Q4 2021 Enel Chile SA Earnings Call
Good day, ladies and gentlemen, and welcome to Enel, Chile, Q4, and full year 2021 results Conference call. My name is Gigi and I will be your operator for today.
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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 are described in Enel Chile.
The press release reporting its Q4 and full year 2021 results.
The presentation accompanying this conference call and Enel, Chile annual report on form 20-F, including under risk factors you may access our Q4 and full year 2021 results press release and presentation on our website www dot and now dot CL and are.
20-F on the SEC's website.
WWE W. Dot SEC dot Gov readers are cautioned not to place undue reliance on those forward looking statements, which speak only as of their date and then Chile undertakes no obligation to update these forward looking statements or to disclose any development as a result of which these forward looking statements.
Become inaccurate except us.
Required by law.
I'd now like to turn the presentation over to Mrs. Isabela <unk> head of Investor Relations of Enel, Chile. Please proceed.
Good afternoon, and welcome to Enel, Chile fourth quarter and full year 2021 results presentation. Thank you all for joining us today.
What it means is the head of Investor Relations, Let me remind you that our presentation and related financial information on our website <unk> dot and nasdaq's yeah.
The investors section.
Our active investor in the final of the presentation, there will be an opportunity.
To ask questions via phone or West coast shacks.
<unk> asked a question joining me. This morning. This afternoon, our CEO followed by launching our portfolios that would be just totally in the following slides, although we won't bring the presentation with the main highlights of our performance in the FERC for a week.
Youre welcome.
Financial results a replay of the call will be available and as always our IR team will continue to be available to provide you with any <unk> information you may need concerning the speakers.
The presentation, let me remind you that media participants are connected only in Houston I.
Thank you all for exploration in now let me hand over to Pablo.
Thanks Julien.
Good morning.
<unk>.
Good afternoon.
<unk>.
Thank you for joining us.
How do we have already commenced.
During our previous calls.
And then the computer system.
Goodbye silver and contemporary.
The poop under pressure dynamics and stability.
In terms of ideology.
<unk> III is facing one of the dry periods.
Youll early flu labels printed for Julien.
The lower overall pathological conditions why the level of business computers can be fuller.
We have important consequences correlated one quarter it is cyclical like.
And unfortunately, one among the others.
Although more and then I guess.
Demand for commodities the consequence for largest fourth.
Thermal generation.
Year of increased pressure at the global level.
Larger labor people, Argentina, natural gas boom or most of the first nine months of 2021 .
The combination of all these effects in addition to a structural delay or renewable approach it calculated constrain our 2021 margins.
Our cash flow cash flow generation capability.
The latter one also affected by such loans.
Basic fit with slow and.
And the price subsidization.
We already mentioned the several pictures, we put in place since the first smartphone with 21.
Guests.
Additional LNG.
Our plan.
And then for <unk> gas to the system.
Being the largest importer of LNG gas in the country for the year.
In this challenging scenario.
Cash condition posted by the tradition.
We have been able to advance with our renewable project, increasing 900 megawatt digital capacity over the period.
Additional projects are ongoing I will recall uli.
We have also started to leak they issued a new credit lines to sustainability targets today.
Today, 21% stake.
Of the total debt.
Julie.
As we mentioned in our last patient plan presentation, we target to achieve.
Persists.
Or this kind of financing by 2054.
Regarding <unk>, we are pleased to announce that we have been included in the Bloomberg gender equality index for the first time.
So we applied for the first time to the CDP climate change, we're gaining it before.
That confirms that.
We.
Taking coordinated and consistent actions on climate change.
Now, let's move to slide four to give you an update about the markets.
Okay.
Yes.
In 2021 this is.
Less water availability that in 2000 trips with poor hydrology, only slightly better than Detroit recorded.
It was 1990 819, thank you.
The effects of melting season.
Very poor.
And there are limited because of the level of local outage that we took.
In the second half.
The year, some really positive effect on the use of water resources derived from the issue.
Sure.
And the agreement that we reached with some communities.
Where does that go with Keybanc.
I'm not sure I guess for the periods of fall 'twenty 'twenty early 'twenty one.
Some of you forced by in this book of monarch for data generation position facing a significant overall increase.
Most of the price as a consequence of the international market situations.
Gas prices more than fivefold.
Fourth quarter 2020.
The second half of <unk>.
In addition, the delay or respect to use of renewable projects come through later.
Cemetery restrictions.
Monthly effect on the system.
Consider equal to the lack of production of two strategic diesel three under the mid $50 million.
Yes.
It will be a bold mission.
Led to a strong pressure on the system.
With an important rise in margin cost.
Particularly during the third quarter of 2021.
The issuance of the preventive rationing.
Yes.
The situations life improved during the fourth quarter of last year. Thanks in particular to their ability that arent of Argentinian gas in the Chilean market.
Right on a stable until the end of the year.
The chart in the graphic the center the Green.
