Q1 2021 Enel Chile SA Earnings Call
Good day, ladies and gentlemen, and welcome to the <unk> Q1, 2021 results conference call. My name is waning and I will be your operator for today at this time all participants line are in a listen only mode. After the speaker's presentation, there will be a question and answer session.
Ask your question during the session you will need to press star one on your telephone.
Please be advised that today's conference is being recorded.
If you require any further assistance. Please press star here. During this conference call you 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 packet Vargas factors.
These factors are described in the Endo Chile's press release reporting in its Q1 2021 results. The presentation accompanying this conference call and and they'll change and well report form 20-F, including under risk factors.
Axis Q1, 2021 results press release and presentation on our website Triple double your dog and that's C O and our 20-F on the S. E. T website triple double your thoughts S E C Dot Gov.
Readers are cautioned not to place undue reliance on those forward looking statements, which speak only as of their dates and they'll Chile undertakes no obligation to update these forward looking statements or to disclose any development and such results of which leaves moving forward statements become accurate except.
As required by law.
I'd like to turn the presentation over to MS. Isabela <unk> head of Investor Relations of energy. Please proceed.
Thank you and morning to Hello, and welcome to Enel <unk> first quarter 2021 results presentation zinc zone for joining us today I Hope you find you.
Well and your family as well.
Mr Della Clini scheduled Investor Relations, our presentation and related foundation formation available in our website.
Investors section a replay of this won't be elsewhere.
There will be an opportunity to ask questions. After the presentation via phone for the channel prudently.
I ask my question joining me this morning, our CEO of loyalty in our simple Luca Savi just getting in the polo Women's line, although we won't bring the presentation with the main line line.
Net and operational performance day in.
Does that mean, we walk you through our financial results. Let me remind you that media participants aren't connected well what do you need to make moves as always our team will continue to be available to providing you with many of the same formation. We may need concerning the figures included in this presentation.
Thank you all for attention and let me now handover to phone.
Right.
Good morning, and thanks for joining us.
Let me start with the main highlights of the period those line too.
We continued to reinforce our leadership in the LIBOR margin growing with a new build capacity.
We are adding one three gigawatt renewable projects under construction on an installed base of one point to jingle rainy operation.
We recently announced.
Announce.
I am to solar to develop.
Mr. Good to small scale projects being 75 megawatts by 2020.
During the first quarter, we are closing the transactions with the factory full accounts receivable related to the application from seafood mechanism.
Realizing electricity prices.
Totaling $118 million income doctors.
For the first time since the creation of a bit in Chile.
Jim has on the price of 28 1 billion free appointed to women.
The position of director.
Dws to get at board level.
We continue to advance in our commitment to inclusion and diversity within our organization.
Lastly, <unk> is also prudent.
The proposal to be paid on may 20th.
Reaching net amount of three seven.
Seven seven Chilean pesos per share not affecting our showroom deliberation, we discounting effect related to the impairment made linked to interest rates.
Let's now have a look on our decarbonization renewables zero.
We constantly seek new ways to boost the energy transition generally business opportunities and push efficiency and innovation in all our business lines. Under this approach we have developed different projects and initiatives as part of our action to tackle the climate change.
Compute from levels in the energy transition and the suite product from them.
As an example, we have connected the sorts of three out of them as more sort of blends known in Chile. The mgb as part of the agreement signed I am too.
From the first phase of this project moving towards 'twenty, one and early 2022.
We will secure 75 megawatts of solar store capacity direct connected to medium fortunate in the sense regional become close to I conceptual salaries.
Finally.
As we have in mouse. We are currently developing different technology approaches always embracing the opportunities over there as you can see in the efficiency of our operations as 40 since the first wave energy converter in Chile.
Now on our capacity under construction and patient pool.
We are finalizing one three gigawatt of capacity under construction.
So dose project will enter into operation during this year contributing to the accounts of the carbonization process.
This will be a milestone for the industry transition both for us and for the couch.
Regarding our solar facilities.
The second half of the women finished the construction of income is.
That's about <expletive> domain. So the leader is there and then.
And part of the first phase of the PNG project previously mentioned.
The construction of those projects has been a good news to be very challenging considering all the headwinds we are freezing since the pandemic outbreak, including lockdown restrictions.
Delays in the momentum with US is this delays on our garage compartments and most recently the closure of the country's borders that prevent the specialized technicians from the newer interest.
From someplace.
Now, let me give some details on market conditions that drove the price volatility during the first quarter.
On page.
Five.
During the first months of this year, we saw a combination of factors that led to in a very unusual situation for the chileans ecosystem.
At one end the system had less water on the EBIT.
Give me out here.
With the 25% less potential energy storage reservoirs.
Your line.
Since October 2020, the Chilean market to show a deficiency.
Natural gas availability due to the interruption woloszyn deemed mcgough supply, which became more critical at the beginning of 2021.
Since the first months of 2021, we put in place a margin to improve the availability of gas and start to buy additional LNG cargos first of all to supply our planting the central accounts and then negotiating access from Mexico and as LNG.
Supply our metro gas for planting at all.
During the second industrial Marsh, we have stopped selling natural gas to other genetic items within this framework, we will generate or maintain it.
The supply of LNG, what is planned during the period and at the same time, we operate our Idaho facility achieving conditional ration.
Once out of a dollar contributing to offer digital national hydraulic generation.
