Q2 2026 Engie Energia Chile SA Earnings Call

August 12, 2026

Speaker #2: Good afternoon, everyone, and welcome to Engie Energía Chile's second quarter 2026 results conference call. If you need a copy of the press release issued on July 28, it is available on the company's website at www.engie.cl.

Operator: Good afternoon, everyone, and welcome to Engie Energía Chile's Q2 2026 results conference call. If you need a copy of the press release issued on 28 July, it is available on the company's website at www.engie.cl. Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward-looking statements, or contact Investor Relations Officer, Marcela Muñoz. We would like to advise all participants that this call is dedicated to investors and market analysts, not for the press. We ask all journalists to contact Engie Energía Chile's PR department for details. I will now turn the call over to Mr. Vincent Sorel.

Speaker #2: Before we begin, I would like to remind you that this call is being recorded and that information distributed today may include forward-looking statements regarding the company's financial and operating performance.

Speaker #2: All projections are subject to risks and uncertainties, and actual results may differ naturally. Please refer to the detailed note in the company's press release regarding forward-looking statements, or contact investor relations officer Marcella Muñoz.

Speaker #2: We would like to advise all participants that this call is dedicated to investors and market analysts, not for the press. We ask all journalists to contact Engie Energia Chile's PR department for details.

Speaker #2: I will now turn the call over to Mr. Vincent Sorrell. Please go ahead, sir.

Operator: Please go ahead, sir.

Speaker #3: Hello, everyone. Today I’m here with Juan Villasenso, Chief Executive Officer; Alison Safri, Head of Corporate Finance; and Marcella Muñoz, Investor Relations Officer. We are very pleased to present Engie Chile Q2 2026 results.

Vincent Sorel: Hello, everyone. Today, I am here with Juan Villavicencio, Chief Executive Officer, Alison Saffery, Head of Corporate Finance, and Marcela Muñoz, Investor Relations Officer. We are very pleased to present Engie Chile 2026 H1 results. I leave you with Juan Villavicencio, who will describe our performance during the H1 of 2026.

Speaker #3: I leave you with Juan Villasenso, who will describe our performance during the first half of 2026.

Speaker #4: Good afternoon, everybody. On page 2, we show that we have organized this presentation into two sections. In the first part, I will briefly go through our first half 2026 performance, and then the second part will provide an updated vision of our financial results and guidance.

Juan Villavicencio: Good afternoon, everybody. On page 2, we show we have organized this presentation into two sections. In the first part, I will briefly go through our H1 2026 performance. In the second part, Vincent will provide an updated vision of our financial results and guidance. We can start on page 3, where we share the main highlight for H1 2026. First, I want to highlight that we continued to show strong results during H1 of the year. We had a very strong cash generation, which helped support our investments as well as our dividend payments. Some of the drivers of these excellent results were, on the one hand, the high regulated demand we supplied, leveraging on the high availability of our thermal fleet, which, together with the addition of new BESS capacity, helped give stability to our generation portfolio, especially in non-solar hours.

Speaker #4: We can start on page 3, where we share the main highlight for the first half of 2026. First, I want to highlight that we continued to show strong results during the first half of the year.

Speaker #4: We had very strong cash generation, which helped support our investments as well as our dividend payments. Some of the drivers of this excellent result were, on the one hand, the high regulated demand we supplied, leveraging the high availability of our thermal fleet. Together with the addition of new base capacity, this helped give stability to our generation portfolio, especially in non-solar hours.

Speaker #4: This continued to reduce our exposure to the spot market. Notably, all our renewable projects under construction are currently injecting energy into the system, most of them 100% energized, while the wind farm has been progressively adding energy.

Juan Villavicencio: This continued to reduce our exposure to the spot market. Notably, all our renewable projects under construction are currently injecting energy to the system, most of them 100% energized, while the wind farm have been progressively adding energy. This strong operating performance allow us to confirm our guidelines for 2026. On page 4, we give you a summary of all the projects and activities we continue to develop related to our thermal asset in Tocopilla and Mejillones. In Tocopilla, we continue working on our coal-based former unit 15, which was closed in 2022 and is being converted into a synchronous condenser, which will provide ancillary services to the system. We have also improved, extended the life, and increased the capacity of our gas fire combined cycle plant, unit 16, thus becoming the most efficient in the north and ensuring the flexibility of our generation portfolio.

Speaker #4: This strong operating performance allows us to confirm our guidelines for 2026. On page 4, we give you a summary of all the projects and activities we continue to develop related to our thermal assets in Tocopilla and Mejillones.

Speaker #4: In Tocopilla, we continue working on our coal-based former Unit 15, which was closed in 2022 and is being converted into a synchronous condenser, which will provide ancillary services to the system.

Speaker #4: We have also improved and extended the life and increased the capacity of our gas-fired combined cycle plant, Unit 16, thus becoming the most efficient in the North and ensuring the flexibility of our generation portfolio.

Speaker #4: In Mejillones, the conversion of our EAM coal-fired plant to natural gas has advanced as planned, and is currently in its final stage to reach COD during the second half of 2026.

