.D. So for the future consolidating this platform off.
Ed distribution, combining energy with services and we are in a in a good way in a good path to this transition.
Interest in what's out there.
The Nada Nebraska.
Well.
Question comes from the line.
Well you will see me with think of.
Santander Your line is open.
Hi, Thanks for the call.
Sometime that.
I had a couple of questions. If I may the first one regarding the guidance.
To review the EPS sexist you might use it for the Twentytwenty guidance.
And also the levels uses for the Twentytwenty One guide us the second one if you could give me or give us more color on the $695 million adjustment related to go into effect.
I mean in terms of countries and that that coming from each one.
As in the page nine of the presentation.
And the last one if you could give us an update on the said so.
Hills process. Please thank you.
Yeah.
Moving to <unk>. Thank you.
Well the the Covidien backed as you as you see I can speak to the $195 million snow in both in generation distribution Oh of course, more modern affecting distribution business.
It's $42 million in a in Argentina.
Well, but I see 100, and 111 million us dollars in Brazil that made me major impact special for a party distribution.
In Colombia, Duane the Neil young the U.S. dollars in through 22 million a U.S. dollars HM.
Well the the other question I I'm, sorry, I didn't I say they play that decision process. So <unk> yeah. The fed as long as it relates to the Apple things have changed I think I got some of the company I, Okay, sorry, sorry, I missed the detail on a very important question or where we are we are maintaining.
The guidance to enable a explaining why.
We are asking them and of course, if you eat fuel and you do your calculations you have Ah.
The figures and of course, we are considering a an extra ordinary in fact.
That we we can we cannot sustain especially in the in the context of Egypt into perhaps you didn't go into all of the right parts of these effects.
So we.
We are confident in recovering as as we explain it to the operations and the economy recording a shorty showing a better a better quarter in the last quarter, then ER than the previous one.
We are seeing the possibilities to compensate and these one off that I explained to you.
Related to the Quantico feed and last but not least Ah I would like to remember that we are oh, not an ongoing process to de risk the pension funding some policy.
Which closes by the end of November and we are confident that or did some of that will have some positive impact.
Of course this is a positive accounting impacts because when you perform youre your liabilities a from a defined benefit the im sorry, the findings that yeah. It kind of benefit he tried to find a contribution you equalize the discount rate from a from a.
I am afraid to ask and the local discount rates and think the local discount rates from pre peak is higher so this could bring it bothered to infect so resuming the the the explanation yes, we are maintaining the the the guidance.
And of course, the bed or working in this front since the rig will that started front.
In this Ah breakthrough, they show or or patient fines migration plan and of course, the recovery of the off the last the left squats off the airplane the independents as well.
What we cannot control is unfortunately, unfortunately is there an FX exposure.
Exposure right.
So.
HM.
We cannot.
Predict what will be the Colombian peso, the Brazilian rise or the Alogent Dina.
Bizarre this all is paid ones.
But considering what are the issues that we can manage give us the confidence that we can that they can achieve these are these are these targets this guidance mm.
Well they pretty much as they can process are you Ah well are we are we.
We are where we are participating in these in this process.
Yeah.
And of course, we are.
Disease, and I reject that the interest interest is us.
We the synergy with Glioblastoma with there that he put the condition of the very good condition of the of the market, though of Brasilia write them talking about Brazil, which is the most oh, let's say that the next to no or already announced it revitalization.
To be a a in our view a competitive process of course, we are very very and.
We add up the very let's say.
Considering of course, our financial discipline, and our criteria to to do it but to.
Two birches ours to participate.
We are confident that we have good conversations or who to choose to award. The these are beside this productization again, depending on the what level of competition and what the hour this financial discipline or allow us to to move or move forward to.
Okay.
Thank you and just one follow up question.
Do you have any update on the demand during October as it seems to to to be very very positive. During during this just this last month some countries like Brazil.
If you can comment on that please.
Ah, yes, well, what we have seen our agents is Uh huh.
He is a better better October than a than September I'm, sorry, I cannot give you of course are the final the final the final number because there are some as you know.
Some there are some steel.
The most measuring and remote metering, we have it but ER again, not what I can tell you is that we.
We have seen you have a better a better mouse or in a especially now we're in our concessions and or anybody else. He was well and Ah. That's why we are confident that we will will have a better a policeman considering october a better quarter, let's.
The next most how we think he's moves as you know.
No that is not only active economic activity the box on these i. I, we saw lots of economic impact, but also temperature right. If you see the the for example in this setting a in a in Brazil.
In a in Rio the weather there are there the harvest season I mean, if these heart there have been a warm and then the then the because you will have a high conception.
In Colombia, that's not the variety because Colombia as you know we got to have annual EPS. So no no concerns regarding these and we see a slow report very favorable do I I think as you as we as we saw in the in days like they'd be Mandeep. It was the most the impact and that of course, we are estimating that went.