All these actions allow us to generate with our CGP plans in the country simple audis.
And to reduce the pressure on margin on price is doing.
Let's move to the thing from glide work. Thank you.
Blaine why we believe that these.
This is not the stocks on balance from the Chilean system and lid challenge that we need to push.
And you can see on the left side managing that caused strongly increased during the first quarter.
Moving from an average of $50 per megawatt hour during the first quarter to $22 $75 per megawatt power first quarter 2021.
These and flex the condition already percentage, primarily that SaaS ideological conditions, and the lower LNG and Argentine gas availability in the market, which led to the system.
To generate decent recoveries.
With regard Keystone believes that renewables growth based on solar and wind is a key to continued to reduce exposure to win two hydro availability and commodities.
We also believe that the situation we have seen some months is not unusual situations Bob.
So that was a short term one off condition of the market.
In addition, we think that natural gas will continue to play.
A link to play a leading role during the energy transition to maintain and guaranteed supply and price.
And do you sort of go into Chile will continue to be a player that you'd acknowledge we.
We firmly believe that as the transition on decision any new proposal technical rules year dogmatic Hagar LNG usage.
Should guarantee system security and price stability seems this technology is the net energy transition with complements the liabilities for renewable sources.
Finally, we added one two gigawatt portfolio.
E S S project.
Bye bye from different stage for them.
Ready to be as.
As we announced the regulation will be ready for this technology.
Battery energy storage systems.
The additional option to reach more stability and diversification for the Chilean interest expense.
Now, let's move to electrification.
On a net.
Seven.
During the first quarter of the year, we have signed a partnership with Softbank to develop an infrastructure plan and restore charging points in day school through the Capex. It's worth highlighting that we have already started charging points corporate building and distribution centers.
To supply its new last mile electric trucks.
On the same line thanks to an alliance with Anglo American we have finished our first electric charging public station.
Fisher.
Wild type power charging points for public and private use underpin chassis sales model.
The agreement allows under American to use that NOL for eight years and supply their fleet of 17 boxes that the company used to transport day stuff.
Continuing with electrification strategy, along with a number of sculpt the opinion and the energy sustainability actions and the minister of energy, we have integrated five sustainable Sports center, using a mix of technology, which not only reduce the cost of food.
But also generate savings to the machine.
Regardless, it's more strategic initiatives.
We just reported so greater than communications, we have developed the first smart parking lots of moving to these things.
Which integrates smart lighting and Olympic Communist Wi Fi with charges binding bottoms up another solution.
Now network H eight.
And it will move with energy reflects the impact from the extended lockdown, which was partially offset by today share concepts.
Our investment Committee. The addition, and action plan.
Have allowed us to provide more efficiency, increasing the quality of our service Arctic quality, the total loss rate to two 5% despite.
Despite despite all the logistics of accretion we have faced.
And the distribution reached more than 470000 downloads, 81% higher than March 2020 can we can free goods.
Viewed confirmed the improvement of our digital channel Douglas true stay in contact with our clients.
On the military side. The final report on distribution growth is expected to be Bob you should do it in the second quarter of this year.
As a consequence, the regulators, taking our reported debt we'd seek new Donaldson definition should be percentage of the November.
Any discrepancy between the downgrades from the company's positions can be challenge in the.
Panel of experts expense.
Consequently, we expect the final distribution direct to decrease during the first half of 2020.
Regarding transmission Donnish cycle 'twenty 'twenty two 'twenty three we expect the Regulator's report fixing the new tariff cycle to be issued a second quarter.
Which can also be challenge in the panel of experts Eastern's transmission Jive X. A decree is expected to be published in between the end of 2021 in early 2022.
Let's move to slide nine.
Our exports on digitalization and also allowed us to maintain our collection level at 98%.
In that sense today, 80% of interactions with our clients are made by digital China.
Considering the negative economic effects of the COVID-19 pandemic.
To support the most vulnerable clients, we have already promoted adult payment agreements before the approval.
All the the basic service today.
Good day.
Cognizant of discussing the condition for the extension.
Silicon vision of that flow.
In our view the program was being allowed to growth without losing four loans that I mean, but some clients.
It's time to look for a comprehensive and the type of solution.
That prevents the most vulnerable families.
From a calibrating and increasingly heavy backpack all day.
The state participation Mccann from Dominik to develop a day cooperates with.
The state itself, becoming possibility 12, corporate index people, who need it most.
Thank you and now even though it pretty simple.
Thanks, Bob.
We start with a summary of our earnings highlights on slide 11, which will go through life.
Right.
We'll explain the adjustment we made in our first quarter 2021 lumpy.
But the first quarter 'twenty, one we have adjusted EBITDA and net income.
Seated in the sector arising from Nicola talking settlement.
Associated to welcoming them to our loss column firepower claim.
The coldest impediment has an effect of $15 million EBITDA $10 million out of the bottle line.
All of the detail described from development on this line.
And before we knew line that will have price the more deep in each of these fabulous.
No.
We start reviewing the EPS.
Capex per location on slide 12.
In the first Q 2021 our capex reached $472 million.
Amazing dedicated political inspection of our new renewable capacity.
Customer Capex reached adult below $15 million in line with the prior to 2020. The Capex was mainly allocated to build new connection and maintain the supply from team.
Asset management, Capex reached $24 million 42 per lead.
Hi, yes.
The sweeny.
Mainly due to higher maintenance activity in the solution.
