Q4 2021 Enel Americas SA Earnings Call
Good day, ladies and gentlemen, and welcome to Enel Americas fourth quarter 2021 results Conference call. My name is Howard and I will be your operator for today.
If you require any further assistance. Please press Star then zero at this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press Star then one on your telephone keypad as a reminder, this conference call is.
Being recorded.
During this conference call, we may make statements that constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
These statements could include statements regarding the intent belief or current expectations of Enel Americas and its management with respect to among other things he Neil Americas business plans and Neil Americas cost reduction plans trends affecting enel Americas financial condition or results of <unk>.
Operations, including market trends in the electricity sector in Chile, or elsewhere supervision and regulation of the electricity section in Chile, or elsewhere, and the future effect of any changes in the laws and regulations applicable to inhale 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 equity capital markets of the United States. Fortunately.
An increase in the market race or of interest in the United States or elsewhere adverse decisions by government regulations in Chile or elsewhere and other factors described in India Americas Annual report on form 20-F, including under risk factors.
You may access our 20-F on the S. E. CS website Www Dot 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.
Americas undertakes no obligation to update these forward looking statements or to disclose any development as a result with these forward looking statements become inaccurate.
I would now like to turn the presentation over to Mr. Raphael de La Hossa email America's head of Investor Relations. Please proceed.
Yeah.
Ladies and they came on a local level will.
Tony do you want to be.
This presentation.
Thank you Mr. Nathan poultry.
Nick let me get lights out.
Anthony and I wont CFO of Williams will be presenting the figures released videos.
Let me remind you that this presentation a week follow the slides I'll be noteworthy.
Well, we think through the company's website.
Following the presentation, we will have the <unk>.
Do you have any sense yet.
We then take that questions can be made only from the telephone lines.
Now, let me hand over to <unk> Kim.
<unk> got a way of winding that highlights the.
The beauty of it is like non directly.
Thank you good morning, everybody.
During 2021 we had an important very cool very on the main operating indicators compared to last year, reaching pre pandemic levels.
The increase in demand and the consolidation of getting power made it out of the main reasons that explain the important improvement in our songs.
EBITDA increased by 15% during the fourth quarter and 26% in the full year period.
In addition to this we had an accounting adjustment in Brasil.
Resulting in a positive impact on EBITDA.
You'd be back labor.
We will see the detail later on.
Net income was affected by higher financial expenses.
One oh, it imply that negative impact.
On the other end despite the significant increase in debt, our net debt EBITDA ratio remain flat compared to last year.
Regarding ESG, we continue with our strong commitment to support the energy transition.
As a consequence of the DS we were scored with a b rating by the carbon disclosure project.
Finally during the fourth quarter, we incorporated that point D. G. I want the new renewable capacity into our metrics.
Meaning that thing to the merger with the E. G P. We.
<unk> added four seven gigawatt of new capacity.
The same time, we continue working on another 2.7 gigawatt under construction.
Let's move to the following slide to see our current scenario.
As shown on the left side of the chart during the quarter and the cumulated fully at all the currencies in the boundaries, where we operate devaluated against the U S.
Except for what they Mila, which remained flat.
In terms of inflation, we can see that it increased in all the foundries except for weather manner.
This significant increase there is an impact on our operating costs.
Our capex level.
Which has been partially compensated by the currency devaluation in the foundries we operate in.
Regarding electricity distributed during the last quarter, we saw an important recovery in Argentina, Colombia, and Peru continue its growth.
On the Ita in Brazil, slightly decreased due to lower economic activity lower temperature and rationalization plans.
Launched by the Donald's Amazing.
Connection with us.
Dry condition, we saw last year well.
Considering the full year, we see a recovery in the four countries, which has allowed us to be in line with the threep underneath that.
Finally in terms of collection, we had an important recovery in the region, especially in Peru, which increased 5.2 percentage points compared to last year in.
In the four countries. We are now around 100% of collection slightly better than pre pandemic levels I wonder in terms of bad debt, we had an increase of 42%.
Mainly due to the to be paid in more than one year by the climb in Brazil due to the pandemic.
Now, let's look at our investment for the period.
During the fourth quarter of a D C. At our Capex increased by 163 per cent compared to the same period over last year, reaching 1000 163 million years ago.
This is mainly explained by the consolidation of <unk>, which contributed with a capex of 524 million U S. Dollar.
Which represents 45% of total capex of the period.
Without considering these capex would have increased by 44% mainly explained by higher investment in distribution business in Brazil.
In quantitative.
Third our investments increased by.
Nine per se.
<unk> 2970 $1 million.
Without the contribution of AGP Capex would have increased by 38 seats per se.
Asset development Capex or growth Capex go do it.
Denise and Tom Madden that building of the PEO, mainly due to the development of new renewable generation plant in line with our strategy and our commitment with the energy transition.
Let's now analyze our operating relies on the following slides.
In generation business our.
What are you still capacity increased by 31% due to the incorporation or BGP, reaching 15 nine gigawatt. Some week, 69% is renewable.
Net production in the fourth quarter reached the 12.1 Daytona.
Sure.
Increase of 18% compared to the same period over last year explained by ETP and I added production in Peru.
In community.
It actually increased by 20%.
With this we have increased our emission free production to 72% showing our commitment to the energy transition.
Energy sales increased by 18 per se and Glenn 3% during the fourth quarter.
Billions.
Reaching 18.5 Terawatts hour.
71.3, Terawatts hour respect keep moving mainly explained by the consolidation of <unk>.
