Q2 2023 Enel Chile SA Earnings Call
[music].
Okay.
Good morning, ladies and gentlemen, and welcome to Enel, Chile first shop in second quarter 2023 results Conference call. My name is Gigi and I'll be your operator for today.
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During this conference call. We may make statements that constitute forward looking statements within the meeting of the private Securities Litigation Reform Act of 1995, such forward looking statements reflect only our current expectations are not guarantees of future performance and involve risks and uncertainties actual results may differ materially from.
Those anticipated and look forward looking statements as a result of various factors. These factors are described in Enel Chile's press release reporting its first half and second quarter 2023 results. The presentation accompanying this conference call and Enel, Chile Annual report on form 20-F included under risk factors.
You may access our first shop in second quarter 2023 results press release and presentation on our website at.
Www Dot and no dot CL and our 20-F on the S. E. C website www Dot S E C Dot Gov.
Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of their dates and now 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 as required by law I would now like to.
Turn the presentation over to Mrs. Isabela Clemens head of Investor Relations of Enel, Chile. Please proceed.
Yes, good morning, and welcome to Enel, Chile second half 2023, and first half results presentation. Thank you all for joining US today. Joining me. This morning is our CEO habitual bad Daddy and now our CFO Jos.
Our presentation and related financial information available on our website.
And now Dr. Yang.
In the investors section and in our App investors.
Additionally, a replay of the call will be soon available at the end of this presentation, there will be an opportunity to ask questions via phone or webcast chat.
Ask your question media participants that connected only in listening mode. In the following slides Fabrizio you won't bring the presentation with our key highlights of the viewer all fortune following management actions and regular cardio market, mainly off days later, and just give us a view of the business economic and financial performance.
Thank you all for your attention and let me now hand over the call to February so Fabrizio.
Thank you Bella good morning, and thanks for joining us.
Let's start our presentation with our main highlights on slide two.
The first topic I would like to highlight and we'll give you more context is the status of our stabilized portfolio management action.
Together these actions targeting optimization and flexibility of our portfolio, Indiana transitions.
Having followed this path during the first semester, we received at the commercial operation authorization for more than one gigawatt of our renewable project.
All the growth projects.
<unk> eight terawatt hour of additional production to our portfolio.
Another important topic with all the management and timely effective measures carried out by our team to continue the operation of our plants and so you've got the neighboring communities. After the heavy rains during June .
These are heavy rains contributed to accumulating almost one terawatt hour of water in our it support the fall in the period.
Which should be very positive also intend somebody using spot prices for the second semester.
In terms of market context, the most respected positive news.
Yes.
The back to factor in process is very close to being initiated on the regulatory side. We have some updates on the government's efforts to continue pursuing the faster the carbonization path for Chile.
On the performance of our business the second quarter presented a temporary mindset for months digging into account that the complex pricing environment as expected.
But looking at the first offer results overall, we continue to see a significant improvement in terms of EBITDA, increasing by 50% mainly due to all the gas optimization efforts, we have been performing.
Net debt is temporarily increased mainly due to the delay in the bag to factory execution.
Once executed could add the $300 million to our cash flow.
<unk> contribution our of our generation business in the second doubtful of DC added due to the seasonality embedded in the business.
And the closing of an asset rotation transaction named up God, Yeah at <unk>.
Going to allow us to reach founder level of net debt by the end of the year.
Finally, let me then talk about our guidance.
As we announced two weeks ago, we signed an agreement to sell four non strategic solar power plants in the north of the country.
We expect these to be concluded at the end of 2020.
I will give you more deferred some this later.
We continue to develop our strategy toward a cleaner and more efficient generation matrix.
During this first semester, we connected 98 megawatts of additional net capacity related to the final phase of our <unk> five corridor.
And the first phase of our solar plants of Sierra Gorda.
New renewable projects ended around the 114 terawatt hour of additional generation.
During this year. We have also received the commercial operation of approval from the system are they sort of put around the one one gigawatt related to composite score, but it is sold instead of extension and finish that.
And one choice the latter being the largest solar power plant in Chile, with a capacity of 398 megawatts.
All these projects together prevented the emission of around two 5 million tons of cotwo into the atmosphere.
We are maximizing our all efforts to advancing the construction of EBIT suffice projects in different zones of the accounts for.
Fully aligns with our strategy to increase exposure to wheat storage and solar close to the center of consumption.