When it comes to when especially the economic activity the good quotes but it will be faster than the other but again. This is related to the reduction of that they too happy they demand a base load or or are there kind of hot baseload the norm.
But what we are seeing a in brings you up better I better UBS.
Whether or not that a month I bet October in Colombia, and the same is that either it's not it doesn't affect <unk> pretty much.
It's almost a line.
If they do.
We ought to recoup it but but not at the same level that we have in January so it's still is still slow.
ER and Argentina is low okay, but if we account oh the companys altogether, it's a better October then.
Then than a than September and better than nestea, <unk>, because Brazil, when they send sales force it has a higher.
Hi yard you back to a higher wage and though in this calculation.
Thank you and our next question comes from the line of Charles Fishman with Morningstar. Your line is open.
Good morning, Jeremy.
Yeah, Hi, Charles Okay, sorry, I had a.
Hi, a disconnect and.
On the.
Merger proposal, Okay. Ah report from the independent appraisers or do any time now it sounds like a shareholders meeting in December.
When do you think that.
Well the complete report be released and and about what is the timing of that before the shareholders meeting would be.
My first question and then the.
The other thing was.
Slide 21 the.
Just the really significant increase in your cost of debt, which is great.
Do you see any more ability to drive that lower is there anything on the horizon as far as refinancing is there anything.
With respect to the merger that.
But ER gets that cost of debt the average cost of debt even lower.
Those are the two.
But they think the trials are well.
Regarding the reports we expect the deemed a in the next Uh huh.
In the next few days tool to tool to receive the final and published the final version right. So.
The market will not have to wait to do longer to have it that information and by our side by side that we are very committed to give all the shareholders. All the information that they need to to have their their decision. So this is a thats why we ought to.
Moving fast or a football not moving fast but the.
And committed to publish as soon as possible the report.
I cannot give you. The therefore this certain dates but I can I can assure that thing. The next step in the next abates, a it will be the Republic of Capex.
Well regarding the debt.
Well, there's no there's two factors here no.
It's part of this reduction is due.
In spite of being violent that that with the tech and would they just rate reduction this as as we all know into in a in all the countries no but.
But even even death or Intel Americas had a a very good position to do liability management in the company. So we take advantage of our financial position in order to refinance and reduce the marching or reducing day spread off.
I'd just scratch off the off the banks you know in all geographies right. So it it gives us the of course, we take advantage of Lisa of these situations too.
That is a natural reduction off being local interest rates right, but.
We also refinanced and reduce that they spread because it's not a it's not a condition 40 fought every company.
Fortunately I know Americas had this possibility and the third issue is related to our policy or Charlie to June.
To maintain the local that's correlated with the local currency right. This is something that the we do we'd love to get a international or in foreign exchange was strongest for FX.
ER debt and not correlated to our revenues right Oh revenues, how do you look at cutting so a we need to have a balance said with a with a look at that so these three major points explain decision.
Let me tell you that the advice you that ER, we are very actively in the liability management ER and ER, it's especially if I may.
Anticipate the depth of course, the company that that is moving into a more SVG fall cruise or more to sustain that they like the focus or can get better finance show up but well see some so I mean.
Since we are moving to be a and we are proposing to to move to be that action of course, it will have a a much better conditions due of course to some financial costs as a in reducing funding overall financial costs with these Ah E. F. G. We did sustainable.
Let the approach again.
We do not do sustainability to reduce financial cost, but we appreciate these.
These impacts are they also know this is part of our day to day strategy off of our Ah <unk> long term strategy.
But also as a consequence, we are expecting a with this.
We decide and moving forward to decide this transaction to reduce our financial and financial costs seems to be such a strong requirement from the from the the financial markets. Then and then the worthy in general no not only in Europe, but also in U.S.
Yes.
I think that that.
We agree we have we'll have a better couldn't be better condition. Then again, we are very actively on the site.
Okay, well good job on the Batman and look forward to the.
Independent appraisal and so that's all I have thank you.
Thank you Chad.
Yeah.
I'm.
Showing a question from the line of Allison.
With some very clear on is open.
Hi, there Elton model from Bloomberg Intelligence I have two questions. The first one is on.
Pat Cody I mean, obviously, we're seeing quite that good.
Improvement in Threeq, you, but now we've seen that second wave happening all over the world now if we if this whole thing continues into the second half or maybe next year the pandemic.
What what kind of impact do you expect that from colleagues on EBITDA and is that going to be primarily on the demand side on bad debt or some project delays. The hat. So this is on they called into question. The second question is on your mid term guidance on annual ASP in publishing.
Me Me Tim guidelines on November 24th is it when we are going to hear something from you or is it going to be before or after that so if you could give us a bit of them you know an idea when to expect that the guidance for the next few years that that would be great. Thank you.
