Enel Chile S.A.

Good afternoon, ladies and gentlemen, and welcome to Inoculate first quarter 2022 results conference call. My name is Olivia and I will be your operator for today. At this time, all participants are in the listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star and the one key on your touchtone telephone. 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 are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors. These factors are described in NLTLIFT Press release reporting is first quarter 2022 results. The presentation accompanying this conference call and Enel Chile's annual report on Form 20F included under risk factors. You may access our first quarter 2022 results press release and presentation on our website, www.enel.cl, and our 20F on the SEC's website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. NLT will undertake 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 Mrs. Isabella Clemens, Head of Investor Relations of Enel Chile. Please proceed.

Buenas tardes, good afternoon, and welcome to Enel Chile's first quarter 2022 results presentation. Thanks to all for joining us today. Joining me this afternoon are CFO Giuseppe Turchiarelli, Let me remind you that our presentation and related financial information are available on our website, www.nl.cl, in the Investors Relations section, and in our app, Investors. In addition, a replay of the call will be soon available. In the final of this presentation, there will be an opportunity to ask questions via phone or webcast chat. Through the link, ask a question. On this occasion, media participants are connected only in Eastern mode. In the following slides, Giuseppe will open the presentation with our main highlights and strategy updates. Then we will go through our main financial results. Thank you all for your attention, and now let's hand over to Giuseppe. Giuseppe, please.

