Q3 2025 Enel Chile SA Earnings Call
Speaker #1: Good morning, ladies and gentlemen, and welcome to Enel Chile 3rd Quarter and 9 Months 2025 Results Conference Call. My name is Carmen, and I will be your operator for today.
Speaker #1: During this conference call, we may make statements that constitute forward-looking statements within the meaning of the private securities litigation reform act of 1995. Such forward-looking statements reflect only our current expectations and are not guarantees of future performance and involve risk and uncertainties.
Speaker #1: Actual results may differ materially from those anticipated in the forward-looking statements as a result of various Enel Chile's press release, reporting its 3rd Quarter and 9 Months 2025 results.
Speaker #1: The presentation accompanying this conference call and Enel Chile's annual report on Form 20F included on the risk factors. You may access our 3rd Quarter and 9 Months 2025 results press release and presentation on our website at www.enel.cl.
Speaker #1: In our 20F on the SEC's website, at www.sec.gov. Readers are cautioned not to place under reliance on those forward-looking statements which speak only as of their dates.
Speaker #1: 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.
Speaker #1: I would now like to turn factors. These factors are described in the presentation over to Ms. Isabela Klemes, Head of Investor Relations of Enel Chile.
Speaker #1: Please proceed.
Speaker #2: Buenos Buenos días. Good morning and welcome to Enel Chile's 2025 3rd Quarter and 9 Months Results presentation. We greatly appreciate you taking the time to join us today.
Speaker #2: My name is Isabela Klemes, and I'm the Head of Investor Relations. Joining me this morning is our CFO, Simone Conticelli. Our presentation and financial-related information are available on our website www.enel.cl in the Investor section.
Speaker #2: As well as through our app, Investors. In addition, a replay of the call will be soon available. At the end of this presentation, there will be an opportunity to ask questions via webcast chat through the link Ask a Question.
Speaker #2: Media participants are connected in listening mode. Simone will kick off the presentation by covering key highlights of the period, our portfolio management actions, providing us updates on the regulatory context, and an overview of our business economic and financial performance for the period.
Speaker #2: Thank you all for your attention, and now let me hand over the call to Simone. Simone?
Speaker #3: Thank you, Isabella. Good morning, and thank you for your participation. Let's start the presentation with our main highlights of the period. Let's begin with the portfolio management.
Speaker #3: We observed a high-level performance of our thermal generation fleet, which helped us offset lower hydrological conditions during the course. These outcomes reflect our ability to adapt to evolving market dynamics and maintain operational stability.
Speaker #3: In addition, our gas optimization activities continued to support our margin, reinforcing the strategic role in balancing our portfolio and mitigating exposure to spot market volatility.
Speaker #3: On the distribution side, we achieved successful implementation of the comprehensive winter plan aimed at strengthening grid resilience and improving service continuity under challenging climate conditions.
Speaker #3: Indeed, our performance in the period was one of the best in Chile. The winter plan included the deployment of emergency crews, strategically positioned in high-risk areas, extensive vegetation management action, and the installation of new telecontrol units to reduce restoration time.
Speaker #3: Additionally, targeted measures were implemented to support vulnerable customers, ensuring continuity of supply during adverse weather events. Now, let's move on to the Chilean regulatory context.
Speaker #3: With reference to the VAD 2024-2028, a key milestone was the publication in the last weeks of the consultant report, followed by the preliminary regulatory technical report.
Speaker #3: I will give you more details about it. Furthermore, in October, was also released the preliminary regulated energy tariff report for the first half of 2026.
Speaker #3: Now, the generation association of which Enel is a part of is working with authorities regarding the outcomes of the report. Looking ahead, two regulated energy options are scheduled for the 4th Quarter 2025.
Speaker #3: Let's now turn to business profitability. We closed the first 9 months of 2025 with a stable EBITDA compared to the previous year, despite the difficult context and significantly lower hydrology, demonstrating the resilience of our operations.
Speaker #3: Our SFO remained positive, driven by the recovery of $261 million of receivables generated by the PEC mechanism. This inflow significantly strengthened our cash position for the year.
Speaker #3: As a result, we maintain a strong liquidity position, enabling us to support our development plan and to mitigate operational headwinds associated with the market and climate uncertainties.
