Enel Chile(ENIC) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The hydro generation increased by 20% compared to last year, attributed to higher reservoir levels and a solid rainy season [9][15] - EBITDA for the nine-month period reached $1 billion, a 46% improvement compared to the previous year [50] - Net income for the nine months amounted to$ 446 million, representing a 62% increase year-over-year [54] Business Line Data and Key Metrics Changes - Net electricity generation totaled 18.6 terawatt hours, exceeding the previous year's production by 6% [22] - Energy sales increased by 9% to 25.3 terawatt hours, driven by higher sales to both regulated and free customers [24] - The distribution segment faced challenges due to extreme weather events, impacting operational costs and service restoration efforts [27][30] Market Data and Key Metrics Changes - The company reported a strong liquidity position, with a gross debt increase of 8% to $4.8 billion by the end of September 2024 [65] - The average cost of debt slightly increased to 5.0% as of September 2024 [66] - The net debt-to-EBITDA ratio improved to 2.9, indicating a solid decrease compared to the previous quarter [67] Company Strategy and Development Direction - The company is focusing on improving its generation portfolio with a diverse mix of renewable projects and battery energy storage [19] - The Los Condores project is nearing completion, with expectations to connect to the grid by the end of the year [10][21] - The company supports government efforts to assist vulnerable families through subsidies, while also advocating for regulatory stability to protect long-term investments [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the upper end of the EBITDA guidance range of$ 1.3 billion to $1.5 billion for 2024 [74][107] - The company anticipates hydro production to close the year at approximately 13 terawatt hours, with a long-term estimate of 10 to 11 terawatt hours per year based on historical averages [75][83] - Management acknowledged the impact of extreme weather events on operations and is awaiting regulatory feedback on the distribution tariff process [76][94] Other Important Information - The company executed a factoring totaling$ 630 million related to regulatory receivables, which will strengthen its balance sheet [12][70] - The regulatory framework is evolving, with discussions ongoing regarding energy stabilization mechanisms and subsidies for vulnerable customers [32][38] Q&A Session Summary Question: Guidance on EBITDA and net income - Management confirmed guidance for EBITDA at the upper end of the range and net debt-to-EBITDA ratio below 3x [74][75] Question: Recovery of regulatory receivables - Management updated expectations for the recovery of pending amounts, with significant cash expected in 2025 and 2026 [73][79] Question: Publication of new distribution tariff - No significant updates were provided, with expectations for news early next year [76] Question: Hydro generation estimates - Management projects hydro generation around 10 to 11 terawatt hours per year based on historical averages [83] Question: Impact of extreme weather events - Management is evaluating the operational impacts and potential fines or compensation related to service interruptions [88][94] Question: Dividend policy - Management indicated that the current cash inflow aligns with the dividend policy, with no significant changes expected [99] Question: Status of Los Condores project - The project is in good shape, with pre-commissioning tests underway and expected synchronization by year-end [102]