Thank you, Isabella. Good afternoon, and thanks for joining us. Let me start with the highlights of the period on slide three. We continue to enforce our leadership in renewable markets, growing with renewable capacity. We connected around 0.2 gigawatts of renewables to the grid during the first quarter of this year, and we still have over 1 gigawatt of projects under construction that will be added during the 2022-2024 period. Argentina's natural gas availability was a positive highlight of the year. During this quarter, the natural gas supply from Argentina was burned, which supported our natural gas loss strategy, as I will show you later on. In addition, for this year, we have contracted with Shell for around 12 LNG cargoes to fulfill our operation in Chile, a strategy that gives us more flexibility. The annual general meeting held on April 27th approved the new dividend policy of 30% payout ratio for 2021 and 2022. This reflects the final dividend approved of 0.26 trillion pesos with payment date of May 27th, totaling a distribution for the 2021 fiscal year of 0.37 trillion pesos. That's it. And lastly, the extraordinary general meeting held right after the AGM approved the e-mobility business Carbound, which considers selling the 51% stake of Enel X-Way Chile to Enel SBA, representing a cash-in of 12.75 million euros in Enel Chile during the Q2 2022. Now, Let's move to slide four to briefly talk about the market situation. During 2021, we saw a combination of factors that led to a very particular and stressed situation for the Chilean electricity system. Unfortunately, some of these factors continue to impact the energy market, such as a poor hydrology, a delay in the commissioning of some renewable projects at the country level, and the important overall increase of commodity price worsened by Russia-Ukraine conflict. In addition, there have been several failures in maintenance of thermal power plants that have put even more pressure on the system. All these factors have led to an increase in margin and cost during the first quarter 2022. We were able to cope with this situation thanks to our solid LNG supply position, which includes our long-term LNG contract with Shell and the Argentinian gas supply, which was successfully delivered during the first quarter this year. In this regard, it is worth noting that we have 12 LNG shipments already committed for the year 2022, ensuring our supply for the entire period. out of which we have already received three cargoes. On Argentinian gas, between January and April 2022, we have imported an amount of gas equivalent to five LNG cargoes approximately. Our renewable expansion will be called to bring additional flexibility, so let's now take a look. on our generation portfolio on slide five. We are convinced that renewable expansion is a key factor to cope with the energy transition, and it will give us a better position in the current challenging context. Therefore, during the first quarter, we connected 178 megawatts of solar capacity to prove our consolidated position in renewable development in China. In line with our decarbonization plan and asset optimization, we completed the sale of Diego del Magro thermal power plant, 24 megawatts, during the first quarter. Chile is now at the forefront of the jet energy transition, and we will continue contributing to consolidating the country position and reaching the environmental targets set out in the Paris Agreement. Now, let's see our evolution in terms of network main API that support the diversification movement from slide six. We continue to deploy the digitalization of our commercial channels. In the first quarter of 2022, 86% of our client interaction was executed through digital channels. Despite the complexity introduced by the pandemic situation, we have been able to enhance the quality of our customer care thanks to the introduction of our app and WhatsApp interfaces to improve the communication with our customers. On the network side, our quality indicator continues to improve, supported by an increase of automation at any level of our bridge. As a result, our SAID indicator decreased by 15%. To conclude, energy distribution increased 5% in Q1 2022 compared to Q1 2021, reflecting the easing of the sanitary restrictions and overall economic recovery and reaching pre-pandemic levels. Now, let's see the main KPIs and highlights of power beyond commodity strategy that is supporting the electrification and decarbonization of the panel consumption on slide 7. Electrification has turned into one of the main pillars of the decarbonization process and one of the core elements of our strategy. In that sense, we continue to develop different and innovative initiatives. promoting new uses of energy and bringing real change towards a sustainable future. E-mobility is one of the channels towards electrification, and on this line we are working on stewardship structures to foster the growth. One example is the creation of NLX Way Chile, which will be focused on e-mobility facilities. During the external nature of the meeting held on April 27th, 80% of our shareholders approved the sale of 51% of this unit to an SBA. That, by an international arm on e-mobility, has a commitment to accelerate electricity mobility in the country in line with the global trend, benefiting from a scale economy. In our view, the growth of this unit shall bring additional opportunity to our generation and distribution business. During the first quarter, we have incorporated 107 new electric buses into the public transportation system associated with Transantiago 5. This incorporation is also part of our Circular Cities project. It brings the development of the infrastructure and the energy sales, improving