Speaker #3: In the next slide, we will take a closer look at these topics to provide further insight. But let me anticipate that these achievements demonstrate our focus on operational excellence and sustainable growth.
Speaker #3: We remain committed to delivering long-term value to our shareholders via advancing in the energy transition and strengthening the resilience of our business. And now, let's move to slide 4 to talk about the energy market situation, especially regarding hydrology and gas opportunities.
Speaker #3: On the left side of the slide, you can see our hydro production over the last 10 years. For 2025, we set our target at 10.7 terawatt-hours based on the last 10-year average.
Speaker #3: Although 2025 has been a particularly dry year, our hydro production has remained in line with our strategic plan. This was possible thanks to the flexibility of our hydro plants, with access to hydrological basins.
Speaker #3: For this reason, we are keeping our hydrology guidance unchanged. To manage this dry scenario, we relied also on the flexible and competitive thermal fleet, supported by a strong and diversified LNG and Argentine gas supply.
Speaker #3: This helped us respond quickly to market needs and reduce exposure to hydro volatility. As a result, we increased thermal production using competitive gas and CIS favorable trading opportunities, adding 74 million dollars in margin during the first 9 months of 2025.
Speaker #3: Regarding gas business, in October, we completed a gas sales-to-Europe with margins similar to those recorded in the 2nd Quarter 2025. Looking ahead to 2026, we are evaluating options to secure competitive gas from Argentina through firm contracts in line with the past year's strategy.
Speaker #3: And now, moving on to the slide 5, let's review our generation portfolio and energy balance. During the first 9 months of 2025, net production decreased by 9% compared to the same period of 2024.
Finally, we strengthened the collaboration with most municipalities to improve coordination during a stream weather events.
This joint approach as enhanced emergency response capabilities.
All this effort translated into tangible improvements in the performance of our distribution. Network will result that clearly demonstrate the effectiveness of the winter plan.
And now, let's take a look at slide 7. Where we highlight key updates on the Energy Regulatory context.
In the regulatory framework.
The distribution cycle for 2024 2028 is under development in September. The consultant final report was published then in October. The CNA released, its preliminary technical report which changes in maintenance and Technical standards.
Company have until the 10th of November to submit comments. The final report is expected in 20206.
In parallel, we are currently awaiting settlement of our standing, that related to the vad degree for 2020. 2024, published in April 2025 that is expect to be settled in 2026.
Passing through generation business on the 4th of October, on the 14th of October, the C published the preliminary technical report for the first half of 2026.
It includes a correction related to the inflection aspects.
We are reviewing the impact and waiting for the final report.
Passing to the stabilization mechanism. As of September 2025, we have 149 million spec. 1 received be fully recovered by the end of 2027.
Going to other relevant topics, in August coming into effect resolution on best remuneration that authorized the best to provide ancillary services.
In the last week changes have been introduced in 2025 regulated auctions, increasing the volume of the 2027, 20130 auction, from 1.7 to 3.4 terawatt hour period they offer. The Line is now the 14th of November launching a 1.5 terawatt hour period short-term auction for 2026.
The offer deadline is the second of December.
finally, regarding
Subsidies from the third electricity subsidy round run from the 3rd of June.
To the 15th of July covering the period from July to December 2025 around 341,000 and a distribution customer benefit of it.
A bit to expand. The subsidy is still pending in the Congress.
And now I will start reviewing the allies of our financial performance over the period.
Before we review the results, a quick reminder, as of January the 1st 2025 enel, Chile changes, its functional currency from Chilean pesos to US dollar.
For comparison, 9 months, and third quarter 2024, figure are shot using the average exchange rate of these periods.
I will enter into details of our financial and economic performance in the next slide.
So let's move to the next slide to look at the progress made on capex.
Arturo, capex, reached 245 million during the first 9 months of the year, maintaining and focus on grids and power plant Fleet performance.
Let's review the allocation in more detail.
41% or $101 million was deducted towards grid investments.
31% or 76 million supported thermal power projects.
27%, or
70, 67 million was invested in renewable and Storage.
regarding this, the focus remain on the resilient program to strengthen the grids and ensure service continuity under adverse weather condition
Internal segment. The priority is the maintenance and performance enhancement of the power plant Fleet
In the renewable segment. We have presented our efforts on finalizing, the pmgd program. Enhancing Hydro facility performance and maintaining Fleet viability.