Juan Villavicencio: In Mejillones, the conversion of our IEM coal-fired plant to natural gas has advanced as planned and is currently in its final stage to reach COD during H2 2026. Also, as we've already mentioned during the pure calls, our coal plants, CTM1 and CTM2, were decommissioned on 21 December 2025, while CTA and CTH have continued operating as required by the authorities until May 2027 in order to secure supply and services to the system until such date. CTM1 and 2 will be kept under preservation maintenance while the company decides if and how this asset could be used in the future, and the same will occur in CTA/CTH once disconnected in 2027.

Speaker #4: Also, as we've already mentioned during the prior calls, our coal plants Sitting 1 and Sitting 2 were decommissioned on December 21, 2025, while CTA and CTH have continued operating as required by the authorities until May 2027 in order to secure supply and services to the system until such date.

Speaker #4: CTN 1 and 2 will be kept under preservation maintenance while the company decides if and how these assets could be used in the future.

Speaker #4: And the same will occur in CTA/CTH once disconnected in 2027. Our thermal asset in operation continued to show high availability and operational excellence, providing the generation to secure the 24/7 supply for RPPA contracts and, at the same time, reducing our exposure to the spot market.

Juan Villavicencio: Our thermal asset in operation continue to show high availability and operational excellence, providing the generation to secure the 24/7 supply for our PPA contract and at the same time reducing our exposure to the spot market. This continued to be true during H1 2026, dispute our IEM plant being closed during its conversion. On page 5, we show in some depth the importance of the conversion of IEM to natural gas. It is a key milestone in Engie Chile's decarbonization roadmap. The project enhance operational resilience, support renewable energy integration, and strengthen system reliability through dispatchable backup generation. At the same time, it reduce emission and improves ESG performance. The plant is now equipped with 20 dual fuel burners and new gas infrastructure, enabling more efficient and sustainable operation while creating long-term value.

Speaker #4: This continued to be true during the first half of 2026, despite our EAM plant being closed during its conversion. On page 5, we show in some depth the importance of the conversion of EAM to natural gas.

Speaker #4: It is a key milestone in Engie Chile's decarbonization roadmap. The project enhanced operational resilience, supported renewable energy integration, and strengthened system reliability through dispatchable backup generation.

Speaker #4: At the same time, it reduced emissions and improved ESG performance. The plant is now equipped with 20 dual-fuel burners and new gas infrastructure, enabling more efficient and sustainable operation while creating long-term value.

Speaker #4: This project demonstrates how Engie Chile continues advancing the energy transition while maintaining reliability and operational excellence. If we go to page 6, we show a graph of the complete generation portfolio transformation Engie has embarked on since 2019, when coal generation represented 61% of our generation capacity, while renewables represented only 3% of our total generation capacity of 2.2 gigawatts.

Juan Villavicencio: This project demonstrates how Engie Chile continues advancing the energy transition while maintaining reliability and operational excellence. If we go to page 6, we show a graph of the complete generation portfolio transformation Engie has embarked on since 2019. When coal generation represented 61% of our generation capacity, while renewable represented only 3% of our total generation capacity of 2.2 gigawatts. in December of 2027, we showed that our generation capacity had reached 2.9 gigawatts, of which coal represented only 25% after disconnection of CTM1 and CTM2. Natural gas represented another 25%, and renewable plus batteries represented 50%, a significant increase during this period. Today, as of June 2026, our generation capacity increased to 3 gigawatts, which now includes the 0.1 gigawatt extra capacity of BESS Tocopilla and BESS Arica.

Speaker #4: In December 2027, we showed that our generation capacity had reached 2.9 gigawatts, of which coal represented only 25%. After the disconnection of CTN 1 and CTN 2, natural gas represented another 25%, and renewables plus batteries represented 50%, a significant increase during this period.

Speaker #4: Today, as of June 2026, our generation capacity increased to 3 gigawatts, which now includes the 0.1 gigawatt extra capacity of base Tocopilla and Besarica.

Speaker #4: Our expectation for 2027, considering the renewable and base projects currently under construction, as well as the conversion of EAM and retirement of the remaining coal plant, is to reach a total installed capacity of approximately 3.6 gigawatts, of which 71% will be renewable and batteries and the remaining 29% will be natural gas.

Juan Villavicencio: Our expectation for 2027, considering the renewable and BESS project currently under construction, as well as the conversion of IEM and retirement of the remaining coal plant, is to reach a total installed capacity of approximately 3.6 gigawatts, of which 71% will be renewable and batteries, and the remaining 29% will be natural gas. On page 7, we can see that we continue to show additional progress in the execution plan for our renewable capacity under construction. As of today, we already have 1.6 gigawatts of renewable installed capacity, including the recent addition of BESS Tocopilla, our first standalone battery site, built in the same site where coal units 12 and 13 used to operate and which added 119 megawatts of capacity to our portfolio in February of 2026. Additionally, in June of 2026, BESS Arica reached COD. All these projects continue to be developed on time and on budget.

Speaker #4: On page 7, we can see that we continue to show additional progress in the execution plan for our renewable capacity under construction. As of today, we already have 1.6 gigawatts of renewable installed capacity, including the recent addition of base Tocopilla, our first standalone battery site, built on the same site where coal units 12 and 13 used to operate, and which added 119 megawatts of capacity to our portfolio in February of 2026.

Speaker #4: Additionally, in June of 2026, Besarica reached COD. All these projects continued to be developed on time and on budget. As such, during the first half of 2026, we generated 1.071 gigawatt-hours through our renewable asset.