the quality of services and bringing technology closer to the people. E-industries and E-cities are important parts of electrification. In line with that, we have developed, with the Mandarin Oriental Hotel, the first rooftop in Chile that incorporates photovoltaic panels and biodiversities. which deliver unique and differentiated experiences with a dark, positive impact on environment. On the city, we continue to tackle the opportunity to build circular cities now outside the Santiago region. Now, in slide 09 and 09, on a summary of our main financial highlights of the quarter, Let me start with a quick summary of the adjustments applied and a summary of our main financial highlights. In the first quarter of 2022, we applied an adjustment of $21 million in EBITDA due to the impairment made on the cold stock of the period. This has an effect at the bottom line of $14 million. To the same period of 2021, the adjustment applied due to the cold stock was $13 million, with an effect at the bottom line of $9 million. The 2021 adjusted EBITDA had an increase of 15% or $29 million, mainly due to positive provisions of transmission business as a result of the conclusion of the regulatory status review process and indexation at a higher volume on generation and distribution differences. In terms of adjusted net income, this increase by 41% reflects the higher EBITDA and the lower financial costs in the period coming from the structuring of the pension accounts made in Q1 2021. to improve the liquidity of the compact. CAPEX reached $167 million, 31% lower than Q2021, mainly due to the connection of the new renewable capacity, which has ended in December 2021. $151 million, presenting a significant reduction quarter-on-quarter, mainly due to the factoring of the PEC accounts made in June 2021 and the sales of Interos and NIST services online. Now, let's begin with the capex on slide 10. 2022 first quarter accumulated capex reached $167 million. out of which 93% are located to achieve the SDG goals, particularly devoted to the construction of our new renewable capacity. Customer capex total $15 million, mainly located to build new connections and to implement our new distribution commercial system. Asset management capex, which is $29 million, 35% higher than 1st June 2021, mainly due to the maintenance in our CCGP unit. Development capex reached $123 million, a decrease of 41%, mostly driven by our renewable extension program, which added nearly of 0.9 gigawatts of installed capacity in December 2021, and the recently connected by solar power plant. Regarding the network business, we executed the lower traffic due to the quality and digitalization project made into one 2021. Let's move now to slide 11. where we had the summary of the first quarter adjusted EBITDA breakdown accounting for $26 million, 15% higher versus 2021 figures. Our generation portfolio mix resulted in a positive variation of $14 million, mainly related to $82 million higher GPA sales in 2020, 2021-2022, primarily explained by the higher foreign exchange of the Chinese pesos against dollars, the new PPA agreement started in 2021, and the higher regulated demand. New renewable capacity, which was connected in December 2021, added $8 million in the bid-out decision. A positive effect on variable costs and purchases, mainly due to a more efficient thermal injection in the period, boosted by an aging commodity coverage instrument negotiated for the period. All these elements were partially offset by a higher thermal generation cost due to the commodity prices. On the effect that I have just mentioned, were partially offset by higher stock price in the system in the Q1 2021, mainly due to the higher commodity prices at the World War XI, hydrology, and several system facilities that were into outgift during the period. And following on the slide, let me talk about the other elements that explain our data. Hydrology continued to have a negative trend. The 0.2 terawatt-hour LED hydrogeneration impacted our EBITDA in around $16 million. Network remuneration and demand accounting for a positive impact of $20 million related to a positive impact of the release of the final transmission type technical report issued by the regulator in the first quarter 2022. This final tariff allows us to reduce the provision we have been made since the beginning of the new regulatory cycle that started in January 2020, and the tariff indexation in both business, network business, and the recovery of the demand in the period, which increased 5% in the Q1 2022, compared with the Q1 2021, reaching a semi-minimum level other aspects accounted for $10 million, mainly related to lower OPEX in network business due to the regional agreement signed in 2021, and higher capitalization of generation business due to the construction of the project. Let me now give you more detail on generation on page 12. Next, electricity generation reduced by 15% to 5.2 terawatt-hours, mainly as a result of a higher dispatch of our combined type of power plant, and higher solar generation in the field, partially affected by lower hydro generation related to reduced water availability. Our energy sales increased 27% during the first quarter of 2022, essentially explained by the higher sales to pre-customers primarily related to the new contract, coupled with an improvement in sales to regulated customers. Adjusted EBITDA grew 4% to $180 million, reflecting the portfolio effect that had previously been mentioned. Regarding our sourcing on the stock of the ready-making production variances, we have counted a total increase of 1.1 terawatt-hours or purchases primarily on the stock market to meet the higher energy demands of the quarter. Let me now give you more