Now, let's move on to the breakdown by national.
Management cap is totally 139 million accounting. For 57% of total, capex, mostly used for the maintenance of Atacama in Tarot as an
Will fit, availability and corrective maintenance, and digital digitalization of Greece?
development capex was $60 million, mainly driven by
Investment for greed reliability enhancement, digital methods, programs and Telecom, telecontrol deployment.
and for the compression of 2024 investment program for PM GDs,
the 2012025 development kapus of battery related project will be recorded starting from the next course.
Finally customer cap is totaled 46 million. Many invested in low and medium Volta connection project and initiative to support load increase.
Let's now turn to the next slide, which provides a closer look at our EA performance.
During the last quarter, I repeat the total at 345 million. Representing a decrease of 63 billion dollars compared to the same period of 2024 mainly explained by the following factors.
Starting with the generation business. We record that a decrease of 89 million in PPA sales mostly due to the termination, some high price regulated contract that impacted on volumes and average price of regulated portfolio.
Partially offsets by the negative impact of exchange rate. Hedges recorded in 2024.
Regarding sourcing its contribution remained in line with the same period in 2024.
This result was mainly achieved at thanks to our optimized sourcing strategy and the issuance provision, mainly coming from gassama, which effectively offset higher cost in the energy spot Market. Mainly due to the higher purchases at volume,
gas trading contributed positively with a $5 million margin increase, mainly followed by expanded trading activities, in the third quarter of 2025
Turning into grids, we recorded a positive impact of $70 million, mainly driven by a regulatory provision reflecting the settlement adjustment for the previous year.
And higher Opex recorded in the third quarter of 2024 due to the severe weather events that occurred in May and August.
This effects were partially upset by the increase of OEM expenses mainly associated with the implementation of the comprehensive winter plan.
And now, let's move on to the next slide to review the main impacts on ebida during the 9 months period.
1.04 million remained flat compared to the same period of 2024.
Starting with the generation business. We recorded a decrease of 244 million dollars in PPA sale. Mainly due to the termination high price, regulated contracts.
Partially offset by the negative impact of exchange rate, Hedges recorded in 2024 and the positive price effect. Due to the indirect session of the freeze
regarding sourcing, we recorded a positive effect of 192 million, despite the 34 billion negative impact related to the transmission line, restriction, following the February blackout and the additional second quarter issues.
The result was obtained. Thanks to lower spot and third parties energy purchases costs, energy settlements from previous periods. Already anticipated Insurance provision and finally lower transmission costs.
In the first 9 months of 2025, gas margin contributed for 27 million. Also thank to the increase of the gas training, activity versus the same period in 2024.
passing to Greece, we recorded a positive impact, primarily driven by the provision, reflecting the higher type expected for the 2024 2028 regulatory period and Tarif, indexation
Partially offset by the increase of OEM expenses mainly associated with the implementation of the comprehensive winter plan.
We also recorded an increase of generation cost to the due to the new developed capacity and the maintenance activities.
Finally, in 2025, specifically, in the second quarter, we recorded the personal cost 1 of effect. Mainly for the incentivized early retirement, retirement plan to support the company organization aimed at improving internal skills and performance.
And so, now let's move on to the next slide, where we will review the net income evolution.
At 9 month, 2025 19, come reached 352 million at 21%. Decrease compared to the last year, figure many explained by higher depreciation and monetization impairment embedded expenses for 84 million dollar mainly due to a commissioning of new renewable capacity, amounting to 32 million, the impairment related to our decision, not to proceed with the new pmgd. Solar project initially planned for development in this area and finally the 12 million dollar increase.
Of grief, bad depth provision. Mainly due to the higher billing resulting from tariffs, increase and longer overdue customer debt.
Regarding Financial result, we recorded a negative variation of 38 million mostly explained by the lower capitalized expenses on renewable project by 61 million.
Partially offset by lower Financial expenses for 29 million, resulting from lower, average of, extending depth, and lower average interest rate.
