Q2 2024 Enel Chile SA Earnings Call

Good morning, ladies and gentlemen, and welcome to Enel Chile's first half and second quarter 2024 results conference call.

Operator: All participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To participate, you will need to press star 11 on your telephone. You will then hear a message advising that your hand is raised. To withdraw your question, simply press star 11 again.

Carmen: My name is Carmen and I will be your operator for today.

Speaker Change: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To participate, you will need to press star-one-one on your telephone. You will then hear a message advising your hand is raised.

Operator: Please be advised that today's conference call is being recorded. During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not guarantees of future performance, and involve risk and uncertainties.

Speaker Change: To withdraw your questions, simply press star 11 again.

Operator: 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's press release reporting its first half and second quarter 2024 results, the presentation accompanying this conference call, and its annual report on Form 20-F, included in the risk factors. You may access our first half and second quarter 2024 results press release and presentation on our website, www.enel.cl, and our 20th on the FEC's website, www.fec.gov. However, readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their dates.

Please be advised that today's conference is being recorded.

Speaker Change: During this conference call we may make statements that constitute forward-looking statements within the meaning of the securities

Speaker Change: Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors.

Speaker Change: These factors are described in Enel Chile's press release reporting its first half and second quarter 2024 results, the presentation accompanying this conference call, and Enel Chile's annual report on Form 20-F, included on the risk factors.

Speaker Change: You may access our first half and second quarter 2024 results press release and presentation on our website www.nl.cl and our 20-F on the FEC's website www.fec.gov

Speaker Change: Enel 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.

Operator: Enel 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 Ms. Isabela Klemes, Head of Investor Relations at Enel Chile. Please proceed. Buenos dias, good morning, and welcome to the Enel Chile 2024 second quarter and first half results presentation. Thank you for all joining us today.

Isabela Klemes: I would now like to turn the presentation over to Ms. Isabela Klemes, Head of Investor Relations of Enel Chile. Please proceed.

Isabela Klemes: My name is Isabela Klemes, and I'm the head of investor relations. Joining me this morning is our CEO, Giuseppe Turchiarelli. Our presentation and related financial information are available on our website www.enel.cr in the investor section and also in our app Investor. In addition, a replay of the call will soon be available. At the end of this presentation, there will be an opportunity to ask questions via phone, webcast, and chat. Through the link, ask a question. Media participants are connected only in listener mode.

Isabela Klemes: Health Results Presentation. Thank you for all joining us today. My name is Isabela Klemes and I'm the Head of Investor Relations.

Isabela Klemes: In the following slides, Giuseppe will open the presentation with our key highlights of the period, then go through our portfolio and regulatory context, and finally, will give us a view of our business economic and financial performance. Thank you all for your attention and let me now hand over to Giuseppe. Thank you, Isabella. Good morning and thanks for joining us.

Isabela Klemes: Media participants are connected only in listener mode. In the following slides, Giuseppe will open the presentation with our key highlights of the period.

Isabela Klemes: Then go through our Portfolio and Regulatory Context Update. And finally, we'll give us a view of our business economic and financial performance. Thank you all for your attention, and let me now hand over to Giuseppe.

Giuseppe Turchiarelli: Let's start our presentation with our main highlights of the period on slide 2. During the second quarter, our ideal portfolio performed outstandingly, repeating the good performance of the first quarter. This resulted from higher reservoir levels at the beginning of the year due to the El Nino phenomenon last year, coupled with strong weather events during this walk. This gave us a robust and efficient generation portfolio mix for the future. We added approximately 250 MW of new renewable energy capacity and the best products.

Giuseppe: This resulted from higher reservoir levels at the beginning of the year due to El Nino phenomenon last year, coupled with strong weather events during this course.

Giuseppe: This gave us a robust and efficient generation portfolio mix for the summit.

Speaker Change: We added approximately 250 megawatts of new renewable energy capacity and best process.

Giuseppe Turchiarelli: All these additions will support our long-term ambition of decarbonization and the ongoing optimization of our portfolio. Furthermore, I would like to mention that we have received the commercial operation date from the system operator for around 410MW this year, totaling 1.6GW since January 2023. Moreover, during this period, Enel Generacion, a subsidiary of Enel Chile, secured a 20-year-term regulated PPA representing a sales of around 3.6 TWh in the regulated option starting to deliver around 1.5 TWh in 2027 and the remaining part to reach 3.6 TWh in 2028.

Speaker Change: Moreover, during this period, Enel Generacion, a subsidiary of Enel Chile, secured

Speaker Change: A 20-year term regulated PPA, representing a sales of around 3.6 TWh in the regulated auction.

Speaker Change: starting to deliver around 1.5 TWh since 2027 and the remaining part to reach 3.6 TWh in 2028.

Giuseppe Turchiarelli: This continues Enel's generation goal to diversify its sales and include more long-term TPA in its portfolio. On the regulatory side, we have some important news to share. First, as you may know, the Chilean Congress approved the law related to the stabilization mechanism, type 3.

Speaker Change: This continues Enel's generation goal to diversify its sales and include more long-term DPA in its portfolio.

Speaker Change: On the regulatory side, we have some important news to share. First, as you may know, the Chilean Congress approved the law related to the stabilization mechanism, PEC 32.

Giuseppe Turchiarelli: In July, the decree with the updated regulated study was published. Now, we are awaiting the Sovereign Guarantee Decree during the third quarter to enable the factoring process. Second, the distribution tariff for 2020-2024 came into effect in June of this year. The review process for the distribution tariff for 2024-2028 has already begun and is progressing as expected. I will give you more color on this topic later on.

Speaker Change: In July , the decree with the updated regulated tariff was published.

Giuseppe: Now, we are awaiting the sovereign guarantee decree during the third quarter to enable to start the factoring process.

Giuseppe: Second, the distribution tariffs for 2020-2024 came into effect in June of this year.

Giuseppe: The review process for the distribution tariff for 2024-2028 has already begun and is progressing as expected.

Giuseppe Turchiarelli: Regarding profitability, I am pleased to announce that the first half shows solid EBDA and net income results. This reflects our confidence in our guidance for this year. We achieved a positive FSO despite the effect on receivables, and as you know, we expect to recover a portion of it during the second half of this year. The positive effects of SFFO reflect our solid operation performance during this semester. And, finally, we have a solid level of liquidity to be used for future cash CAPEX deployments. I will provide more details on this later.

Giuseppe: I will give you more color on this topic later on.

Giuseppe: Regarding profitability, I am pleased to announce that the first half showed solid EBDA and net income results. This reflects our confidence in our guidance for this year.

Giuseppe: We achieved a positive FSO despite the FEC receivable. As you know, we expect to recover a portion of it during the second half of this year.

Giuseppe: The positive effect of SFO reflects our solid operation performance during this semester.

Giuseppe: And finally, we have a solid level of liquidity to be used for future capex deployments. I will provide more details on this later.

Giuseppe Turchiarelli: Now let's look at some updates on the hydrological situation on slide 3. Positive hydrological conditions during 2023 will allow us to have greater water availability during the first quarter of this year. In addition, higher than expected rainfall during the second quarter of 2024 allowed us to increase our idle production, exceeding by 72% the level recorded in the second quarter of 2023. Therefore, during the first half of 2024, we accumulated 2.1 TWh of hydro generation compared to the last. The hydrological situation in our reservoir is also very positive year-to-date, once compared to the last year's figures, especially in the...

Speaker Change: Now, let's look at some updates on the hydrological situation on slide 3.

Giuseppe: Positive hydrological conditions during 2023 allow us to have greater water availability during the first quarter of this year.

Giuseppe: In addition, higher than expected rainfall during the second quarter of 2024 allowed us to increase our hydro production, exceeding by 72% the level recorded in the second quarter of 2023.

Giuseppe: The hydrological situation in our reservoir is also very positive year-to-date, once compared to the last year figures, especially in the south.

Giuseppe Turchiarelli: In fact, with the water accumulated in our reservoir to date, we have sufficient availability to supply our energy demand until the end of this year, even with the possibility of a weak laminar phenomenon in August 2013. Based on these results, we have updated our hydro generation estimate to approximately 12 TWh for 2024. We expect to complement this information once we know the results of the Ruta de Nieve studies, which will be carried out in the coming months, so that we can better estimate the snow melt forecast for the fourth quarter.

Giuseppe: In fact, with the water accumulated in our reservoir to date, we have sufficient availability to supply our energy demand until the end of this year.

Giuseppe: Based on these results, we have updated our hydro generation estimates to approximately 12 TWh for 2024.

Giuseppe: We expect to complement this information once we know the results of the Ruta de Nieves studies, which will be carried out in the coming months, so that we can better estimate the normal forecast for the fourth quarter.