In the following days, we are also going to receive the authorization for a 94 dos our 144.
Megawatt wind project located in the South.
Today, we have around <unk> seven gigawatts of projects in construction, which is performing as expected.
The deployment of our renewables plan aimed to improve our generation mix and increase the flexibility of our portfolio, which today is 76% renewable base.
Now on page four let's take a look at the serological condition and the outlook for the second out of there yet.
Yeah.
By the end of June there was a significant increase in rainfall, especially in the south of the country in fact in the seventh and eighth to regions, where the basins of Mt. <unk> are located the rainfall almost reached the level of urology for a normal yet.
Fortunately, we had no damage to the infrastructure of our hydropower plants. We also manage our reserve work in a timely mednet regulating the flow permanently enabling us to avoid impact on the neighboring communities.
In addition, as you can see on the right side of this slide knock over in demand since they've been improving the moly lockup, but equally during July .
So far we cannot predict the volume of no. We expect to have more details in August . Once this is done coordinator performs in your inspection.
The situation allows us to foresee and optimistically the scenario for the second half of this year based on this we can fairly estimate at least one up to two terawatt hour of additional either generation for the full year 2023, when compared to our last strategic plan.
Regarding our gas trading activities, let me highlight some topics on slide five.
During the last semester, we have continued the ebbing plentiful gas availability. Thanks to the long term LNG agreement with shell and the contrast finder with Argentinian gas supplier.
Given the availability of Argentinian gas in the central zone, it hasn't been possible to carry out LNG swaps in the northern zone, where natural gas is not unavailable.
Multiple gas shipments have been sent from inter automation newness during the first half of 2023 totaling around the 12, Tera Btu and we expect to continue sending gasoline not during the rest of the year.
As you may recall during the first quarter of this year, we executed some opportunistic sales and negotiated during the year end 2022, taking advantages advantage of attractive prices of natural gas in the international markets.
These infections contributed around $150 million individuals.
In addition, we have continued to perform trading activities with local industrial and mining customers, they're continuing to bring additional margins for our business.
In the second semester, we have already granted some additional sales for the end of day yet.
Getting an additional $50 million to come from this trading activity.
To conclude let me say that we are also anticipating additional volumes of gas from Argentina for the October 2004 period.
On page six lets review our performance in new initiatives in distribution and Alexis with focus on electrification and decarbonization.
Yeah.
Our main pillars include boosting electrification in the carbonization in the public and private sectors to face climate change appropriately.
As a result, we have taken an active role and expanded our efforts to speed up this mangled.
Let me highlight some indicators and projects executed during the last up starting with the distribution business in our concession I read the number of customers and distribute and energy continue to grow.
Therefore, new opportunities and challenges will arise.
The important message is that looking at the last 12 months, we certainly we see a solid improvement in deciding index of around 4 million.
And distribution will continue to review, our processes and intelligence and energy losses to better respond to the current environment and the government sound indicators lever are a result of it.
Finally regarding digital payments, we have continuously promoting payments through digital channels.
Regarding the analysts some important milestones focused on electrification deferred amortization of our clients energy consumption ever occurred.
Let me go through some examples from this period.
Regarding the de carbonization of households, this semester, we have replaced.
104.
1420, <unk> stores with efficient air conditioners, contributing to a reduction of around $2 6000 tons of zero to better yet.
Most of these replacements are due to contract signed with companies that seek to offset the <unk> mission.
In the field of efficient lighting in our cities and Alex has replaced the national stadiums lighting system for the 2023 Pan American games.
<unk> efficiency and quality to this important event.
Third as leaders in electric public transport that we continue participating in new project.
We have signed an integrated offer with the bus operator called voice. The sulfur includes 200 plus E buses to.
<unk> and the PPA for 10 years.
To conclude we continue working to increase the number of public and private charging points for electric vehicles and to be awarded more lighting projects throughout the company.
All these efforts are noticeable once if we look at electrification indicators that is showing a significant improvement in the videos.
Now regarding Macintosh market context, let me fall mental on major updates on slide seven.
Chile is a reference in the region for his commitment towards the net zero emissions and de carbonization of the matrix.
Faster renewables growth and increasing electrification required the country's prompt response.
Regulation should continuously adapted continue giving the right time for the farther and faster achievement over the counter.
In that sense, we received positive news on the changes in the main characteristics of the 2023 regulated auction, which introduced the concept of segmentation now the generators can choose the zoning allowed us they would like to beat in the auction and clear benefit for EBIT projects.