And the low and middle age in Britain, and digitalization projects the renewable.
It will launch.
Non development Capex reached almost $235 million.
$134 million higher than last year.
Largely driven by renewable expansion and development one day.
From defense to continue the digitalization of our metal.
Let's now.
How do we think Q first.
Adjusted EBITDA breakdown on slide 13 net.
From that $20 million, 18% below where the vessels going into any figures.
Mainly due to.
Challenging hydrological condition may lead to a more intensive.
Generation in the fourth Q23 during the winter season.
Leasing that either up or down and is therefore co.
Combined with the lack of GAAP.
Keep them, resulting in higher spot price, which increased the cost away into opportunities required to supply our contacts at the moment.
Negative EBITDA lapping effect, mainly associated to be the lowest price of our regulated PPA due to the commodity indexation new agreement, starting the beta Ungula mania, and new concepts coming from day, one and distribution grid customer volume.
<unk>.
And lastly.
Around 50% of net negative finance is explained by the association of Chile.
Those in the periods advances.
Media cost.
Considering that our book currency easing Chilean pesos and our EBITDA.
It didn't get it.
Net flix business volume out.
Coming from lower demand.
Mainly namely.
Got it from them.
Due to the continued.
Downward.
But our regional below or elimination of all distribution body.
We shouldnt be retroactive to November 2020.
All of these effects.
Partially offset by $29 million.
Sure.
Positive effect from the net commodity coverage 8 million.
Non.
Lower depreciation all Shannon versus the US dollar related to our total net loans.
Loans and.
The $8 million last.
Due to the lower effect of the stabilization mechanism that accounts for the adjustment in this patient.
Changed from before.
Let me now give you more detail about the generation keep your eye on page 14.
Our first quarter January showed us like electric fishing from me.
From a lowered about EBIT compared to the first quarter over last year, which was partially offset by other renewable sent them on production.
Production.
Our energy sales shows the reduction in the regulated energy due to lower demand in day.
<unk> PPA in the.
Tweedy <unk> overshot.
More than offset by the increase in the free market because of the new comp Lang Romney SA retail volume coming from David This evolution is impact of them moving that equation.
For what concern our sourcing on top of the already mentioned production volume seems to be accounted for an increase.
Okay.
<unk> three of opportunities coming from spot market and 0.6 relative to the portfolio of contracts coming from distribution.
Sure.
And the length of the line.
We presented some money over the past one month of our generation business, including.
From Chile and anything pouch.
Our net net book business equally and what's going on in energy.
The main imbalances between repeat them well already in the line.
<unk>.
Now, let's go through the main driver of our growth mid teen.
D&A and net debt reached.
76 million, even though a lot of pay body, all 16 million mainly related to the lower D&A.
G generation maybe.
Maybe you can for the impairment made in book Amina <unk>.
Net financial results totaled an expense of $52 million.
Please note that the scheme.
Mainly due to higher cost.
Related to the factory executed the integration business from the stabilization.
Accounts.
This is Phil.
It was partially offset by the high net financial expense capitalized in the first Q 2021 and lower financial cost of debt due to day playing them.
Phase of abbreviation basis, yes.
Income tax and minority here reflects the impact related to the lower EBITDA not yet financial expense.
Moving to the cash flow from slide 17.
First Q 2021 hotel reached $215 million.
Why isn't any previous DSP was mostly due to <unk>.
Net working capital mainly explained by the cash received from the factory to be visually make any cowen and client receivable in D. C. We've shown total U K mountain almost $12 million net.
Michelle line sales.
23.
For the kitchen.
Clearly non U.
Two they sold it back during the first quarter of last year and lower new accounts so that.
The biggest issue right.
Hi, net income tax during post acute from 'twenty, one mainly explained by higher net income tax payment this year.
Sure.
And higher financial explain expenses, mainly explained by the cost of factory of the stabilization mechanism.
Let me now growth.
However, based on slide 18.
Our gross debt of March 2020, one is in line with the standard trainee.
Our mountain.
We named him in.
Hi.
Our net debt in the period compared with January 1st cleaning one increase in line.
Directly associated with our Capex.
Capex Glenn.
Associated to the one one giga.
On the cost reduction that will start bringing EBITDA from this thing.
For the year.
David is the cost of our index is quite stable, reaching $4 seven per se.
2021.
The cost of debt should remain stable during 2021.
Let me highlight that we have issued our press if the genes that company index.
And then moving.
The maturity of 10 years.
And coupon five percentage.
A very competitive interest rate demonstrating the recognition of our day rig passage.
The new the gene known consider and to keep the field coordination of our generation fleet by between 203.
Thanks, Dave.
From a position our kids moving mainly but it's moving.
With an EBIT of fear and their own $300 million annually to the limit.
Yes.
In terms of liquidity, we maintain the level of zero margin then be giving.
Giving our flexibility to face potential headwinds.
Now a million dollars per bottle.
Yes.
Thank you Sir.
Let's go to closing remarks.
Despite the challenging circumstances, and then Chile is taking all the necessity reaction.
<unk> mitigates the impact.
That is affecting the accounts.
And the effect that COVID-19 of course to achieve the guidance for 2021.
Our clients remain at the center of our strategy and will be the focus of our exports.
<unk> said, we are improving the customer experience based on our digital operations.
This year, our decarbonization plan.