And a demand and at corporate in the region.
Let's analyze net business in the timing that slide.
Electricity distributed reached the 34 Terawatt hour in the fourth quarter and the hundreds of 19.8 Terawatt hour in the accumulated ERP area.
Which represent increases of four 4% and 4% respectively.
This is explained by an important recovery in demand in Argentina, Colombia, and Peru, partially offset by a lot.
Fees in Brazil during the fourth quarter.
Regarding the number of customers.
At an increase of around 540000 in the last 12 months.
Reaching almost $26 2 million customer among all our distribution conference.
In terms of quality indicator sadia and <unk> improved in the fourth.
During the period with it.
Uh huh.
Without a.
Deviation of safe indicators in Argentina.
While energy losses decreased in the four countries.
The steady improvement allows us to supply energy in a reliable and efficient way.
Crazy our commitment towards the our electrification board.
On the following slide we will see in the leaks and retail business.
In Italy business, we had a very solid growth in savaging, a station and maintenance repair contract and photovoltaic.
Along with the public lighting and credit card business also incurred.
Regarding retail business.
The number of delivery points increased by 32%, reaching 4600 and too and the energy sold amounted to 23 Terawatts hour in 2021, which means.
32% increase compare to 2020.
Both businesses.
Keep reinforcing our focus on customer and electrification has been gas on our strategic goals and board meet net zero target.
Let's now.
Look at the <unk>.
Our ESG highlights our incoming supply.
As we have already mentioned on previous occasions. These recognitions reflect how we embed.
Staying ability in our operation with our ethical social responsibility and their domain.
Corporate governance behaviors.
Being part of our culture and the day to day actions of our operation.
During 2021, our company improved in all the main ESG ratings, maintaining with a positive trend over the previous year.
As you can see in and that he I S&P Dow Jones.
We'll see that.
Moody's ESG and our affinity we had significant improvements we wont do I lied.
In 2021 we made the application for the CDP climate change a 2021 and we just seem to be scored position the company in the management cluster.
This means that we are taking that core beneath adoption climate issues.
We also received a b in the 2021 CDP supplier engagement ratings report.
Evaluates organization and supplier engagement on climate change.
We are also proud to be recognized again by the S&P Dow Jones index on their sustainability yearbook, 2021, with a better class.
Now notwithstanding this excel that result, we are always looking into improve our score in our reporting system.
I will now pass the call to our radio caught about financial fact, Aurelio the floor is yours.
Thank you Mohit you good morning, everybody.
Beginning with slide by mentioning that in dispute we had to make an adjustment in our Brazilian distributions of ingredients Ethernet accounting rule.
For each well, which implied moving some financial revenues operational revenues.
It represents.
In APAC.
$247 million for <unk>.
You may begin.
And $82 million.
Fourth quarter.
A lot there.
Comparable yes, just keen to Duane.
The impact in <unk>.
Dave is $99 million barbecue meal.
$17 million for the fourth quarter.
EBITDA in the fourth quarter, reaching 1170 $9 million, 14% higher than the same period of last year.
Mainly explained by the consolidation of the Americas and by the better results.
Conventional generation, especially Colombia and Peru.
If we include <unk>, sorry, if you exclude I E.
APAC the APAC.
The negative $8 $59 million currently from devaluation.
Get to our Navy that of 1040 $3 million, which is 9% higher than the adjusted EBITDA.
The fourth quarter last year.
These terms EBITDA increased by 86, 1% in nominal terms and 16 point.
Excluding $2.
All right.
Each of the Americas, and the negative impact of $185 million from the currency devaluation for the two years.
Group net income in the fourth.
<unk> decreased by 65%, while on a cumulative basis it decreased by 10%.
We'll have a focus on net income in the coming drag to moderate to better understand these numbers.
From operation.
Richard 8270 $4 million.
We're saying compared to last year, while net debt increased by 32 point keeps contented, reaching $5 9 billion with one of my lines into to your cash flow and that's in the later in this presentation.
Glad to see that evolution do you need to break down.
Starting to form 1020 $7 million off would be done.
Lots of Brady Dwayne.
We see that all of our businesses.
Positive operational results due in dispute.
<unk> networks thermal generation improved by $46 million, while renewals increased by $141 million from week, one rather than 13 are pending from PGP Americas networks decreased by $7 million, mainly due to lower demand in Brazil.
Analytics grew by $84 million.
The arms respectively.
Relations.
A negative impact of $59 million.
Considering the splits are there impacts we've got the.
A foundation with did not find out where did that 1170 $9 million, 50% higher than same period of last year.
On a country basis, we had we'd see that the main contribute can talk we can consolidate that EBITDA was resumed with 51%.
They represent a 30%.
11% Central America, 5% in Argentina, 3% less.
<unk>.
Nathan maybe dive into kind of the glass.
Here, we started from.
$259 million I'll kick it off.
And we can see that all our businesses and.
Significant increases in operational results.
With generation and boosted by $186 million right. When you have both increased by $476 million from which 374 gained from Egypt, The Americas network increased by $294 million, including 100.
48 million loss from the Aussie impact on price.
The 12th wire with data <unk> analytics grew by $68 million and $14 million.
Respectively.
Let me keep devaluation had a negative impact of $185 million, which you can find out where did that all 4000 $102 million, 26% higher than the safety showed up last year.
On a country basis.
The main contributor for consolidated they did not want to be a few week 40.
<unk>, 7%, while Colombia represented 3%.