Juan Villavicencio: As such, during the H1 2026, we generated 1,071 gigawatt hours through our renewable assets. Next, on slide 8, we show the six renewable and batteries project still under construction, which are developed over five different regions of Chile, including BESS Los Loros, which is in the process of obtaining its COD. BESS Libélula, the battery project in our Libélula PV plus BESS site, is also in the process of obtaining COD. The PV is 100% energized, as well as the Lilé and Calama battery project. These three projects should reach COD during the H2 2026. Our two wind projects, on the other hand, have advanced on a schedule and are expected to reach COD in the H1 2027. We expect this project to continue adding megawatt hour of generation as they progress with their energization.

Speaker #4: Next, on slide 8, we show the six renewable and battery projects still under construction, which are being developed across five different regions of Chile, including Beslos Loros, which is in the process of obtaining its COD.

Speaker #4: Best Libélula, the battery project at our Libélula PV plus base site, is also in the process of obtaining COD. The PV is 100% energized, as well as the Lille and Kalpa battery projects.

Speaker #4: These three projects should reach COD during the second half of 2026. Our two wind projects, on the other hand, have advanced on schedule and are expected to reach COD in the first half of 2027.

Speaker #4: We expect this project to continue adding megawatt-hours of generation as they progress with their energization. On slide 9, we provide an overview of our transmission project. The strength and reliability of our transmission assets are enablers for the accelerated growth of our renewable generation portfolio.

Juan Villavicencio: On slide 9, we provide an overview of our transmission project. The strength and reliability of our transmission assets are enablers for the accelerated growth of our renewable generation portfolio. As shown, we have projects in different regions of the country. Currently, we have six expansion works in the north and south of Chile and another six new projects in different states, mostly in the center south. On May of 2028, our Toti West substation reached COD, showing our project execution capacity and our ability to provide integrated energy services to our customers. Now I will leave you with Vincent, who will present the detailed evolution of Engie Chile's financial for the H1, as well as the guidance for 2026.

Speaker #4: As shown, we have projects in different regions of the country currently. We have six expansion works in the north and south of Chile, and another six new projects in different states, mostly in the center-south.

Speaker #4: On May 28, our Totiwes station reached COD, showing our project execution capacity and our ability to provide integrated energy services to our customers.

Speaker #4: And now I will leave you with Bansan, who will present the detailed evolution of Engie Chile's financials for the first half, as well as the guidance for 2026.

Speaker #1: Thank you, Juan. Hello, everyone. I am now pleased to present the financial performance for the first half of 2026. On slide 11, we present our key financial highlights for the first half of 2026.

Vincent Sorel: Thank you, Juan. Hello, everyone. I am now pleased to present the financial performance for the H1 2026. On slide 11, we present our key financial highlights for the H1 2026. EBITDA reached $400 million, up 11% year-on-year, reflecting strong operating performance, higher electricity margin explained by a more efficient generation mix and higher physical sales to regulated clients. Despite lower thermal generation, we were able to reduce our purchase from the spot market. Net income amounted to $205 million, representing a 10% increase versus the same period last year. This improvement was mainly supported by a stronger operational result. Finally, net financial debt stood at $2.3 billion, while the net debt to 12-month EBITDA ratio improved to 3.3 times as of June 2026. This reflects both our strong EBITDA generation and disciplined financial management, even as we continue executing our investment plan.

Speaker #1: EBITDA reached $400 million, up 11% year on year, reflecting strong operating performance and higher electricity margin, explained by a more efficient generation mix and higher physical sales to regulated clients.

Speaker #1: Despite lower thermal generation, we were able to reduce our purchases from the spot market. Net income amounted to $205 million, representing a 10% increase versus the same period last year.

Speaker #1: This improvement was mainly supported by a stronger operational result. Finally, net financial debt stood at $2.3 billion, while the net debt to 12-month EBITDA ratio improved to 3.3 times as of June 2026.

Speaker #1: This reflects both our strong EBITDA generation and disciplined financial management, even as we continue executing our investment plan. On slide 12, let me provide more detail on the driver behind our EBITDA performance in the first half of the year.

Vincent Sorel: On slide 12, let me provide more detail on the driver behind our EBITDA performance in the H1 of the year. Our EBITDA increased by $38 million, from $362 million in the H1 2025 to $400 million in the H1 2026. The main driver was a $67 million increase in electricity margin, supported by a more balanced generation position that reduced energy purchase volume in the spot market. Higher sales to regulated clients and lower spot purchase explain most of this improvement. In addition, EBITDA benefited from positive contribution from transmission, as well as higher savings reflected in the performance brake, which also contributed $8 million to this EBITDA year-on-year increase. These gains were partially offset by a negative effect of one-off, considering that last year we had reflected the result of the arbitration with our main natural gas supplier.

Speaker #1: Our EBITDA increased by $38 million, from $362 million in the first half of 2025 to $400 million in the first half of 2026. The main driver was a $67 million increase in electricity margin, supported by a more balanced generation position that reduced energy purchase volume in the spot market.

Speaker #1: Higher sales to regulated clients and lower spot purchases explained most of this improvement. In addition, EBITDA benefited from a positive contribution from transmission, as well as higher savings reflected in the performance break, which also contributed $8 million to this EBITDA year-on-year increase.