We'd be focused on the execution of our EBITDA and good projects to achieve our two four gigawatts of new capacity as dark as reported in our 2000 21052 per se.
Our business resilience.
Maintenance a sustainable strategy.
Supported by our balance sheet strength, and long term vision, especially against the sector headwinds that we were facing.
Thank you for your attention and let me now open the Q&A session I will handover to Mr. Miller.
Sure.
Thank you.
I want to see.
We will receive questions.
Sure Ann chat into the webcast either case between each section.
Oh boy non operator, you may start.
As a reminder to ask a question you will need to press star one on your telephone territory question and Chris Kotowski. Please.
Please standby will come from the Q&A roster.
First question.
As from Chile of Santander Your line is open.
Hello, Paul Indulgence happenings abella, thanks for the call.
My first question.
Do you expect higher provisions in the coming quarters due to the extension of the pandemic and.
Could you give us an update on the last thoughts on developments on the.
The basic service law.
The second one.
Sure.
I expect it to to review your current guidance three during the coming months.
And the last one if you could elaborate a bit more on the storage plan.
I'm a battery you you'll be filing related to the arbitrage on from marginal price are more focused on providing complementary services.
Have you seen the investment costs and these technologies.
I do have access to and when do you expect the installation of these type of technologies to took center meeting Chile. Thank you.
Sure.
Thank you morning before your question.
Let's talk broadly answer on basic service flow.
Okay do you see you know that there is a long debate here in Chile.
These are the normal.
It has been the first line.
First day on the first day, though January now.
The let's say the deadline is.
The feast of.
<unk> of May and the discussion is to let's say there are the current situation.
There are two.
That project alone coming from the commentary coming from the Chile that will be collapsed into one and we'll be moving both in sooner. So.
And in the context of this project is quite easy.
Today, the contribution just to extend the day at the line until the end of this year.
And to extend the number of <unk>.
And that could be allowed to the clients.
Up to 48 quarters.
And let's take the last change at ease lid two large.
The perimeter of clients that are allowed to access to a special especially on the agreements at four such repayment to 80%.
All of the client.
In the social Register.
In Chile.
This is the current situation then the evolution is.
Let's say could be approved delay could be approved.
And very very very soon at the same time, there was a debate ongoing.
<unk> introduced for the first time, a different approach in the sense net diseases.
Let's say a growing understanding of the impact that this simply extension may able to clients.
And that could.
Could be subject to let's say.
Technical.
Analysis technical stable between the center and the government in order to fix a certain rules.
<unk>, let's say to evolve.
Also the state of Chile.
Let's say.
Define a schema to recall what the depth that the different solution may growth too much and then at the end of the deal.
Yeah.
Let's say the low at the end of the Luxor day look maybe in early 2022 could be a word.
It's too big a four day family.
<unk> have to pay the current let's say plus the amortization of the net so beazley Barbara discussion ongoing get Mei.
The drive to approval.
A different scheme before the recall at Ingalls today.
And this isn't let's say easy then.
Waters element because it was the first time in Greece.
On the table with a discussion of important to state that we think extension for this book.
The same time there is another element that should be addressed that at ease that day.
<unk>.
Together, the companies and distribution companies the availability to GAAP.
System.
Segmental appliance that let's say are not vulnerable. According to the traditional day low but they can the day to day, they're not paying their bills because they cannot become awesome.
The fourth day.
Babies. So these Isabella let me shoot relative to recall that situation day for the gaming is growing forward. According to day, let's say the roots of fix to the first from the first.
Basic centers flow.
Issue.
So this is the current situation clearly we have that instead of sending the look.
The evolution and we are let's say eager to understand what could be the outcome all day.
Technical table.
We think.
Regarding the guidance.
Clearly, we do we do more.
Is it an issue any any change today clearly we are working to.
Recall to recover.
They get that.
We let's say we have in the first quarter and then we have an action plan in order to.
Your line sales.
In the next months of what could be the outcome of the action plan.
Regarding the storage it.
Clearly the histology that we think that storage is an essential element in the system.
And we see storage.
Together, Lee with renewable facility, especially with solar facility.
Cleveland cliffs clear needs explanation regarding net debt because.
Clearly can stabilize the flow the energy can let's say provide the most viable capacity availability availability of the system.
And should that also.
Good day flow of energy from the northeast to descend.
Day.
Social side. So these are.
Only part all day.
Let's say additional services that the storage can provide true day to day.
Six of them and that we think that.
And we are waiting for let's say.
Yeah.
Sure.
Ken.
And give us the possibility to start with the selection of load factor.
We have already let's say, we have Randy somehow some project we can go on in the system.
As announced that aggressively.
Clearly our position we see that.
Positioning between net voice with pilot.
But we are focused on providing additional services.
Many thanks Paula.
Your next question comes from the line of Andrew Mccarthy of credit card Pesto. Your line is open.
Good morning father, just at the Isabella.
Thank you very much for the presentation.
<unk>.
No questions.
I have three questions.
First one just from the.
On the items.
Likelihood of hitting the one five to one point.
The one four to one five.
Volume.
Target for this year.
Just trying to think through what needs to know that our rights for that.
Be achievable.
Could you talk a little bit about what needs to happen in terms of the day.
The hydrology the availability of gas.
Pulp operation of coal plants.
In the system.
Generation side of the business.
And what you're saying maybe today almost from.
That's maybe going to helpful in the coming weeks drive down a little bit.