Sticking with Central America Forklifts.
In Argentina for them for sale.
Let's have a package on generation and that would be within the coming slides.
EBITDA in generation business increased by 42% mainly explained by the contribution of Japan languish without the effects.
That would have increased by 13%.
Mainly explained by better results in Colombia.
And in Fortaleza in Brazil, due to higher sale prices and higher energy sales.
Partially offset by currency devaluation, which had a negative impact of $31 million on accumulative basis 2019.
1960, $5 million in Colombia, and Brazil, the maintenance of genius.
This represents a 42% compared to last year.
Like could you be a matter doesn't become life.
He stopped capacity in operation booting dispute, which Richard.
She's a lot from which to put fleet keep a watch.
One six gigawatts of solar and 0.8, gigawatts, meaning hydro.
Basket capacity goes three hands.
Megawatts of new capacity added during the fourth quarter in Brazil.
We currently have two seven gigawatts of capacity under construction from week, one seven gigawatts of wind projects and one gigawatts of solar.
Most of them coming from the U N, Colombia from 2.7 gigabytes.
Megawatts.
Again, it varies from 'twenty to 'twenty, one nine gigawatts in 'twenty three.
100 megawatts in <unk>.
Dwayne before EBITDA during the fourth block of whats $113 million from week, 47% came from Central America.
45% from Brazil, and 80% something in a cumulative basis, it would be kind of reaching 375 millions all else being equal to flourish.
Regarding Capex, we took our lives.
$6 billion in each quarter this quarter, mainly due to Brexit keep reviewing Colombian capex for the full year of which $1 $1 billion. Finally, our long term pipeline currently reaches around if he thinks he can watch from week 30. Once you go walk starting in early stage.
Five gigawatts in mentioned in mature stage.
So not like networks business in the next two slides.
Networks business decreased by 3% compared to the fourth quarter last year.
$641 million. These amounts include $82 million coming from the reclassification made T. D. G. I think 12 already explained that we love the track.
In addition business would have increased by 5% in the quarter, mainly explained by lower demand in Brazil to lower sales in Argentina due to higher costs. This was partially upset by better results in Colombia and Peru.
On cumulative terms if.
In distribution business, which in 2220 $8 million, leaving you in Colombia at the main contributors beats represents an increase of 14% compared to last year.
If we exclude the impact coming from I think 12, EBITDA would have increased by 7% mainly due to higher demand in the full quantity and higher sale price.
I've spent my life net income in the next flight stopping.
Starting from 1180 $1 million from last year and that.
We have a negative impact from currency devaluation of $277 million, one offs in <unk> amounted to plus $101 million, while and mainly I connected with the nuclear arena and other adjusted.
Yes.
If you're not going to do that to $709 million.
She piece I think dwell we backed already explained.
Then we have negative variation depreciation how much change them for $288 million, mainly due to higher asset base net financial results for $234 million explained by higher death, and taxes paid by $57 million due to higher.
Earnings before tax and highest next week.
D 90, Colombia, we did we get to a net income of 1130 $5 million, which is 4% lower than 20 between let's summarize our cash flow in the next slides.
First one for each of my mouth scheme.
<unk> thousand $374 million completed 91.
Starting from an EBITDA of $4 $1 billion. This result includes negative networking kept from the amount of 700 and needs.
Mainly due to <unk> that should be recovered in the coming back to Jasmine.
Working capital in Queens and compare it to J D.
It's mainly explained by deposit give me back on.
$614 million related to contact will be enjoyed doing.
Texas They do it.
EBITDA amounted to $735 million, while net financial expenses amounted to minus $284 million after investments at an 8970 $1 million.
1000, 170 million bullets coming from Egypt Americans, we get to a free cash flow.
<unk> hundred $96 million.
Now underlies the depth of our company following these lives.
Well, that's amounted to $7 $4 billion I mean please.
At 4% compared to December 20.
This amount includes $90 million, Okay, Let me take the Americas, which is offset by cash injection made by analyzed.
Before the American Spirit currently and then Americas holding level.
Increase in last night that he was always also explained by increases in our distribution gains shouldn't he lives, but doing so.
Partially offset by a reduction in.
You know America is holding.
Looking at our net debt starting with $4 $4 billion last year, we had minus $596 million of free cash flow as mentioned in previous lives.
Needed in Spain amounted to $972 million and financial receivables minus $103 million each of the Americas contributed $675 million of cash coming from equity injection of formations.
Which aims to finance new projects, new renewables projects.
With this plus the net debts coming from Egypt, and maintenance up $631 million and effects.
Minus $22 million total netback reach it.
5000 $870 million.
In terms of currency and country, we stick with you remain the largest contributor while the death at holding level represents less than 10% off the building.
Regarding the cost of debt, we can see in ingredients for disputed going from four 9% to six 1% mainly explained by the growing trend in the English.
But with variable rates in Brazil.
This was partially offset by a better rate conditions in the refi 19, that's equal, albeit in the room.
Now on the following slide.
Look at that.
Liquidity and debt amortization.
We finished the year with $3 1 billion U S dollar the liquidity squeeze.
Evenly among cash and committed credit lines. We also have moved.
Move to debt maturity.
Kyle.
For the coming years.
And average monthly each of three six years.
Nothing we didn't need to support the majority of just over the phone.
Theaters now.
Now on the following slides Maui, Jim will finish the presentation with some closing remarks before we issue.
Yeah.
During the 2021 we saw a solid operational recovery across the region that Egypt, yeah pre.
