Q2 2022 Enel Chile SA Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the second quarter to the second quarter and first half 2022 results Conference call. My name is Victor and I'll be your operator for today at this time all participants are in a listen only mode. After the speaker's presentation, there will be a quest.
<unk> and answer session to ask a question. During this session you May press Star one one on your telephone please be advised that today's conference 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, such forward statements.
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 <unk> press release reporting its second quarter and first half 2022 results presentation.
A presentation accompanying this conference call and <unk> annual report on form 20-F included under the risk factors you may access our second quarter and first half 2022 results press release and presentation on our website www dot and know the CL.
Al.
In our 20-F on the SEC's website, www Dot FCC dot Gov.
Ladies are cautioned not to place undue reliance on those forward looking statements.
Which speak only as of their dates and all Chile undertakes no obligation to update those forward looking statements or disclose any development as a result of which these forward looking statements become inaccurate, except as required by law I would now like to turn the presentation over to MS. Isabela premise head of Investor Relations.
And Chile. Please proceed.
Many thanks Dietmar.
Good afternoon, and welcome to Enel, Chile second quarter, and first semester 2022 results presented inflation.
Thank you all for joining US today joining me. This afternoon is our CEO Fabrizio Benedetti and now our CFO Jim Kennedy, Let me remind you that our presentation and related financial information are available on our website.
Zabeel Jonathan now does.
The Investor Relations section and in our App investors in additional a replay of the qual will be soon available.
In the final this presentation, there will be an opportunity to ask questions.
Jeff on our webcast chat through building ask your question on this occasion media participants are connected only in these center mode in the following slides Fabrizio a walk in the presentation. We from me highlight any strategy update and then just Zap you walk us through our financial results and our recent.
Material fact, released thank you all for your attention and let me now hand over to Fabrizio.
Thank you Isabella good afternoon, and thanks for joining.
Let me now the highlights of the period on.
On slide three.
As you know the market pressure and the need of it during the year.
Sure.
Given the we have been taken several management actions.
Great.
Advantage of <unk>.
Moving to our strategy is sustainable and would be.
I will give you the debut of the actual contribution for this first off from the call.
We have David reinforced as Norwegian epic.
During the <unk>.
<unk> got the right ideological perspective.
Sure.
Also there has been some regulatory update.
Through the energy stabilization measures.
<unk>.
<unk> related into the notebook and some recent updates.
Thank you.
Sure.
Yes.
Regarding our economic and financial performance, we have faced some temporary headwinds over democracy.
The commodity risk.
Thanks to many actions we have put in place and the positive.
Perspective.
We are comfortable with it.
Execute our.
Got it.
We debate.
Yes.
The priority.
Debt relief, yes.
With a strong part of our sustainable balance sheet repositioning.
Joey and evolving as expected.
Of both timing and multiple suppliers and different vision.
We meet the quality of our assets and our proposed does go unlocking value.
Our shareholders.
We signed the phased into purchase agreement with industrials this quarter.
Got it.
The company fully owned by.
EBIT grew quickly with.
With an equity value of <unk>.
1340 $5 million.
As I indicated.
We hope everything will be grouped by the TSA.
David.
Now, let's move to slide five to briefly.
About the market situation.
The national electrical system has been impacted by a set of quick correlated with the restaurant vehicle.
In the last year.
Hi, George.
Mortgages continued uptrend, particularly coal prices.
They did through a lower pitch resulted in this chart.
All right.
Yeah.
This scenario is being soft due to the presence of <unk>.
Now that I've got up to April and David our action in terms of their most of the optimization that we put in place.
Unfortunately, the forthrightness and David were also negatively impacted by the Covid LNG port measure in the system.
Maintenance and outages and uncertainties.
Sure.
Despite this strong adverse scenario, we have been able to put in place action that contributed.
But around $130 million.
Our solid LNG supply position, which include our long term LNG contracts to ship and doesn't need a light which was successfully delivered.
It will last through.
The generation volume and optimize our operating number ive got them a fleet.
Through the first half of the week.
$97 million.
This is up from natural gas drilling.
Contributing more.
$34 million into herself.
In addition, our commodity hedging instrument contributed an additional $58 million in the first half.
Complementing this short term action and also having in mind, the new configuration of the market.
We have also decided to enter into long term ppas with some view renewable developers.
Debated move over <unk> of our portfolio strategy to reduce our non hedged.
This.
<unk> growth has been one of the main dealer and gain efficiencies.
Yeah.
So let's now look at how we are consolidating our renewable acquisition on slide six.