Giuseppe Turchiarelli: Now we move to the next slide to review how we continue improving our portfolio of generation. We continue developing our strategies towards a more efficient generation matrix, increasing our renewable capacity across different areas of the country. Focusing on solar close to the center of consumption and incorporating more batteries in our portfolio projects, During this first half, we reached a total netting soil capacity of 8.7 GW. We connected almost 200. 50 MW of additional net capacity related to our solar plant with batteries, Don Umberto, located in the metropolitan region, and two more projects with batteries. These are El Manzano Base, which is also in the metropolitan region, and La Cabaa Base, too, in the southern part of the country.

Giuseppe: Now, let's move to the next slide to review how we continue improving our portfolio of generation assets.

Giuseppe: We continue developing our strategies toward a more efficient generation matrix, increasing our renewable capacity across different areas of the country.

Giuseppe: Focusing on solar close to the center of consumption and incorporating more battery in our portfolio project.

Giuseppe: During this first half, we reached a total nesting soil capacity of 8.7 GW.

Giuseppe: We connect almost 200.

Giuseppe: 50 MW of additional net capacity related to our solar plant with batteries, Don Umberto, located in the metropolitan region, and two more projects with batteries.

Giuseppe: These are El Manzano Base, which is also in the metropolitan region, and La Cabaña Base, too, in the south part of the county.

Giuseppe Turchiarelli: During this half, we received authorization from the National Electricity Coordinator to begin commercial operation for 410 MW released to the two solar plants, La Salina in the North Zone, a hybrid project that is located in the same field as Sierra Volda Este, a 112 MW wind farm, and El Mantano, a solar plant located in the metropolitan region of Santiago, very close to the consumption center. And finally, our wind farm, La Cabaa, located in the south of Santiago.

Giuseppe: During this half, we received...

Giuseppe: Authorization from the National Electricity Coordinator to begin...

Giuseppe: Commercial operation for 410 MW released to the two solar plants, La Salina in the North Zone and Hybrid project that is located in the same field as Sierra Golda-Este

Giuseppe: a 112 MW wind farm and El Manzano, a solar plant located in the metropolitan region of Santiago very close to the consumption center and finally, our wind farm La Cabaña located in the south of Chile

Giuseppe Turchiarelli: In addition, let me inform you that we are closing the closed contract on the hydro power plant. In September, we will have an important milestone. We will start filling the tunnel with water to execute what we call the wet stage. Following that, coordinated with the system operator, we will start the testing process for lost contacts.

Giuseppe: In addition, let me inform you that we are concluding a closed contract.

Giuseppe: Hydro Power Plant In September we will have the important milestone. We will start filling the tunnel with water to execute what we call the wet test.

Giuseppe: Following it, coordinated with the system operator, we will start the testing process of Los Condores.

Giuseppe Turchiarelli: Our goal is to have the connection of end testing concluded in June 2024. The deployment of our renewable plants aims to increase the flexibility of our portfolio, which is today 77% renewable-based. It should be noted that with everything mentioned above, we have completed the first wave of growth projects that were part of our plan. Now, on the next slide, we will review the performance of our Generation KPI. Net electricity generation totaled 12.1 TWh as of June 2024, exceeding by 15% the production during the first half of 2023, mainly due to higher hydro and renewable generation resulting from the improved hydrology in the operation of the new project, respectively.

Giuseppe: Our goal is to have the connection and testing concluding June in 2024.

Giuseppe: The deployment of our renewable plants aims to increase the flexibility of our portfolio, which is today 77% renewable-based.

Giuseppe: It should be noted that with everything mentioned about

Giuseppe: We have completed the first wave of growth projects that were part of our plan.

Giuseppe: Now, on the next slide, we will review the performance of our Generation KPI.

Giuseppe: Net electricity generation totaled 12.1 TWh as of June 2024, exceeding by 15% the production during the first half of 2023.

Giuseppe: Mainly due to higher hydro and renewable generation, resulting from the improved hydrology and the operation of the new projects respectively.

Giuseppe Turchiarelli: During the second quarter of 2024, net generation grew by 11% to 6.1 TWh, mainly due to higher hydro and wind generators. Our energy sales totaled 17 TWh in June 2024, 10% higher than the level recorded in the first semester last year, resulting from higher sales to both regulated customers and free clients. It is worth mentioning that our commitments with our clients were fulfilled with a higher portion of our renewable generation, which also led us to lower energy purchases in the spot market, mainly for our solar power.

Giuseppe: During the second quarter of 2024, net generation grew by 11% to 6.1 TWh, mainly due to higher hydro and wind generation.

Giuseppe: Our energy sales totaled 17 TWh in June 2024, 10% higher than the level recorded in the first semester last year, resulting from higher sales to both regulated customers and fleet clients.

Giuseppe: It worth mentioning that our commitments with our clients were fulfilled with a higher portion of our renewable generation.

Giuseppe: which also led us to lower energy purchases in the spot market, mainly in our solar power.

Giuseppe Turchiarelli: During the second quarter of 2024, physical energy sales grew by 11% to 8.5 terawatts, mainly due to higher state-to-regulation gaps. In terms of our balance, during the first semester, we increased our purchases from third parties by 1.5 TWh as part of our continued effort to diversify our services. Now, on the next slide, we will review the performance of our main API.

Giuseppe: During the second quarter of 2024, physical energy sales grew by 11% to 8.5 TWh

Giuseppe: mainly due to higher stakes to regulated customers.

Giuseppe: In terms of our balance, during the first semester we increased our purchases from third parties by 1.5 TWh as part of our continued effort to diversify our sourcing.

Giuseppe: Now, on the next slide, we will review the performance of our main API.

Giuseppe Turchiarelli: In the generation business during this semester, we have seen relevant improvements in our kit. In terms of renewable and back-increased capacity, reaching 6.8 gigawatts of net capacity, representing a 77% take in our generation portfolio. This enables us to reach 74% CO2-free production, which is 13 basis points higher than in the first half of 2023. Additionally, the energy sold in the generation segment reached 17 TWh, representing an improvement of 10% compared to the last year.

Giuseppe: In the generation business, during this semester, we have seen relevant improvements in our KPI.

Giuseppe: In terms of renewable and back-increased capacity, reaching 6.8 GW of net capacity, representing a 77% take in our generation portfolio.

Giuseppe: This enables us to reach 74% CO2-free production, which is 13 basis points higher than in the first half of 2023.

Giuseppe: Additionally, the energy sold in the generation segment reached 17 TWh, representing an improvement of 10% compared to the last year.

Giuseppe Turchiarelli: I would like to highlight now the great contribution that the RELAX is making in terms of our individuals that allows us to continue driving electrification. We improved our figures this semester compared to the last year. Period.

Speaker Change: I would like to highlight now the great contribution that the railways is making in terms of our individual building that allow us to continue driving the electrification process.

Giuseppe Turchiarelli: We have increased the number of public and private charging points for electric vehicles by 25%, reaching almost 3,000 charging points. Regarding key home services and the electrification indicator, we also improved our numbers by 40% and 60%, respectively, compared to last year. Regarding public lightning, we reached 372,000 lightning points, 1% higher than last year, mainly due to the maintenance contract with La Florida, Castro, and Wechuraba Municipality. Regarding the distribution segment, the number of clients and distributed energy in our concession area continues to grow by 2 and 3%, respectively, compared to last year.

Giuseppe: We improved our figures in this semester compared to the last year's period.

Giuseppe: We have increased the number of public and private charging points for electric vehicles by 25%, reaching almost 3,000 charging points.

Giuseppe: Regarding key home services and the electrification indicator, we also improved our number by 40% and 60% respectively, compared to the last year.

Giuseppe: And regarding the public lightning, we reached 372,000 lightning points, 1% higher than last year.

Giuseppe: and Wechuraba Municipality.

Giuseppe: Regarding the distribution segment, the number of clients and distributed energy in our concession area continues to grow by 2 and 3% respectively, compared to last year.

Giuseppe Turchiarelli: It is relevant to mention that this quarter we had some critical weather events with heavy rains and snow that affected the stability of the electricity supply, impacting our quality indicators such as SAIDI, SAIFI, and LOSI. Regarding Saeed and Saifi, as a matter of comparison, the numbers presented on this slide do not include the impact of the mentioned events.

Giuseppe: It is relevant to mention that this quarter we had some critical weather events with heavy rains and snow that affected the stability of the electricity supply impacting our quality indicators such as SAIDI, SAIFI and LOSSES.

Giuseppe: Regarding Saeed and Saifi, as a matter of comparison, the numbers presented on this slide do not include the impact of the mentioned events.

Giuseppe Turchiarelli: Now, on the next slide, we look at some updates related to the regulatory content. If you recall... Last call, we indicated that, in January this year, the Ministry of Energy presented a bill related to the Stabilization Energy Maximum, with the purpose of continuing the PEC mechanism and mitigating the project's tariff increase to the final count. At the same time, they also aim to improve the Client Protection Mechanism, known as the MPC Mechanism, to allow gradual repayment of accumulated debt with the generator and establish a transitory Subsidy for the most vulnerable clients. This new law was discussed and approved by the Chilean Congress in April, published, and came into force last Tuesday, April 30.