The usage of natural gas coming from Argentina versus the use of LNG.
Yes.
As a result.
The price recovery in the fourth quarter.
The good performance.
By contemporary technical outages of several step in our plan for the system.
Okay.
Austin funeral.
The 2021 electric demand the rate of 5% over 2003.
We expect that this growth will continue in 2000.
Let's now.
On the regulatory framework could be an interesting.
Let's go to slide five.
Well, because we shouldn't business the expert panel initiatives.
Regarding the regulatory period of 22020 now the process is almost again already in the publication of the decree by the authorities.
Considering the available information, we do not expect negative effects on listing with a tariff level already.
Yes.
The process of distributions.
Do you still.
In brokers know much TV advances made during the last month and the final distributions.
Expected to be released by the end of 2022 or early.
Early 2020.
Difficult to review of the basic service law has been approved by the Congress and recently published addressing the treatment of the debt incurred by the residential values as most companies between March 2020 December 2021.
The electricity consumption fresh adult lines of the future.
Our per month.
Has been established to define the customers that will be subject to the effect of it all.
Customers with consumption up to 250.
We scheduled debt payments.
And 40 AC Orbitz.
We then into 50% 15%.
H Bill in 2021.
The government will subsidize such quarters.
Ethan.
The ending balance will be in place at the end of the 48 Assortments.
That would be addressed in the agreement between distribution companies and governments.
And the other items.
Customers with over 250 gigawatt hour months.
Nonpolitical assumption.
<unk> to the standard routes already in place before different anemia, with the possibility of being cut off from the servicing queso not replacement of.
The existing debt.
The current bill.
On December 31st 2021, our total outstanding debt reached $210 million of which.
$140 million.
Lola can differ to liquidation.
Being.
$52 million below the thresholds of 250.
Concerning deep.
Stabilization mechanism.
According to the CME estimates the fund will reach.
Each legal.
1000, 350 million withdrawal by June 2020.
As of December 31.
And then she is net accounts reached 282 million U S dollars.
Now, let's make it a review on our discount amortization process on page number six.
In 2021, and we successfully connected the 900 megawatts of renewable projects, which more than 90% of soldiers.
This milestone.
Have achieved a total amount of AG gayla on storage capacity.
Each 70% renewables.
Such capacity already connected to the network.
We will reach the salt production within the next months.
All the desktop computers.
Let's go on slide seven.
In addition to the recently connected approach I mentioned before we are advantaged with more than one four gigawatt of additional projects.
Those megawatts includes projects under construction six last year and the new ones already announced like the combined wind facility, whose construction will start in the following months.
Comparable store and Sierra Gorda vessel.
Similar plans already under construction.
Regarding our JV agreement with <unk>.
Any.
And the other partners the winter buying decided for ice.
Very simply.
Chile function day, we expect to start operation doing this year and will be an important milestone.
Or the green either Jimmy Choo.
Now, let's review our fourth Kpis on slide number eight.
We continue to deploy the digitalization of our commercial challenges.
In 2021, 90%.
Our clients' interactions.
Was it worse.
For Q2 digital.
Could you touch on this.
Nonetheless, the complexity introduced by the time being the situation.
<unk> been able to announce clinical customer care also.
Thanks.
The introduction of our ABB.
<unk> and <unk>.
Industry.
On the network side, our quality indicators continued to improve supported by the increased automation at any level of our trees.
There is data that showed a low voltage networks.
Where there is more of the smart meters will have an important role in driving to lower say EDC and continue improving.
Overall.
Yes.
Ross This is David.
Plain stable and we might see some reductions to.
To conclude energy distribution improvements in 2021 reflects the easing of the 70 30 restriction and the overall economic recovery, showing a 5% increase compared to 2000 trades and the really cheap pre pandemic limits.
Now, let's move to Vegas could musician focus on the financial.
Right.
Page number nine.
And I think.
He's pushing Goldman certification of the final use of the outage promoting the integration and development of new sustainable technologies in January we launched the first electric patient service Latin America is a nice move.
Growth and expansion of electric.
Electric mobility.
These chose <unk> station located in a strategic investor.
Yes.
As a total of 23 charging points to use a fruit juice plus up.
This initiative, we supported the reduction of 240.
For the year.
In collaboration with government authorities last December and Alex presented the first month's square in Chile.
On <unk> this is related to as necessary.
The Bakken.
Analyst.
<unk>, Canada.
Security token environmental sensors and charging points.
Thanks to this collaborative project with the subsea Telecommute.
Telecommunications work and biofuel luxury arena, including technology is close to it anyway.
Thank you and now I will hand over to Giuseppe.
Thanks Al.
Let me start with that.
Summary of our.
Highlights on slide <unk>.
<unk> adjusted EBITDA.
8 billion.
The 37% lower than last year.
In the Q4 adjusted EBITDA reached plus.
Okay.
The people in.