Obviously the spot market prices.
That's my first question. My second question is I was wondering if you could provide.
Provided a bit more color on day.
Yeah.
Sort of the margin and she might be expecting to make from P.
PMG business.
You talked there about 75 megawatts between 2021 and 2022.
Scale, maybe that business could have bought more.
Longer term.
And then the final question I.
Specific question just trying to understand.
The savings we saw in the net commodity coverage is 29 million followers in the quarter whether that holds up.
One time effects on us.
Those are my three questions. Thanks very much.
Okay I'll take the first two.
I'll leave it at the last two interest.
Okay regarding guidance.
<unk>, let's say.
We're still net.
Can answer let's say.
The general elements per share with you guys. So clearly our non bars are affected by price.
As you correctly mentioned so we.
We have our current thought it yesterday Basil.
What happens.
During the first four.
Four months.
And that would be.
Clearly these can have in positive or negative effect, depending on what could be the evolution.
There is the contribution of our project debt is important and reaching out with our guidance.
And we are let's say focus from the development of the project.
The day the line.
Clearly as adventure.
The situation is not very easy because the day.
But all the Dania is field.
Strong and so as the ultra taking as I mentioned.
The possibility of adding the.
People coming into the country in order to.
Let's say support our traditional on site. So these are the easier it is tight.
And Matt, though timing is not the methodology.
But.
In any case.
Net sector on this regarding guest availability, we are entering into the C zone, where.
Our plan.
A deadline regarding the delivery of the OLED sheep shipping all the LNG of course and put our contractor usage and time and news on line. So we do not expect any extraordinary events from this.
Clearly we bought Griffith.
Uh huh.
The last part of the year.
Regarding the availability of Argentinian gas.
No.
There is let's say.
<unk> information regarding the <unk>. So the exports from Argentina, we've discussed again according to the agreement, but we will that day.
By September October that everything is working well.
This could be an extraordinary event that today, we can afford a Z we expected that we've come a line as a regular basis, but we can say.
A strong vehicle Victor this is Ed.
So these are the.
And clearly we are also working channel in order to find that.
Internal action to recover.
System elements it confirmed to let's say call. It again this is what they kept government.
Second question is that the managing all of the new day again Digi.
It is reflecting that.
On our non boxes.
What I mentioned is the starting point, so that means that agreement and part of the agreements that we see.
Solar facility in the NUCYNTA over all day.
Country music something that it.
Ed.
To let's say to support our generation and to provide the into PCP.
According to our contract.
Is that a competitive a competitor either generation based on the solo on solar.
Guaranteeing regarding the element I'll leave it at the 0.2%.
But.
In general of course, we.
<unk> used to call it I'll, let exclusion from.
The commodity for.
Actually we should will be debt free.
The following month, we are going to.
On the training of the commodity.
Good day.
We go boldly income from competing with the mid tier how that trend is going in.
The commodity is going to be.
Operator, I don't know interest.
Good question.
I mean, you still have another question.
From Sara Piccinini of Mediobanca Your line is open.
Sara Your line is open.
Can you hear me.
Yes.
Okay. Thank you you can see from answer and thanks for taking my questions.
The first question is from working capital evolution.
She then positive effect from working capital line first quarter net if you can come in today and the non.
Behind that and how do you see the evolution during 2000 and thanks Ron.
The second question is on the impact that.
The negative impact that you had in the first quarter that related to the Tpa margin do you see these negative impact to continue.
The coming course does.
Yes.
Dynamics behind that.
And third question is on the quicker it have you on networks.
Any context weighted Eric laid then what do you expect.
From visa deal.
One is on them if you cannot from data on the evolution.
On the free market.
The impact of that you see on the company's margin many thanks.
Okay. Thank you set a volume question I will take the last two and lead the first throw to intersect with regarding networks.
The two title III each zone is on our ongoing.
And there is a clearly these accounts that are a form of contact with the regulator.
The committee.
The proposed by Representatives of the company that does a regular meeting with the with the regulator.
The working it for the time being that he got the distribution.
The day lets say the activity is in the end of the regulator, especially in the end of the consultant to the regulator in order to achieve.
Distributor.
The report.
On the reference model and then.
Basil Missouri reported.
Regulator, we issue.
Reported.
So these days.
The moment when we wouldn't see.
The way we did it relate to weeks at a time and then clearly there will be a debate on DS and east decades each day.
It will be a discrepancy between the position of the companies and the position.
Oh the <unk>.
Reported regulator.
It's a discussion in the bundle we expect these required time for the time being gateway.
We are seeing that.
These discussions will take place in the second half for this year So day.
Issuing at the end of this year and day.
The decrease of distribution will be fixed by within the first half of 2022.
The process.
Distributed distribution transmission is more advanced.
And.
And we see that we think that can be fixed by the enthusiasm early next what mix.
2020.
Clearly the.
<unk>.
Say immediately.
I think later.
Let's say four months and then they will be the formal review all direct booked each bite any rig.
Regarding.
And the last the second question is the Wuxi day free market.
For the time being.
No.
Step exit in terms of the profitability look you should easily.
Excellent.
In the sense that after day presentation.
The project too.
Congress level there was it was the initial debated.
<unk>.
Scope of this node and then everything else would be pleased to see that today.
The focus of the Congress.
The wrestling to the energy sector is more on the on the basic sales floor rather than the other.
The change in the sector.