Speaker Change: We did generate store and.

Speaker Change: In the established brand.

Speaker Change: Deeply subsidy.

Speaker Change: Most vulnerable.

Speaker Change: This new law was discussed and approved by the generic Congress immediately published and came into force last Tuesday April 30.

Giuseppe Turchiarelli: In June, the PNP decree was published, and with this publication, the tariff of the regulated clients started to be updated, depending on their location and monthly consumption. Clients with consumption below 350 kWh had their generation components of the tariff updated by inflation, and clients with consumption above. 350 TWh, 12% and higher amount increase of around 35% related to the start of paying the real price of electricity. Plus, a new charge, NIM-MP. We are now waiting for the issuance and publication of the Sovereign Guarantee Decree as well as a complementary set of rules and regulations to the new law, needed to start the factoring.

Speaker Change: In June.

Giuseppe: Yes.

Giuseppe: The decrease was published.

Giuseppe: This publication the startup of the aggressive clients started to be updated.

Speaker Change: In the pain data location and monthly co packed.

Speaker Change: Client with consumption below 300 feet.

Giuseppe: Our.

Giuseppe: Add that component of the historic updated by inflation.

Giuseppe: Client with consumption above.

Speaker Change: Thereafter, our pulpwood feat and a higher amount of increase of around 35% related to the starting to pace the real price of electricity.

Charles: Charles NIM.

Speaker Change: We are now waiting for the issuance and publication of the sovereign guarantee decree.

Speaker Change: Well as a complementary set of rules and regulations. So there is no need.

Speaker Change: We needed to start the factoring processes.

Giuseppe Turchiarelli: This guarantee will be presented to investors as part of the issues coordinated by the IDB expected in the next few months. As of June 2024, we had an account receivable related to the PEC, already net of factoring, of 904 million dollars, considering the readjustment in the interest of around 115 million dollars. We reached an accrual of approximately 1 billion dollars, approximately, with the issuance and publication of the pending regulation. On the basis of the pending regulation, we expect to execute the factoring of the current accounts receivable during the second half of this year, ranging from 550 to 650 million dollars.

Speaker Change: These guarantee.

Speaker Change: We'll be presenting for investor as part of the issue coordinated by the IDB.

Speaker Change: In the next few months.

Speaker Change: Okay.

Speaker Change: As of June 2024, we had an account receivable related to the effects already net of factoring of 99.

Speaker Change: Our million dollar.

Speaker Change: Figuring that adjustment in the index of around $115 million.

Speaker Change: We reached an accrual of $1 billion approximately.

Speaker Change: With the issuance and publication.

Speaker Change: The pending integration, we expect to secure the factory of the current accounts receivable during the second half of this year.

Speaker Change: Ranging from $550 million to $615 million.

Giuseppe Turchiarelli: We expect that by the end of 2024, the accounts receivable net of factoring should range between 350 and 450 million. Now, all the discussions are centered on the subsidy in place, which could increase the number of families that will receive subsidies and avoid further tariff increases. According to the law approved today... $100 million is coming from subsidies paid by the consumer, particularly free customers, and $20 million is coming from the Treasury of Chile. This $120 million would support around 1.2 million families.

Speaker Change: We expect that by the end of 2020 for the accounts receivable net of factoring to.

Speaker Change: So the range of between 350.

Speaker Change: $450 million.

Speaker Change: Now all the discussion are centered on the subsidies in place.

Speaker Change: It would increase the number of family that will receive subsidies.

Speaker Change: Further tariff increases.

Speaker Change: According to the law approved today.

Speaker Change: $101 million are coming from subsidy is paid by the consumer.

Speaker Change: Equally the free cash flow and $20 million.

Speaker Change: Coming from the creation of Cheetah.

Speaker Change: This $120 million would support around the $1 2 million families.

Giuseppe Turchiarelli: The family that will be benefitted shall be known during September, and the distribution company shall apply retroactively from July this benefit during October this year. Now, Congress is discussing with the executive authorities a potential increase in this benefit to increase the number of feminists supported by this subsidy to around 4.7 million, increasing the total annual subsidy to around 300 million dollars per year versus the current 120 million in place. The measures to increase the subsidy are still under discussion by the government and the Congress. We expect the final proposal to be submitted by the middle of August.

Speaker Change: The payment that will be beneficial.

Speaker Change: So I'll be known during September and the distribution companies will apply retroactively since July.

Speaker Change: During October this year.

Speaker Change: Now Congress is discussing with executive authority, a potential increase of this basin.

Speaker Change: To increase the number of payment is supported by the subsidy to around 4.7 million families.

Speaker Change: Creasing, the total annual subsidy to around $300 million.

Speaker Change: The current $120 million in place.

Speaker Change: The potential changes.

Speaker Change: We increase the subsidy is still under discussion by the government in the call that we expect final proposal to be submitted by the middle of August.

Giuseppe Turchiarelli: On the Distribution Tariff Review, the Regulatory Final Decree for the 2020-2024 cycle was published in early June, and therefore, the new distribution tariff represents an increase in the tariff for the final customer in our concession era of around 5%. Regarding the 2024-2028 cycle, in July, the consultant's report was received, and is currently being reviewed by a committee. The final report is foreseen to be published yearly in the Q4 2024.

Speaker Change: On the distribution side, we view the regulatory final decree 2000, 22024 cycle was published in early June and therefore, the new distribution tariff will represent an increase in the tariff for the final customer in our constellation hour of around 5%.

Speaker Change: Regarding the in 2024 2008 cycle in July the consultant taken very possible with you.

Speaker Change: <unk> received.

Speaker Change: And is currently being reviewed by a committee.

Speaker Change: The final wrap up is foreseen to be published.

Speaker Change: And the Q4 2004.

Giuseppe Turchiarelli: We expect that by the end of this year, the regulator will publish the Preliminary Technical Report on this new cycle. We are more confident regarding this process, considering that the consultant who is working is the same one who worked in the previous cycle. Cyclopedia Therefore, we understand that some topics already discussed before the previous cycle shall be automatically applied to this one.

Speaker Change: We expect that by the end of this year the regulator published.

Speaker Change: The preliminary report on this new site, we are more confident regarding this process.

Speaker Change: I think that the consultant who is working is the same one who worked in that.

Speaker Change: Yes.

Speaker Change: Cycle.

Speaker Change: Therefore, we understand that some topics already cut before the previous cycle shall be automatically applied to this process.

Giuseppe Turchiarelli: Now, let's review on the next slide our earnings indicator performance. Our economic and financial performance was very solid in the first half and second quarter of 2020. As you can see on the slide, in the first half and second quarter of 2024, we had an important improvement in EBDA and net income versus last year's figures. This is mainly explained by the outstanding hydrological situation and a more efficient generation mix.

Speaker Change: Now, let's review on the next slides our earnings indicators at Paul.

Paul: Our economic and financial performance was very solid in the first half and second quarter of 2024.

Speaker Change: As it gains seen on the slide.

Speaker Change: In the first half and second quarter 2024, we had an important improvement in EBITDA and net income versus last year.

Speaker Change: This is mainly explained by the outstanding as rosy gossip ratio and a more efficient generation mix.

Giuseppe Turchiarelli: In the first semester of 2024, the FFO also showed an improvement compared to last year, reaching $52 million. This is mainly explained by the improvement in the BDA, offset by a negative impact due to higher tax payments related to Arcade operations and a more significant backup commodity. Regarding the second quarter, FFO improved by $27 million in 2024 vs. 2023 due to the same impact already mentioned in the second quarter. We will review more detail on the following slides.

Speaker Change: In the first semester of two.

Speaker Change: 2020 for the FX, Paul also showed an improvement compared to last year, reaching $52 million.

Speaker Change: This is mainly explained by the improvement in EBITDA offset by a negative impact due to higher tax payment related to our other operations in a more significant backup company.

Speaker Change: Regarding the second quarter <unk> improved by $27 million for April versus 2033 due to the same impact already mentioned the delay.

Speaker Change: We will review more detail on the following slide.

Giuseppe Turchiarelli: Now, on the next slide, let's review the progress on... Our total capex reached $290 million this first half, 9% lower than last year, considering the conclusion of several renewable and storage projects since the second quarter of 2023. 66% of our total capex, equivalent to $190 million, was related to renewables and storage. In 22, a patent equivalent to $63 million was related to greed, mainly due to new customer connections associated with the growth of our customer base and corrective maintenance of the network. Asset management capex reached $87 million, which represents 30% of our total capex.

Speaker Change: Now on the next slide lets review the progress on Capex.

Speaker Change: Our total capex reached $190 million disbursed.