In line with our 2021 guidance.
Sure.
Thanks, Paul.
Okay.
My name is Peter we cannot hear you. Please check your mute button.
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Pardon me Isabella has rejoined US you may resume with your conference.
Okay.
No.
Okay.
Yes, we can hear you Isabella you may continue with your conference. Okay. Thank you very much exactly sorry as far as we have umbrella in connection to that at least.
<unk>.
So thats probably the peak.
A brief summary of our financial highlights on slide 11.
Well, yes cadence when you Wanna adjusted EBITDA reached <unk> $8 billion.
37% lower than last year.
Q4, adjusted EBITDA reached one eight.
$8 million.
Figure is in line with our 2000 and the loan guidance relatively favorable.
In terms of adjusted net income.
Zero point $2 billion per year results are in line with our guidance for the year.
And the last quarter figures reached $96 million.
Capex stood at $1 $1 billion 12 per se.
And again, mostly in line with our guidance.
Epic achieved $441 million prepaid.
90% reduction.
In the following slide we will deep dive into the main financial figures now, let's begin with the topics on slide 12.
Turning to any one or two related capex reached $1 1 billion.
Out of which 60% allocated to acute the ACG bowls.
Hillary devoted to the construction of our new renewables.
Customer capex totaled $80 million.
Mainly located to build new formation and to implement our new disabled from commercial systems.
Asset management Capex reached $141 million.
17% higher than fully upgraded fee.
Mainly due to expansion of the new high voltage projects awarded in 2021 activities to improve the quality of our services and others as utilization grows profit.
The renovated capex to reach $916 million, mostly driven by our renewable expansion program and development of our distribution business to continue the digitization of our network.
The development of the renewable Capex was cost increase in the solar expansion.
Figuring this set of projects under construction and recently <unk>.
Because at least.
Regarding the Metro business 2021, Capex reached 200 million dollar mainly for the new customer conversion and improvement of the quality of degree.
In our distribution of interest mission.
In the following lines I will show you more detail about the me generation kit in the PEO.
In slide 13.
Generation of that both for quarter was affected by poor hydrology in the account, which reduced our hydro generation by one Dulles tower and increase our external dispatched by the <unk> nine terawatt hour, mainly through our <unk>.
Therefore, our Q4 2021 production reached five two terawatt hour decreasing 1%.
Q4 <unk>.
For the year 2021, our production reached 19, Palomar dialogue slightly lower than 2000 gaming in living with two terawatt hour lower either production because of food.
In the.
Our energy sales increased.
Our strength is.
As of December 2021, primarily.
And by new contract wins.
Customers, including <unk> and <unk>.
Retail clients transferred from Lucerne children.
Most of them bundling regulation requirements.
For what concern our sourcing on top of the already mentioned production and balances. During 2021, we have counted a total increase of six terawatt hour of purchases.
Include.
Simon on the spot market and plus two three terawatt hour from other generator.
Relative to the nonregulated customer portfolio of content from the distribution business.
Let's now.
Start with the Q4 adjusted EBITDA breakdown on slide 14.
County, Florida, and a $53 million.
Hence lower basis.
To achieve this.
Let me describe the main balances.
Our generation portfolio mix resulted in a positive variation of $83 million.
Mainly related to.
Higher TBA fees in Q4 2021, primarily.
Explained by the New agreement started in 2021 in the mining company and Wrangler <unk> and DSP.
Men due to indexation and the new contract coming from this.
We assume flat customer portfolio at the beginning of the year.
Partially offset by $56 million related to higher assignment duration cost scenarios.
Yes.
This project for a balance of our portfolio mix were offset by worst hydrology conditions impacting in ADHD.
Sure.
<unk>.
$99 million related to higher commodity prices that impact both spot prices.
Our G&A.
In addition costs.
Network remuneration demand accounting for the positive impact of $7 million.
Related to the recovery of the Q4 2021 demand in the distribution business, mainly associated to the ease of the lockup lockdown measures.
Hopefully the indexation and goodbye.
Other effects accounted for $27 million.
Mainly related to negatively impact associated to.
The financial nature.
It could be additional net any impact on EBITDA and lower expected edition.
<unk> business is interesting.
End of construction of several projects.
Let's move to slide 15, where we have the summary of full year adjusted EBITDA breakdown.
Tom.
For the $774 million.
It is 7% lower versus 2020.
As you can see the main aspects of this team the theaters in digital with Q4.
Our generation portfolio.
There's obviously been a positive variation of $35 million.
Mainly related to <unk>.
$171 million higher.
<unk> sales in Q1.
Primarily explained by the new agreement started in 2021.
The adjustment due to indexation and the new contracts coming from.
So.
Great customer portfolio at the beginning of the year.
Partially offset by 136.
Longer.
Termination costs and higher taxes.
The positive results of our portfolio mean threat offset by.
While hydro condition of around two hour impacting part of $199 million.