Regarding the aptitude. The current situation clearly there are some activity that exceeds what other receivable net client that can opt to go to the free market.
Moving about dictates it.
It's about if we see growth compared to the size of it.
We have a day.
They would upsize of the free market.
With receptor.
So for what concern the.
Net working capital.
As I said net.
When I talk about.
Tina.
Yeah.
By relation income in the first of all because of the factoring of the stabilization mechanism accounts and impacting that.
Doing or from receivable from our distributor.
Company.
And clearly.
We are growing I hate that word needs. So we believe that new.
During the first quarter, we are going to.
Moving ahead with them.
Factoring out the subsidy income.
Around either.
$30 million between the state from Q2.
And the other.
The impact that could be affected the net working capital in the Chooser of course are the implementation of the.
Exhibit flow and because of that we need from us.
It's going to be designed.
And that.
Of course, we have.
Significant amount of Capex line. So these are the third.
In fact, it could bad luck.
Working capital.
Sure.
For what Carl said, Matt.
And negative EBITDA my opinion.
We ended the current.
It's a game that we charge the variation the reason they bought it from first of all.
The commodity indexation invigorated EBITDA.
Now on the commodity.
From the reference of the commodity.
Yes.
Net timing lag of six months, so basically the index relative to the previous six months.
And they gain.
They think about the future months, we need from the center.
It will be the evolution of the commodity.
Debated for a day.
PPA adequately PPA.
For what concern there.
Based on the rebound zone.
Net.
New contracts, we've done in Romania.
Tom.
Coming from.
Sure.
This kind of income.
But it shouldn't be remiss because basically.
Our portfolio in the generation portfolio.
Change according to the new partner.
And for what current spend a lot.
From the loss impacted.
Yeah.
<unk> 50 per sample.
This negative volume.
The current address the accounts of the sub debt.
Our brokerage.
The basis, so considering the fact that golf and appreciation of the channel.
<unk> seen before.
What are we going to be.
According to the same trend that.
Really when you compare a dollar basis.
You're going to have such a negative EBITDA.
Yes.
Yes.
To let you know.
Yes.
Great.
The average.
Exchange rate basis dollar Walter.
Our global E com that phases dollar and DBM.
Q.
And then pays.
Pesos per dollar.
During the day.
So.
Steepening deepening the change also.
Also in the following months according to the information that we've seen in that region.
That said from a little bit.
Thank you.
Great.
Okay.
Your next question comes from Rodrigo Mora.
Your line is open.
Hi, good morning.
Thank you for the presentation I don't know in view and you can't immediately.
Yes.
Oh, okay, Okay and when it. Thank you for the presentation I've got a couple of quick from Felipe let Michelle Wiggs.
With me.
The first one is I would like to understand.
Why.
Is there reason that the company.
Making an impediment or coal stockpile.
The second question.
It related to distribution business.
I would like to know.
He has today and it is too soon.
<unk> got the service to customers.
<unk>.
Hi, consumer high consumption items.
Mean items.
I read an interview all seal.
You see on that.
Mentioned that some customers that consume around 500 kilowatt hour per month.
It creates means is a huge consume.
More than two point time.
Five times, the Abbott ex of consumption.
<unk>.
D. Then paid the bill so I would like to understand why the company cannot got or east.
The company is able to cut the service to those kind of consumers.
Finally in.
I would like to understand the impact of the EBITDA.
Or.
The.
Free customer business that.
And then Canada soon.
Board.
And then B to C zone last year.
I think there is.
Slate of EBITDA from <unk> to a central and Edison.
Thank you.
Hi, Larry.
I will take that day.
The second question and then I'll leave the number per se.
Yes.
So let me give you some quarters from this because your question is very interesting I like very much because you see that day.
If you look at the.
The concessionary awesome Thiago.
And we look at residential.
We have.
And average consumption in the range of 2200 20 to $1 30 kilowatt hour per month.
This is the average consumption.
And then.
What's that.
You are referring to.
Domestic clients American domestic line domestic clients.
Net concept.
The consumption higher than 1000 per kilowatt hour per months.
You can also talk about from the clients. This happened from higher then.
And then the 750 kilowatt hour per month.
So our domestic clients.
At these kind of consumption that east to boost to be.
Domestic clients.
Dan share client.
A nice G mobilize let me say.
And yes.
<unk>.
The number of these clients that today are not paying.
And the point is that according to also the second issue in the label.
He said look we cannot cut the SA.
Add this to them because we are not allow to GAAP.
And new residential in flight.
So this is the situation.
What we are asking it in these the review is also to focus be added to the support and boats a day.
T.
They actually are not cutting growth.
To the clients that are definement.
Good level.
Net today is 60% of the clients that are in the least.
Okay.
All told.
The shift to social Delguidice paradigm.
Importantly, sharing the concept in Chile.
Net concept process.
Other.
Clients that debt.
Peter.
Put out.
Yeah.
And our clients.
Lose the loss per day job or.
Clients with this.
In Asia I got it then each one of them correctly 65 or 70 years. So these are the clients that today.
And as.
We'll know more.
This gain access to certain agreements with certain conditions with no interest with no anticipation and the number of growth that can go up to six according to the current level.
But we cannot allow us to GAAP.
Other residential domestic line.
And this is what we are asking to change.
Among others because there are some.
The other items.
Greetings.
Okay.
Okay.
For what concern there.
The impairment.