Speaker Change: 9% lower than last year.

Speaker Change: Considering the conclusion.

David: David on renewable and total profit since the second quarter of 2023.

David: 66% of our total capex of Keybanc to $190 million was related to renewable and storage and 22 acute authentic equivalent to $63 million was really disagree.

David: Mainly due to new customer economy associated with the growth of our customer base and corrective maintenance of the network.

David: Asset management, Capex reached $87 million, which represent 30% of our total capex.

Giuseppe Turchiarelli: It decreased by around 22% compared to the last year, mainly explained by increased capex in the distribution business, mostly related to activities in the low and middle voltages and maintenance activities in our generation fleet, particularly in our hydro and gas. Finally, Development CapEx reached $167 million, representing 58% of our total CapEx, a decrease of 21% compared to last year's figure.

Kris: Kris may around 22% compared to the last year's figures may.

David: Mainly claimed by increased Capex in the distribution business.

David: Mostly related to activities in the low and medium voltage.

David: And maintenance activity in our generation fleet.

David: In our hydro and gas.

David: Finally development Capex reached $167 million, representing 58% of our total capex.

David: A decrease of 21% compared to last year figures.

Giuseppe Turchiarelli: Considering that we are finalizing our Renewable Embedded Portfolio under, Let's now move to the next slide, where we have a Summary of the second quarter EVDA. In the second quarter of 2024, our BDA reached $301 million. I will start with the positive. We have you in the preliminary slide and indexation the framework, and other relevant effective quarters, considering this quarter's hydrological situation and more efficient generation methods. I have a donation in the video.

David: Seating that we are finalizing our renewable portfolio and their cost structure.

David: Let's now move to the next slide what we have.

David: Summary of the second quarter EBITDA breakdown.

David: In the second quarter of 2024 hour EBITDA reached $381 million.

David: Pete.

Pete: Four times higher than the second rig.

David: Great.

Speaker Change: Let me explain the main zone.

David: Scott.

Speaker Change: I will start with the positive effects.

Speaker Change: I would like to highlight a relevant contribution from PPA.

Speaker Change: Equivalent to $150 million.

Speaker Change: Primarily related to higher volume mainly regulated market.

Speaker Change: We have you in the preliminary slide indexation the free market.

Speaker Change: Another relevant effect this quarter.

Speaker Change: Related to industrial sourcing or $70 million.

Speaker Change: Really explained by lower variable cost coming from lower commodity prices in thermal generation.

Speaker Change: Considering this quarter at Rosebel situations and more efficient for mix.

Speaker Change: Baird.

Speaker Change: There is a positive contribution of $60 million related to commercial sourcing primarily due to lower policies in this landscape.

Speaker Change: Mainly explained by lower prices as a result of more significant.

Speaker Change: Either in Asia in the PEO.

Speaker Change: In addition, we had a positive effect of $12 million related to the grid margin mainly explained by the grid the moderation associated with IBD.

Speaker Change: Clearly we need to.

David: The need for regulatory reporting obligations.

Giuseppe Turchiarelli: Finally, we had a positive effect of 13 million dollars from OPEX and others. Mentioned in the quarter linked to the higher capacity payment coming from the new project which offers an offset, The above-mentioned defects were partially offset by... Our net income increased by 2.2 times versus last year's figure. These are mainly explained by the ABDA results. Let me drive you through the additional effects for the first half. Higher depreciation in energy and power due to the new renewable capacity coming into operation. However, higher bad debts are currently in Greece due to higher credit losses expected associated with residential capital.

David: Finally, we had a positive effect of $13 million from Opex and other.

David: This is mainly explained by higher capacity payments coming from new projects.

David: More than offset higher opex related to these new renewable projects.

David: The above mentioned effects were partially offset by negative effect of $7 million related to the largest gas activity carryout during the second quarter of 2023.

David: And finally, we had a negative effect of $10 million related to the met PPA agreement, which was signed in 2023.

David: Let's move on to the next slide to review the main impact on the EBITDA during the third.

David: In the first half our EBITDA was 74% higher than last year, reaching $197 million less that basically in the positive effect.

David: Baird.

David: We had a positive contribution from DPA stays the key balance to $168 million, mainly related to higher volume in the regulated market.

David: Indexation in the free market in line with effect explained previously in the call.

Speaker Change: Second there is a relevant effect of 160 <unk>.

David: Relative to industrial sourcing.

David: Primarily explained by lower variable costs.

David: Sure.

David: Sure.

David: A consequence of the remarkable hydrology.

David: Of the period and a more efficient generation mix semi positive effect of the instrument versus pre clinically.

David: Third there is a positive contribution over $108 million related to the commercial sourcing primarily explained by lower prices and volume associated with the possibilities in the spot market.

David: This effect is partially offset by higher productivity from Piper.

David: In addition, we had the positive effect of $16 million related to the grid margin primarily explained it in the quarter by the recognition of the bad 2000 trailers in 2024.

David: Now on Opex and other we had the positive effect of $16 million from Opex and other.

David: Which is mainly explained by the same asset.

David: Randy.

Randy: In the quarter that linked to the higher capacity payments coming from the new projects, which are offset.

Randy: Higher opex related to them.

Speaker Change: <unk> costs for a contingency plan after the climate events during the second quarter of 2024.

David: The above mentioned effects were partially offset by price.

David: And negative effect of $124 million related to the remarkable got trading activity.

David: During the first half of 2023.

David: Around China.

Speaker Change: That would be fine.

Speaker Change: There was a negative effect of $85 million related to the EPA agreement signed in 2023.

Speaker Change: Let's move on to the next slide where we will review the net income evolution accounting for $267.

Speaker Change: Our net income increased by two two times versus last year figures.

Speaker Change: Mainly explained by the EBITDA result.

Speaker Change: Let me drive you through the additional effect.

David: Yes.

David: Higher depreciation amortization of bad debt of $34 million, mainly resulting from.

David: Higher depreciation in energy.

David: In power due to the new renewable capacity coming into operation.

David: Our higher bad debt accrual injury due to a higher credit loss expected associated with the residential customer.

Giuseppe Turchiarelli: Regarding financial results and equity investment, we recorded a $6 million reduction versus last year, mainly explained by higher interest related to the pay-per-receivable, offset by higher financial expenses and lower financial income linked to the lower average interest rate. $57 million, mainly due to better results in the period. This was partially offset by a lower cost related to the reclassification of assets held for sale in 2023, specifically as related to us. Focusing on the quarter, our net income increased by $137 million.

David: Regarding financial results and equity Investor, we recorded a $6 million reduction versus last year, mainly explained by.

David: Higher interest related to the receivable.

David: But offset by higher financial expenses and lower financial income linked to the lower average interest rate.

David: Income tax increased by.

David: $57 million, mainly due to better results in the period. This was partially offset by lower costs related to the reclassification of assets held for sale in 2023.

David: Specifically.

David: Relative to our guidance.

David: Focusing on the quarter, our net income increased by $137 million.

Giuseppe Turchiarelli: This increase is mainly explained by the rise in LBDH contribution, which was partially offset by an increase in DNA and by debt of $21 million, primarily due to a 15 million dollar loan linked to the operation of new renewable capacity, but they've increased by $6 million, primarily due to higher credit losses among residential customers in the distribution. This dynamic is closely mirrored, but observed in the fight.

David: This increase is mainly explained by the rise in EBITDA contribution, which was partially offset by an increasing <unk>.

David: And the depth of $21 million.

David: Primarily due to a $15 million.

David: Linked to the operation of new renewable capacity.

David: Debt increased by $6 million.

Speaker Change: Primarily due to higher credit losses, among residential Kathryn the receivable from visa.

Speaker Change: This dynamic closely mirror.

Speaker Change: Offset in the first half.

Giuseppe Turchiarelli: Higher financial expenses and lower Financial Income Links to the Lower Average Interest Rates, An increase in tax of $58 million in the period, mainly due to the earnings before tax losses recorded in the second quarter of 2023 and positive EBITDA in 2021. 597 million dollars coming from EVDA in 2024 and a variation of 254 million dollars versus last year, primarily due to higher PPA sales and positive performance of the industrial and commercial sources.

Speaker Change: Higher financial expenses.

Speaker Change: And lower.

Speaker Change: Financial income linked to the lower.

Speaker Change: Average interest rate.

Speaker Change: An increase in tax of $58 million in the period, mainly due to the earning before tax losses recorded in the second quarter of 23, three and positive EBT in 2024.

Speaker Change: Moving to our careful analysis on the next slide.

Speaker Change: Regarding SFO the figures for 2023 have been adjusted by $310 million paid in taxes on capital gains from the sale of lithium in 2022.

Speaker Change: The first half of 2024.

Speaker Change: Our <unk> reached.

Speaker Change: $52 million, representing an improvement of $56 million compared to the same period in 2023.