The $255 million related.
Higher commodity price that impact both the spot prices in our unitary.
Cost.
Network remuneration and demand accounting for a negative impact of $90 million.
Lower network for remuneration.
Related to the effect lower distribution and transmission side.
In effect much higher volume.
Other exit accounted for $19 million, mainly related to lower subsidization of generation business due to the end of construction et cetera project.
<unk> reimbursement booked in 2000 training and new phones agreements booked in Q1 2021 with distribution Union.
Now on.
On slide 16, let's go through the main drivers of our growth in lithium.
Jenny impairment and bad debt.
<unk> reached $388 million.
$15 million lower than last year.
Mainly related to lower gaming independent young due.
Due to the more familiar to environment neatly into entertaining.
And lower D&A.
Energy and power assets.
The creation of the Tdm in Texas in the period.
Net financial charges totaled an expense of $189 million.
Increase of $52 million.
$8 million.
Mainly due to higher cost.
As a result of the factoring it.
In generation business on accounting receivable that derived from the types of additional low.
Partially offset by a higher financial expense capitalized during 2021.
Yes.
Income tax experiments.
Right.
Impacts related to lower this period partial effect.
Positive effect between training because of cost base that you envision in generation business and nonrecurring tax adjustment in 2021 due to CPI.
As a result of the adjusted full year 2021, net income reached $119 million.
Moving now to.
Cash flow on slide 17.
Turning to anyone SSL reached $541 million.
49% lower than previous year, mainly resulting from.
Lower EBITDA as already explained.
Higher income tax during 2015 run mainly related to COVID-19 measures.
During the Clinton clean that postpone part of the corporate etc family completing one in addition to lower stocks of reimbursements in Phoenix versus screen.
In financial expenses, mainly in the crossover.
Yes.
Accounts receivables that derive from the types of additional in the cost of factoring in the solution business.
These effects were partially offset by.
Positive impact related to the net working capital swing.
Training mainly explained by.
Factoring in both generation and distribution business accounted for almost $128 million.
Transmission line in 2000 training in 2021 projects funding.
Chinas sales of instead of transmission line and the same.
In 2011.
As CEO of EBITDA.
Similarly total cash in.
The impact of $40 million.
In 2021.
Partially offset by lower collection, the new anyone in the face of the impact.
<unk> inventory.
Let me now go through our best evolution on slide <unk>.
Our gross debt.
Increased by 1 billion.
<unk> two $5 billion as of December between the 21.
Today, the company loan provided by energy Finance international to an industry four <unk>.
The $40 million.
Bank loan.
Around $100 million mainly.
Capex needs.
And also $114 million increase in leasing agreements in Egypt due to the renewable.
Development.
This transaction with <unk>.
Partially offset by.
For the three months.
Davidson.
Catherine Keating of Barclays.
Therefore.
Currently 21% of our total gross debt.
SPT, Inc.
Our plan is to continue to foods.
In line with our sustainable business strategy.
In terms of debt amortization, our schedule remains strong with an average of six year and with the cost of such functionally align with the last figures.
In terms of liquidity, we continue to have a comfortable position. We are in 30, some available committed lines considering the possible Green index to market.
Timing from the initial income.
In Eastern Europe .
This year, we have around with $100 million.
Over that I mentioned are relatively cheap with maturity in December .
<unk> already started activities and evaluate several opportunities in the law and finish on market now.
And now I'll leave the floor to Paolo for closing remarks.
Thank you Joseph.
The construction of our renewable project is advancing.
Proving the competitiveness and resilience of our generation portfolio.
And supporting our long term ambition regarding <unk>.
We will continue to support the electrification.
The energy use our clients to accelerate the reach.
Net.
And be sure.
The implementation of our strategy continues to reflect the highest ESG standards.
For example, we are.
<unk> been score.
Gamma chain Chen.
With that.
That confirms that we are taking.
Actions on climate change.
For another year, we have we were included in the standard approved globally year 'twenty two.
As Cedric plus company.
This reflects our solid performance regarding the sustainability of our operations.
We are advancing in the development and deployment of appropriate asset throughput ish.
To support the implementation of our commercial strategy strengthen some leverage structure.
As you may be aware today.
We have announced my departure from energy there.
To assume another position with them.
I would like to take this opportunity.
To think.
All the colleagues in Chile, the management team.
That work together with me for fully diluted.
Excluding these.
10, Ceos were four of US has been called for a very strong effort to manage the business in the turbulent environment.
Okay.
I would like to thank you for all the incentive scheme interaction during our calls in our meetings.
Things can come soon tumor March in order to deal with regular businesses and not with the Permian. The situation that we are hearing is going on.
Great.
But tomorrow from each of our data is growing steadily as the new CEO of an issue.
Congrats to.
All the success for the years to come.
Now.
Let's open the Q&A section.
If anything our for you.
<unk>. Thank you final here please.