detail on networks on page 15. In Feb-June 2022, our network business reached 50 million dollars, an increase of 71% compared to 2021, due to the above-mentioned effects. One of the positive effects on transmission business, as explained in that slide, the start of taxation in both network business and recovery of demand in the field, which increased 5% in Q1 2021 compared to Q1 2021, reaching the same level. Lower OPEX due to the union agreement signed in Q1 2021. The performance of the network business in this quarter improved regarding Q1 2021. the demand reached pre-pandemic increasing 5% and the sales decreased in 10 minutes in this quarter. In regulatory terms, we expect that the tariffs decreased from traditional business will be published during the first half of this year. Now, on slide 14, let's go to the main driver of our group meeting. Adopted EBITDA increased 15% to reach a total of $26 million, mostly owing to the better results in distribution and distribution business. DNA impairment and backbite reached $77 million, $9 million higher than the first quarter of 2021, mainly related to the higher depreciation and amortization in energy and power assets, primarily explained by exchange rate effects and the initial commissioning of new solar power plants. Also, there was a higher depreciation in the distribution and transmission segment related to the transfer of new investments into operation and the higher amortization of intangible assets related to the new commercial system, frequently upgraded at NL Financial results recorded at $36 million, declining by $11 million, meaning to a lower expense relative to the factoring executed in Q1 2021 in generation business on account receivable that arose from the tariff stabilization laws. Increasing income tax was basically related to the improvement in results during the Q1 2022, partially compensated by higher tax credits due to higher monetary collection. Therefore, the adjusted Q1 2022 net income reached $89 million, representing a 41% growth when compared to the first quarter of last year. moving to the SSO on this quarter 2022 on July 15th. Q1 2022 SSO reached a negative $151 billion, 151% lower than previous year figures, mainly resulting from negative one-off effects related to the factory made in Q1 2021 of the spec account which had a commodity during the period in order to manage the cash needs from the business operation. And higher commodity accounts of the stabilization mechanism 2.1.2.2 versus 2.1.2.1, which has reduced the cash conversion in $44 million. Negative effects related to the net working capital versus 2.1.2.1, mainly explained by Kintero-San Luis transmission line sales corresponding to MSNS in Chile with a total positive cash of $29 million in Q1 2021. A lower collection of corporate clients in Q1 2022 and a lower factoring of distribution receivable accounts in the period compared to Q1 2021 also affected the cash conversion. FIRE cost of payment in the period and not catch a debt. Entire financial expense mainly explained by the new debt time. These effects were offset by higher debt that is already explained and lower income tax during Q1 2022, mainly related to the lower PPM rate in the period in generation and distribution period. Let me now go to our debt evolution on slide 16. Our gross debt increased by $0.3 billion, amounting to $5.3 billion as of March 2022. Due to an intercompany loan granted by Enel Finance International for $300 million, mainly to fund capex and networking capital needs, In terms of debt amortization, our schedule remains sustainable with an average maturity of 5.5 years. For the current year, we had around $400 million debt at NHK level with AFI that has the maturity in design. We have already started to evaluate several opportunities in the local and international markets in order to face the most efficient options. The average cost of the debt in March 2022 decreased to 3.9% from 4.4% as of December 2021 as a result of the financial management error carried out during the last month. On the other hand, 20% of our total gross debt is currently SDG. Our plan is to continue to pursue this kind of debt in line with our sustainable business strategy. In terms of liquidity, we continue to have a comfortable position. We are returning some available committed lines considering the possible testing in the debt market coming from the international complex in Eastern Europe. Now, I would like to point out some closing remarks. We are always looking for new alternatives to strengthen our generation portfolio, making it cleaner, efficient, and resilient to external shocks, such as the commodity volatility that the world is facing. We will continue to pursue the electrification of the country to open the access for more uses of electricity for our clients and communities. We are pleased to announce that we published our first integrated annual report. This report includes the financial and non-financial information for the 2021 period. And we also published the 2021 sustainable report. Both reports are aligned with CCFD and GRI and SAP standards. And they are available in our website in the investor section. The record reflects how sustainability is fully integrated into our business model and a risk management and validation data. It also demonstrates the company effort to face the energy transition, mainly in the countries of decarbonization and electrification, and comply with our mid-zero commitment and the group commitment to the Paris Agreement. We are scaring and active portfolio management plans and other case initiatives to support the implementation of our commercial strategy, strengthening a sound leverage structure. Let me now hand over to Isabel.