Speaker Change: Let's see the comparison of our first half 2024, and the balance is vessels through an intermediary starting with EBITDA.

Speaker Change: $597 million coming from EBITDA in 2024.

Speaker Change: Every nation of $254 million versus last year.

Speaker Change: Sure.

Speaker Change: Primarily due to higher PPA sales and positive performance of the industrial and commercial outsourcing as already explained.

Giuseppe Turchiarelli: $260 million negative impact coming from the cumulative stabilization mechanism effect in our receivables. Once compared with the last year's figures, the net impact of the PEC, adjusted by factoring in the period, totalized $147 million, an amount of $13 million higher than last year. Working capital reached a negative balance of $142 million, mainly

David: $260 million negative impact coming from the cumulative amortization met any effect in our receivable.

David: This negative effect is partially offset by the execution of IDB factors related to the pack, which amounted to $70 million. This fab.

David: One compared with last year figures, the net impact of the FX adjusted.

David: Adjusted by factoring in the fields.

David: Total is $147 million, an amount of $13 million high end vehicles.

David: Working capital reached a negative balance of $142 million mainly.

David: Due to the payment.

Speaker Change: From 'twenty to 'twenty three.

David: One compare last year figures, the working capital was $19 million lower.

David: Mainly explained by the sales of our quarter in terms of the building in 2023, partially offset by higher correlation.

David: Of the tax credit impairments associated with the Santa Rosa E buses Lane.

David: Income tax also negatively impacted our sales.

David: These out by $137 million, mainly explained by higher tax payments in duration visits in 2024 and taxes paid on the sale of assets.

David: One comparing the income tax paid in the first.

David: 2024 vessels by staff to implement rate, we see a negative balance of $135 million.

David: The main differences come from the tax payment of al-qaeda operation the recovery base period of 10 billion 43, three and lower tax payment and duration.

David: To conclude regarding financial explained.

David: Expenses. This first half of a $120 million is the negative effect, primarily explained by the payment of royalty.

David: Once we compared the first half.

Speaker Change: Expenses with the last year figures, we see our balances of $32 million, mainly explained by lower financial income linked to both reduce cash level and lower average rate.

Giuseppe Turchiarelli: Due to the payment, in contact, it also negatively impacted our FTO. The main differences come from the tax payments of Arcade operations, the recovery from previous periods obtained during 2023, and lower tax payments in generation. Now, let's take a look at our Liquidity and Leverage positions. Our growth rate increased by 8%. This increase in gross debt should reverse during the second half of 2024, considering the seasonality of our generation business and the upcoming factoring under the tax-free mechanism, which we expect to be carried out soon.

Speaker Change: Now.

David: Let's take a look at our liquidity and leverage positions.

David: Our gross debt increased by 8% to.

David: <unk>.

David: 8 billion by the end of June 2024, compared to December 23.

David: This higher debt was mainly due to higher working capital and Capex needs.

David: Paul.

David: This increase in gross debt should reverse during the second half of 'twenty 'twenty four considering the seasonality of our generation business and the economy factory.

We are making with respect to be Carryout soon.

Giuseppe Turchiarelli: Average time of our depth maturity is slightly decreased to 5.9 here by the end of the first half of 2024 versus the 6.1 here seen in December 2023, and the portion at the fixed rate was 60-76% of the total debt, primarily due to the Enel Acceleration Yankee Bond Maturity in April 2024, for $400 million at 4.25%. Regarding liquidity, we are in a comfortable position to support our capital needs for the upcoming month and cope with the next year's maturity.

David: The average term of our debt maturity slightly decreased to $5 nine here by the end of the first half 'twenty three vessels that $6 one year in December 2023.

David: And the portion of the fixed rate was 67%.

David: Firsthand over the total debt.

David: The average cost of our debt reached 5%.

David: As of June 2024, and slightly above the $4 nine recorded in December 2023.

David: Primarily due to the <unk>.

David: Stone Yankee bond maturity.

David: In April 2024.

David: Paul.

David: $400 million.

David: 25%.

Speaker Change: Regarding liquidity, we are in a comfortable position to support our capital needs for the coming months.

Speaker Change: In coping with the next year of maturity.

Speaker Change: As of June 2024.

Giuseppe Turchiarelli: We have a valuable committed credit line for $750 million and a cash and cash equivalent for $305 million. The first half of this year was very important regarding an update in the regulatory framework for the generator starting to operate the factory in the third quarter of 2020. Today, the Regulatory Agenda is centered on the potential increase of subsidies for vulnerable families.

Speaker Change: We have available committed credit line for <unk>.

Speaker Change: And the $50 million and our cash and cash equivalents for $305 million.

Speaker Change: Now are we.

David: To conclude this presentation with some closing remarks.

David: Yes.

David: The first half of this year was very important regarding.

David: Upbeat in the regulatory framework.

David: The bad 2000 trailers in 2024 decrease in the approval of the factory.

David: Were followed by the publication of the <unk> decree, which was a significant milestone.

David: The generic staffing to execute faster in the third quarter 'twenty three.

David: Today, the regulatory agenda.

Speaker Change: Same threat from the potential increase of subsidies for vulnerable families.

Giuseppe Turchiarelli: We understand the importance of this moment, and we are constantly monitoring the situation. We will provide any necessary feedback to the Authority and the Association according to the formal process. As you can see, all the committed megawatts of renewable generation embedded have been successfully delivered.

Speaker Change: We understand the importance of this moment.

David: We are constantly monitoring the situation.

David: We will provide any necessary feedback to the authority and association according to Palmer processes.

David: We hope that the state of Chile will make the best decision for all maintaining the security of the regulatory and market environment.

David: An important message that will delight.

Speaker Change: Two leaving here consent increased our flexible technology and our generation market.

Speaker Change: Can see all the committed megawatts of renewable generation and Beth.

Speaker Change: That success.

Successfully deliver.

Speaker Change: Deliver.

Speaker Change: As I mentioned before we are also concluding the lost contract other power plants by the end of this year.

Giuseppe Turchiarelli: To conclude, in this quarter, you can also see that we have been able to deliver a more than solid operating and financial performance in the first semester. These are the results of our actions to unlock value and give us enough support to be confident about our 2024 guidance. Let me now hand over to the...

Speaker Change: To conclude in this quarter as you can also see that we have been able to deliver and more than solid operating and financial performance in the first semester.

These are the results of our action to unlock value and give us enough support to be confident about our 2020 core guidance.

Giuseppe Turchiarelli: Please proceed. receivables by the end of the year, but the whole amount is going to be fully recovered by 2035, so I wanted to understand the trajectory of the remaining 400 million. And you also said that you expect a 5% increase in tariffs for the next update for 2024-2028, so I wanted to understand what impact that this may have on your numbers. But now we see that the projections are pointing more towards 12 terawatt hours.

Now <unk> is available.

Thank you.

Speaker Change: Let's now begin with the Q&A session, we received questions via phone and chat window at the cash the Q&A session is now open operator. Please you may sash. Thank you so much and as a reminder to our teller audience Press star one on one to get in the queue and wait for your name to be announced to redraw youre.

Question simply press Star one again.

For our first question.

And he's from Alessandro Davita with maybe you'll be at.

Medio Banca. Please proceed.

Hi, Hi, Thanks for taking my question I have three.

Alessandro Davita: The first one is on the back mechanism. So I wanted to understand you said that you have more or less a billion.

To recover.

Speaker Change: I wanted to understand if this if this amount can move or is it still because I saw that on your cash flow you booked 200 additional $200 million in the first half. So I wanted to understand if you could either move upwards or downwards.

And then you said that you expect that.

You expect to recover let's say $600 million.

Receivables by the end of the year, but the whole amount is going to be fully recovered by 2035. So I wanted to understand the trajectory of the remaining 400 millions.

This was the first question. The second question is on the update of distribution Paris I wanted to understand if the conclusion of the review for 2010 to 2004 tariff set some impacts on your numbers.

And you also said that you expect a 5% increase in Paris for the next updates for 2004 2008, so I want to to understand which impact. This may have on your numbers and the last question is on guidance.

So.

You confirmed the guidance for 2024, if I remember correctly. The guidance was based on an assumption of 10 Terawatt hour eyedrops booster.

Speaker Change: But now we see that the projection.

Pointing more towards 12 terawatt hours, so I wanted to understand whether this guidance.

It's conservative because looking at the numbers they are more or less where we are more or less true.

Through the year and the number of the guidance. So I just wanted to square the circle on this matter. Thank you.

Okay, starting from the first one.

As I said.

We have.

End of June with $1 billion that include also around the $150 million.

So in there.

Giuseppe Turchiarelli: The evolution of the PEC is based on the exchange rate US dollar pesos because I remind you that we have the PPA in dollars even if the payment of the site is in pesos. So, we have a certain trend at the end of the year, but again, this trend is strictly linked to the... Thank you for watching. The records that we expect in 2024, of course, are strictly linked to this factoring process.