As anticipated we received questions the Avalon and snacks and the webcast can be Depletions came hoping operator. Please you may start.
As a reminder to ask a question you will need to press star one on your telephone.
Sure. Your question press the pound team. Please stand by while we compile the Q&A roster.
Our first question comes from the line of Enrico Bartoli from Stifel. Your line is now open.
Hi, good evening and thanks.
Thanks for taking my questions.
Three actually the first one is regarding slide 23 year the presentation, where you are right.
The evolution of EBITDA net.
Business from distribution endometrium, so if you can.
Guidance a bit in the relative movement. So the two components of transmission and distribution with the distribution going down 21 about recovery in.
In Q4.
<unk>.
Got it.
As mentioned contribution.
Going down in the fourth quarter.
And if you can.
Hi, guys on how you expect these two components to move along to 2022.
Second question is related to the <unk>.
On the outlook, what you spent in terms of hydrology.
Considering the first.
Two months of the year sort of 2022, and if you can update us on the guidance for EBITDA.
For the whole year.
And the third one is regarding Europe .
As I mentioned on asset rotation in slide 19.
You can give some flavor on what kind of assets you will be considering.
To be to be transferred the asset protection.
Thank you very much.
Yes.
Thank you Eric for your questions. Let me take the last two questions and then I'll leave the first one could you say.
Regarding hydrology I would like to share, let's say larger yield on this just to consider which is be.
Evolution of the sector in terms of resources, because if we look at just the contribution of.
Water resources.
Visitation is not increasing so much.
Perfect.
Demand in this season was too.
Because of the low levels more accumulated during winter time.
Yes.
The positive effect of lease is that during the last quarter of 2021.
The sector and also we benefit from gas coming from Argentina.
And third is allowed.
Let's say and management of the resources.
Yes.
Allow let's say, meaning that the use of water resources into the basis, if we look at.
At how we close the year and how we are open in terms of availability of resources.
In Beijing.
In line with your expectation.
And just to consider is totally different from what's up in end of 2020.
Beginning of 2021 win.
Yes.
Total lack of Argentinian gas required.
Good day.
Two days ago.
The coordinator of debate.
The networks due to.
Call for additional use of water and so we reached.
At the end of 2021 early 2021 with a low level of banking, but also without gas.
Because <unk> got so these from this point of view the situation, let's say in all of those can be considered makeup even if we focus on.
Hydrology nothing has changed.
The other important point is that in the first four.
Months of 2022.
The continued to be availability.
Argentina guests and so these allow first.
Let's say to manage corporate EBIT sources and secular shift too.
Optima is also the use of LNG that has been planned since the end of last year to deliver it.
<unk>.
So.
Just to make the long story short with.
Water availability is still to be very low.
Additional resources.
With all of our situations, even if that if we look at just the spot price market.
The language is still under pressure continued to be a little bit.
And because of some outages that we need.
Research in the sector.
Between the end of 2021.
These early stage in 2022.
Regarding the asset rotation, let me make a general statement here.
Some optimization payments or other adjacent to mention Europe itself.
Non core assets and we are working also to address.
Larger part of the extra protection that at this stage it used to be.
We continue to be confidential, so I cannot.
I can describe.
The content so the action that we are improving their performance.
Let me say that we are advancing to our targets.
And just for the first.
Yeah. So.
So.
EBITDA moving to slide 16, just put in the guidance.
In terms of generation of as we've said that we have an important impact.
For what concern the face of EPA.
We have said before we have that.
New agreements in place in 2021.
Counted for around $110 million.
The remaining five two compliance thing when I make $61 million related to the rehab adjustments due to the indexation of some business.
This is the breakdown of $151 million.
And for local sand.
One is we see none of it.
We see them and thanks, all for comparable cost.
Almost 60%.
No.
At almost $70 million is coming from the higher <unk> costs and the remaining part because of higher spot opportunities.
Follow up on some of the project.
Accordingly.
Vance and ideology.
As I said kind of an impact that is around funding.
Sure.
In this case.
Impact.
You can begin to apply for one is already the pure volume that one.
The impact of lower rates and energy on the spot price.
He said that is $200 million include or not.
And.
For what concern the.
Next one.
$55 million.
Also in this case.
And if you.
You can.
It is around $100 million.
On the spot price.
Ron.
Million.
And the remaining part of the variable costs.
Net loss net loss.
As I said, we have a $19 million lower than last year.
And basically in the flows of the remuneration.
That change in it.
At the end of 2020.
Remember the north side.
The provision has been without it.
We started in November 2000, cleaning so we have.
Around $19 million.
Timing from distribution and in less than $10 million on the products.
<unk> segment.
Volume vehicles.
Yes.
Yes.
Because of the start of Covid.
Ms Deborah.
One was lower than 2021.
So these are the main effects.
Automotive is running the business and the data.
<unk> already discussed timing from lower capitalization.