Thank you, Giuseppe. And before we start our Q&A section, just recall you if you have any questions, please just put a question on the chat or just raise your hand into the poll. Okay, but before going, let me just ask to all the investors and connected that highlighting that we have now published already our integrated report. That is our first integrated report. And also our sustainability report. So as Giuseppe mentioned, all the reports are aligned with the different kinds of taxonomies in terms of climate change and others. So we would really like your feedback and also feedback any other information that, any comments that you have in this report, okay? So thank you very much, and now I will open the Q&A. Lydia, please.

Thank you, ladies and gentlemen. To ask a question on the phone line, you will need to press the star, then the one key on your touch-tone telephone. Now, first question, coming from the line of Murilo Resini with Santander, your line is open.

Hello. Hi, Giuseppe and Isabella. Thanks for the call. My first question comes from the generational side. What are your expectations for generation among your several sources? Maybe you could comment a little bit about how these 12 cargoes of LNG compares to last year cargoes that you used. And what should we expect from hydro dispatches as the Chilean coordinator has adopted this strategy to save water for now to face a potential complex situation during the second or mainly third quarter of this year? So a little bit of your feeling about this generation situation for the coming quarters. And my second question, if you could give us a little more details on these additional $199 million related to working capital that affected your FFO during this first quarter, please. Thank you.

Okay, Murilo, thank you for your question. We have now Giuseppe, please.

Yeah. Finally, for what concerns the 12-inch shipments, as I said, we have already committed all this cargo for this year and already received three cargo. Consider that this year the situation is definitely better than last year because of the availability of gas in Argentina that, of course, it will cover until April and we're supposed to receive in the summer period. And so we believe that the situation that we have this year with the shell availability and the gas argentino is going to allow us to feel comfortable for what concerns the sourcing on this side. And for what concerns the FSO, let me say that this year, if you compare this year with last year, as I said, we have a negative aspect because last year we made the factoring of PEC. It was an important amount, around $130 million. related to the PEC accumulated until the moment. And the amount is definitely lower. But on top of that, we have also the impact of the accumulation of the PEC receivables because of the situation that we have, especially because of the situation that we have in the exchange rate, U.S. dollar payoffs. And another impact that we have to take into consideration is related to the amount of capex that we concentrated in the last quarter of last year in order to ensure the connection to the grid of our renewable plants. all the situations give us a result that you can see in the slide.

Okay, thank you, Morilo. Operator, Lydia, do we have more questions?

Yes, our next question coming from the line of Javier Suarez with Mediabanca, your line is open.

Hi, Giuseppe and Isabella, and thank you for the presentation and for taking my question. I have three. The first one is a follow-up on the negative working capital during the first quarter. The question is, what do you expect to be that number, that working capital absorption by the year end? The second question that is related is, can you help us to understand what do you see the net debt to EBITDA by the year end, which is the assumption on CAPEX that that forecast includes. And the third question is, if you can update us in the process for the tariff review, then we're going to review in your network business. Many thanks.

Thank you very much, Javier. Thank you, Zate.

Yes. Well, for what concerns the FSO and negative results that we had this year, of course, as I said, are strictly connected to one of the effects that we had last year and also the perfil of CAPEX that we added. We are expecting to recover the situation by the end of the year, considering the evolution of our business and also considering the fund that, of course, we're going to continue the capital, the project. And let me confirm, taking the second question related to the capital, let me say that we are confirming the amount that we have already provided in our capital market day for the two years, it was around 1 billion monoliths. So all the capex are confirmed, and the trend is going well. For what concerns the net-debt EBITDA, of course, the evolution the rear end is going to be going to have a better result in comparison to 2021. As you know, we are looking at a starting operation in terms of access to rotation in order to improve these targets. But let me say that without these asset rotation measure, we're going to be around five times a little bit more than five times without the asset rotation. And the last question, maybe I didn't get it correctly.

Can you repeat it? If you can repeat your last question, please.

So the question is if you can update us on the process for the ongoing tariff review for your distribution business. Any update on that?

Well, actually, it's a good question, but we don't have a lot of information, unfortunately. As a matter of fact, you know that the process is pretty delayed. We do believe that we're going to have some additional news in the second half of the year. So as of today, we don't have in front of us any expectation or any news, at least before June. I believe that something is coming up in the second half of this year.

Thank you. As a follow-up, you mentioned that your estimate on method to EBITDA was before asset rotation. So the follow-up question would be, what is the level of method to EBITDA that the company managed to be sustainable for Enel Chile?

Well, let me say that we are putting – in several actions to improve our net ratio. And clearly, one of the most significant is the asset rotation measure. And of course, we're going to have some additional information about the process we're going to communicate to the market. We believe that this is improving the improvement of the net asset value something needed for anemicide, considering the ambition that anemicide has in its own plan to increase and to develop our decarbonization strategy. So we are monitoring clearly the situation, and we are going ahead with this action to improve the situation. Of course, this kind of situation is a temporary situation because you know that as soon as all the projects, all the renewable projects are going to be put in operation, the situation is going to change. As a matter of fact, this year already the situation improved a lot in comparison with the last year.