The current context.
<unk> remains an important challenge for the energy sector.
<unk>.
We estimate this study to adapt to this new environment.
In that sense, we have been one of the principles drive imported energy.
This can become.
One group.
What I mentioned with our strong position in the renewables market, where we have consolidated our leadership connecting more than 1000 megawatts of renewable capacity.
Thank you Brent.
During this year, we have already.
250 megawatts of solar capacity Mauro.
Moreover, our efforts and capital.
Committed to Nick.
And this year in a more significant part of our project and construction is simplified.
We are strongly convinced about the potential of Chile is the renewable development forward in the region and we will continue contributing for two concluded disposition aiming for a clean energy metrics.
Now on page seven let's take a look at the geological conditions and the outlook for the stay tuned up.
During June and July there has been a significant increase in rate and up related note.
In the south of the country.
In fact in the Asia region, where the basis of.
And <unk> are located the wafer recorded to date.
Wanted recorded in Asia with enrollment.
Something that we haven't seen for a while we cheated.
As you can see on the left side of this slide no over in demand.
The better than the last year and therefore.
Highlights a very good situation.
Low enough that would be an optimistic scenario for the rest of the especially for the fourth quarter.
On the other then we have also been carrying out various steps to maintain our portfolio to be resilient.
Mainly thanks to the higher visibility of what is being done.
During this year, we have been able to reroute, our LNG capacity, increasing our trading activities and optimizing our thermal generation.
This year, we have rescheduled part of our LNG delivery from instead of the port of <unk>.
For the second half of the year the presence of that gap.
We can meet us to continue going forward.
Jason.
On Argentina and got during June and July the government has organized the three option we reached several gas.
<unk> participated to deliver natural gas, which eat it.
Two of these auctions, we're focused on the sweep of Delek because system in both beef, we totaled $4 7 million meters per day of natural gas from October 2020, due to average density at competitive prices that will allow us to monitor every seat.
<unk>.
All in all we are convinced that there are signs that the worst is leaving us behind recovering our performance and second up and confirming our target or the previous year.
Regarding the new stabilization mechanism projects and other regulatory method for the energy sector. Let me highlight some topics on this on slide eight.
On July 15, the second best renewable that creates an energy stabilization and emergent emergent demand and also established a new mechanism.
Okay.
But the addition of an autoclave.
For the Blizzard side was approved.
The approval of this though is positive for our company and also for the sector as a whole to bring back. Some rationality is it means that to the generators will not continue benign financing Facebook for the region.
Now with the new mechanism, we expect to reduce the impact on our cash flow as the receivables shouldnt be backed by the new energy Subsidization Megan.
Regarding the basic service slow in early February to Institute, a new law was approved to solve the problem of the debt accumulated between March 2020 one.
The DCP consumption lead up 250 kilowatt hour per month was established to define the customers that will be benefit.
Replacing the bright area of vulnerable revised and other institutions.
The collection system of these low shall beginning in our concession either.
In June the conductor report was published on the distribution side to review and we have already address more than 100, <unk>, the regulator, which I reviewed.
Any potential discrepancies between the companies and the regulator should be reviewed by the expert panel in the next page.
On transmission deposits it will be completed.
Not just Texas company arguments.
Good bye.
And we expect the new buses will be published during the second.
Now, let me recap our strategy based on electrification and decarbonization.
Despite the temporary headwinds within our market, we continue boosting our long term goal now on slide nine.
As you will know our strategy embed sustainability that is why the quality and the digitalization of our network remains a key enabler or did it kind of organization and the electrification of our final capital.
As you can see in our main Kpis, we are improving in all quality digitalization decarbonization and litigation indicate.
As demonstrated by our network.
Okay.
All of this strategy is backbone by a solid ESG structure that is aligned with the U N G.
Recognize confirming our leadership on the Mi industry.
Ending piracy and report.
Let me now hand over to present additional foods that fit our CFO .
Thank you.
Our retail.
And that.
Okay.
Does that.
Understood.
Yes, yes, okay.
Okay, Yes.
Yes.
No.
Hopefully you all had just Kevin prominent connection with does that be just a second.
You hear me.
She said that we can hear you.
Okay.
All right.
Okay sorry.
For the bromine many thanks Fabrizio.
Good evening to all our investor connected.
My presentation on the slide 11, with a quick summary of the adjusted athlete applied in the page in the book.
In the first half and the second quarter of 2022, we applied an adjustment in the EBITDA due to the impairment made through the course of the period, which amounted $60 million to $41 million respectively. These adjustment.