Pre pandemic levels.
These along with a solid contribution or UGC America allowed the highest or of an important in Peru at EBITDA level.
In line with the guidance announced on our strategic plan.
We continue with our ESG focus and we are positioning our company as one of the best ESG player in Latam.
Finally, we are strongly delivering and executing the new capacity coming from nonconventional renewable sources in line with our strategy.
But that's up to you.
Thank you Mollie.
Okay.
Okay, well. Thank you all for your all things being able to pass the.
The call today for the Q&A session. Operator. Please proceed.
Ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue simply press the pound key.
Again, if you have a question or comment at this time. Please press Star then one on your telephone keypad.
Our first question or comment comes from the line of Enrico Bartoli from Stifel. Your line is open.
Hi, Yes, good afternoon, everybody and thanks for taking my questions I have three actually first of all if you can.
Update us on your outlook for 2022, if you can provide a few comments on the growth drivers that just back for this year and particularly the evolution of the demand and the Dod X increase he said that you expect in the distribution business. So maybe some comments.
By country would be really very household.
Second question is related to this change in accounting in the Brazilian distributor business, if I understood well some items have been moved from our financial results are into revenues. If you can provide some detail. So what kind of items, we are talking about and if this.
Additional EBITDA how much of that is actually as that is cash.
The last one is regarding.
The capacity. Additionally, renewables that you are expecting for 2000, and so did you. If you can provide us some some debates on that possibly by country and also a guidance on the capex that just like this year. Thank you very much.
Thanks for the question I will start to take the first question.
Got it.
To be in demand.
Really.
We are observing in all countries, where we as.
We said during the conference that we are back to the pre pandemic level.
11.
The decrease of the demand in the embassy is mostly due to the reduction of demand in Sao Paolo why.
Why.
In that regard.
Generation that there are some change in terms of our customer base in the sense that commercial our commercial business suffered a lot.
On due to the pending a pandemic and so we've ever seen.
The industry going back to the B.
Consumption of the pandemic and we observed an increase in demand.
Bye bye.
Domestic cats them.
So that they're there the major segments offset in terms of demand is called mesh out of that segment and then you have.
Distributed generation, especially in but I think in general the demand will be.
Continuing to grow in all three of our and then and in America.
Regatta and the projection is.
Different country by country.
We can we can give.
M. A number out there that can give you some numbers in terms of expected growth in terms of demand.
2022 .
They've got a thing of the stake on the second.
Yeah.
I will let the Aurelio reply.
The variable that would be.
Affected by Africa, where it's mostly that happened.
Got it.
But I agree with Dave.
Aurelio just to reply on the on this please aurelio.
Yeah.
Hi, Thank you.
Question.
The coming years, we have a three five gigawatts of new capacity in.
In renewables.
We have 70% of these oh who's playing through for 2022 right there.
Then we have.
600 megawatts I mean four days at the end of June then we have 27.
56% up from 23, three and then second the central 'twenty 'twenty four I mean, the main the main.
In Greek esports tournament in 23 of these three five would you.
56%, a little bit more than the hospital for 2023.
Right.
Okay.
If you wanted to kind of if you want to.
Great.
Yes.
And Mauricio speaking.
My question is related to easily get to it you want to just understand exactly what kind of the extraordinary devaluation we have done.
Okay.
12.
We had a reclassification of nitric 12.
Two regarding our I mean, we consider.
Before it used to be that he can say, they're deep deep in fact.
Our financial results.
Next allocation regarding the related to inflation, okay of the mirth, Rob off the distribution company. So before these are the key to it was.
It's classified as financial results then after an assessment.
Our auditors, we reclassified can we got fired Ts as operation results, she seems to be related to that.
Adjustments I mean is this.
But it's that's a big bet.
It is a basic.
Florida bar so be it.
So eat.
It is better reclassified as operation our results. So it was $247 million and 22 and these amounts are was 19 9 million U S voice.
Well I mean that will be okay, I'm talking about full year.
Okay.
Oh no no sorry, just two two Bcf a day said these additional revenues out of our cash shortly just a it's just an accounting change.
You can start counting the company equal because E E.
Our next one.
<unk> unique.
When we adjust the net write off for the company each year right.
We've been at it should concession distributions these are in Brazil each year.
What we've just been reclassified what we need to do it before.
Before classified as financial results.
Got to fire this adobe diamine operational results okay.
Okay.
Okay. Thank you.
And can you provide some detail on the TARDIS increases that you expect for this year in the distribution business.
The D C area that just to say that.
If you remember you recall the PD adult.
But if we adjust the mandate.
Every four years five years, so that's the major Patty.
Yeah.
Redefinition East for example in Brazil in 2023.
You said you had Obeidi, Adam you said Jeff.
Jeff and I just thought if you too are in place and are due to devaluation depending.
Uh huh.
The indexation is to the Brexit Maggiore style, Oh C. P I.
The increase.
The increase or the adaptation of the ER the body. So it will be it would do to our inflation adjustment most of it.
But that the change in that is that the new guide is would be defined in Brazil in 'twenty 'twenty three.
In Argentina as well as in.
In Colombia, we recently are we at the adjusted myself the fatty.
And even though you ever.
Make any smoke the adjustment cookery differently, so I'm glad that our foundries and tell us whether we would expect going to 'twenty three for a new tariff.
They can issue, but all the Patty I don't know.
Adjusted that we didn't play with inflation, mostly.