An insurance reimbursement that has been booked in <unk> and <unk>.
New contract agreement.
Distribution.
In 2021.
Neighborhood.
Yes.
Thank you very much very very clear just to just to follow up on on regarding that obviously that means that the.
The hydro volumes.
<unk> expected in line with your Florida.
Also the guidance that you provided for the full year in terms of EBITDA is.
Is confirm is in line with how things are going on.
Regarding the regarding the volumes that.
Within our forecast.
Let me say too just to look at.
January debt.
In the <unk>.
So we got the accident.
Two minutes.
The level of.
<unk>.
The measurement of <unk>.
Capability of production in our plants is that let's see.
Very very high.
It's not going to increase back to let me say that the reason.
The quietest Mark usual debating that can support our solutions, so I cannot I cannot say.
Say that.
The the first month can be lined with.
With our expectation is we look at just one month forecast that there is a difference.
Approx 111 hundred 100.
Got it.
Maine, Massachusetts.
Even track.
That part of the discrepancy.
<unk> bye.
The use.
The way in which the plant has been this much buy vehicles.
It could be meaningful.
And I lifted sooner.
And so there is.
The gap.
They're limited and this basically ensure that way, which is the plant that we discussed.
Thank you very much very very helpful.
Thank you as a reminder to ask a question you will need to press star one on your telephone.
Your question press the pound key.
Our next question comes from the line of Sara Piccinini from Mediobanca. Your line is now open.
Hi, Thanks for taking my questions and congratulations for your opportunity.
I have a first question on Walmart com.
Got it.
Is that the level of capacity that you have.
Therefore, the problem here.
And how much is the level of Capex industrial has contact global times.
Okay.
This capex level to higher commodity prices.
Sure.
Are you comfortable with that.
The second question is on the 11th.
Working capital as we can.
Yeah.
The level of that.
Factoring in that too.
Working capital in Congress.
Hello, everyone.
How much is the level of working capital that will go on that.
For 2000 and principal.
I'm not going to do.
Improvement.
Collection activity.
Yes.
Two clarifications.
Does that mean.
Hum.
Zach.
The higher contribution from <unk>.
Luca.
Correct.
Hi, Brian .
Improving.
Because.
And that question has moved back with landing favorably in the fourth quarter and final data gotten with parties.
Distribution partners from Loopnet, Hello, can we come back to them.
Thank you.
From Goldman Sachs.
Mark Mcghee outcome.
Latin America confirms why not push.
<unk>.
The discussion ongoing.
When we lap and visibility on the profit.
Thank you very much.
Okay.
Thank you Sarah.
There are a lot of work to melt that catch all of them and maybe that you can.
Let's say like if we miss something.
Let's start from the M. So let me give you a highlight on the regulatory framework and then I'll leave to sector to let's say to work through the numbers.
There are.
Plus or minus in the recently.
Development.
Plus in terms of timing and timing at least is that the.
New transmission.
Tariff scheme.
Let's see should be very final stage.
<unk>.
<unk> defined a position nor the discrepancies data submitted to them.
Now we are waiting for the shipping of the.
Sorry, Patrick.
So we should let's say even if.
I ask you all to consider that we are in FY between their situation considering that by the 11th of March the new government.
And so it leads to.
Let's take place so maybe that this discontinuity may some delay in important decision in several sectors, including the image.
The process is ongoing.
There are not.
Debate on this show on transmission, let's say I would.
North Sea measure program regarding distribution is a different story because.
We added the third or the fourth issuing the technical report by the device by the consultants all very gradual.
David.
Okay.
<unk> here.
We are spending.
We submit our our continental reported but.
We have not advanced so maybe these and other items.
Realizing that can go under the scrutiny of the government.
Did it.
Let's say that net net we call it positive.
Vance is R&D.
No.
Because after let's say many months of discussion.
It has been approved by the Congress.
Simon publish that is trying to.
Fix it certain.
Certain elements and also to allow the company to come back to the lunch and dinner.
Yes.
For one side.
FIFA definition.
Clients that needs to be supported and supporting this case proceeds coming from the states.
So clients with the consumption below 250 gigawatt hour per months.
And that has a depth.
Created during the convenient period.
Ken there.
That in 48 Assortments with the captain.
And as such assortment.
I agree.
Going to page by the <unk>.
The important point here is that.
The client in charge to pay the current bill.
If they stop paying close to the current Bill then we go and cut of scheme that is the one that we are going to apply directly to the clients with the consumption above 250.
Then.
Ken.
Can be cut off.
They are not repay existing debt alright, alright.
The Permian period, or they're not paying their bills.
It is a set time.
Trying to reach.
D.
Regulatory fees, even though clearly.
There is.
2022.
We can see the eighth year of recovery.
We are going to recover.
First of all for the payment.
Substance coming from the state.
Also we are starting during the weeks during these days.
Put in place.
Cutoffs team for the net debt does not.
Not really.
