Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Enel Chile SA (ENIC, Financial) reported a robust performance in hydro generation, increasing by 20% compared to the previous year due to favorable hydrological conditions.
- The Los Condores project is nearing completion, with expectations to be connected by the end of the year, enhancing the company's generation capacity.
- EBITDA and net income results improved compared to last year, confirming the company's financial guidance for the year.
- The company successfully executed a factoring of $630 million, improving liquidity and reducing short-term debt.
- Enel Chile SA (ENIC) increased its renewable capacity, with 77% of its total net installed capacity being renewable, demonstrating a strong commitment to sustainable energy.
Negative Points
- Extreme weather events in August caused significant damage to the electricity distribution network, leading to widespread power outages and increased operational expenses.
- The company faces regulatory uncertainties, including ongoing discussions about electricity subsidies for vulnerable customers and potential impacts from proposed regulatory changes.
- Despite improvements, the company still has a significant amount of regulatory receivables, with expectations to recover the pending amount over the next few years.
- The distribution business was negatively impacted by the extreme weather events, with potential fines or compensations for service interruptions still under evaluation.
- Higher financial expenses were reported due to exchange rate differences and increased tax payments, impacting the overall financial performance.
Q & A Highlights
Q: Can you elaborate on the latest guidance provided to the market in terms of net income and net debt, and the implications of increasing hydro guidance to 13 terawatt hours this year?
A: We confirm our guidance for EBITDA to be in the upper side of the range between $1.3 billion and $1.5 billion. The net debt-to-EBITDA ratio will be below 3x. We expect to close the year with approximately 15 terawatt hours of hydro production.
Q: What are your latest expectations for the recovery of regulatory receivables under the stabilization mechanism?
A: We expect to end the year with receivables in the range of $500 million to $560 million. This amount should be recovered mainly in the next two years, with around $100 million in 2025 and most of the remaining in 2026.
Q: What is the status of the new distribution tariff publication?
A: There are no significant updates on the 2024-2028 distribution tariff process. We expect some news at the beginning of next year when the regulatory model will provide feedback.
Q: What is the company's reasonable estimate of hydro generation in the medium to long term given the uncertainty of water availability?
A: We do not consider the recent years' hydrological conditions as a proxy for the future. We project around 10 to 11 terawatt hours per year based on the last 10-11 years' average.
Q: Do you expect the distribution business to return to normalized operating profit in the fourth quarter, or will there be more negative impacts from fines or compensations?
A: We are still evaluating the period needed to restore operations to their original status and are in discussions regarding possible fines or compensations. More details will be provided during our Investor Day.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