And our next question coming from the line of Ezequiel Fernandez with Palance. The line is open.

Hi. Good afternoon, everybody, and thank you for the materials as always. I have a question on the PEC limit, the receivables for the stabilization fund. We know that the government and the power generators and our in talks, but I was wondering if you could share perhaps some details on whether a new agreement might imply a higher limit for the fund or maybe a lower price for higher duration agreement on the BPA side or something else?

Let me say that, first of all, it's a very good signal that the government is trying to face this issue. You probably know that in June, one is going to be used totally. So basically, in cutting from July, we need to find a solution. We don't have a lot of detailed information about this new proposal that has to be discussed in the Parliament. What I can tell you is that, of course, we as a company, but also as an association, we are always in touch with the government. We believe that this new At least for what we understood, we believe that this proposal is definitely better than the previous one because it's going to limit the perimeter of the client that is going to be managed with this system. And what we understood also is that this proposal could be a temporary proposal in order to find a better way to manage the situation for the future. If we're going to have better information, we're going to, for sure, discuss all together, but as of today, we are really at the early stage of the situation, so we don't have a lot of information. Okay, great.

And if I may ask a second question. Well, we saw through the last year many renewable projects winning bids in the distribution auctions for $20, $25 per mWh solar and wind projects, right? So with this new scenario for spot prices that should be materially higher than what we thought before for at least three or four years. Do you think any of these projects are, which are scheduled to start in 2023, 24, 25, if any of these projects are at risk of not being commissioned?

Well, clearly, you know, the trend of price is going to be pretty different than, like, if If I have to talk about energy, of course, every time that we decide to take the decision to build up a new project, we do have in mind our first goal in terms of sales. So basically, all our... project or the projection of the energy that we have in our project and the construction are in some way covered by the sea. The question is more general, so if you look at what is going, what could happen in the system, clearly there could be some players that they are going to be affected by this trend. Now, again, here we need to decide whether or not we need to decide, we need to see the short, medium, long term, right? Because, of course, in the short term and maybe medium term, the trend are toward a price that are higher than what we saw last year, in the long term, clearly the situation is going to return to the previous situation. We don't have any worries about anything about your life. It could be this kind of situation could trigger some difficulties to the patient, to the small player.

And as for my ladies and gentlemen, to ask a question, please press star one. Our next question coming from the line of Andrew McCarthy with Credit Corp Capital. Your line is open.

Good afternoon, Giuseppe, Isabella. Thanks very much for the call and taking my questions. First one is with respect to the transmission business. Could you give us an update?

Sorry, if you could just... Hi, hello, this is Isabella here. We are not able to hear you, just like I can be close to a mic, please. Yes, certainly. Thank you, thank you very much.

Certainly, I'll try to speak louder. So, my first question was on the transmission business. There, I'm just trying to gauge, you know, where you are in that process with respect to the formal potential sale of that asset. And also just trying to understand, you know, from the presentation, you showed a sort of a transmission EBITDA and then a tariff adjustment. Should we be thinking there, therefore, that the sort of the annualized transmission EBITDA going forward is in the order of $75 million to $80 million? That's the first question. And then the second question was with respect to the fuel costs in the quarter. You know, if we take a look at the particular the cost of coal, we take out the provision that you recorded. It appears that your unitary cost was very, very low. I'm just trying to understand if I'm reading that right and what might be the behind that. That's it to begin with. Thanks very much.