At the bottom line of $42 million in the first half and $28 million in the second book.
To the same period of 2021, we applied an adjustment due to the cost stock and the voluntary retirement, which amounted to $40 million in the first half.
$27 million in the fourth.
At the bottom line these effects amounted 28 and $19 million in the first.
Okay.
In the second quarter, respectively.
The second quarter pulling to improve adjusted EBITDA had a decrease of 54%.
Our $100 million, mainly due to the higher commodity prices, which increased the spot prices and had an increase in the variable cost of the PEO. These effect.
And to also impact the first half 2020, adjusted EBITDA per month, which decreased 21% or $82 million.
In terms of adjusted net income during the first two.
2022.
<unk> decreased by 3%, reflecting the lower EBITDA of the period, which was offset by the lower financial costs coming from the factory.
Accounts made in the first half 2021 to improve the liquidity of the company.
In the second quarter, the net income decreased 65% due to the same reason maintenance before.
First half 2022, Capex almost reached 500 million dollar at 12, IL, 12% higher than the first half 2021, mainly due to the construction of the new renewable capacity.
In the second quarter, our Capex reached $336 million, a 63% higher than the same period of the previous year.
<unk> reached minus $219 million, representing a significant reduction in the first half of 2022, mainly coming from the stabilization mechanism FX in the second.
'twenty two.
Now, let's review more about our Capex on slide 12.
In a consistent trend throughout the last year.
Our primary efforts have been mainly focused on boosting that commentary energy transition.
As a result during the 2022.
Accumulated capex reached $499 million.
Of which 95 or below.
Okay.
Mainly related.
Okay.
Customer capex totaled $35 million and was mainly allocated to announcing our network building, new commerce and improving the experience for our customer.
Asset management, Capex reached $68 million, mainly related to maintenance activity in order to increase the resilience of our termite capacity now redox, reducing and availability right.
Development Capex reached $397 million.
Representing an increase of 10%, mostly due to the activity of our projects under construction is a clear signal that our renewable expansion plan is on track.
Let's move now to slide 13, where we have the summary of the second quarter adjusted EBITDA breakdown accounting for $92 million.
This variation was mainly related to.
And increasing our tpa sales of $100 million.
Merrily explained by the higher devaluation of the Chilean peso against dollar.
New renewable capacity, which was connected in December 2021, and during 2022, adding $12 million in EBITDA to beat it.
Gas trading activities that generated $21 million of mapping mainly due to the sales of gas as a consequence of that natural gas availability and fill in during the second quarter of 2022.
All of these effects that I have just mentioned and in the generation side were offset by <unk>.
$11 million due to the lower hydrology and negative effect on variable costs, mainly due to the higher termination costs driven by higher quality product.
This was partially offset by a more efficient thermal generation, the build and buy the hedging commodity coverage instrument in the PEO.
And the higher spot price in the system in the second through 2021, mainly due to the higher commodity prices and.
And surveillance system facilities, where outages during the period.
Following on the slide let me talk about the other element that explain our EBITDA.
Network preliminary Asia and demand accounting for the positive impact of $16 million related to.
Startup indexation in both network and transmission business.
The recovery of the integrated demand during the period, which increased 9% in the second 2022 compared to the last year period, reaching pre pandemic level.
Other effects accounting for $6 million, mainly related to the aging is associated with the bond debt.
Let's move now to slide 14, where we had some many of the first half.
EBITDA breakdown accounting for $313 million up 21% lower versus.
2021 figures.
This evaluation was mainly related to $190 million higher PPA sales.
Our 2022, primarily explained by the higher foreign exchange of the Chilean peso against dollar.
New renewable capacity, which was connecting the December 2021 enduring.
2000 22020.
$20 million in EBITDA in the period.
Gas trading activity that January .
$24 million of margin, mainly due to the sales of gas as a consequence of that Jane Keener, Macedonia gas availability and LNG largely during the second quarter Tracy.
All of these effects net.
Mentioning generation side were offset by.
Lower hydrology with an impact of $27 million.
And negative impact of $100 million on variable costs, mainly related to higher amortization costs due.
Due to the commodity prices and higher regasification cost in the period due to the higher volume, partially offset by more efficient thermal generation in the period.
The agent Commission commodity coverage Eastland individuals.
And negative $234 million too.
Due to the higher spot price indices in the first half.
The remaining variation of our EBITDA comes from $35 million due to the network remuneration and demand explained by $14 million, mainly due to the release of the final.
Mission type taken at a report issued by the regulator in the first quarter of 2022.