Speaker #1: These gains were partially offset by a negative effect from one-offs, considering that last year we had reflected the result of the arbitration with our main natural gas supplier.

Speaker #1: Overall, this chart shows us that a stronger and more balanced operating profile was the key factor behind our EBITDA growth in the first half of 2026, confirming the benefits of our portfolio transformation and reduced exposure to spot market volatility.

Vincent Sorel: Overall, this chart shows us that a stronger and a more balanced operating profile was the key factor behind our EBITDA growth in the H1 2026, confirming the benefits of our portfolio transformation and reduced exposure to spot market volatility. On slide 13, you can see how this improvement in operating performance translated into growth in final result. Net income increased by $20 million, from $185 million in the H1 2025 to $205 million in the same period this year. The main positive driver was the strong increase in EBITDA, partially offset by higher depreciation and higher income tax, as well as a negative foreign exchange effect. At the same time, a decrease in net interest expense contributed to a positive net income during the H1 as compared to the same period last year.

Speaker #1: On slide 13, you can see how this improvement in operating performance translated into growth in the final result. Net income increased by $20 million, from $185 million in the first half of 2025 to $205 million in the same period this year.

Speaker #1: The main positive driver was the strong increase in EBITDA, partially offset by higher depreciation and higher income tax, as well as a negative foreign exchange effect.

Speaker #1: At the same time, a decrease in net interest expense contributed to a positive net income during the first half as compared to the same period last year.

Speaker #1: The decrease in net financial expense is mainly explained by a $16 million increase in capitalized interest, but also by a lower interest rate. Notably, our net income in this first half of the year is the highest since 2016.

Vincent Sorel: The decrease in net financial expense is mainly explained by a $16 million increase in capitalized interest, but also by lower interest rates. Notably, our net income this H1 of the year is the highest since 2016. On slide 14, we show our investment program continue to be funded through internal cash generation, which allowed us not only to fund our CapEx, but also our dividend payment. Despite a high level of capital expenditure during this H1, net debt decreased by $57 million. This reflects strong cash from operation, which more than covered all of the CapEx deployed during the H1. In addition, the company received $17.5 million in dividends from TEN during the Q1 and paid $66 million in dividend to its investor. Slide 15 highlights the strength of our financial structure.

Speaker #1: On slide 14, we show our investment program continued to be funded through internal cash generation, which allowed us not only to fund our capex but also our dividend payments.

Speaker #1: Despite a high level of capital expenditure during this first half, net debt decreased by $57 million. This reflects strong cash from operations, which more than covered all of the capex deployed during the first half. In addition, the company received $17.5 million in dividends from Q1 during the first quarter and paid $66 million in dividends to its investors.

Speaker #1: Slide 15 highlights the strength of our financial structure. Engie Chile continues to maintain an investment-grade rating at both the international and local scale, reflecting a solid credit profile and disciplined financial management.

Vincent Sorel: Engie Chile continues to maintain investment-grade rating at both the international and local scale, reflecting a solid credit profile and disciplined financial management. Notably, confirming this solid credit and risk profile, Fitch Ratings upgraded Engie rating in national scale from AA- to AA Stable during Q2. As of June 2026, net debt stood at approximately $2.3 billion, while the net debt to 12-month EBITDA ratio improved to 3.3, excluding IFRS 16 lease. At the same time, the company increased its cash position and continued reducing its average interest rate, which stood at 5% coupon. The debt maturity schedule also remained well spread over time, with no material short-term refinancing pressure. Overall, this slide confirms that Engie Chile is preserving a strong and flexible balance sheet while continuing to execute its growth plan. In June 2026, we issued a new bond in the local market.

Speaker #1: Notably, confirming this solid credit and risk profile, failure rate upgraded Engie rating in national scale from AA- to AA stable during the second quarter.

Speaker #1: As of June 2026, net debt stood at approximately $2.3 billion, while the net debt to 12-month EBITDA ratio improved to 3.3x, excluding IFRS 16 leases.

Speaker #1: At the same time, the company increased its cash position and continued reducing its average interest paid, which stood at a 5% coupon. The debt maturity schedule also remained well spread over time, with no material short-term refinancing pressure. Overall, this slide confirms that Engie Chile is preserving a strong and flexible balance sheet while continuing to execute its growth plan.

Speaker #1: In June 2026, we issued a new bond in the local market. It was a $3 million UFA bond, equivalent to $136 million, with a seven-year bullet structure.

Vincent Sorel: It was a UF 3 million bond equivalent to $136 million with a seven-year bullet structure. We used the fund from this bond, plus cash, to prepay a loan with Banco Santander. Finally, on slide 16, we confirm our 2026 guidance. After a strong H1, the company remains on track to deliver an EBITDA in the range of $690 million to $760 million, while CapEx, as mentioned, is expected to range between $640 million and $710 million. At the same time, we expect net debt to EBITDA to remain below 3.5x, excluding IFRS 16 lease. The H1 result, EBITDA of $400 million, net income of $205 million, CapEx of $384 million, and net debt to EBITDA ratio of 3.3, support our confidence in meeting these targets.

Speaker #1: We used the funds from this bond, plus cash, to prepay a loan with Banco Santander. Finally, on slide 16, we confirm our 2026 guidance.