Rewards renewable energy plus storage system of four hours.
Also the government is just submitted a draft bill related to energy transition.
The government is proposing the realization of a storage option in 2024 in the north and the definition of a national energy plan to better anticipated impatiently plant the new transmission infrastructure required for the account.
This process is still in the beginning phase so throughout the year, we might have further details to share with you and how this draft bill fits with our strategy.
Now, let's share some more good news the faster in process of BEC. Two also known as the consumer protection mechanism is very close to being concluded at the end of this quarter, we have coordinated at one $633 million relating to this instrument.
The important and most respected news arrive a lobbing genco to start recovering the courageous to a factory mechanism guaranteed by the Chilean Treasury.
Around the us over the accounts receivable accumulated since the second half of 2022 will be paid through an additional fee levied on the final tally.
The acquiring the fabrication of decrease for recovery of second degree suspected to be issued in the following months related to the second of 2020 boom period in order to reduce the gap between the tariff in the concert Brian normalized in the process.
Regarding the distribution tariff review, we expect the regulator to publish the final report in the following weeks.
As for the process with DSC several lines for improvement, but we managed to achieve some positive outcome as the panel recognized the sum of our trades.
Now I will hand, it over to Jose.
Many thanks <unk>.
Good morning to all connected.
I'll start the financial analysis on slide eight introducing a summary of our main results for the period.
In order to better evaluate the performance of our company. The 2022 figures are shown as pro forma.
Where do we are including two main adjustments in the first half and the second quarter of 2022. The EBITDA was adjusted by the impairment made to the coal stock of the period.
Which amounted to 63 and $42 million respectively.
This adjustment had an effect on the bottom line.
$43 million.
In the first.
And $29 million in the second quarter of 2022.
The second adjustment and the most prevalent one is to exclude from 'twenty to 'twenty two figures the contribution of Enel Trust me Sean.
Considering the says this company executed in December 2022.
We have excluded from our analysis, the buildout and traveling soon for the first half and the second quarter of 2022, which amounted to 54 and $22 million.
Respectively.
And then there are some inherent Sheila had an effect on the bottom line of 30 and $10 million in the first half and in the second quarter 2022.
In terms of <unk>. We are also excluding from 'twenty to 'twenty two figures the contribution of Enel <unk> and <unk>.
Terms of cash $2 million in the first half of <unk>.
N minus $19 million in the second quarter 2022.
And in 2023, we are excluding the payment of taxes related to the capital gain of this transaction.
$310 million.
So thank.
Taking into the mind, let's see how the earnings indicator and SSL performance in the period.
In the first half EBITDA and net income showed improvement versus last year indicator, mainly as a result of the trading activity improvement in April .
Renewable contribution.
The quarter earnings performance on that end.
Was more challenging, particularly due to the temporary effect of higher bulk posture. These internal costs and that will give you more detail in the next slides.
In terms of FX tailwind.
Figures continued to be impacted by the combination of the bank accounts that reached $189 million during 2023.
<unk> in the quarter also demonstrate the same impact but that will give you more details later.
Let's review our Capex on slide nine.
Our first half 2023, total capex reached $372 million.
74% of our total Capex deployment awards related to the renewables and 91% of the total capex was linked to the <unk>.
Goals.
Customer capex totaled $41 million.
14% higher than the previous year, mainly associated to the new customer connection in the video.
Other investment reached $83 million mainly.
Mainly as a consequence of the several maintenance and repair activities to guarantee the continued resilience of our operation and our power plants.
Development Capex reached $24 million, representing a decrease of 39% versus last year figures in line with the remaining portfolio under construction two.
2023 capex shall meet committed to confirming our strategy of growing in the center part of the account and in the south with the wind project.
Let's move now to slide 10, where we have the summary of the second quarter EBITDA breakdown accounting for $55 million.
Yes.
Let me remind again the change in the company consolidation perimeter, mainly as a consequence of the series of analyst estimates on Chile in December last year. We have included a pro forma of our EBITDA for Q2.
2024.
For comparison purposes.
Second quarter 2023, not is $18 million lower than 2000, <unk> to pro forma mainly explained by the following.
$55 million increase in 10, multination costs, mainly related to lower thermal generation and lower positive effect of aging instrument in 2023.
2022, partially offset by lower commodity costs versus 2022.