This final targets, allowing us to reduce the provision we have been made since the beginning of the new regulatory cycle that started in January 23.
And $16 million of tariff indexation in both networking business.
And the recovery of the demand periods, which increased 7% in the first half 'twenty two minutes to compare with the first half.
2021, reaching pre pandemic levels.
FX accounted for $9 million, mainly related to the hedging instruments explained before partially compensated by lower Opex and network businesses due to the Union agreement.
In the first quarter 2021.
Let's now give you more detail on generation Kpis on page 15.
Net electricity generation grew by 11% to standpoint, two terawatt hour during the first half of 2022.
Mainly as a result of higher the spots of our combined cycle power plants and the additional capacity coming from our new Canadian solar unit in the video.
During the second quarter.
2022, net generation increased eight.
251 set of a tower also due to the IMF, Panama dispatch, coupled with higher solar mainly due to the new project wins.
Even though our first semester generation was affected by poor hydrology during the second quarter. There was an improvement in rainfall that enable a recovery in our repertoire.
And then no call rate in demand and that brings a new and better perspective for the second half of the year.
Nevertheless, since.
There is that very thing.
Electricity rationing decrease enforced until September 32022.
Going forward there are some.
Sure.
It is a bit Walter with data for their own national electricity system Auto, which zero point to are in our reserve while the.
The impact of this was a result.
It is.
Basically in April since the accumulated water to the system into to be generated a return for this season was a decree expired in proportion to the sales of H J.
Our energy sales increased 18% during the first half of 2022 more.
Mostly related to the higher sales to three customer primarily due to the new contract coupled with an improvement in sales to regulated customers.
During second quarter 2022, physical sales increased 10% as a result of the higher sales to both free and regulated Scott.
Let's quickly see the EBITDA performance for the periods by business line on page 16.
As it was mentioned previously our first half 2022, EBITDA decreased by 21% mainly due to the performance of our generation business, which was affected by the increase in commodity prices worldwide.
The drought that has affected the account and the consequence that.
These effects have.
Add into the production costs into the spot market.
On the network business side this debt an increase of $41 million, mainly due to the reduction of the provision as a consequence of the technical studies report published in the first quarter 2022, and the recovery of the demand.
During the 2022.
Besides the fact that the one off effect of the Union agreement made in the first quarter.
For the 2021 had a positive effect in the Opex this year.
Other reflect mainly.
The all the Opex of the pillow and the effect of that head in that pitch.
Now on slide seven inland niche or you how our 'twenty two EBITDA guidance will be accomplished.
During this presentation somebody so, indicating our portfolio a central element and strength that make us reasonable confidence that the current headwinds showing not drop at night data our guidance or our long term goals for our assets in Chile.
Let me give you a few words on our adjusted EBITDA guidance for the year.
As you May know our generation business is quite seasonal.
This is mainly related to the fact that from June to August .
Part of the winning deep.
<unk> in Chile associated with desktop any post knowing.
At the beginning of our screening during October we start to have a higher hydro generation in the accounting associated with the maintenance season.
All of these.
We start to have a higher hydro generation in the account associated with emergencies.
All of these effector.
Associated with the return.
That's what I got.
Right now in the reduction on the spot prices and higher generation of our either fatigue.
Generating and higher EBITDA in the second semester of the year versus the first one.
This seasonality that have just introduced associated with several active portfolio management action in place.
Better than expected either season here.
Our view that we will be able to tackle DCF guidance next quarter. It should give you more detail on the evolution of our EBITDA performance in our Asia.
Now on Slide 18, let's go through the main driver of our group in the Kingdom.
Our first half.
Adjusted net income amounted to $102 million representing.
<unk> variation versus the last year.
The main imbalances are coming from lower adjusted EBITDA, which decreased $82 million or 21% mainly explained.
The effect of higher commodity prices and its consequence in the spot.
Market and variable cost and Jason.
Hi.
Impairment and bad debt by $28 million.
Vessels.
Last year.
Period, mainly related to higher depreciation and amortization in enabling power assets, primarily explained by the exchange rate effect in the period in the initial commissioning of a new solar power plants.
And the higher depreciation the distribution transmission segment related to the new projects and higher amortization of intangible assets.
Related to the new commercial system recently updated and receivable sale.
Also we had the higher provision of bad debt in the distribution business, mainly due to the increasing depth in the retail clients.
Financial results in listed investment recorded a $53 million declining by $59 million in the first half 2022.
Mainly due to lower expenses related to the factoring executing first half 2021 integration business on the accounts receivable.