Speaker #1: After a strong first half, the company remains on track to deliver an EBITDA in the range of $690 million to $760 million, while capex, as mentioned, is expected to range between $640 million and $710 million.

Speaker #1: At the same time, we expect net debt to EBITDA to remain below 3.5 times, excluding IFRS 16 leases. The first-half results—EBITDA of $400 million, net income of $205 million, capex of $384 million, and a net debt to EBITDA ratio of 3.3—support our confidence in meeting this target.

Speaker #1: While capital expenditure will remain high, this represents a decrease compared to the record investment level of 2025 and will reduce our financing needs. Overall, this reflects a strong first half of the year and reinforces our confidence in the outlook for the full year 2026.

Vincent Sorel: While capital expenditure will remain high, this represents a decrease compared to the record investment level of 2025 and will reduce our financing needs. Overall, this reflects a strong H1 of the year and reinforce our confidence in the outlook for the full year 2026. Thank you for your attention, and we are now open to any question you may have.

Speaker #1: Thank you for your attention. We are now open to any questions you may have.

Speaker #2: Thank you. The floor is now open for questions. If you have a question, please write it first in the Q&A section. Later, your microphone will be opened so your question can be answered on the call.

Operator: Thank you. The floor is now open for questions. If you have a question, please write it first on the Q&A section. Later, your microphone will be open so your question can be answered on the call. Questions will be taken in order they are received. Please hold while we pull for questions. Our first question comes from Miss Fernanda González from BTG Pactual. How do you perceive the current operation of BESS in terms of charging and discharging profiles, spots, price formation, and asset remuneration? Are you willing to renegotiate regulated PPA with the CNE, or do you rule out that option? Have you signed a new LNG contract to replace the one expiring this year? Are there market conditions for such contracts these days?

Speaker #2: Questions will be taken in the order they are received. Please hold while we pull for questions. Our first question comes from Ms. Fernando Gonzalez from BTG Pactual.

Speaker #2: How do you perceive the current operation of BEESS in terms of charging and discharging profiles, spot price formation, and asset remuneration? Are you willing to renegotiate the regulated PPA with the CNA, or do you rule out that option?

Fernán González: How do you perceive the current operation of BESS in terms of charging and discharging profiles, spots, price formation, and asset remuneration? Are you willing to renegotiate regulated PPA with the CNE, or do you rule out that option? Have you signed a new LNG contract to replace the one expiring this year? Are there market conditions for such contracts these days?

Speaker #2: Have you signed a new LNG contract to replace the one expiring this year? Are there market conditions for such contracts these days?

Speaker #1: Okay. Thank you very much for the good questions. Regarding the batteries, charging and discharging profiles, spot price formation, and asset remuneration, what we can say is that in Chile, this is a new technology, no more than two years at industrial scale.

Juan Villavicencio: Okay. Thank you very much for the good questions. Regarding the batteries charging and discharging profiles, spot prices formation, and asset remuneration, what can we say? In Chile, this is a new technology, more than 2 years in industrial scale. The authorities and the different players, we are learning in the process to maximize the value of the asset. We are not seeing a big disruption in the way of operating this. I think that there are a fluent communication to take care about the short-term value for the system, for the companies, and to take care in the long term, the operation to secure that we will not damage them in the long-term expectation of production. In terms of the remuneration, what can we say?

Speaker #1: And the authorities and the different players, we are learning in the process to maximize the value of the asset. We are not seeing a big disruption in the way we are operating this.

Speaker #1: I think that there is fluent communication to take care of the short-term value for the system and for the companies, and to take care in the long term of the operation to ensure that we will not damage, in the long term, expectations of production.

Speaker #1: And in terms of the remuneration, we can say that today there is a business case leveraged by the capacity payment, and when the batteries are requested to supply ancillary services, there is transitory regulation. Obviously, it is in the center of attention for all the players what will be the formal, stable regulation that will start in one and a half years more.

Juan Villavicencio: Today there are a business case leveraged by the capacity payment, and when the batteries are requested to supply ancillary services, there are a transitory regulation, and obviously is in the center of attention of all the players. What will be the formal stable regulation that will start in 1 and a half years more is something that we need to secure that will make sense to protect the value of the asset and the kind of services that we supply to the system. Okay. Regarding the second question then, about the renegotiation of the regulated PPAs, what can we say today is that it is not clear yet what will be the mechanism to understand if makes sense or not to participate in some manner.

Speaker #1: It's something that we need to secure, that will make sense to protect the value of the asset and the kind of services that we'll supply to the system.

Speaker #1: Regarding the second question about the renegotiation of the regulated PPAs, what we can say today is that it's not clear yet what the mechanism will be to determine whether it makes sense to participate in some manner.

Speaker #1: Obviously, we agree with the voluntary concept that was introduced and the two principles that are directly mentioned, related to economic efficiency and respect for the contract. These are the basis of the same principles that we are following.

Juan Villavicencio: Obviously, we agree, in the voluntary concept that was introduced and the two principles that are directly mentioned related to the economical efficiency and the respect of the contract that is the base of all same principles that we are following. But we cannot say yet if we will participate or not because it is not clear the rules. Okay. About the LNG, what can we say is today we are focusing close positions for the next year to secure the confrontation of the winter. This is what we are doing, not thinking

Speaker #1: But we can't say yet if we will participate or not, because it's not clear what the rules are. Okay, about the LNG, what we can say is that today we are focusing on closing positions for the next year to secure the confrontation of the winter.