And a $36 million higher spot price in the period as a consequence of the higher dispatch costs, all the Chilean thermal fleet, particularly call Uni during the 2023.
Also as a consequence of debt and availability of different power plants in the system, increasing the spot prices.
And the lower effect.
Thus optimization activities, which decreased $7 million, mainly related to lower desk trading sales of around three point seat.
In the period versus last year figures.
They are both mentioned effects were partially offset by.
$34 million from higher PPA.
In the second Q2 thousand 23, primarily due to <unk>.
Higher average PPA prices, mainly related to the contract indexation.
Higher ancillary systems services and capacity payments revenues, whereas the last one is mainly due to two factors.
In the course of some market the renewable projects that increase the payment for all the other projects in operation and the new power plant connected and commissioning during the second half of 2022 and 2023.
Improved hydrology contributed $19 million to our margin.
$24 million contribution from renewable volume mainly related to the new capacity.
The remaining variation of our EBITDA comes from.
$6 million due to the agreed the remuneration related in the chest indexation, lower fines and compensation and higher demand.
Opex and other costs, mainly in the generation business by $2 million associated with the new renewable capacity in operation and inflation.
And now let's move to drive 11, where we have the summary of the first half.
Back down accounting for $400 million.
As we did in the second quarter, we are excluding the 2020 EBITDA and then I think so for comparison purposes for a better understanding of the 2023.
And in Chile, EBITDA increased 50% or $133 million, mainly explained by $124 million from higher PPA.
In the first half 2023.
Primarily due to.
$83 million of higher average PPA price, mainly related to indexation put it $2 million, mainly due to higher ancillary services system and capacity payments revenues.
The last one is mainly due to two factors.
First delay and the cost of some market renewable projects that increase the payments for all other projects in operation and to.
The new power plant coordinate and commissioning during the second half 2022 and 'twenty three.
$110 million of Augusta immunization activity versus previous year, mainly due to higher volume and higher commercialization prices.
Improved hydrology voting contributing three three.
$3 million to our margin.
And $33 million contribution from our renewable growth volume mainly related to the new capacity.
Yes.
<unk> mentioned effects were partially offset by.
$152 million increase in variable costs.
Mainly related to $129 million.
Related to higher thermal generation cost due to commodity prices and lower termination $24 million related to higher power surges in the period.
So one of the higher commodity prices during 2023.
And then about a b of different power plants in the system and past partially compensated by an agreement with one of our PPA supplier.
The remaining variation of our EBITDA comes from.
$7 million.
Due to grief and amortization related to the indexation lower financing compensation and higher demand.
Higher opex, mainly in generation business by $40 million facility to new remember capacity and inflation across all the business.
Let's move now to slide 12.
Hey, Luke.
Our generation Kpis.
Okay.
Net electricity generation total same six terawatt hour as of June 2023.
3% higher than the level recorded in the first half of 2022.
This was mostly due to the higher solar and either off generation during the current year, reflecting the contribution of new projects and higher water availability respectively.
During the second quarter of 2023 net generation reached $5 five set of a power increasing 8% when compared to the second quarter of 2022, mainly due to higher renewable generation.
Our energy sales totaled $15 five.
During the first half of 2023, maintaining the level recorded as of June 2022.
This was mainly explained by lower sales from two or three markets offset by an improvement in the phase two regulated tests.
During the last quarter physical sales increased 3%, mainly due to the higher sales to pick up.
As a result in terms of energy balance the amount of energy purchases.
In the spot market, both in solar and solar in Iowa.
It's basically in line with the last year's figures.
Now on Slide 13, let's go through the main drivers of our group net income.
Yes.
Net income from the first half this year increased 90% to $141 million.
Mainly resulting from greater EBITDA.
There is $3 million as explained in the baselines.
So less depreciation and amortization impact is higher depreciation related to the new renewable projects in operation are fully.
Totally compensated by lower bad debt in essentially in distribution.
Mainly related to the clients that the recovery as a result of the server commercialization, including disconnection and commercial agreements.
Slide financial results and equity investment considering huh.
Higher financial income in the period, mainly explained by greater returns on the short term fixed income investment.
Really due to the higher cash availability.
Great.
Lower cost mainly to lower debt levels and higher capitalization.
Higher financial costs, mainly due to the factoring of our accounts receivable executing 2022.
Most of them are executing 2020.
Lowered financial.
Revenue related to the commissioning of our former core fleet.