The latter was partially offset by a 20 million dollar reduction in corporate income tax expense mostly explained by lower results.
focusing on the quarter, net income decreased by 74 million mainly due to
A 63 million decrease in beta at 29 million increasing, the precession of monetization and bed depth. Primarily due to the operation of a renew renewable capacity,
And an 11 million dollar increase in financial research mainly due to the lower capitalized expenses of renewable projects.
The latter was partially offset by a 23 million dollar reduction in corporate income tax expenses, mostly explained by lower results of the period.
And now, let's move on to the ffo analysis on the next slide.
Let's analyze the ffo composition for the first 9 months of 2025 and the main effect compared to the same period in 2024. Rff Richard, 600 650 million representing an improvement of 240.
8 million compared to the previous year. This is due to the following factors.
First it be the total 1 billion dollars remaining flat compared to the same period last year as previously explained.
Second, the recovery of tech receivable in 2025 contributed the 4285 million. Mainly thanks to
Factory executed in April 2025, they did expect 2 3.
And Recovery through the target of 31 million of pecan receivable.
It is worth mentioning that we observe a positive fffl variation of 248 billion versus the 9 months 2024, thanks to the end of accumulation of back. Receivable started in October 2024.
Third. The increase of networking Capital impacted for 329 million, mainly due to the 2024 development, Capital payment, lower collection in our distribution business and other seasonality effect.
the increase was higher by 255 million versus previous year, mainly due to
Was 2024.
This effects were partially offset by lower caps payments related to the new renewable capacity.
Forth the income taxes, impacted on ffo amounted, to 231 million mainly due to the tax payment in the generation business.
Income taxes paid in the 9 month 2025 were higher by 63 million compared to the 9 months 2024. This difference is mainly due to the increased tax payment in the generation business driven by both higher results and higher monthly payments tax rates.
Finally, financial expenses were $130 million, mostly due to debt-related costs.
This represents a reduction of 52 million compared to the 9 months. 2024 mainly driven by a lower average debt this year.
And now let's take a look at our liquidity and leveraged position.
That is 3.9 billions at the end of September 2025 in line with the gross debt as of December 2024.
The average terms of our debt maturities decreased from 6.2 years as of December, 2024 to 5.5 years, as of September 2025 and the portion at the fixed rate is 87% of total debt.
The average cost of our debt reached 4.8% as of September, 2025 decreasing from 5.0% in December 2024, in line with our efforts to optimize the financial costs.
Regarding liquidity, we are in a comfortable position to support our Capital needs for their coming months and cope with the next year maturities.
As of September 2025, we have available committed 3 Lines for 6 and 140 million and cash equivalent for 373 million.
And now I I would like to share the following closing remarks.
In the coming months, significant regulatory updates are expected that will clarify tariffs and Market mechanisms.
These represent an essential step to refine our long-term strategy, and to ensure that our investment decision remain aligned with regulatory developments.
We are implementing productivity initiatives to address Performance. This include action to strengthen our generation, and distribution businesses, improve risk management, and enhance our ability to respond to extreme weather events.
The measures are designed to safeguard service continuity and maintain system stability.
Are solid financial position and flexible business model. Allow us to follow with our business plan. Even through Market, uncertainties, while continuing to invest in strategic renewable and best project, and deliver, sustainable returns for our shareholders.
Finally, we are preparing for our 2026 investor day, scheduled for the first quarter 2026, where we will share a comprehensive view of our strategy. And the action that will drive long-term value creation.
And now, let me end it over to Isabella for the Q&A session.
Thank you. Good morning. Now let's move on to Q&A section. We will be taking questions via chat through the webcast. The Q&A session is now.
Okay. So simony the first question is coming from Rodrigo Mora? Someone is a patre Rodrigo has for questions, so I will be talking 1 by 1, okay.
The first 1 is what is the amount that can help chili must return to customers the 2, the miscalculation of the CNA included in the first half 2026 CNP reports.
Okay, thank you. Rodrigo just to, to, to read some contests. So, in, in the first couple of of October that he need explained that
Of the PM. And so this change in the formula will have some impact.