Is that we are.
Following the same accounting treatment that means that our main zone.
When we made the impairment of that asset.
So considering that the call subsidy.
Moving to be.
You've seen a bit of a unique way indicate and debate all day.
Don't really blame that every time that we have.
<unk> provided services to D C and we need to be called.
Every quarter when we look at the stock.
Stock that we have in our.
Our bouquet we need.
These net.
And just an accounting treatment again I will repeat that is in line with what we need.
Yes.
But what growth there.
The impact of the fleet customers.
More from distribution to generation.
Clearly at the level of non <unk> non bank.
Good day.
Moving from one side to that.
What I can believe that.
And the monitoring.
Congress was them.
The end of the first.
Q2 was around $16 million.
Thanks, Toni Ann.
You said it.
If I can if I understood the impairment all coal stocking is not the day coal itself is day coal facility.
No nothing on the call that none.
One of the coal stocks.
But this July.
The company is going to use the stock burden during all this year until may of the next deal why you.
The company should make an impairment.
I will explain basically year on day.
The facility.
The bulk of Mena, but green plains.
Hence to provide this day so.
And then the TSA is going to call book and Bill.
Has to produce okay of course in order to be ready to produce we need to have the quote.
We buy it.
To be weighted to two provided savings now which is therefore able to quote there.
We see our March in phase III.
Terms of quota.
And that considering the five day <unk>.
<unk> net.
And the value equal to zero, because we have already embedded in the full amount of that.
The remaining work at Illumina in terms of stock has to be impaired.
So we need to be zero.
The amount.
The stock of the call.
The following months again, if needed this week on a buy out of the call.
Okay, we provided the sales being.
Being called by the feed them a day end of.
June will it be exercise so we look at our March <unk>, the remaining calling our stock when we made the payment.
This gain non equal because of that because.
The treatment and the sanction aimed at that and we'll cleanup is a theory that.
Sure.
Input being caused by the system.
So basically no.
Look I mean adaptive doesn't have any tangible data right now.
Right.
Okay.
Sorry, and the second handset.
<unk> respect to the free customer business.
And from distributed generation you you said that last year, the EBITDA margin was $6 million.
Yes.
Nice quarter.
Nonetheless, we will seek medium.
Okay.
Okay. Okay.
Net.
Look.
Another question is related to the <unk>.
The process all the the test meet June devaluation of the breast meat June.
Asset off now.
And anytime you see items.
M.
I would like to know.
Would each day.
The current situation all day.
The preliminary report.
<unk> released by day nationality Comaneci enough energy.
What day.
Following the steps.
That the company.
I have two.
Okay.
Make reply.
A replay of the devalue receipt.
Could you give us some idea about this process and the impact that could have over and then transmission.
The comments.
Net debt, we can provide comments to this preliminary report and.
The deadline for these.
For DS.
Comment.
Okay.
Net timer, we are providing our comment because we have comments on this on the direct book then.
Net deregulate, we've collected governance from any parts that are involved in the process and then we.
Publish the definitive reported.
Once we have in our lives.
The reports, we make our let's say consideration.
If the case cash.
Discrepancy we go to the kind of look at all the experts. So this is this is the process.
Clearly.
All in all.
Today, we cannot let's say this is the process.
What we are.
We are acting according to the deadline that was in front of us.
Okay. Please.
Just two short questions one off if you could.
Give us some idea of day evolution of day electricity and investing in it has to the zone due to less Abraham.
Last month and the second question is related to.
The volatility of abating, the availability of natural gas production peanuts during the first quarter.
Uh huh.
Deno.
It said to me that commenced that use all of the natural gas and Ted or export used all day that allows us to produce electricity and export to Brazil.
I didn't I didn't know he and some contracts there were some contacts between enel did at ICR and Sun Gasparas Argentinian gas producers that maybe we're not accomplish during the first quarter.
As I mentioned in my speech the situation.
I guess it was very complex.
All the last year in the first months of this year.
The problem was and is that.
These are these this is the season, when Chile, usually imports gas per merchant team.
This lag.
We are required to use different sources.
During this period and so created some politics, we notice it.
2021.
D L ability during the first quarter was very very little I would say negligible. So cannot we cannot support the generation or the us open.
As you see that we have the English <unk>. So we have to act in a different way so.
Blocked it.
When the spot market.
We have set a set of supply through shipping of LNG.
Because the.
Then we have our plan in regarding the delivery of the sheep through our agreement with share that.
So we are receiving their labor only take us so that we need them for an hour per hour.
But to the problem was that the Argentina gas you mentioned correctly one event that.
They use of gas as being let's say to produce.
It seems to be sold to Brazil. That's correct. The same information that we had and there was also some other province, so they got it didn't get the day basically will that come later, so at the very end that day.
The day availability of gas was negligible reported.
I will save dealer the expectation for the next season is that this availability should we start to get let's say easily.
The information that we have at <unk>.
Regarding the first vessel honestly.
Yeah, Yeah, the amount that we would not comment.
We are focusing on the first quarter and then you'd see the litigation that is true.
This evolution in the next call.
Thank you.
Okay. Thank you very much.
Thank you.
Do you have more questions on the line.
Yes, we still have one more from Sebastian <unk> from you guys have been Chile. Your line is open.
Hi, guys. Thanks for the presentation I've got two questions one is that.
I was keen to understand.
What are you expecting in terms of difference between injections I would draw within generation given the large amount of.