Okay. Thank you very much sorry, the very very last one if you can spend the numbers on the guidance for EBITDA and Capex for this year.
Aurelio up to you.
Yes.
Yeah, the number of out of our EBITDA.
We have got a likelihood for 1 billion this year and yes make them for the next year.
$4 nine and 5.4 I mean this is related to COVID-19 .
That's the range that we are.
The theater to properly so.
Fortunately, we can be choosy.
Yeah, I mean, the lower.
If you have that.
We have a $4 $8 billion between $4 80, and $5 19.
We should consider any more for considering the fact that we are seeing though so we close at $4. One now and we are estimating for point to 80 283 to $4 83, and $4 93 before.
Net income are we close to 1 billion you obviously.
In one five degree Jimmy Choo, 143, and 1.2 is really painful.
Perfect. Thank you very much.
Thank you.
Our next question or comment comes from the line of Sara Piccinini from Mediobanca. Your line is open.
Hi, and thanks for taking my question and I also have key and the first one is on working capital and looking at the Slide 18, now where are you sort of debate.
And it looks that the the level of what can be done.
It remains.
Hi, I just had I never know what about the state of high versus what we have seen in the nine months. So do you expect these levels to be easily absorbed that and on the other end that we have seen that the FX a little have a substantially improved.
And if I understood correctly D C is related to.
The contact call me the cash that you received some come back later.
This figure included that in so in this bridge.
What can we see a positive effect from the contact coffee that explains the better ethical and thanks, sorry towards maybe for the long question, but just to understand the how the beach are working well.
<unk> done that and that's helpful.
The second question is on the energy losses, that's all so youll cut the slide seven.
Seven a M.
Level of energy law since it looks.
Look so quite high.
Did you see an improvement over the year or are you seeing kind.
The other magnitude elections tool to novartis level.
The second question and the last question, even though I think about it some.
So you indicated they've got Lucky do you expect for 2020 to 20 and these are the topics for this capacity already contracted.
It doesn't sound like the effect of the higher commodity prices or you expect some increase in the level of capex per megawatt. So that's just an expectation thanks a lot.
Okay, I I read a reply the second and the third down we'll let our aurelio already play on working capital.
Are they got a big.
Losses losses.
As you know they are recognized as well by our regulator in the Fatties.
Some extent no.
If you go through.
We can say that in a in many cases, we are indeed.
The law says.
That are supposed to be compensated by the authorities.
But nevertheless, oh, well we are doing we are completely change our.
Our relationship with our customer Centricity.
Centricity of the customer.
It's not that the formula.
Something that.
We are transforming an hour that they the eh daily operation. So we have.
Now are powerful system of Uh huh.
And blocker Corp that are able just to know exactly what are the needs of our customers explaining exactly how it works.
We are it works our system.
Of course, we either after two years of pandemic in which in some cases, we were obliged to nut to crack.
<unk> a dampening of activity was suspended.
There are seen say the last six months, we have but we started to work with the customer and that's.
Explaining that the relevance of our Oh.
And.
Our relationship with the greater and the benefit of all the person as you recall from the conversation we had that we still continue.
And the impact of bad debt of 42%.
And this means that we are working as well.
Establishing that the discipline of the market so.
In many cases summarizing in many cases the.
The losses.
Looks like a high that are in line.
Right.
The I think later.
Nice in the Paris due to the specialty equation separately the wheel.
And in our in our Sao Paolo on scatter.
Or in Argentina of course.
They gotta Binga young all of our renewable energy.
Of course in the end.
In general the majority of the items I've already contracted that are due to the Corona crisis of Oh.
It might be easier to keep maintain of course that we are.
And that would be.
It's a negotiation with our with our suppliers.
In general we don't see a huge impact in our that you know what are right now in the performance of our project, but of course the situation of the.
My theory, I love and logistics there.
And this AR.
Thanks to the relationship we were able to create with our with our supplier and.
We are holding the cases in Greece.
This is a problem.
Well for the supplier and we are not.
Observing that.
But the real impact on our I got out of it probably took okay.
Regarding our working our working capital.
And Aurelio could apply and of course, if you have them.
My other question.
Alright.
Thank them all each of a high startup.
If you see the full year 'twenty.
We see a negative impact of $94 million in Utilizations right. These are what's I mean positively.
Positively affected by.
The colter injection of funds and $14 million right. So.
The D C.
Ah Ah moment very impacted by the Ob and the written later.
With.
All of the distributions are establishing these financing wait not only for distribution, but the whole sector. That's why they're mounted in June to let's say the smaller then you have to me.
In in 'twenty, two and what we would have a knock on effect.
We keep the.
Hydrology impact right. So mainly because you are we are.
The amount of a higher price and the FERC keeps from distribution company and be effective.
We believe the working capital of the company B hydrological effects deep.
This amount of money a little are you back.
Around with it.
102, $900 million I mean, a huge impact.
Distribution companies are now.
In our discussions with them right away.
So you'll have a similar mechanism like go into whole week, let's say I.
I mean I cant.
Hydrology, if I may say.
To support all the sector.
In order to put the company not to be shouldn't goffman combating.
That's about that award.
A better condition.
I mean, we'll implement in the lithium brine the hydrology situation with you so.
These amounts of money. He of course has been a busy day.
Black flag definitely have to be in Brazil. So we are still discussing.
The amount will come from these hydraulics, we support from the regulators I mean.
Yeah.
It's very difficult to compare twenty-three entity.