Now.

Speaker Change: The evolution of the Tech is.

Based on the exchange rate.

U S dollar basis, because I have a menu that we have.

The PPA in unique.

Speaker Change: Payment of the.

So we have a certain trend at the end of the but again this trend is weakening today.

The exchange.

Exchange rate effects.

The recovery that we are.

The equity that we expect.

In.

2024 of course that could be a factor.

Factoring processor.

Giuseppe Turchiarelli: The remaining part is going to be recovered between 2025 and 2025. I'm glad to remind you that FACT-1 is going to finish in 2027, so... Approximately, but again this is just an estimation so far, we are going to recover another 200 million dollars in 2025 and the remaining part between 2026 and 2027. These are basically the current estimates that we have today. For what consent, the, eh, the...

The remaining part is going to be recover between 2025 and 2012.

I would like to remind you that.

One.

Foreseen.

Mechanism of recovery in that.

Is going to finish in 2027.

Approximately.

But again the destiny aviation so far we are going to recover another $200 million in 2025 and the remaining part.

Between 2008 Infinity and these are basically the current estimation that we have.

Today.

For what concern the.

And.

Giuseppe Turchiarelli: Type update 2020-2024, As I said, we had an increase in our number of around $16 million in June versus last year. But you have to consider that this amount also includes around 7 million dollars that are part of the recognition that is referring to the previous year. Sponsored ADR, for from 2020-2023, and for what concerns the next regulatory..., cycle, 2024-2028. Let me say that the technical report that we have received so far is in line with our strategic plan.

Hi.

2000 22024.

As I said we.

Any increase in our number of around $16 million in June versus last year.

You have to consider that this amount is the.

In crude also around $7 million that are there.

Part of the cooperation that.

Referring to the previous year.

We have to consider that.

We started that way.

The.

Basically.

In a situation that was.

Absolutely externally because we are at the end of the process and only now we got.

Panel types so.

This increase is related to the.

<unk>.

Four from 2000 22023.

And.

For what concern the next regulatory.

Sure.

Cycle, the 23 or 23, 8%.

Let me say that.

The.

Victory.

The report that we have.

We see so far is in line with our.

Giuseppe Turchiarelli: So basically, we don't see any kind of... um, any kind of situation that could affect the debut plan. Clearly, we are going to give our feedback, and we are going to try to understand which is the best for covering the several aspects of the distribution company. But as of today, we don't have any kind of issue with the... Thanks for taking the report. In terms of guidance... Eh, well... What I can tell you is that as of today, we confirm our guidance. Of course, what we and declared on the last capital market day was the range, and as of today, I can confirm that we are in that range. Clearly, we are still trying to understand what the result of the Ruta de Nieve will be, and that will give us further information to understand how the mating But as of today, I can tell you that we are in the rain.

Strategic plan, so basically we don't see any kind of.

Any kind of situation that could.

Sure.

Could affect the strategic plan clearly we are going to give us our feedback.

We are going to try to understand which is the best.

Type bump.

Or covering several.

Several aspects of.

The distribution company.

As of today, we don't have any kind of issue for the <unk>.

Great.

Taking the report.

In terms of guidance.

Sure.

Well.

What I can tell you is that as of today, we confirm our guidance of course, what we.

And declare the last capital market day was the range.

And as of today.

We are.

In our Ranger in this range clearly.

Phil.

Trying to understand with charter.

Which is the result of diluted EMEA, then that will give us.

Further information for understanding.

How the maintenance season with.

We'll be in the following months, but as of today at the integrated we are in the range.

On the guidance.

Operator: Okay. Thank you, Giuseppe. Operator, do we have more questions coming from the line? Yes.

Okay. Thank you Jonathan.

Do we have more questions coming from the line. Thank you one moment for our next question that is from Maria Florencia Mayorga Torres with Metlife. Please proceed.

Operator: Thank you. One moment for our next question. This is from Maria Florencia Mallorca-Torres with MetLife.

Operator: Please proceed. And Giuseppe, Isabella, thanks for taking my question. Share a follow-up regarding... For this year, how much are you expecting to be able to monetize? Thank you, Florencia.

Okay.

Thank you for taking my question Joseph follow up regarding the.

Yes.

Paul.

How much can.

Can you be able to monetize.

Thank you Florencia.

Giuseppe Turchiarelli: Yeah, well, for what concerns the retrieval that is currently affecting our generation companies, as I said, in June, at the June closing, we have approximately $1 billion, and if everything is going as expected, in the second half, between, I would say, September and October, we were able to proceed with the factoring process. We should have around 450 and 600 million dollars. The Okay. Thank you, Florencia.

Yes.

What concerned the receivable that.

<unk>.

Is currently affecting our generation company.

As I said.

In June the June closing, we have approximately $1 billion and if everything is growing.

Active.

In the second half between the.

September and October we were able to.

To make the to see with the.

Factoring process so we.

We should average around 450 and 600.

Million.

Sure.

Okay.

Yeah.

Okay.

Thank you Florencia operate more questions coming from the line.

Operator: Operator, more questions are coming from the line. Yes, I have one more question from the line of Martin Aranset with Balance. Please proceed. Hi. Thank you, Giuseppe, for the presentation and for taking my questions. I have three questions. I would like to run them one by one, if that's okay.

Yes, I have one more question from the line of Martin answered with balance. Please proceed.

Hi, Thank you should separate from the presentation and for taking my questions three.

Three questions I wanted to run them one by one if that's okay.

Giuseppe Turchiarelli: First, we learned that the Superintendencia de Electricidad y Combustible, We express a desire to see the Santiago electrical grid strengthened in order to address potential issues with quality of service. I was wondering if this could affect Enel's distribution to the OPEX and CAPEX plants, and if so, by how much. Thank you, Giuseppe. Yeah, I mean, maybe the extreme weather events that we had in May affected our supply of energy to our city. It was very, very, very complicated because of the rain and also the temperature.

First we learned that superintendents have repeated that again.

Dividend.

<unk> desire to Sydney Santiago look to.

Strengthen in order to address potential issues with quality of service.

I was wondering if this could affect.

To sum to Opex and Capex plan.

So by how much.

Okay.

Thank you.

Yes, I mean.

Amy.

On the extreme.

Weather events that we had in may.

Affecting our.

Supply of LNG to our webcast.

It was very very very complicated because of arena and also tempered.

Giuseppe Turchiarelli: And we had some costs associated with it. Approximately 3 million dollars. And clearly, we are in... to manage this situation. We don't have, so far, any other information. Okay, okay.

And we had some <unk>.

Cost associated Luke.

Okay.

With approximately $3 million.

And.

Clearly we are in.

In this.

A discussion with respect to understand how.

To manage these situations, we don't ever so far any other information about that.

Giuseppe Turchiarelli: Well, following up on Enel Distribución, and I'm sorry because I think that you already mentioned this, so I may be asking you to repeat yourself, but I want to understand the situation around current household power bills. And so, could you please tell us which hikes have already been implemented by July. I guess that the ones related to the Valor Arreglado de Distribución are already implemented. I was wondering which hikes have been implemented in the energy component and also, Specifically, about the surcharge for LASH customers related to the tech credit repayment if that has already been included in the power bills. Thank you, Giuseppe. We have two kinds of adjustment, depending on the cluster.

Okay. Okay.

Following up then on Enel distribution and I'm, sorry, because I think you already mentioned this so I may be asking you to repeat yourself, but I want to understand the situation around.

Corn household our booths.

So if you could please tell us which hikes have already been implemented by July.

Let's start with <unk>.

Related to the.

<unk> already implemented I was wondering.

Which has having implementing energy component and also the.

Typically about the surcharge for large customers related to the tax credits with payments.

That has been growing.

In the power business also.

Okay. Thank you.

For what concern there.

Tariff adjustments in the distribution segment.

We have two kind of adjustments depending of the cluster. So we have the.

Giuseppe Turchiarelli: So we have the... Clients that consume less than 350 kWh will be around 16, 1, 6, 16 percent. And this increase is basically the result of... The first one is the update of VAD 2020-2024. This represents 5%. So basically, they include a tariff associated to the VAT 2020-2024 for the distribution company. It's around 5, but...

Clients that consumed lower than 350 kilowatt hour.

Which the increase is going to.

Be around 16, one 616%.

And this increase the basically.

Then.

The results of <unk>.

<unk>.

Yes.

Two components. The first one is the update of Bob <unk> with me for.

This represents 5%, but basically the increase.

Tight associated to the <unk> 20, <unk> 23 for the distribution company.

Is that around 5%.

Giuseppe Turchiarelli: The remaining part is split between an increase in the type coming from the updating transmission regulatory framework that is around 4%. And finally, we have 8% that is associated to Generation 7. This is for what's concerned that in the cluster of clients lower than 350. Keep them up, fellas.