Renewables that is entering into the system do you see them any congestion that could be meaningful in terms of results going forward on a word.
Do we.
When we will see those congestion is being manifested the most within that.
Full operations.
And then I've got another one.
Okay, you can say negligible.
Good afternoon.
Okay No worries.
The other one is in regards.
Sure.
Okay.
During.
Expectations for Capex going forward, rather than day, while we're saving within the plan.
What should we it should be.
Mid to long term sustainable Capex on what should we think in terms of growth going forward.
Uh huh.
I hate of what we are already have ISR.
Projection on the numbers on the industrial plan should we think that that level of capex that should be maintained for longer than what the master plan suggests.
Or then should we converge.
The maintainer do they maintain a capex level.
That would be from my side.
Okay. Thank you Sebastian following okay regarding some day.
Index.
Injection.
I would like to comment that.
The.
Position of our clients and the.
Generation and supply all of our interest because the position of our client is a spread.
Totally all concentrated in the center.
It is all that we have also booked per contract.
Could you disclose a two day agenda degeneration, our generation facilities, especially the solar that revenue will judicial proceedings. So.
We do not expect we do not see it.
Strong.
The effect.
Of.
And.
Bottlenecks in day in day injection and show the difference between the injection and withdrawal of price, especially considering that we have.
Large contrary mindset.
Regarding the midterm expectation honestly, what we see we have going on net.
With our investment plan.
We let's say.
Analyze it.
First tranche, let me say all of our projects.
Within the next months.
Hopefully by the end of this year and May be some models can go further on the next day.
In early months.
2022, and we continue to investing to let's say get our target is two four gigawatt.
Our renewable capacity by 2023.
So in line net with the expectation of Capex.
Don't see any change in terms of let's say investment can I work done.
Perfect very clear many thanks.
Thank you Jim.
Have more questions on the line there I think growth.
Good day.
Yeah.
And then the questions at this time I would like to turn it back to Isabella kindness Ma'am. Please continue.
Okay. So we have from several questions here.
Let's try to have Jim here, because some of them.
They are similar so thank you all.
Alec.
And then did as well so the first question here.
To elaborate coming from more of the consumption.
So residential and commercial segments.
Yeah.
I think here, we have direct touch.
At this stage.
And now so now the question is why.
Sure.
Free and the customer's day on the line of tools, what we call me a good day.
On the announced EBITDA.
Sure.
Also let me share we have some questions from Les.
Mr. Bob because that we have great. Thank you.
So.
Solid and so I was asking here.
Regarding the latest buzz because.
Because the small debt collectors and collectibles Warder act provision and easing the political noise to reduce that exposure to low income customers is very analysis to be shown to the board to make.
Non of part of our Society collection Uncollectable.
Each day.
The National Energy Commission.
Preliminary reports from technicians, Derrick roster with a negative impact from.
From business and what is the things that you said I think we also have corporate base. So I think just to conclude here following day and does that need to be.
Syed on the demand.
Why we have one decrease on the day.
During the quarter and about the assay R&D too.
Regarding the demand.
Net.
In the quarter.
<unk>.
Let's say that.
<unk>.
Clearly there is the impact that having the conditionality of Santiago and considering.
Let's say the wave, which.
The situation of quality has to be managed and computing growth.
Three minutes, putting lockdown or even limited the PMT.
We eh.
Ed.
Let's look at colder in the commercial.
Much of the sector.
Debt.
All in sustaining partially by the restoration of consumption.
It is what we see.
In the first quarter.
Got it.
Clearly compared to the first quarter 2020 in DSD.
She got that'll be all agreements are affected by by the building.
Regarding the other crystal was that again are related to.
The write off.
Clearly today, we are acting and we are following the evolution of the basic salaries alone. According to what we are moving forward. So.
We go through a common discussion than the day.
Available in discussion and.
Available information that we can achieve so the informations based on that.
The renewal with new deadlines.
Current basics that are reasonable.
And so then we have a we have expectation in time zone.
State participation in that.
Recovering these situations will give you what.
I can't comment I don't have any further information to comment on.
Okay. Thank you Paolo.
Conclude here, we have a list.
Questions related to the guidance then.
The industry is asking if we could give more color on the plan. So.
Cutting costs.
There has to be that we have seen during the first quarter and if we.
A typical mix.
Yeah.
Thank you Paolo.
Yeah, what I can comment is that we are reviewing the clearly all of the let's say efficiencies that day.
And efficiency plan that we put in place because of our control.
Yes.
We are on it.
Clearly there are other.
External elements.
That a mistake and we cannot control like as I mentioned before the growth.
And.
Also the evolution of the demand that day.
Shake or direct COVID-19 that can get affected in terms of.
Chile and economy.
Regarding the clearest day being in terminal at Pvt.
Top efficiency, maybe the general broad.
The boat sales in the sense that we are looking to get to each.
The business line, each pvp that can be optimized in order to.
Two.
Recorder.
The situation that Liberty has been complex in the first quarter and you would try to let's say to rebalance that we that we did with these kind of interaction.
Okay. So thank you Paolo.
I'd like to thank you all for joining us today. So any other remaining questions. You may have some of the Investor relations team in Vietnam.
Thank you very much.
Thanks.
Thank you.
Bye Bye bye bye.
This concludes today's conference call. Thank you for participating you may now disconnect.
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Yes.
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