Partially offset by higher income tax that increased by $61 million, mostly due to the higher.
Results in higher monetary correction.
The second quarter of 2023 net income reached a negative 3 million mainly related to lower EBITDA.
In the <unk>.
Previous slides.
Lower depreciation and amortization essentially due.
Due to the lower bad debt.
In distribution, mainly related to the client depth recovery as a result of several commercial.
Including this connection and agreements, partially offset by higher depreciation related to the new renewable projects in operation.
Hi, good financial results and equity investment of $7 million, mainly related to lower financial.
Revenue reserves related to the commissioning of our former core fleet.
Higher financial cost due to factoring of accounts receivable its secured in 2022.
One six figures in 2023.
Financial income in the period, mainly explained by greater return on short term fixed income investments.
Due to the higher cash availability to interest rates lower costs, mainly due to lower debt levels and higher capitalized interest.
Higher income tax net increase minus $14 million, mostly due to provisions relating to the classifying that.
As the health for sale higher monetary correction partial offset by lower <unk> results.
Moving to <unk> analysis on slide 14.
Let's now see in more detail the SSL for the CDO debt.
The pro forma <unk> in 2023 that excluded.
$310 million payment on taxes.
On the capital gains generated with Ana, It's Jon reached a negative $5 million.
Which reflect a $217 million improvement.
One comparing to last year pro forma figures.
Resulting from $400 million coming from EBITDA, driven by better hydrology higher renewable contribution in gas trading activity in the period.
$118 million negative impact.
The cumulative stabilization mechanism effects in our receivable.
Reducing the cash conversion of the period.
The situation has slightly improved since that time with the fee for July 'twenty 'twenty. Two period was published enabling us to start the process of recovery.
Part of this receivable.
According to the mechanism and the process approved we expect to recover an important part of the balance accumulated during this year.
So in August we expect around $300 million from the factoring process with ICB.
Working capital negative reached a negative balance of $111 million as a consequence of energy and Capex to rebound from 2022 last month.
Partially offset by cash management action and kitchen from the sales of Santa Rosa.
Working capital improvement once compared with the loss.
Cm mainly comes from.
Santa Santa Rosa billing and other managerial section in contacts reached $2 million.
Mainly related to better results in generation business in both 2022 and first half 2023.
Set by tax recovery from previous period on both generation and distribution business.
Once compared the income tax paid in 2023 vessels last year. The main difference comes from the tax recovery from previous period opting now during <unk>.
To conclude.
Now on financial expenses reached $103 million, mainly due to the debt interest paid during the year higher factory costs, partially offset by higher cash interest.
Financial expense was in line with the last year.
Now, let's take a look at our liquidity and leverage position on page 15.
Our gross debt increase around zero point $4 billion to $5 billion.
June 23, when compared to December 2022.
This increase was mainly related to the delay of back to payment and other network Cabozantinib.
The tax payment of the same and then.
Executing the last year.
It should be noted that this debt increase is temporary effects.
As we should receive part of the fixed coupons hopefully within hours and we will start to see higher income from our operating business coming from the better hydrology and later this year. This is so vast caveat.
All in all.
On a net net debt.
EBITDA lower than three times by the end of 2023.
And the average of our debt maturity reached five seven year at the end of the last semester.
Maintaining the largest portion of the fixed rate with 77% of the total debt.
Regarding our maturity during 2023 in the slide we are seeing a $200 million maturity for this year of 2023.
This amount was already paid early July using <unk> throwing this shall be paid once the BEC two.
Two factory resources, our kitchen.
The average cost of our debt reached four 7% at the end of last June .
Little bit higher than December she was due to the new profile of our debt prepay.
Prepayment or someplace short semi.
Sovereign market situations.
I would like to reinforce the message of the current debt levels are temporary.
Sydney all the sources generated by our asset during the second half of this year as you may be aware that our generation business is an important seasonality during the rainy season and by the sources coming from Cabot transaction.
So we'll give you more detail. Many thanks, now I will hand over to <unk>.
Yes, many thanks does that fair.
Now on page 15, as part of our goal to continue optimizing our portfolio reinforcing the value of our assets and as a consequence strengthening to the sustainability of our balance sheet I would like to speak on the recent announcement of the state of our subsidiary yet Scott.
On July three lbs enter Chile, signing an agreement with <unk> to sell its entire stake in arcata heresy on solar.