Arose from the tariff stabilization law.
Income tax decreased by $49 million, mainly related to a higher tax credit due to the higher monetary correction in the fear among the lower.
Results of the company and Batesville accounting effects.
One.
The adjusted net income for the second quarter 'twenty to improve reached $15 million, which represents a reduction of $28 million in the quarter, mainly explained by the same aspect of that.
Moving to the SSL.
The first of 2022 on slide 19.
The first half 2021, SSL amounted to a negative $219 million in the period.
Mainly explained by the accumulated the stabilization mechanism accounted in the first half of 2022 for $211 million.
As the reduce the cash conversion of the deal during the second quarter. This effect had a significant impact in our asset.
<unk> $144 million.
Out of 2011.
The working capital in the period accounted for a negative impact of $187 million.
Mainly due to <unk>.
The $7 million related to the desktop payables in June 2022, mainly coming from the Capex execution.
$43 million related to the lower collection and receivables young mainly associated to the final certainly finance.
Turning on the commission.
System update most of this impact should be recovered within this year.
Another effect in the period, mainly related to $62 million, referring to the cost of.
Cost of payment.
Not including the EBITDA adjusted.
So as mentioned tariff revision provision and bad debt.
Let me just underline that regarding the work working capital in 2021.
It included the back factoring Easter meant that.
We are executing totaling $189 million.
Income taxes reached.
$35 million with regard to the variation vessels Lafayette period, I would like to recall that last year number we're impacted by FX losses, resulting in a lower payment of tax.
And finally, the financial expenses amounted to $100 million related to the debt cost payment in the videos.
For what concern the last figures, which include the expense related to the <unk> factory is doing that and you mentioned it.
Moving to our debt on page 20.
Our gross debt increased by.
By.
660.
$65 million amounting to $5 $7 billion as of June 2022 due.
Due to inter company loans provided by Anna Finance International 2000, Chile, $400 million and third parties for <unk> million in.
In the second Q2 thousand six.
Offset by the amortization of and soon Cheetah and amortization, leading contract as of June 2020% to 18% of our debt.
D G linked to our field to scope, one pop reduction for 2023 and 2024.
In terms of debt amortization, our schedule remains comfortable with an average of five year.
For the current year, we have.
Around $400 million of depth, and then Sheila level with data that has the maturity in December .
And that we aim to renegotiate looking at opportunities in both local and international.
Regarding the depth of our tour in 2020, we will use the proceeds from the sale of transmission to repay this maturity.
In terms of liquidity, we continue to have a comfortable position we are reserving some availability.
Our available committed lines, considering the possible headwinds in depth market coming from the international conflict in Eastern Europe .
Despite the increase in our debt.
Its average cost in June 2022 decreased to three nine.
<unk> percentage versus port.
As of December 2021, as a result of our financial management Carryout during the last month.
As a part of our goal to strengthen the sustainability of our balance sheet.
We have put in place an asset rotation strategy focusing on optum.
Optimizing our investment mix.
And creating value for all the shareholders let.
Let me spend a few words on the Red recent material facts regarding the sale so and so.
<unk> shown on slide 21.
Okay.
As we have just informed the market image.
Turning to the <unk>.
So say that presently sodomitically Nana.
A company, 100% controlled by <unk>, an agreement to sell into.
Entire peak in Atlanta has been filmed Sheila.
Equal to 99, 9% of this shift.
In San Diego Metropolitan area.
And as has been seen ciena operate 683 kilometers of transmission lines.
Managing 57 substation.
The purchases and sales.
The transition will be carryout through a public tender offer by deposits at Grupo <unk>.
And it's subject to certain conditions precedent customer for this kind of transition.
Like the approval from the Chilean antitrust authority fiscal and economic booms.
The agreement provides the group of the ASR will pay an equity value of 1.3 hundred $45 million.
For the entire.
Headed by an inch either equal to.
One.
<unk> thousand $526 million of enterprise value.
Capital gain embedded in this transition transaction.
I will generate an estimated impact in our.
Our net income and 23 to.
$783 million.
The pricing is subject to a price adjustment mechanism.
Based on the interest rate from January one.
2022 until the launch date.
Of the public tender offer as I mentioned before.
The closing of the transaction is expected by the end of this year.
The transaction is part of our asset rotation initiatives focusing on the capital recycling of our company and contributing to optimize our leverage the timing and the pricing.
We have reached on this negotiation clearly expressed the quality of our portfolio and our <unk>.
<unk> pop forelock debatable finance here.
We're going to give you further updates about the process in the next quarter call but.