You're going to do.
Okay.
On a normal situation their position. So this is.
Let's see.
Good step ahead.
Regarding the pending element.
I would mention also something that is it just mentioned so there is no.
Real or for production going regarding the deep.
The.
Subsidization transmissions.
Those are all the players to the sector are expecting that.
The fund will be color by June next June .
Nope.
Everybody is let's say.
<unk> talking about what next.
I think that this is something that we.
It needs to be addressed by the new go into the new Ministry.
We go in.
When it will be in place.
Because do you lose something that has an impact on the generation sector and at the same time also on the tariff refund of clients.
And separately for the exposure numbers.
Catch all the questions.
So far what type of networking capital.
Let me finish with <unk>.
Important here in terms of opportunity for both the generation and distribution.
Specifically.
The receivable timing from the stabilization mechanism.
And where we've made more than $200 million.
In terms of fact game in terms of casino.
And then.
All in all.
Factoring in generation and distribution, we reach around <unk> million dollars.
In 2021, so something like plumbed in fleet.
The $30 million higher than that.
Of course, I'll watch the receivable timing from the law.
During 2020.
'twenty two is depend of the.
Exchange rates. So we don't know right now I mean, it's difficult to put in.
Projection, but in any case.
As of today, there is a law.
<unk>.
The receivable piece of it should be an adjustment there.
In order to recover that.
In addition on Piedmont.
For what concern the level of collection, yes.
We wish to improve a little bit in comparison to 23 and of course <unk> was the first.
The safety of the soft call layoffs that VIX is magical.
So clearly we had any impact now in 'twenty to 'twenty one.
Sure.
Normal.
No.
Make sure we have made to improve the percentage in terms of correlation but of course the impact in the networking capital was significant.
More than one under Maryland law.
I believe that the last question was about the level of capacity of being cash very well indeed.
Sure.
Yes, thank you tier one.
Yes, yes, yes.
Yes, it's about the capacity additions that you have a flood of new outlets.
In the coming years.
You have already contacted the capex.
Patrick you are you expect.
Some higher capex due to commodity prices.
Okay, Yes.
Of course, some some projects.
More than others, depending on the.
In this stage of the complex of limited an average I would say more than 50%.
I can find it out and maybe is a better one by one sure interest in some detail in terms of contract with you.
Yes.
In China yet.
And the commercialization of the Capex.
Many thanks.
Thank you. Our next question comes from the line of Andrew Mccarthy from Credit Corp. Capital. Your line is now open.
Good afternoon.
Thanks, Paolo you set me up for the presentation.
Nation.
My first question was a follow up on the.
Heck stabilization tax stabilization mechanism.
Apologies.
They have already answer the mine is not with us today.
Just trying to understand.
The alternatives.
Sure.
Going past you when we reach the amendment at the $135 billion.
In your conversations with the so called the priorities and what we're saying is likely outcome.
That's the first question.
Second question just a question on the retirement of two.
There's been some press reports about maybe being delayed just wanted to understand your.
Tycho.
So I'm not worried about.
It is now likely.
And if so until when.
Your contingency plans.
We're making coal purchases will be.
The second question and then the third question is and again apologies if you may have.
The answer, but just trying to understand how your.
Today.
Three months after the.
The strategic plan presentation, how youre feeling about 2022 EBITDA target that you have.
The very end of November and December .
Just trying to get a handle on whether that now.
You.
Should maybe be adjustments already.
Those are my three questions.
Okay. Thank you Andrew.
Let me take the first two and leave.
Okay.
Okay regarding.
The.
Fresh utilization mechanisms.
Honestly.
We sure will.
Fair enough.
We can be creative here honestly there are some some some.
Solution that can be implemented honestly I cannot be.
The shoes or will take this decision what I can say is that correct.
The evolution of the <unk>.
But actually dilutive.
Yes.
Rice energy.
What we have seen at the end of 2020.
Yes.
The effect of the increase.
Paul.
But.
Very very small.
So in terms of.
Price said.
Again.
Some of the energy box.
We'll start the expectation for.
Yes.
Is that that increase is.
Reflected to the trial.
Sorry for declines should be very huge.
The fund will be coal and then.
Any.
Get should we manage in a different way.
And I think that.
The scheme is there.
I don't know if that is true.
Got it.
Understood.
Very different.
Elution.
We are working on what we are committed to improve a little bit because of that.
Let's say, it's a lot of effort to manage the situation from the generation project.
Cannot dissipate because I don't have let's say.
That's it for this question I think that is something that we manage it.
Starting from let's say next months in order to reach the lending pointed before the previous June .
Decline.
Would be covered.
And the closer it could be something that cannot be affordable in defense.
Kris.
The energy to the financials.
Sure.
For the question.
So our complaints have been answered but.
I don't have precise question in this regard.
Sure.
Coke plant that will come in there too.
It wasn't the price seems.
A few weeks.
<unk>.