Speaker #1: This is what we are doing, not thinking beyond this. The focus and the center of attention is to protect the risk of our position during the winter.

Vincent Sorel: In more than this, the focus and the center of attention is to protect the risk of position during the winter. Okay?

Speaker #1: Okay.

Speaker #2: Our next question comes from Ms. Andrew McCarthy from La Haine View.

Operator: Our next question comes from Mr. Andrew McCarthy from Invesco.

Speaker #3: Good afternoon. Can you hear me?

Operator: Good afternoon. Can you hear me?

Andrew McCarthy: Good afternoon. Can you hear me?

Speaker #2: Yes. We can.

Operator: Yes, we can.

Speaker #3: Okay, great. Thanks very much. Yeah, just a couple of questions from my side. First one, you know that the better hydrological scenario that we've been seeing in Chile since mid-July—I was just wondering if you could comment on how that impacts your confidence with respect to the 2026 EBITDA guidance.

Operator: Okay, great. Thanks very much. Just a couple of questions from my side. First one, the better hydrological scenario that we have been seeing in Chile since mid-July. I was just wondering if you could comment on how that impacts your confidence with respect to the 2026 EBITDA guidance. Then my second question is, can you comment on potential impacts to earnings or the balance sheet from the reconstruction law, especially the tax reform within that law with respect to impacts that you will see on deferred taxes? Just trying to understand if adjustments to deferred taxes might impact your earnings this year or next year, and any impacts that could have on the balance sheet. That is it from my side. Thanks.

Andrew McCarthy: Okay, great. Thanks very much. Just a couple of questions from my side. First one, the better hydrological scenario that we have been seeing in Chile since mid-July. I was just wondering if you could comment on how that impacts your confidence with respect to the 2026 EBITDA guidance. Then my second question is, can you comment on potential impacts to earnings or the balance sheet from the reconstruction law, especially the tax reform within that law with respect to impacts that you will see on deferred taxes? Just trying to understand if adjustments to deferred taxes might impact your earnings this year or next year, and any impacts that could have on the balance sheet. That is it from my side. Thanks.

Speaker #3: And then my second question is: can you comment on potential impacts to earnings or the balance sheet from the reconstruction law, especially the tax reform within that law, with respect to impacts that you will see on deferred taxes?

Speaker #3: So I'm just trying to understand if adjustments to deferred taxes might impact your earnings this year or next year, and what impacts that could have on the balance sheet.

Speaker #3: That's it from my side. Thanks.

Speaker #1: Thank you, and always a pleasure. For the first question on hydrology: good hydrology is indeed better for results. That being said, I think we are closing the short position. As you know, we are less exposed than in the past to the volatility of spot prices.

Vincent Sorel: Thank you, Andrew, and always a pleasure. For the first question on hydrology, good hydrology is better for result indeed. That being said, I think we are closing the short position. As you know, we are less exposed than in the past to volatility of spot prices. Also, I would say the level of reservoir today, in July, sorry, is not higher than last year at the same date. So the probability of the El Niño is increasing above 50%. But all in all, I would say we remain balanced. I do not see a significant upside to date of El Niño condition on our result. Regarding the deferred tax, we are analyzing and we are, I would say, observing all the tax progress through the various legislative steps.

Speaker #1: Also, I would say the level of the reservoir today in July is not higher than last year at the same date. So the probability of El Niño is increasing above 50%, but all in all, I would say we remain balanced.

Speaker #1: And I don't see a significant upside to date of El Niño condition on our result. Regarding the deferred tax, we are analyzing, and we are, I would say, observing all the tax progress through the various legislative steps.

Speaker #1: Indeed, it will impact the balance sheet and the P&L in the same period. And it will also depend on the instruction that the CMF will likely issue, like they did when the rate was increased to 2027.

Vincent Sorel: Indeed, it will impact the balance sheet and the P&L in the same period, and it will also depend on the instruction that the CMF will likely issue like they did when the rate was increased to 27%.

Speaker #1: Sorry, to 27%.

Speaker #2: Our next question comes from Mr. Juan Felipe Becerra Torres from Credit Card Capital. Please, you may now proceed.

Operator: Our next question comes from Mr. Juan Felipe Becerra Torres from Credicorp Capital, please. You may now proceed.

Speaker #1: Hello, and thank you very much for taking my question. I have two by my side. The first one is related to backup PPAs and if we could expect the company to maintain its backup PPA contracted status to remain around for terawatt-hours per year.

Juan Felipe Becerra: Hello, and thank you very much for taking my question. I have two by my side. The first one related to backup PPAs, and if we could expect the company to maintain its backup PPA contracted status to remain around 4 TWh per year. Given the significant amount of BESS capacity that is being expected to come online in Chile over the next few years, do you expect the renewal of these backup PPAs to remain relatively straightforward, or how do you expect the market for these PPAs to evolve? My second question is regarding, maybe emphasizing some of the previous questions regarding standalone BESS projects, battery projects. How do you see the arbitrage opportunities evolving over the medium term as the additional capacity of BESS enters the system? That will be from my side. Thank you very much.