Well, first of all, let me explain a bit the point with the tariff adjustment. The transmission new tariff cycle had to start in January 2020. Since then, we started making a provision of what we estimated at that time would be the new type. Now, according to the last technical record that has been issued by the regulator, we understood that the provision that we made since 2020, January 2020, was... lower than what basically the report is saying. So, in other words, we had a one-off effect because we had to register the positive impact related to the period 2020 and 2021. This is the reason because we had such a positive impact in the telecommunications. Of course, as I said, it is a one-off because we are recovering what we didn't look in 2020 and 2021 because we assumed that the target would be lower than what the report is saying right now. For what concerns the state of admission, In the process, we are at the beginning of the process, and so next week we're going to have more information and something that we can disclose, we're going to communicate to the market. If I understood well the question about the call, you were in doubt about the fact that the cost of call Q1 2022 It doesn't include the impairment of cold. This was the question, but I'm not sure that I understood very well. Can you confirm it?

I can joke. So once I take away, can you hear me?

Okay.

Yes, if you could again just speak closer to the mic because I think there's our mic here, but we're not able to listen to you very well.

Understood. I'll try and speak up. So with respect to the coal, the unitary coal costs in the first quarter 2022, once you take sort of adjusted the impairments, it seems to be a very low unitary cost. I just wanted to understand if I'm reading that right. And if so, why is it so low?

Look, for what concerns the cost of coal, without taking into account, of course, the impairment, so the external effects, The cost of coal that we have is between $150 to $100 per ton.

Great.

Thanks very much. Thank you. Do we have more questions?

I am showing no further questions on the phone line.

Okay, then thanks. So let's go here. So we have some questions here from the chat of our call. So let's start with a question from Rodrigo Mora, from Moneda. Rodrigo has some questions, so we're going to just list the questions and then we go one by one, okay? Okay. So the first question of Rodrigo also came from the same topic on the coal. So Rodrigo is asking us to give more details about why the company continues to make the coal permits in 2022. And this decision might or not might be impacted by the coal prices today. The second, one by one, is that correct?

Yes, one by one. Well, for what concerns this point, the impairment of the call is strictly related to the fact that our facility is supposed to be closed according to the plan. So basically, in other words, The fact that we have explained that it should be closed soon and according to the declaration that we made, and especially according to the fact that it's not fundamental for our sourcing, This astra allows us to consider it as an internet. Now, you know very well that there are some informal requests for the extension of the life of the planet. As of today, we didn't receive any clear request or at least any written form request for extending the line. As soon as we are in this situation, we continue with the same criteria that we had so far.

Okay, thank you. The second question from Rodrigo, we have already addressed it, but just to give more the numbers. So Rodrigo is asking about if we can get more details on the LNG contracted for 2022 and how many LNG cargo the company has already consumed in this first quarter.

Yeah, the cargo, as I said, there are 12 LNG cargo for this year. and we have already used K-TAC in the first quarter.

Okay, thank you, Gisele. And then we have other questions on the price stabilization mechanism that you have already addressed. So let me go now to another question that came from Mario Estrela from Itaú. Mario is asking us, how are you planning to mitigate the effects of the end of the Argentinian gas supply and the problems with Bocamina 2 considering the weak hydro expected for this year. Is that the case?

Yeah. So as we said, we have a long-term contract with Shell. So we have a supply of energy cargo already committed for this year. And you have to consider also that in our plan, in our budget, in our first year plan, we didn't have considered, we didn't have into the account the time that Argentina gas was available. So basically, if you compare with our target for this year, we are in a better position because of the Argentina gas availability. In terms of hydrology, in terms of hydrology, we have the same projection that we declare in the capital market day. The situation in the first quarter was a little bit lower than expected, But, of course, the ideological year is starting in April. So, fortunately, the situation seems positive, at least for what we see this year, this month, sorry.

Okay, Dan, thank you very much, Isabel. I think that we don't have any more questions from here, from the chat. So I would like to thank you all for your attention to joining us today. And I conclude, Dan, our conference call. Let me remind you that the investment relations team will be available for any doubts and feedback that you may have. just contact us by our website, email, or telephone. Okay? Thank you very much for your attention, and have a good day. Bye-bye.

Thank you. Bye-bye.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.