At Gerdau operates a known say portfolio of 460 megawatt power generation assets that includes four solar power plants named Diego de Almagro, Correira Beanstalk, ocelot, not there and domain.
The agreement provides that <unk> would be an equity value of $550 million for the entire stake held by energy to ensure secured back to back PPA to enter with different tenures of around 80% of the production of the power plants defined in the contract.
The capital gain embedded in this transaction will generate an estimated impact on our net income of $110 million in 2023.
And the cash impact of around $500 million.
Net of taxes of about $50 million.
The purchase and sale transaction is subject to certain conditions precedent that are customary for these kinds of transactions like the approval from the sheet and antitrust authority. The feed study aniston on economics.
The closing of the transaction is expected by the end of DCF.
Finally, this transaction is part of our asset rotation initiatives and unlocking value goals targeting the optimization and diversification of our portfolio.
<unk> generated with the sale will create further space for our company to execute our Capex deployment plan, while at the same time strengthening our financial position in a bit to cycle.
With the execution of the annual transmission fee and the shell agreement both executed last year and the closing of this transaction. We have entered Chile in a much more comfortable position to continuous start getting aggressive and strategic market opportunities.
Now I will point out some closing remarks on slide 17.
Okay.
The first semester showed a solid operating performance the elements that we have now catalyzed by better than expected hydrology full natural gas availability and the quality of our assets support our view for a solid 2020 results.
Our business has progressed in line with our expectations and visibility for the rest of the year allows us to be fully confident in reaching the upper range of our targets provided back in November 2022.
The repositioning of our generation portfolio growth actions and BBC diversification of our sources continues to evolve.
Cara transaction was an important and well design action that will support the execution of our committed plan.
The growth of our renewable fleet is well on track and will continue to bring additional value to our portfolio complementing and diversifying our matrix influencing it.
Thanks to the portfolio optimization actions that we have been constantly pursuing and the significant asset rotation initiative address we continued to deliver strong economic performance and build a solid financial balance sheet.
This will allow us to leverage our strong position in the energy transition for context.
And exploit the opportunities that will materialize.
Let me now and over to Isabella.
Thank you Fabrizio. Thank you all for your attention now let's begin the Q&A section.
Key questions via phone and net shattering the webcast on this equation. The Q&A session is now open GDP you may start.
Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please stand by while we compile the Q&A roster.
Our first question comes from the line of Bad Threes Genoa from Mediobanca.
Yes, good morning, everybody and thanks for taking my question I guess that three.
Our first question in regard to slide 14, I can see.
Does it mean, some cash flow absorption related to the stabilization mechanism.
Can you provide more color I'll now do you expect this amount to evolve by yearend and related to this how do you see that evolving during the year.
The second one that is on hydro, we see that deterioration has been positively impacted by good.
How do you see this evolving in 'twenty three and how do you see these in the year to come in and very last one are you concern to your earnings guidance for 'twenty three.
What about the one for EBITDA is that you are concerned can you. Please provide more color on this.
Many thanks.
Okay.
But I think that Ah I can answer the second question about the either the generation then.
Let's do that.
To the first and the third question.
As I mentioned during my presentation.
Basically we already have one more.
Our more than expected in our <unk>.
So that.
Quite easy to predict that at least one terawatt hour, we will exceed at least the one terawatt hour of R. F.
The expectation of.
Either generation four Dcs.
As for the following years.
What probably a good level of.
IBRA inflows during.
2023 call that in some way also ban if at the beginning of 2024 by for sure. This is of course, a temporary effect of let me say that the.
Structurally.
Something difficult to comment that we could.
<unk> be more optimistic on the following year for sure we are quite optimistic for Dcs and some.
Priorities also some potential positive effect on 2024.
Okay.
For what concern that aspect to it as I said in the first.
Also we are counted $189 million and we believer.
We believe that we are going to.
Accrued at the end of the <unk>.
Something like more than $700 million.
All in all.
Not coming from the 2020 I'm talking about the full amount of that.
Receivable.
Clear.
Clearly.
In August we expect to perform the first part of a factory that is going to be around $10 million.
And.
And either.
Went on that a little bit more.
Factoring of back by the end of the year.
So let me say.
Full year, it should be around 400 million.
Facts.
For what concern the <unk>.
Guidance basically.
We are confirming the upper side of our target in terms of EBITDA because on one side.
The remaining.
Managing coming from the trading activity is going to be already is already closed. So we are going to perform.
The margin in the last quarter, but in the same time.