Always express our position we have.
Announced electric supply.
The closing of the plant by May 2020.
That's been approved.
And we have a plan.
Yes.
But.
Plan to close.
The facility being managed appropriately.
The commodity managed properly.
Sure.
Bigger patient.
Our people.
The contract contracted company that are working.
What can you share vendor selection with them.
<unk> any decision.
May be taken by the authorities in charge.
Yes.
Thanks.
It should be done in a better shape.
What we are all set because.
And the team.
In fact on the way in which we are managing.
This process and if.
<unk>.
David decision.
Portfolio the closing of the <unk>.
<unk> will be taken but we have to sit down and to define the condition for PS.
Bob.
For the time being.
Ed.
He's in charge to take this decision.
Not.
Yes.
Sure.
But.
This is important for the <unk> strategy and we cannot react properly.
In a moment.
Sure.
Yes.
Rob concept.
Okay.
We confirm the guidance that we presented in the last nine months or so.
And it is between one and one for $1 billion.
Of course.
As of today.
And the projection that we see.
In the effectiveness.
Okay.
Any any scanners.
Okay.
Amy.
And then could cause effect, but as of today, we came into.
This guidance.
We don't see any issue.
Great. Thank you very much for all the additional color.
Thank you at this time I'm showing no further questions over the phone lines I would now.
Like to turn the call back over to you for Bad luck Glenn.
Hi, Thank you Didi actually we have two questions.
Sure. So the first one is some phenomenal side from BTG and the question is.
Apologies again for the year.
When spot prices remain high for the second half and you as a cute here.
Fully where do you see the leverage by J&J.
In Q part of your question.
Let's start with the loan.
Okay.
Yes.
Okay.
We are defining another let's say.
The perfect storm.
The fact that there is a possibility that the energy east.
Poor again yesterday.
If there is no let's say.
60.
You can predict precisely.
Right.
Please.
The 2021 was a protection compared to the previous.
But so we had to cope with this situation.
These trends.
Okay.
For the year of 2022.
These larger availability of.
Argentinian gas.
That is supporting the position where LNG.
Gas has been already coal.
There is more flexibility optimization from the.
Gas point of view there is also the extension.
Of the.
<unk>.
The creator did assume interpretive NPV.
Yeah.
Debt.
Sure, let's say fix roofs and managed appropriately.
Infrastructure.
And the use of water.
So.
Let's say that.
The current view cannot be.
Let's say soft domestic flows.
Yes.
We cannot see that there will be more rain clearly we are also in the in some upside if DSO.
It's difficult to say.
To see the effect of the.
Our gross debt is slightly negative.
But we also we execution made important starting from <unk>.
The rate per node.
In this framework.
Clearly.
We see that the situation can change.
More on the control.
That we have already.
To the system 900 megawatts of renewable.
Capacity is a software company from the effect of lack of water and the effect of as we are in.
Good morning.
The megawatt.
Maybe a lot.
To come.
Developing the project.
Bill.
Best of luck to storm that Dr condition that may change from the perfect storm that we go with that.
In 2021.
And then so.
Our perspective.
Look at the leverage we are also working to let's say two.
Strengthen our.
Our financial position.
But I'm going to measure so we think that all in or even <unk>.
This ratio is not.
Yes.
And play in place.
<unk> plan.
Allow us to.
More leverage is to manage the difficulties.
Okay. Thank you Pablo and then we have a second question from Romania.
P J.
You're asking about fleet provide explanation on how this situation, Russia would affect FX and energy costs.
My first reaction here too.
Stop monitoring what we are doing the evolution of the commodities.
The submission of <unk> in effect.
Our current position.
The first the U S.
Give us the mix.
It's a very silly because fisheries.
Fisheries.
Growing.
Especially with Russia.
Yes.
Element there can be effective in commodities, particularly gas.
<unk> and core.
From the perspective of our contract we have not any direct or indirect link with.
As our European guests.
So.
The source is more on 'twenty.
So.
We don't see.
Direct impact in terms of volumes.
Yes.
Really.
That is true.
Sure.
The stage of integration.
But in terms of the effect.
In terms of price.
The concert at the indexes and our culture.
But these are.
Limited enough in terms of even if we consider this week largest winning all the branch for instance.
Sure.
For the time being we see very limited impact.
On gas.
And our guest situation in terms of core are really we are going to shut down our core specifically by May <unk>.
Something may change if need be.
<unk>.
Additional let's say export but to find it.
Caller.
<unk> market is quite complex situations.
Should the rest of it should be.
This properly within the framework of the <unk>.
Extension mechanism before for the play.
Okay. Thank you Paolo.
As there is no more questions I now conclude our results conference call. Let me remind you that the Investor Relations team is available for any doubt you may have.
Thanks for your acquisition thank.
Thank you bye bye.
Bye Bye now.
This concludes today's conference call. Thank you for participating you may now disconnect.
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