One as you know we went to Duane the huge impact of the pandemic in 2020 . One we still have to do you think that these impacts malika explaining the lawsuits.
The issue that we are recovering, but they still keep guns do get booked and also collections. So I mean these are.
We are progressively improving the basically the market since we can operates in the in the in the Peter.
Difficult and a 42 anything anyone beats hydrological effects.
You didn't have last year, and we are expecting the.
First one.
The improvement of the situation.
And.
Number two the support from the regulator in order to rebalance within working capital Okay.
Okay, Thanks, and if I may sorry, and on the question on guidance. So that's it.
Oh.
Yeah.
Sorry.
Yeah on the question.
Yeah.
Please.
Yeah, sorry on the question on the guide them to that degree can make before and just for clarification I was looking at your that maybe start to get to that you provided in the business plan at the end of year and.
So are you expecting that they'd be done that can come out to be in the lower end of the guidance I N T.
And he's ready to them, but I can let you off the current he basically did I understand correctly. Thank you.
Yes, you understood correctly, we expect them to the lower part of the of the guidance.
Okay.
Many thanks, and sorry for the introduction.
Oh, I'm, sorry, I I think you asked regarding the Capex just to give you more color about beef a.
We said, that's really invest 3.50, sorry.
Five gigawatts in the coming years deep cut back for US we are estimating $3 4 billion in U S dollars right.
More or less 1 billion per gigawatt that we put in two thirds of these all of these investments will be that you are competing.
Meeting with you than Colombia, Peru, and Central America right.
Many thanks, Thanks a lot.
Youre welcome.
Thank you. Our next question or comment comes from the line of mirror low receipt from Santander. Your line is open.
Hi, good morning, Thanks for the call guys.
Some questions could you elaborate.
A little more explaining the contractions of volumes in the distribution business in Brazil police, maybe some some details on.
On the regional seasonality or something that people give us more details on this.
Second one is you can also provide us more details about the positive performance of the operations in the generation segment in Colombia and Peru.
The other one.
If you could remember us or give us an update on the possibility to delete the company from Chile, or any other kind of trucks or changes that you see as an opportunity for for this year.
That's all thank you.
Okay got.
Ah the man that if you look at Brazil, the only distribution companies that is really.
Reducing the energy demand is Sao Paulo.
Gary Ash, but he actually is growing up 4%.
It's growing the same the Rio de Janeiro.
Regarding it.
Of course, there as you said the the seasonality.
We will have an impact if you have some at least would beat the fresh whether you have less consumption Oh I conditioning and this can be any impact.
We are open to it.
So stop our Sam.
Fracturing.
Yeah.
Mason and the demand both.
I mentioned that.
You have more or less a reduction on super saying something like there.
And we are competing as well with the demand of our 2019.
The pre pandemic.
But in Sao Paolo you have you ever reduction you are baked into the consumption. The other distribution companies or some things structurally is changing in a.
Sao Paolo and.
If you observe.
More domestic capstone that because you continue as you if you can recall by the.
The we said during this call we ask that something in all Lucky and I've made it got something like a 560000, new customers because you have what if any addition process ongoing in Sao Paolo is one of the distribution company.
That get any increase in terms of a customer that goes to the.
So Paolo.
We are losing a big customer from the commercial side.
Side for example, the big storage of.
In the food in the city.
The data that are.
In that sub segment.
Going back to the.
In Sao Paolo is going back to the consumption before.
Good evening.
And B.
If you look at it.
They're all like you have an increase of gas no matter what we.
And a bigger margin that are domestic.
Domestic our domestic customer so.
And all.
All right.
The other aspect related to the distributed.
So the if you look at the megawatts distributed energy storage mean that your eyes and Sao Paolo are on top of that the state in Brazil.
So megawatt installed of Citigroup.
So this is another component of the reduction of the demand in so Paulo, but the other distribution companies growing in terms over there.
So.
How would you mind.
And then.
The second question is about four months of Colombia, Colombia and Peru.
Let's say in Colombia.
Sure.
During the 2021 .
Higher price.
Due to the P. P I eh indexation.
Industrial production.
Index is going up and these are have been transforming that high of a price.
Oh of energy than where we sold some are getting a certificate.
And.
And of course, we generate a generate idle.
And we then I era.
Price.
And then this was the positive result of Colombia.
And of course that we are we spoke about a panic, but if you. If you recall I said that the Oh Columbia.
You say, it's total revenue.
The new copper.
Regulation and so we are we had more.
The Arabian news.
Ebbing.
More wrapped but a more investment in our distribution network and so we have been.
We recognize a month later it doesn't really seem ready.
Delaying the recognition.
Patty.
As well a part of it.
Fannie four distribution CPI indexation.
It is an effect and then you have major that.
Volume in terms of distributed.
Energy.
And in that in Panama, So they do of course.
Ooh Ooh.
And Mexico and higher hydrology of very good data on the G and of course in a different.
Mix of our contract.
Both in.
Contract cover our position better price. So we've got a better result over there in terms of generation.
And in terms of distribution in Peru is mostly due to the higher volume.
Oh distributed a good day.
Regarding the last question.
You know, we always where are we.
<unk> told you that the process of Oh.
I are something that we started.
And we are in our lives.
Over the time.
The box.
Of course.
There is no decision taken.
Okay.
On this aspect regarding a possible de listing so we are finding our way back there.
Yeah organization for it in the interest of all Seattle, that's cool.
And last year, we complete the integration with renewable energy, we make we made let's say somewhat Samsung and today, we are showing a proved that he thought that we de levered.