Speaker #1: And given the significant amount of dispatch capacity that is expected to come online in Chile over the next few years, do you expect the renewal of these backup PPAs to remain relatively straightforward, or how do you expect the market for these PPAs to evolve?

Speaker #1: And my second question is regarding, maybe emphasizing some of the previous questions regarding standalone BESS projects, battery projects. How do you see the arbitrage opportunities evolving over the medium term as the additional capacity of BESS enters the system?

Speaker #1: That will be all from my side. Thank you very much. Thank you, Juan Felipe. Just to clarify, in general, what our expectations are regarding backup PPAs and how this is evolving in our portfolio.

Vincent Sorel: Thank you, Juan Felipe. In general, to clarify what is our expectation about backup PPAs, and the evolution of this in our portfolio. The backbone of our strategy is our own capacity. Because of this, we are creating a strong pipeline to secure that the growth will be responsible to protect the position. Obviously, the backup PPA is a complement to hedge positions, but is not the base of the strategy. This is what I can mention in general. Okay? Regarding the scenario of the standalone BESS project, of course, the arbitrage spread is reducing because of the high penetration. From our side, the key topic, and this is happening now, it is not a topic of the future. We are seeing a reduction when you are reviewing the average spread, and the focus is to be contracted.

Speaker #1: The backbone of our strategy is our own capacity, and because of this, we are creating a strong pipeline to ensure that the growth will be responsible to protect the position. Obviously, the backup PPA is a complement to hedge positions, but it is not the base of the strategy.

Speaker #1: This is what I can mention in general. Okay. Regarding the scenario of the standalone best project, of course the arbitrage spread is reducing because of the high penetration, and from our side, this is the key topic and this is happening now.

Speaker #1: It's not a topic of the future. We are seeing a reduction when you are reviewing the average spread, and the focus is to be contracted at the end of the day.

Vincent Sorel: At the end of the day, if you are contracted and you have a proper hedge,

Vincent Sorel: At the end of the day, if you are contracted and you have a proper hedge, it is not so relevant. The impact is more a protection for the portfolio. The role of the BESS is to give flexibility to the energy management from our side. We are not seeing a big or any strong threat from our side, probably for players that are deciding investment for merchant, it is a real complication. It is not our case.

Speaker #1: If you are contracted and you have a proper hedge, it is not so relevant—the impact is more a protection for the portfolio. The role of the hedge is to give flexibility to the energy management from our side.

Juan Villavicencio: It is not so relevant. The impact is more a protection for the portfolio. The role of the BESS is to give flexibility to the energy management from our side. We are not seeing a big or any strong threat from our side, probably for players that are deciding investment for merchant, it is a real complication. It is not our case.

Speaker #1: We are not seeing a big or any strong threat from our side. Probably for players that are deciding investment for merchant, it is a real complication.

Speaker #1: It's not our case.

Speaker #2: Our next question comes from Mr. Jay Samani from Scotiabank Chile. Mr. Jay, you may now proceed.

Operator: Our next question comes from Mr. Jay Samani from Scotiabank Chile. Mr. Jay, you may now proceed.

Speaker #4: Following up on the best penetration, is increasing best penetration beginning to reduce even in peak prices? Or are you seeing that it's creating more competition among storage operators?

Operator: Following up on the BESS penetration. Is increasing BESS penetration beginning to reduce evening peak prices, or are you seeing that it is creating more competition among storage operators? Secondly, on your guidance, you had a very strong H1. Almost over 50% of the annual guidance has been met. What do you think are the main variables that could prevent Engie from outperforming in the H2? Thanks.

Jay Samani: Following up on the BESS penetration. Is increasing BESS penetration beginning to reduce evening peak prices, or are you seeing that it is creating more competition among storage operators? Secondly, on your guidance, you had a very strong H1. Almost over 50% of the annual guidance has been met. What do you think are the main variables that could prevent Engie from outperforming in the H2? Thanks.

Speaker #4: And then secondly, on your guidance, you had a very strong first half—almost over 50% of the annual guidance has been met. So what do you think are the main variables that could prevent Engie from outperforming in the second half?

Speaker #4: Thanks.

Speaker #1: Thank you, Jay. Regarding the first question, I think that I answered it in the previous one. Mainly, conceptually speaking, the best penetration is so fast in a big portion of the year, with the exception probably of the drop months—May, June, July—which could be different.

Juan Villavicencio: Thank you, Jay. Regarding the first question, I think that I answered in the previous one, mainly conceptually speaking. The BESS penetration so fast in big portion of the year, with the exception probably in the drop years, May, June, July could be different, but in the rest, the peaking price is being lower in general. Obviously there are more competition. This will affect the capture price and the spread. The key topic here is the hedging that you are having with the PPAs. It is the only way. Today is the vision that we have to invest in future asset, with the exception of managing curtailment that could leverage some ideas of investment. In general, you must go through contracted strategy. Okay. In the second question, I will leave Vincent to answer you better. Okay.

Speaker #1: But in the rest, the peaking price is generally lower. And obviously, there is more competition. This will affect the capture price and the spread.

Speaker #1: The key topic here is the hedging that you are having with the PPAs. It's the only way today—it is the vision that we have—to invest in future assets, with the exception of managing curtailment, which could leverage some ideas of investment.

Speaker #1: In general, you must go through the contracted strategy. Okay. For the second question, I will leave Van Sant to answer you better. Okay. Thank you, Jay.