But what I can anticipate is that the doses we obtained in this operation shall be used as an input of a liability management we are processing.
For an entry there.
And now I will handover to many things.
Many thanks <unk> bin.
And just to point out some closing remarks.
During our presentation, we have behaved as several actions we have taken.
It is really excellent.
Externalities.
And from the impact of an international conflict in the commodities market.
All of these scenarios lead to main messages for us.
First we are on the live class to continue.
The energy transition through the de carbonization of our magic in the electrification of the consumption.
Second continue to reshape our actions to bring value to all our stakeholders.
Yes, it rotation transaction, what it is today and our action plan gives us confidence that we will reach our 2022 guidance.
Let me be clear that there are no low hanging fruit from this but what.
But we know that we are trailing derived vote and we continue to unlock the value of our quality and resilient portfolio.
Let me now hand over to the bed.
Yes.
Thank you Fabrizio and let US open now the Q&A session as anticipated we received questions on our shack in the webcast.
During the day.
Operator, please you can start the Q&A session.
As a reminder to ask a question you will need to press star one one on your telephone.
Once again Thats Star one one please standby will compile the Q&A roster.
One loan for questions.
Our first question comes from the line.
Marino.
We see any from Santander Your line is open.
Many thanks for the call and information provides a huge way.
So considering the level of water in his notes part so far and they're looking for in the mountain. Thanks.
Possible to generate approximately 10 terawatt hour of hydro generation with senior.
My first question.
Second one could you provided.
Your view on the FAA ability and prices are full during the second half of this year. After the slower shipments that we are currently seeing to Europe .
Do you believe.
You see the possibility that your guests provider cancel any any guest ships during the winter.
Europe , even if they need to pay a fine.
<unk>.
And the third question is.
Do you have any other asset rotation in process or under.
Their analysis.
Thank you.
Okay. Let me go with the first two questions in that.
Does that back during the third one.
Well, yes, we are quite optimistic on the second semester, and we think that the.
We could reach almost 10 terawatt hour of either production. This year. This is our best estimation today.
Sure.
The waveform.
<unk> system is not yet.
So it depends also on how it goes on in the next week, but.
Today as of today. This is our best estimation to be close to the data.
Our image.
The second question no we don't foresee any problems in our gas supply our contract is very tight we medical that include this in our stable of escape.
No we are not worried about any potential consolidation.
Susan.
Huawei.
Yes.
For local concern possible other asset rotation.
We are always looking.
Whatever opportunity would come up from from the market, we don't have so far anything.
On the table, but ex Rev.
Something we will.
For sure we are not.
This information with David about the but.
Again.
Rigorous process to look.
To our assets in order to.
Find a way to unlock the value for the company.
That is very helpful.
Sure.
Yes.
Thank you Marcelo and operator do we have another question on the line.
Our next question.
Our next question comes from the line of <unk> Fernandes from the Lance Your line is open.
Yes.
Yes.
Hi, good afternoon, everybody. Thank you very much.
Materials very complete as always.
Four questions and I would like to go one by one if you do not mind.
The first one is.
Pretty much an accounting thing.
We saw an unusual.
In the other operational expenses P&L line.
Related to fuel which affected EBITDA.
Could you please tell us a little bit what was behind us.
Yeah.
Menu explain affecting which line youre referring to because.
Yes.
Before getting to us, yes, before getting to EBITDA.
Different.
Operational expenses lines and.
In the second quarter or the last one that says other operational expenses, that's the one that jumped up quarter over quarter significantly.
If it's if it's too specific I can take it by email.
<unk> really matter because.
Im not sure that.
Excluding <unk>, which obviously are being slower.
No.
My second question is related to the leukemia to shut down.
What's the latest on the timing.
Yes.
Yes.
To build a schedule that was defined with the munis.
Sure.
Yes.
Of course.
As you well know.
Was affected.
Was it made them.
Thank you Dennis fraction performance, what's shown on the.
At the end of December .
And to be honest, we don't see any we have done.
Again nice quarter.
Two questions.
Thanks drew.
The logical conditions that we commence is thanks to the availability of the non-GAAP and the system is small.
We expect it to be honest.
Yes.
And for the rest.
Going forward that we have also the <unk>.
Okay.
Can integration of renewable.
Renewable plan.
We don't see any reason why we should therefore fallen again.
Pleasure.
Okay, Great My third question or actually topic has to do with the sale of the transmission lines.
Wanted to get a sense of how much tax you.
You expect to pay on the gain of that sale.
And when should that Enel, Chile pay that.