We have calculated the impacted for NL in amount. That is
So we have to expect a negative provision in terms of mainly Financial costs. So the impact will be mainly in the financial items and but your question you you talk about customer. But in any case just comment that the customers were impacted just for a small amount because just, the 2% of, the total amount of the changes was per customer in in the Target. So, this amount will be
Crucial by NL in 2025 and then we will pay back in this moment. The process is not so clear but in any case we expect in the first half of 2026 but the amount we will
Have not impacted directly for the total value. The the customer.
Okay, thank you, Simone. So the second question now is on an Elvis distribution. So what is the amount on it to an distribution Chile in connection to the vid 200020253?
So talking about the international period 2020 2024. Uh, we are in really, you know, finalizing the last steps of of the
So the amount was already defined, and what we are waiting for is that the SEC will say when we have to.
receive back the missing part and the amount uh in this case is around 5555 million dollar. Uh there are 2 possibility. If you want to be prudent, you can imagine that this is the the cashback can stop, need a lot of 2026. Even if I remember interview of the new minister of energy that say that, that is the process can also be faster and start earlier.
Okay, thank you Simon. So now let me check. Here we have an the third question. So the third question of Rodrigo now is own generation site on the lmg strategy. No. So could you please explain about your strategy regarding lmg and Argentina.
Forum or interval for the year 2026. How many ships do you plan to buy?
So, as you know, for us, the the gas business is very important business because we need gas for our, uh, thermal power plant. But also because we find that during the year, some creative opportunities to, uh, make margin to our, uh, Gasco
We have basically a long-term gas contract for LNG.
And more or less. That is the volume that this contract or any other is something more than 30 322, uh, therapy. You
And so, in 2013, we will keep on using this contract. In this very days, we are working. We are negotiating in Argentina supplier,
To uh, add new contractor for Argentinian gas. And so In This Moment, uh,
I cannot talk about this negotiation for the negotiation is ongoing and as well.
Not been finalized.
Okay. Thank you. Simone. Now, the, the last question of what legal is regarding capex on generation business. No. Uh, regarding capex for Generation. Could you please give us an update for 2025 and actually we also received the same question from balance as well. So uh, what
Talking about.
As you know, we we full of the plan with 1 exceptionalists,
Regulation of it is best. I mean, the regulation for the participation of space in the ancillary service market and then we keep on studying the evolution of the, the market and the penetration of, uh, the the best in the Chilean production system. So we start with a little bit late in the project. And in the first report, the amount of Capital credit project was reduced compared to the expectation, but the project have been already, started are ongoing and so you will see in in the last quarter in total talking about a GP and generation investment for more or less 15216 million US dollar. And a part of this investment will be the best.
At least 60 million and then we keep on going. Also investment on thermal uh,
List, you know how strategic is the thermal sleep? You know, of course in case of low uh low water in the system are efficient ccgt, plants are called to produce. And so we have to keep on this plans at the highest level of efficiency and so forth.
Okay, thank you and uh we have a final 1. Sorry Rodrigo. We have 5 questions from Rodrigo Moda. So the last 1 is on distribution side. Okay, on distribution. Could you outline the measures being taken to address the increasing energy losses?
Okay.
Uh, getting higher uh, in the last 2 years starting from 2023. Uh, and so In This Moment, the percentage of losses is a little bit higher than 6%.
which is the reason can be many reasons, but,
Most important reason is to increase in the Target. So,
to the
final customer know. And so a little bit a change in in up is related also to this increase in time.
What we are doing, uh, from 1 side. We have, uh,
Increasing the activity to to recover, uh, this losses. And so we have recovered more than expected in the initial planning with the to to losses.
And on the other side, we are making other action. Uh, for example, um, launching flexible payment plans for the castle that want to pay the the new bill, we have new smart expression tool. We, we work on a formulas to localize where the, the, the the office are originated and then we can intervene. And finally, we are working uh, with the regulator to try to find changes. Also in the regulation, that can help to contain this this phenomenon.
Okay, thank you, Simone. Now, move on. We have a questions from Javier, Suarez from Medan. Thanks for the question. So the question is
Is the company in Chile confirmed, its latest guidance.