Equity.
We chromite.
In December a 'twenty 'twenty and then we completely in Queensland in Gabon.
We are always thinking a better.
Better organization will decision have been taken.
And whatever the decision is.
It was very helpful and.
And last one if I may.
There are currently many discussions about the conditions on the renewal of the distribution concessions in Brazil could you provide your view on these as the minister of energy will begin to take this matter more and more into account going going forward.
Have a view on this.
On.
Our renewals are.
The concessions.
Could you comment maybe it'll be I suppose that you are right you are talking about either a concession or you are talking of what kind of.
Concession for renewables.
Did you talk about.
This condition.
But I feel a distribution concessions already there they have every 45 years.
The vision based on the.
Formula.
Find the buy the media city.
And every year every year you have very definition of a simple walk.
The application of the walk.
This is a normal.
Normal process Likey in all the commentary you'll ever and a vision of the remuneration every four five years now.
Nothing, particularly different in Brazil from the other foundries.
Okay.
Okay.
And finally at the memorial.
What mortgage explained it.
You know that we have.
Hum.
Oh part for a consultation renewable.
And Ebrahim I mean, we have different situations, but let's talk about hedging.
The first one and then video into it the Green Light then we have a set I believe the 28.
So in some volatile electric Baldwin 2000 Twenty's.
Envoy absolutely Duane D.
45 right.
Yes.
For Easter what between.
The contracts that we have for different fashion concepts, but that'd be a subtle besides these mechanisms.
And.
You have a.
Discussions regarding renewables starting regarding the concept of them three years before the renewal.
The renewal of concessions.
We understand and are these.
For that and for distribution all the different from engineers.
It depends more on the on the integration and the first of all it's the concession the operator wants to renew and of course it depends on the on the Kpis.
If you are reaching your Florida, I mean, the Buda.
And then it.
It depends more on the operational than they've ever been.
It doesn't mean that it's cheaper for the season.
I mean I don't know.
That's what we would do if you read the country cheaper funding teach them about the.
Concerning the consumer the clients that we are renewing.
Sessions.
The best way to optimize the season, but again it depends on the PPI provision Kpis as you know he brought reaching their kpis quality losses.
And in times of.
Transfection, though.
The quality, especially the quality of the off net services.
You can be felt.
These issues it will be a weekend.
No.
And this is our intention to do.
I mean our approach.
Corporation, there are enough to renew the concessions right.
That was very helpful.
Many things are they doing.
No.
You're welcome.
Thank you. Our next question or comment comes from the line of Andrew Mccarthy from credit core capital. Your line is open.
Good morning, everyone. Many thanks Marie ceremonial drop out for the presentation.
My first question I was wondering if you could provide any color on the.
The likelihood.
Getting a tariff adjustment in Argentina this year.
How the conversations are going with the with the authorities what your expectations are.
Then my second question was just a follow up on the working capital.
In Greece.
Just trying to understand in terms of the timing of when.
You'll get maybe the agreement with the authorities so the Oh.
You brought up here if you'd like.
And then the timing on when we should see that.
It's not about that those cash flows coming through.
The final question was on the policies.
You already said it but I didn't quite hear the just wanted to check what the Capex number was for 2022 now saying.
Just given that you obviously you had a.
Well it seems like a bit of an acceleration in capex in the fourth quarter. So just trying to understand how we should think about that capex number for 2022.
Thanks.
Okay I will try.
<unk> to supply to the first question that I got to be got certainty and the reality. We are already in these days are getting there.
The definitions are all of the Earth the Saudis by document.
Oh.
20%.
That's going to have a tender we will go to the ER.
The generation component.
And so the distribution component.
We are observing that in both cases.
Yeah.
If you can see that 50% of inflation in 2021 and for this reason I think.
Need to go I E in the middle of the year with a not a bodies adopt so satisfied just maybe is there but of course he is.
<unk> two.
Call there.
Are the needs are for.
For 'twenty to 'twenty two.
Just recall that that the generation component of the tariff is a pass through for a distribution company, but of course it would improve.
The balance of the generation company and we are as to whether the generation Company. Then we will have and that grew on a bot on baidu hotbeds of distribution and this will continue.
Component W pattern.
In <unk> core investment support payroll etcetera, so due to the fact that we are getting there.
And.
Believe me that the adjustment of the tariff.
We'll put under.
That would put stop putting the distribution company.
Two questions so for the citizen.
The first adjustment that but we need that to work on that.
And our job is to get some other documents along the years.
Ah recall that.
Yeah agreement would be we do them.
With the many city.
Yes, Josh that wherever it transition bodies.
And although there are 2022 'twenty 'twenty three that would be the major revision of bodies.
Last one working a 2017, so five years later and we need to wherever neither.
We see the situation in Argentina.
Working capital.
Aurelio, Josh to working capital and Capex 2022, I will let the aurelio to reply.
Thank you Bob.
Thank you Andrew for your question are we.
Regarding working capital as I was explaining we are.
Moving to from some of the discussion because really the later and.
In parallel of course to improving off the off.
The logical situation.
The amount of money is being let's say.
Or are in the in our in our <unk> numbers in our estimation by the end of quarter, maybe drinking tea.
With all of them.
Complete the distribution I mean walk through our hands or via or by and walk through Atlanta, Washington as seen by the regulator or is it a little here.
By the end of each of these Florida.
Probably.
And then also because of better hydrological.
I'm teasing.
At eight a M.