Yes.
For Wisconsin.
Chuck is going to be paid next year.
The amount of a desktop if you look at that.
<unk>.
Everytime gain impact that we are talking about around spending.
Millions of dollars.
But we have to consider that.
We have some losses that we can use in order to offset.
Such amount.
We are.
<unk> been around the 100 $110 million.
Yes.
In short we are talking about 240 $150 million next year.
Okay perfect.
And well also.
Just have to.
Ellie mention that Enel, Chile plans to use the proceeds from the sale to pay down.
$1 billion debt Amortizations due 2023.
And I wanted to know how much of that are intercompany loans.
Well.
Let me say that.
All the loan all the pound with Theyre going to dedicated to the repayment of the loan.
The criteria based on which we are going to select.
The loan that is going to be repeat are basically in the expiration date.
And the cost associated to that.
The rebate.
Breakage fee of other candles.
Of course I would.
C J.
A good portion of these amounts.
Amount is going to be used in order to repay the revolving credit facility.
We got this year during this year.
They are going to expire next year and we are talking about most of them are in the company.
Yeah.
Okay.
Perfect. That's very clear my final question is also well after selling the lines collecting the cash paying down the debt.
I think you might still be a little bit above your comfort level regarding leverage.
It's the Enel group thinking about an eventual equity injection of capital rates.
Okay.
But.
Of course.
Sure.
Sure.
And then bounce is going to.
Has to be.
Bye bye.
SBA.
For what concern.
I mean, what they know as of today.
There is no plan of.
Capital injection.
Yeah.
On the table.
Okay.
That's great. Thank you very much for your time.
Thank you Omar for our next question.
Our next question comes from the line and recap the RSA from Jpmorgan. Your line is open.
And <unk> just therapy in fabry.
Thanks for the questions I have a couple of points. The first one would be so.
Tax payment of about $150 million and the equity value is.
One 3 billion.
Cash and forward, let's say on it's going to be about $1.1 billion is that correct.
Yes.
Yes.
Well.
Either.
No I would say just the.
Aligning.
We're unable to hear you saw it can just be closer to the line to be more easy to me to come here.
Hey.
You can find.
And what I'll try again, so the question was.
If the equity value is one 3 billion.
And the tax payments of about $260 million. So can we expect the cash inflow of about $1 $1 billion through asset sales.
Yes, yes, yes considered that.
Of course.
So as we see on that.
<unk>.
Has the alone an intercompany loan.
And in Chile.
Basically also design is going to be paid back.
Out of stocks.
We are talking about $1, one roughly again.
The correct amount.
Four.
Having the correct amount we need to wait.
The end of.
<unk>.
Public tender offer because there is a price adjustment mechanism that.
Will will change a little bit.
And the amount of the equity wins so.
Roughly.
Exploration that you made this correct.
Thank you. The second question would be if the annual EBITDA of the transmission business.
$17 million aggregate third question would be and you mentioned.
The company could consider other opportunities in the markets.
Rose.
My question would be.
What type of assets would actually consider Sally or a minority stake.
Other asset rotation measures will contribute Jason.
Whereas again.
We used to evaluate the oil candle asset.
And then does visteon.
<unk> was.
Out of our strategy.
We have a focus.
Basically on the renewable international side and the solution.
Side because of the guidance together with the new services.
And the next.
Having said that.
Is it clear that.
Renewable.
Projects are.
Easily to sleep in.
Modern distribution.
Right.
Then.
It all together so we are not and I think everything we.
Still not there.
Europe .
Potential opportunity.
Sure.
If something will come up for sale.
We're going to we're going to do.
Sure.
Okay, and just to confirm to be EBITDA.
The traditional life. Thank you so much.
Yes.
Okay.
Is around.
$90 million.
If I'm not wrong, you can expect from them.
Okay.
Okay.
Yes, roughly.
Yes.
Alright, and I'm not showing any further questions in the queue I'll turn the call over to Sabella Clements for any.
Web chat webcast chat.
Questions.
Okay. Thank you Vitor. Thank you all for your questions now I'll go through the chat that we received several questions.
From different analysts and investors connected.
One of the questions here just that Brian just to say again the numbers are off.
E transaction the sale for now transmission now.
Similarly.
Requesting more details about the amount that we're expecting that is going to be the caching of these operate Kim.
And.
And how much would be a net in April .
Next Gen Av.
Net debt of the company considering these kashi.
Okay.
As I said that we are going to for the projection that we have.
Is to to get.
After the payment of the tax.
Round, one 1 billion.