Vincent Sorel: Thank you, Jay. The operating performance that we deliver over the H1 is in line, I would say, with our expectation. It is important to note as well that the guidance is the highest EBITDA ever posted by the company, that the low end of the guidance is higher than the EBITDA of last year. We still have many risk ahead of us. That being said, we are super confident to achieve the guidance. Indeed, a combination of positive factors like, I would say, good hydrology, a very strong regulated demand, and that sort of thing, combined, in addition to capturing market opportunities on gas sales, for instance, it is too early to say, could indeed lead us to outperform the current range. But at this stage, we maintain the range published in February, and while we express again the confidence to achieve this target.

Speaker #1: The operating performance that we delivered over the first half is in line, I would say, with our expectation. It's important to note as well that the guidance is the highest EBITDA ever posted by the company—that the low end of the guidance is higher than the EBITDA of last year.

Speaker #1: And we still have many risk ahead of us. That being said, for we are super confident to achieve the guidance. And indeed, a combination of positive factors like I would say good hydrology a very strong regulated demand and that sort of thing combined in addition to capturing market opportunities on gas sales, for instance, and it's too early to say could indeed lead us to outperform the current range.

Speaker #1: But at this stage, we maintain the range published in February, and we once again express our confidence in achieving this target.

Speaker #2: Our next question comes from Ms. Isabel Luna from Farallones Capital. Ms. Isabel, you may now proceed.

Operator: Our next question comes from Ms. Isabel Luna from Farallones Capital. Ms. Isabel, you may now proceed. Hi, you hear me? Yes, we can hear you. Okay. Could you give us an idea of the CapEx levels we should expect from 2029 onward? Could you expect lower levels now that the matrix has been rebuilt around non-conventional renewable energy and gas? Thank you.

Operator: Our next question comes from Ms. Isabel Luna from Farallones Capital. Ms. Isabel, you may now proceed.

Speaker #5: Hi, you hear me?

Isabel Luna: Hi, you hear me? Yes, we can hear you. Okay. Could you give us an idea of the CapEx levels we should expect from 2029 onward? Could you expect lower levels now that the matrix has been rebuilt around non-conventional renewable energy and gas? Thank you.

Speaker #2: Yes, we can hear you.

Speaker #5: Okay. Could you give us an idea of the capex levels we should expect from 2029 onward? Could you expect lower levels now that the mix, the matrix, has been rebuilt around non-conventional renewable energy and gas?

Speaker #5: Thank you.

Speaker #1: Thank you, Isabel. What we can say is that we have the ambition to add 2 gigawatts between the end of 2027 and 2030. This is backed by a strong pipeline that we presented in the strategy update earlier this year.

Vincent Sorel: Thank you, Isabel. What we can say is that we have the ambition to add 2 gigawatts between end of 2027 and end of 2030. This is backed by a strong pipeline that we presented in the strategy update earlier this year. All this was presented under, sorry, the condition of profitable megawatt. In other words, the technologies that will form this 2 gigawatts are, of course, backed by a pipeline, any other project acquisition that we could do. With that regard, as the technology mix is not definitive yet, it is very difficult to give an indication of the CapEx range, especially spread between 2029 and 2030 because this will be dependent on the life of the project development.

Speaker #1: But all this was presented under the condition of profitable megawatts. In other words, the technologies that will form these two gigawatts are, of course, backed by a pipeline or any other project acquisition that we could do.

Speaker #1: And with that regard, as the technology mix is not definitive yet, it's very difficult to give an indication of the capex range, especially spread between 2029 and 2030, because this will be dependent on the life of the project development.

Speaker #1: But I guess that starting from the two gigs, you can probably use that as a model and multiply to model the CapEx intensity that we could have, even if it is not committed.

Vincent Sorel: I guess that starting from the 2 gigs, you can probably use that as a model and multiple to model the CapEx intensity that we could have even if it is not committed in 2029 and 2030.

Speaker #1: In 2029 and 2030.

Operator: This concludes the question and answer section. At this time, I would like to turn the floor back to Engie Energía Chile for any closing remarks.

Speaker #2: This concludes the question and answer section. At this time, I would like to turn the floor back to ENGIE Energía Chile for any closing remarks.

Speaker #1: Thanks a lot. Thanks a lot for attending this call. Thanks a lot for the question. I hope we answered to the extent of what was possible and we met your expectations.

Vincent Sorel: Thanks a lot. Thanks a lot for attending this call. Thanks a lot for the question. I hope we answered to the extent of what was possible and we met your expectation. As always, anytime you can contact our IR people here to further discuss the result. Considering the forecast, I would say next timeline for us is the September result. We will have more information and we will update. We are looking forward to updating you in October with our press release and in November with this call for the key forecast of the performance of this year. Thanks a lot.

Speaker #1: As always, you can contact our IR people here to further discuss the results. Considering the forecast, I would say the next timeline for us is the September results.

Speaker #1: We will have more information, and we will update you. We are looking forward to updating you in October with our press release and in November with this call.

Speaker #1: For the pre-forecast of the performance for this year, thank you very much.

Speaker #2: Thank you. This does conclude today's presentation. You may disconnect your line at this time and have a nice day.

Operator: Thank you. This does conclude today's presentation. You may disconnect your line at this time and have a nice day. Goodbye.