The remaining part is split between an increase in the type curve.

From the update in transmission regulatory framework that is around 4%.

And finally, we had 8% that is associated to the generation segment.

This is for Wisconsin.

That's the cluster of client lower than 350.

Giuseppe Turchiarelli: On the other one... More than 350, the increase in tariff is... Is that how you do it? Because we have an increasing distribution segment 5%, transmission 4%, and an increase in the segment for the generation company that's going to be around 33. And this is because, basically, for this customer, we are going to apply, basically, the cost of the PPA that the..., and the tenders in the past year have resulted in. As far as the PEC is concerned, the PEC that we are going to factorize by the end of the year also includes the interest.

Kilowatt hour.

On the other one.

More than 350, the increase of tariff.

Desire.

Because we have.

An increase in distribution segment, 5% transmission, 4%.

An increase in.

This segment for the generation company.

He is going to be around 33%.

And this is because basically for this software.

Going to apply.

Basically the cost of PPA.

And.

The tenders in the past year has been.

Awesome.

For what concern the back.

The fact that we're going to drive.

By the end of the includes also the interest.

Giuseppe Turchiarelli: There is a date for these increases; sorry, but the date of this increase... It's already in place.

To date for these increases sorry.

The date of this increase.

As already eras, the already in place.

Giuseppe Turchiarelli: Okay, thanks. Well, my last question then, regarding the El Manzano and the Ancabaa batteries... I think that they were collected, if I'm not mistaken, before their co-located generation plants start the operation. So I was wondering, what is the remuneration mix that you expect to receive from these? For the moment, standalone batteries are just spot trading or also capacity payments and perhaps some ancillary services as well, and also who will be in charge of deciding the charging and discharging times of these batteries, if it's going to be Enel Chile or the Cordillera.

Alrighty Thanks Walt.

My last question then.

The resulting elements and online cardiology. Please.

I assume that they will connect clearly cinemas taken before they are co located in our engine plants.

The start of the operations. So I was wondering what is normal and regional mix that you expect to see from these.

For the moment solar and batteries.

SaaS spot trading and also capacity payments and perhaps some <unk>.

<unk> services as well and also who will be in charge of deciding the charging and discharging times of these facilities is going to be.

In the middle of the Continental.

Giuseppe Turchiarelli: Okay, look, for what's concerned, these two batteries... Basically, the composition of the revenues is basically coming from the capacity payment and the energy. These are the main components of the remuneration, and the ancillary services. We are waiting for an update of the regulations, by the end of this year and as soon as it's going to be in force, we are going to have an additional effect coming from this. And these two projects are retrofitting, so basically they are, jointly with other renewable projects, in this case Dolumbeto and Manzano, in this case, we are talking about solar power plants. They are charging from the... Solar Power Plants, but the regulation allows us to charge the battery also from the grid.

Okay.

<unk>.

Concerning.

The.

These two battery.

Basically the composition of the revenues are basically coming from the capacity payment.

And the energy shift.

The main components of the remuneration of this plan.

Yes.

And then city services we are.

Waiting for an update of the regulation.

By the end of this year in SG&A is going to be enforced.

And for US we had good flavor also an additional effect.

Coming from this.

Streamer operating.

And these two projects our project.

Retrofitting so basically are.

Jointly to another.

Sure.

And other renewable projects in this case.

The room better months.

This case, we're talking about solar power plants, so basically.

B R.

Charging from.

The solar power plants, but.

Hey.

Regulation will allow us to charge the battery also by the group so depending on the situation we are going to use.

Operator: So, depending on the situation, we are going to use them. Thank you, Giuseppe. Operator, do you have more questions coming from the line? Yes, I do.

One of the two.

Thank you operator do you have more questions coming from the line if I do my moment for a follow up.

Operator: One moment for a follow-up. From Alessandro Divito with Mediobanca, please proceed. Hi, again, thanks for taking my questions. I have a follow-up, a couple of follow-ups, actually. Well, the first one is on PEC.

From Alessandro Davita with Mediobanca. Please proceed.

Operator: So you said that the general framework to recover the PEC3 receivables goes up to 2035, but you want to recover the whole billion before 2035. Is this correct? and you said that you had this billion on June 24, of which 150 is related to interest and 850 is related to tax receivables. Is this correct? Because, in this sense, the 850 depends on its deal, and the 150 related, let's say, to interest is the amount that is going to change, that may change in the coming months.

Alright.

Thanks for taking my questions.

A couple from ops.

Thank you Susan.

So you see.

The single most schools.

Thank you.

You want to.

Okay.

Between 2027.

Yes.

You said that <unk> billion.

Sure.

And with 150 is related to interest.

850.

As related to <unk>.

Receivables is this correct.

In this sense.

Thank you Steve.

Safety related.

Giuseppe Turchiarelli: So this is the first follow-up. The second follow-up is just a clarification on the update in Paris. So you said that you expected a 5% tariff increase on the next regulatory period, so 24-28, but the 16 million that, let's say, that you are counting in your numbers, it's related to the update, so the one that has been concluded, 2020-2021. I just wanted to have confirmation on that.

Related to regions.

It's time to change.

In the coming months.

Jonathan.

Just a clarification.

Bonnie.

So you said that you expect a 5% increase from the net repeated sometimes.

60.

$60 million.

Let's see.

Not counting the numbers it's related to an update soon.

The 2000 22020, I just wanted to confirm that.

Thanks.

Giuseppe Turchiarelli: Thank you. Thank you, Alexandro, and Giuseppe. As I said, as of today, we have $1 billion, that includes $1 billion in credit coming from the PEC-3, that includes $150 million in terms of income, and by the end of the year, we are going to factorize around 550-650. The remaining part is going to be recovered. Not necessarily through factoring, but according to the regular mechanism, by the end of 2027.

Thank you Alexandra Stefan yes.

We'll try to be.

Sure.

Clear.

So.

As I said as of today, we have $1 billion net include $1 billion credit coming from the factory that include $150 million in terms of impact.

And by the end of the year, we are going to.

Factor is down 550 600 feet.

The remaining part.

Is going to me.

Recovered.

Not necessarily through the factory, but according to the regular mechanism.

By the end of 2027.

Giuseppe Turchiarelli: Okay, this is for what concerns the outstanding credit that we have today. Really, from now onward, we are going to accumulate it. Part of our But we are going to recover it in the next year. For what concerns the update type in the distribution, as I said...

Okay. This for what concern the outstanding creative that we have today.

Really from now.

Onwards, we are going to accumulate.

The painting of the market conditions, we're going to accumulate and other and other remaining part that is going on is not going to be a huge.

Part of our.

Great, but we are going to recovery.

And the next year.

In the.

The second question for what concern the deep dive in the distribution.

As I said that.

Giuseppe Turchiarelli: The impact of the distribution, the remuneration that is going to impact the distribution company is only related to the 5% increase that the company is going to receive because, of course, the remaining component of transmission and generation is going to be Tutubim. So the amount that you see there in terms of margin, of course, is linked exclusively to that fact. And as I said, we are ready for the next regulatory period, 2024-2028, right?

The impact for the distribution. So the emulation that is going to impact the diffusion company is only related to the 5% increase.

The company is going to receive because of course, the remaining component to it.

International is going to.

To be in.

Possible today.

Today's generation company and submission corner.

The amount that you see there in terms of margin of course is linked.

Lucidly.

Thanks.

And as I said.

Correct.

So the next.

Alright.

And now for the 24 28, we are still.

Understanding how is it going to be.

Giuseppe Turchiarelli: No, for the 24-28, we are still understanding how it's going to be... Ok, ok, I just want to understand what regulatory period was related to that 16 million which relates to the 5% increase. So it's 2020... The past one.

Okay.

David Martin.

For the period was related to the 60 million ounce, which relates to the tax.

995.

Perhaps one.

Giuseppe Turchiarelli: OK. No, as I said, everyone is up to date on the information that we got, and it's in line with our expectations, so we don't see a job today, we don't see any... Kind of worried, but it's too... Too early to understand how it's going to be. Sponsored ADR, And I'm not showing any further questions in the queue. I will pass it back to Isabela for any additional questions on your side. Okay, thanks. Isabella, your line is muted if you're reading the questions. Thank you, operator. I was on mute, sorry.

Okay.

Alright.

Just one as of today at least the information that we got it.

Are in line with our expectations. So we don't see as of today, we don't see any.

Kind of.

Worried but its too.

Too early to understand how it is going to be.

The tariff.

<unk>.

Okay. Thank you so much.

And im not showing any further questions in the queue I will pass it back to Lisa <unk> for any additional questions on your side.

Okay.

Your line is muted if you are reading the questions.

Thank you operator.