$1 $1 billion that is going to be.
Late in the to the payment of the debt and.
Today and distribution of the dividend.
Related to the 30%.
During policy. So we are talking about.
Round Brandon.
Dividend.
<unk>.
Nandan.
$190 million.
Of that because again.
On top of the amount that you receive it they may be debated will be going on be paid also for the loan that is inside of that.
Sure.
We estimate at the end of the around $107 million so basically.
We're going to reduce significantly our debt.
Perfect.
<unk>.
Darren we are assumed.
Second question is regarding deep than now so the company is expecting to increase dividend related to the sale of this asset.
We're not going off the top let me say, we are going to increase the value of the dividend because we are going to.
This capital gain we are not going to increase.
The dividend payout that it will remain 30%.
So.
<unk>.
Since the 30% is mandatory.
Though the company has.
No.
The positive results, we are going to distribute the dividend associated with the capital gains.
After tax.
We are talking about roughly $200 million.
Perfect. Thank you then the other question that was made by have eco Mod ask Tom will need that.
So my question more details about <unk>.
Yes that does.
Just a few very pressure due to the hydrology and commodities than if you are indeed, thank you.
Closed.
That facility.
Now in September our <unk> vaccine selected in anything that average there are strategic fit is there.
Our energy mezzanine.
Yes, as I already mentioned.
We don't see the system to be any more.
<unk> and distressed.
And this was also consistent with the pace of meaningful efficacy.
Okay.
No wisdom to postpone again the closure.
For EMEA.
And we were pretty clear at the beginning that we are not going to use the Egypt is there.
So simply shut down the plant.
Finding an alternative use of the site.
Perfect. Thank you Fabrizio.
More questions here also Charles everyone Holly.
And that does regarding the LNG.
So what we are first of all what's expecting regarding sales of applebee's from trading sales of natural gas in the second half of the year.
If we can give that detail on how much.
What salt.
No.
And there are any other play that.
Hello.
During the.
First half.
Of this year.
So also the other question yes.
This is all the questions in terms of LNG and commodity <unk>.
Joe.
Yes, well basically in the first half.
What caused the approximately.
It's dean.
<unk>.
Out of which tend towards the evolve.
<unk>.
Eight days.
Panel.
Or.
Yes.
This panel deal was a.
The deal that was done last year in order to.
Manage it.
Sure.
Good good.
To have the.
First.
Yes.
Yes.
<unk> contribution to the numbers might begin the presentation.
Why the other states where more of them.
This is what I mentioned.
And action.
Cope with the challenging scenario and with integrity and a bottler.
The dividend.
Yeah.
And above the second.
The second offer.
We expect to have.
As I mentioned.
And is it significant the third group is hitting that.
The combination of.
And thats, the availability and our long.
<unk> LNG contract with shell and so we expect another.
Is the pain.
The hue to be available to sell in the second half.
Andy.
The good piece of news about that is that our sales.
We have.
So we are trying to of course.
Optimized.
Back there.
Community into.
Leverage on the <unk>.
Good.
Market outlook.
Got it.
Thank you Fabrizio we have one other question also regarding the Capex.
What we are seeing vidarabine.
Capex.
Or I know.
<unk>.
You May think anytime a reduction in the Capex are postponing to that next year.
Well.
What concern the Capex.
As you probably know most of our projects are.
Projects already under construction actually all of the projects that are.
So that is already under construction and committed so.
We are confirming the.
The capex at the end of the year.
Four.
Because of course, we need the data entry and that this product is going to produce in order to improve our core market. So.
As of today, we confirm that.
The capex is going to be in line with our capital and the production.
Perfect. Thank you and our final question here that we have regarding the rating agencies.
Have you had recently discussions with the rating agency.
And what they are anticipating regarding the moment of the company.
Yes.
Well.
We always.
We are in touch with the rating agencies.
We discussed and we.
We pass on the message.
We believe.
<unk> for them or we discussed about the position of the business and the design all saw about the evolution of the desktop.
I believe that.
We are in line with.
Their expectation in terms of managerial action.
Net.
Our needed.
To deliver than the company so.
I really believe that.
Rating agencies going to.
To give a negative feedback about distribution that we have today.
So we are fine with.
With them.
Okay. Thank you very much does that then also happy to and thank you all for being connected today.
You may have any are there any other consultation please let us know and as always our investor relation team kind of be available Brian yard there.
You may need thank you very much and have a nice day.
This concludes today for participating you may now disconnect Inc. You may now disconnect everyone have a good day.
Alright the.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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