The polls.
Positive effects of radiology.
He is going to.
Currency.
A certain level of confidence in reaching the EBITDA. This is basically the situation we have to remember that.
It doesn't mean only.
Energy available.
During the nine so but also a reduction in the spot price. So basically we are benefit benefiting from both sides for these reasons because we believe that.
But that we will.
Hey, guys.
Reachable.
Thank you. Thank you does that <unk> did we have more questions on the line.
Thank you, yes, one moment for our next question.
Our next question comes from the line of Florida and South.
Florencia mayorga from Metlife.
Hi, everyone. Thanks for taking my question two questions one is regarding your expectation.
On prices for the generation business.
Part one related for client and the other one is more recycling your expectation.
Bye bye ear and considering <unk>.
Asset sales recently announced thank you.
Okay. Let me address the first question and then I hand over to that before the second one.
Right.
In terms of spot prices as I say that given the.
A reduction of international commodity prices, which would be reflected in lower.
Costs in the system.
And also thanks to the good the hydrological conditions there.
The second part of the Ida we would we would expect.
Nipigon lower prices in the spot market that is good news for us.
As for debt.
Three clients.
I think I guess.
You are referring to a long term contract prices for free clients.
In that respect.
We are seeing.
Seeing.
Some.
Positive trend in the market in the sense of that.
Due to the financial.
Uh huh.
Problems are.
Experienced from some renewable.
Our renewable play yet in the last months, we are seeing a context.
In the medium long term seems to be a little bit more tighter reflecting in there.
Better prices for in the in the in the free market.
It was some some wage was already.
Factoring in the loss regulated auction last yet, but I think this trend.
As been reinforcing in the last in the last month. So we are enjoying.
More comfortable prices selling our energy to free customers.
Okay for what concern the.
Leverage that we're going to have at the end of this year.
According to our projection we're going to meet.
Below the three times net debt to EBITDA, thanks to that.
Companion.
EBITDA.
Our guidance and supporting our leverage with the caching or what the status of that.
It's going to be around around that.
Yeah.
Alright, thank you so much.
Thank you did you do you have more questions on the line.
At this time I'm showing no further questions I would like to turn the conference back over to Isabella.
Alright. Thank so we have some questions here coming from the shack.
First one is Jamie Rollo, Linda Mccartney Andrew Mccarthy.
Asking did I understood correctly that you expect one up to two terawatt hours more of hydro generation in 2023, whereas there's a strategy plan forecast of $9 three how much additional it'd be that showed that E. R.
One to one $2 billion EBITDA target for 2023.
Having introduced.
Yeah, I can I can address that we have just mentioned from a physical point of view that is true. So confirming that we are expecting from one to two terawatt hour more widely generation in 2023 compared to our forecast of $9. Three so it was correct.
Correct.
And you was referring to.
It is quite easy to say that as I mentioned, we have already one terawatt hour more in our <unk> worth it so it's quite easy to be in the first part of the range, but I'm quite optimistic seeing also some short term forecast that week.
Could also have something more of that.
And in terms of EBITDA, a let me say that approximately each set about our could add like $50 million more in our EBITDA and that was the reason why I also.
Quite comfortable in mentioning that.
We are in the upper range of our of our guidance.
Okay. Thank you Fabrizio do we have another question Jamie from Rodrigo Mora from Moneda.
Who is asking more details about their project transaction. He is asking if we could give more details about the PPA security. This operation in terms of the duration of the PPA.
Okay, Let me say that this ppas.
Is absolutely.
Like a mirror PPA of what the original lead these plants have in different times of the.
A recent years when they were built so each PPA start date.
Differently, yet and so as a consequence also have a different the expiry in the future. So.
We are saying that the these ppas.
To start declining in 2020 in 2029.
And the last one that refers to the recent the more recent plant that is Domenico is going to hand completely in 2041 as I say that there are contracts that are absolutely.
Mirrored condition of the regional Ppas that each of this plant.
Atlanta.
Signs at the moment of their contract construction and of course, we have a.
Mirrored sales in our portfolio that would be of course address the also from the 80% of our.
And they're just saying that we continue to have this mirrors.
Mirrored in PPA.
Okay Fabricio many thanks.
So we are all for the questions. So I would like to thank you all for your attendance today and any other information you may need.
Esther relations team will be available okay. Thank you have a good day.
This concludes today's conference call. Thank you for participating you may now disconnect.
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