Operator: So the first question is from Felipe Torres from IFP Abita. The question is, could you explain the better results in the distribution segment? Is it related to the therapy decree of June? Yeah, as I said, basically, the status decree allows Enel Distributions to adjust the provision regarding the VAD 2024. So basically... Up to June, we used to make an estimation, from the provision point of view, an estimation of time. Right now, we have the final tariff, so we started applying the final tariff that we received, and we are recovering part of the adjustment that we made in the previous...

Sorry, so the first question is coming from Felipe <unk> from ISP Amit. So the question is could you explain the better results in the distribution segment is it related to the tariff the degree of June.

Yes.

Musically terrific decree Hello.

And in distribution to adjust the provision made in the past.

Regarding the bad debt <unk> 24.

So basically.

Up to June we used to make any niche on the provisioning point of view, it's the nature of the time.

Right now we.

We have the final tariff. So we started applying the panel side that we see and we are recovering part of.

The adjustment that we made in the previous year.

Operator: So this is basically the main reason for... Clearly, we have several other effects, you know, demand, inflation, but basically, in terms of the decree, this amount is clearly significant for a company because it's recovering the gap that we had in the last year.

So this is basically.

The main reason of.

Increase in the distribution company.

Clearly we have a one.

Seven out of the asset and the demand the inflation, but basically in terms of the decree. These amount is a really significant but I am comparing because he is recovering.

The gap that we had in the last year.

Giuseppe Turchiarelli: Ok, thank you Giuseppe. Also, on distribution, we have received some questions coming from our email, ok? So, some retail investors are asking us regarding the impact of the current tariff discussions on Enel Chile. The question is whether the published tariff decree explains the results of Enel Chile as indicated by the press. Well, let me play five points.

Okay. Thank you just a bit also now on distribution. We have received some also questions coming from our EMEA you. Okay. So some retail investors are asking us not the hit guarding the impact of the current tariff discussions are now Chile.

The question is whether the published tariff decree explain the results of Enel, Chile as indicated by the breadth.

Right.

Let me clarify.

The point.

Debt.

Giuseppe Turchiarelli: [inaudible] For what concerns the duration combined, the tariff decree doesn't have any kind of impact in terms of EDA because... Since the first specific law was issued, we, uh... We started to register, to make a provision according to the PPA in place, so basically, we don't have any kind of increase in BDA because of this type. And this is the reason because we have the effect with fumes.

<unk>.

For what concern the generation company.

The tariff.

The decree doesn't have any kind of impact in terms of EBITDA because.

Since the backlog has been issued Lou.

<unk>.

Sure.

We started to reduce that to make a provision according to the PPA in place so basically.

We don't have any kind of increase in terms of EBITDA because of the type of thing.

Okay.

There is none because we have the tax receivable.

Giuseppe Turchiarelli: So... We continue, since the beginning, to receive the correct EPA price, which we received. Sponsored ADR. As far as the tariff decree is concerned, the only impact that is related to the increase in our performance is on the distribution companies, so basically, what we have already said. The Sibuceon is, but, you know... Three years in all, roughly, starting to accrue the current tariff, and this is explained and explained around 16 million dollars, not more, not less, of which half of it, approximately, is coming from the adjustment of the previous year. So basically, in a very short way, I would say that... [inaudible] impacted our performance in a very, very low amount.

So we.

We continue since the beginning to reduce the debt correct.

Right.

We received <unk>.

In terms of payment only part of the EBITDA right.

Because we have the FX refusal.

For what concern.

Sure.

The tariff decrease the only.

Impact that we can.

That is related to the increase of our player from US is on the distribution company. So basically what we have already said.

The smooth Xian.

But.

After.

Three year.

Roughly.

Starting to accrue.

The current size.

This is explained and this explains around $16 million.

Not more not less.

Sure.

Also reached approximately is coming from the adjustments of the previous year.

Basically in a really short.

Well I would say that.

The target decree decree.

Impacted our performance in baby.

Hello.

Hmm.

Giuseppe Turchiarelli: Okay, thank you, Giuseppe. Let's go to another question. Now coming from, the second question is coming from Fernan Gonzalez from BTG. So, Fernand is asking us, how and when do you expect to receive the payments from the accumulated debts in the distribution segments from the delayed 2020-2024 decree? Okay, well, our estimation is that they were going to receive the... They accumulated that at the beginning of next year, the first quarter of next year. This is the estimation that we have as of today. I don't believe that we are going to get any kind of adjustment by the end of the year.

Okay. Thank you just at the last quarter.

Other question.

Now coming from the second question is coming from Fernando solid from Betty.

So he is asking us how and when do you expect to receive and the payments from the accumulated debts in the distribution segment.

The delay of 2000 22024 decrease.

Okay.

Well.

Our estimation is that we are going to receive.

Their quality depth.

At the beginning of next year and the first part of next year.

The.

The estimation that we have as of today.

I don't believe that were going to get any any candle adjustment by the end of this year.

Giuseppe Turchiarelli: Okay, thank you, Giuseppe. Now I will take two questions here. One from Fernan Gonzalez, still from BTG.

Okay. Thank you just joined two questions here, one from cyclical stylists and from Medicare. So how do you feel about your medium to longer term contracted party audio are still participating in the new unregulated adoption to try to be on EBITDA or do you believe you don't have much room left.

Giuseppe Turchiarelli: So, how do you feel about your medium to longer-term contracted portfolio? Are you still participating in the new unregulated option to try to view new PPAs? Or do you believe you don't have much room left?

Giuseppe Turchiarelli: So, also, there is a very similar question coming from Ken Dishow from Morgan Stanley. He's also asking us, are you still on track to hit the 33 TWh sales by 2024-2026? You have several regulated contracts ending, so how will you source additional contracts? Well... As of today, we don't have any kind of information about new regulations. In general, of course, as I have already explained several times, I mean, we don't have any kind of prejudice against...

So also there is a very similar question coming from Candy Shao from Morgan Stanley is also asking US about are you still on track to hit the 33 Terawatts hour.

By 2020 for 2026.

You have several regulated contracts ending so how will you source the additional contract.

Correct.

As of today, we don't see any we don't have any kind of information about new regulation.

Okay.

In general of course as already explained several times I mean, we don't have any kind of basically in an.

Giuseppe Turchiarelli: Sponsored ADR, PPA, we are going to choose. This year we don't see any kind of issue with basically all the contact already in place. For the next year, we have several cuts where in order to, Fulfill the amount of terawatt-hour that is going to expire according to the PPA in the regulatory. So, as of today, we confirm our target in terms of sales, and we are confident to reach it.

And our customers so.

The best.

The PPA.

<unk>.

We are going to choose.

<unk>.

<unk>.

For what concern the 33.

Our this year, we don't see any any kind of issue with basically.

All the contact has been already.

We played for the next year we are.

In negotiation with.

Stable.

In order to.

We'll see.

The amount of Terawatt hour that is going to expire.

According to the PPA in the regulated segment.

So as of today, we confirm our target in terms of sales and we are confident in for rich.

Giuseppe Turchiarelli: Okay, we have other questions in terms of the guidance that you have already answered. So, the other question is coming from Ignacio Lanos from Penta. He's asking, can you give us some color on the cost of a new solar and wind project per megawatt? Related to that, what about the cost of a battery? Yeah, I mean, in terms of wind, I would say it's around 1.6.

Okay. We have other questions in terms of the guidance that you have already answer so the other question is coming from.

<unk> from <unk>. He is asking can you give us some color on the cost for a new solar and wind project megawatt related to that what about the cost of a battery.

Yes, I mean in terms of when the I would say is around one point.

Yes.

Right.

Giuseppe Turchiarelli: Sponsored ADR, for what concerns solar power, I would say that we are close to zero point... $7.8 million per megawatt. Let me remind you that in our plan as of today, we are not expecting any more. $1,000,000 per megawatt in the best power plant for 4 hours, Perfect.

Approximately <unk> of course.

We are.

Several times depending of the project.

How it is an extension and expansion of an existing one how much is close today to decrease but in general one is a good proxy of the protocols.

For what concern that's all out.

I would say that we are close between zero point.

Seven.

$8 million per megawatt.

Let me remind you that in our plan as of today, we are not actively.

Solar power plants.

<unk> cost and the best.

We believe that.

Something is it improving the best cost because we are we believe that we are able to switch.

$1 million.

Third a megawatt in the back.

Our plans for our.

Giuseppe Turchiarelli: Thank you, Giuseppe. We do not have any more questions, so we would like to thank you all for being connected today. And, as always, if you have any other doubts, the Investor Relations team will be available.

Perfect. Thank you, Sir we do not have any more questions. So we would like to thank you all are being connected today and as always if you have any other adopt the investor relations team will be available.

Operator: Have a great end of week. Bye-bye. And thank you all for participating in today's program. You may now disconnect.

Great Handoff week Bye bye.

And thank you all for participating in today's program and you may now disconnect.

Okay.