Hi, all my dog. Thank you for it for your yard.
No questions.
Well in terms of.
Well correct me if I understood. It is the Israeli things of coffee that we are seeing that the need of course.
Yeah.
Even improve in the fourth quarter of Queen the Twentytwenty right well not recovered to coffee the backs off and especially the second quite right, which was divorced for us and Oh okay.
If you ask me, but the what about going into doing to one no. We're not we're not that's the main thing that total recovery or to have for the the let's say the last the last the demand here. If I may a of two ended lengthy right. What we are seeing is that thing.
Especially due to some analysis that we do know geographies and ER and especially that the macro a evolution and multiple decisions of the countries.
We are expecting the by the beginning of doing between the two.
No show some increase regarding the doing the 20 or 2019, I mean think they did one or two into Goodwin almost the same and the same level of reaching the same level of things you, but the increase in the in the first off.
And quite often they think the truth, which means that well it's not the same in each gone through right, we see Colombia or in a better better condition again this is more related to that to them.
Sure, Dan energy and the regulatory scheme.
Well, but I feel it depends on some scenarios.
They were pretty cool for fast in our vision right or the fast the effect that the counter.
And and absent the NAR, let's see but again I think the nights a week control is a neutral cash flow, but though we are confident that semi regular thought he a adjustments will come in the next the beauty of this so with at least in the in the economics is side will have their compensation we.
Regarding we see demand or <unk> or <unk> that think back to what's the most are the biggest one well according to our experience.
When we and able to operate.
In the food to the discipline in the market.
We have the market that we can control the market in our region right. So this is more the collection issues more co relate that to Regulus Doughty.
Yeah sure that's not that prohibited us too disconnected people. It's not that we are we like we want to disconnect people because we want to know of course, not a we are eating alternatives off the Instyle man simply scan no pieces, but at the end of the day the correlation off of really be.
Mission to disconnect, the but with regulatory measures and ER and ER and their collection, we have Lisa Lisa Let's say this situation. We have what we have seen since we are beginning to start to that our normal operations and not only disconnect but.
Open to do that to give you or they might see any stockholm and sense on people are starting to pay the debt the abuse and and as you can see the delinquency. We are refurbishing the delinquency, okay, so which means that that we see that by doing it didn't when we will book value we covert.
The level that we have ER before I mean, most specifically in the first quarter of next the off next year. If there's no particular issue in terms of regulation and so on which we don't we don't see.
We'll we'll recover the operations because again this is ER and we know how to operate these ER, we know how to deal with the with the situation or things, we put in place our our Iwear and.
Initiatives, we will will recall very very fast and then at the very last but not least important initiative, we add that to what it was like it was very good for us as we move it a lot to the digitalization possibilities for payments yeah. It was impressive before depend then make it no.
More or less 40%.
Or 30%, 35% word.
Clients. They are in digital means right a of course, we didn't predict that nobody predicted the coffee but.
Before these by the last quarter of last year, we started a decent palisades on process and with the club and we actually accelerated this process and then we work with these are the situation. So right now we have a higher EPS statements doing by these it though.
Means which means that.
It's another thing I I'm, not there and something that Weve, a a me too it was a it is in our strategy to improve the securitization and improve this quality of Ah ha services through our door cooked at customers and home.
And they can take advantage of let's say you find me no.
It depends it could we accelerate these digitalization so by the end of a of this year and the beginning of the next in terms of that bet that will require over a a varied.
Very very very fast and we.
Have half the free feels lampposts off of collection, okay off.
Okay. That's.
I think that they did with the question.
[noise] and about your mid term guidance.
No we're not change when they have that change that I, Saudi Arabia, you were talking about the long term or long term an announcement sorry, I've talked about this at least question well. We are of course, we have seen that in the middle of a of a transaction with.
The Love Oh FA.
[laughter] merger transaction and yeah.
Of course, it's it's something that that we needed to do have for more.
Let's say tomorrow at defensive to advancing this process in order to try to give you a to give to the market. The new guidance until now we are not changing and when we're not touching anything in terms of guidance in terms of for along with their money on.
Not long term, but in the in the following years, a guy does seem tournaments off of well in terms of guidance no.
[noise] on those and gentlemen, I'm not showing no further questions at this time I'd like to turn the call back to your speakers for any further remarks.
Well, thank you for your past.
There are no more questions. We concluded it was last conference call before these let me remind you that the nobility raise.
Uh-huh say sales at the beginning of this confidence.
If we are going to announce a new conference call two weeks away from investors for putting that make us all the details.
On the proposed merger between an ever Green Power America, and eliminating path to.
We'll take our they see she only the expert he has had her that meeting all their company.
Thank you again, thank you for the European sales and I see the United States Safe.
Ladies and gentlemen.
This conference call. Thank you for your participation you may now disconnect.
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