By the end of March and May be any more first.
The first two weeks of April .
It is our position.
Regarding Capex are you asking me to accelerate Capex no.
The capex that we can provide that I mean, we provided a $3 2 billion U S dollars.
We adjust by unifying effect.
It's probably could be.
A little bit lower but there are I.
I mean, there is no intention to accelerate the capex.
We also see the I.
I mean, we have dealt with that in the next important medicine testing to do so.
But we want the plan that we presented already.
And these side effects.
So they come back with you as I mentioned, the new capacity stop renewables for Florida, the funds become easier so I mean.
We added nearly in line.
We lead the nation that we presented three 2 billion.
Very good alright, thanks very much.
There were something to them.
Thank you again, ladies and gentlemen, if you have a question or comment at this time. Please press Star then one on your telephone keypad.
Our next question or comment comes from the line of Sebastian Ramirez from <unk>. Your line is open.
Hi, guys meetings for the presentation I've got one quick question and it's regarding with cash flows for 2022.
Giving to what you've already said that you're expecting on the low end of the guidance of $4 8 billion.
And around $3 3 billion of Capex, plus a billion or so in Texas.
Interest expenses.
Should we think that.
Overall net debt should be growing next year.
And therefore, where do you think that.
Leverage should and next year.
I am.
Yeah.
I'd like to think about it too.
So thank you for your question I.
I mean are we hadn't met in a better found.
Found a stipulation solid situation in terms of Oh connect exercises.
Despite the pandemic hydrology, but even though we could see the leverage we are at one point for each we are also.
They used to I think 12, my judgment would be with one five and considering the pension fund will move into one set of 19.
A solid situation.
Even with the deep <unk>.
Jackson I mean.
That is realistic projections with four point basis, you're down $3 two.
We'll we'll maintain our well our leverage came in.
It did not.
Let's say not a dangerous situations right remember that one important thing.
And seeing the behavior of our hydrological also we have relaxing with me.
I mean lots of.
Okay.
It seems that to me I forget it will be boosted our payout policy.
D. G D that we did reduce it from like weakness in the extra posing a reduction from 50% to 30% in order to get that into the cash flow.
We are maintained.
Maintain again, our priority here of course, we still maintained a sound situation in terms of our financing to pay both net debt.
We have a very good situation in terms of liquidity you can see our wage in hour credit lines and so once you get enough of them.
And and again, we have important benefits that you're doing in 'twenty three.
And we need to deploy and take advantage of sleep it understates MLP market improving our capacity.
Renewables so.
Oh these are deep.
Developments.
And in there no and industrial.
That's why we decided to propose a reduction in our dividend policy in order to bet there'll be situations that we are facing in a very sustainable way the bouquet.
He was here.
We did it.
It wasn't so sure when you analyze the when do we publish the plane was the hydrology would have a significant improvement in hydrology and different from our Colombia for example, in Brazil, you know that we anticipate.
And one year after you see the public policy developed.
The element could bring.
Also very good compensation do any easier so with all these elements.
Our.
Brother flip and say anything vertical they show a behavior in terms of cash flow.
That's why we we benefit the most.
The distribution payout the dividend payout in order to have this.
Certainly.
Rich position to meet or beat.
These important position that will happen only in 'twenty two 'twenty three.
I mean, you kind of reset I mean.
Market liberalization I mean.
It began to slow.
Due to the generation and we are confident that we'd thought we'd.
We beat the measures we are we haven't found in solving financial positions and faith in the future.
That's very clear if I made out a follow up on the.
Regards of what Youre seeing in an acceleration of Capex for the renewal side that has been something that you have been talking.
Socializing with the market.
Should we think that there's still some room, how big is there room to accelerate there.
The increase in projects on Brazil, specifically should we think that there is I don't know 500 to 1000.
<unk> thousand Mega that that that could be accelerated within the plan in order to.
See that happening between 2000 22002 or three.
Daily I will reply.
In in.
In this way.
Well, we are going right now we are there.
Going in the process in the entire group and then.
The definition of what is the integrated margin that means what is our commercial strategy for this reason I told you that we are.
Focusing on cash them, there, we will start to elaborate that.
Master strategy that we call core.
The new generation.
In this sense that right now we have a.
It's a defined a portfolio of projects under construction and in operation in Brazil for example.
And based on this we are elaborate our commercial strategy. What we are doing right. Now we are elaborating a new commercial strategy and this new commercial strategy all call for eventually additional acceleration in renewable energy.
But we are changing the focus on one side the before it was the focus of having energy and then sadly now reward.
Having said that our commercial strategy and focusing of.
Yeah.
Additional the additional generation facilities. So that is all the possible additional acceleration.
In our renewable generation is based on the plan on commercialization plan that we are going to elaborate we are elaborating right now so it already you have an important and a member of Oh Gee Guy.
What are in construction and inauguration, but I feel that way.
We will be able to even more ambitious.
And of course, this will recall for additional.
Renewable energy.
That's very clear many thanks for the clarification.
You're welcome.
Yes.
Thank you.
Thank you I'm showing no additional questions in the queue at this time I'd like to turn the conference back over to management for any.
Closing remarks.
Well they don't have a lot of questions. We don't feel that your first conference call, Olivia who might get that usually they they certainly can sleep is Hawaii.
Thank you for your patience.
Yeah.
Ladies and gentlemen, thank you for participating in today's conference. This concludes the program you may now disconnect everyone have a wonderful day.
Yeah.
Yes.
[music].