Taper in terms of hydrological situation. So, uh, finally the, the, the system was dryer that expected but in any case we, we show our flexibility as a company, we leverage on our, um, very profitable gas contract. We use the
Flexible and efficient CCGT. And so, we have those effective measures. So, we maintain high reproduction. Also, hydro power plants can use reservoir work. And so, that production flow.
is not decreased so much and given all these action and the specificities, the company builds in the past year, we can react to this adverse climate conditions and Achieve, well achieve, we can confirm that the result for for the
Thank you simony. Uh, so move on the next 1 is
Is also from media. It's about the ffo. So could you explain the Dynamics of ffo during the 9 months of this year?
Uh, and your expectation by the year ends.
Okay. Talking about the fso talking about our Pistons usually is uh concentrated in the second half of the year and particularly in the last 4.
And the main reason is that Nvidia is higher in this field and so on.
This year in, in the first 9 months, in any case, we have a very high level of FFL. And this was
Thanks to the not ordinary cashing from Tech regulatory process. So we cash in around 300 million US dollar, uh recovering cash credit from the past.
Looking ahead, the cash flow from ordinary business, will be higher compared to the first months in, in the last period. And, and also, we will have more efficient, uh, management of the networking Capital because, in the last part of
they are, uh, the
the, the topics, you know, are focused in the last part of the year. So, also the network can be managed in a more future way, uh, and so we expect to improve the performance and of the effect of, uh, in this last 4, this is more or less than 9.
Perfect. So now the next question is coming from for btg pactual.
So, when I talk about the best, not the storage that we are implementing. So, I will read here, I saw that best Las Salinas.
Through this project involve additional solar capacity or just the energy storage.
That are still an additional 200 megawatts of best capacity to meet your announcement plan.
Will this be added to existing solar PV in the North?
Sea. Yes. Uh, so uh,
Talking about.
Uh, we have launched 3 projects, uh, this year in line with what was expected in the plan.
And uh uh this project are a project. So we are we are going to implement best uh system in our uh in solar power plant in the north, and why we do this at in general, the best can be perfect for also like a standalone device.
but uh,
The profitability is higher. If if you use the best system to improvise, uh, our power plants and why because um, the project is faster. You need less. Uh,
In environmental, uh, documents to be produced contain that you are.
Building the best in your plan and also we have some 7 in terms of cost and electrical infrastructure. And so I think that they have answered the question. This moment we are not increasing the the the solar capacity you are just improvising. So
Let me check here so we have another 1 Stone. Some Mass perching balance Capital. Uh, well part of the question was already answered, so I just keep the 1 that uh wasn't here. So thank you for the presentation.
And he has 1 question. If I'm not mistaken, you had a target of 4 2025 of 500 million dollars for extension projects, mainly relating to batteries to storage.
How has that changed by now? Given that you are expecting a resolution on Australia's Services before moving forward?
And what is the resolution in line with your expectations? Do you think it will be enough to unlock high investment in it started? Thank you.
Okay. So in
Our current our plans that we put more or less 600 megawatt of view, uh, capacity and you arrived uh 450 upgraded.
The best project should have been launched at the beginning of the year and were launched in the second round. And so you can expect a movement of also the c h. The original study was in 2026 in the second part.
And then the new CD will be in 20207 and this will have an impact. Uh, but in any case, you know, we start from a, a fleet of around 9, gigawatt of production. And so,
This change is not a, a, a, a huge change talking about regulation. So, in uh, August, the 4th of August, now of launch this new regulation that said, best can participate in Chile service month.
It means that this is a very good news for the, for the country, because the best are very important elements that can stabilize the system at a very low cost. And so using the cost for the system, is also reducing the cost for the participant.
In terms of revenues is not a huge increase, but is in line, what expected talking about the, the current bet that we have to our best that we have already installed. It means that is among 5 and 7 million per year. But in this it's an important, uh, step because permit to make the the the the, the best project, a little bit more profitable than considered,
Beginning, and it means that they are profitable also imagining and higher penetration of cost.
and,
A perfect. So we have uh the last question that is strong Edward Palmer from it. So the question is
Do you have any news for unregulated ppas contracts?
In This Moment know we we don't have any news.
Okay, perfect. Let me just check if we have, uh, no more questions. Okay? As there are no further questions, we formally conclude our conference call. The investor relations team is at our disposal for any further inquiries.
Many thanks for joining us and have a great rest of the week. Thank you. And ladies and gentlemen, this concludes our conference, thank you for participating. You may now disconnect