Enel Chile S.A.

Good afternoon, ladies and gentlemen, and welcome to the second quarter to the second quarter and first half 2022 results conference call. My name is Victor and I'll be your operator for today. At this time, all participants on a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you need to press star 11 on your telephone. Please be advised that today's conference is being recorded. 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. are described in NL Chile's press release reporting its second quarter and first half 2022 results. The presentation accompanying this conference call and NL Chile's annual report on Form 20F included under the risk factors. You may access our second quarter and first half 2022 results press release and presentation on our website, www.nl.cl. and are 20F on the SEC's website, www.sec.gov. Readers are cautioned not to place underlines on those forward-looking statements which speak only as of their dates. NL Chile undertakes no obligation to update those forward-looking statements or 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 Ms. Isabella Clemes, Head of Investor Relations of NL Chile. Please proceed.

Isabella Clemes Many thanks, Victor. Buenas tardes, good afternoon, and welcome to NL Chile's second quarter and first semester 2022 results presentation. Thank you all for joining us today. Joining me this afternoon is our CEO, Fabricio Baderi, and our CFO, Giuseppe Turchiarelli. Let me remind you that your presentation and related financial information are available on our website, www.nl.cl, in the Investor Relations section, and in our app, Investors. In addition, our Play 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 listener mode. In the following slides, Fabricio will open the presentation with our main highlights and strategy updates, and then Giuseppe will walk us through our financial results and our recent material facts released. Thank you all for your attention, And let me now hand over to Fabrizio.

Thank you, Isabella. Good afternoon and thanks for joining us. Let me now start with the highlights of the period on July 3. As you know, the market pressure remained over during the year's second quarter. Given this, we have been taking several management actions to offset this pressure and take advantage of the natural resilience of our assets. proving that our strategy is sustainable and resilient. I will give a detailed view of the actions contribution for this first half in the following slides. We had several rainfalls and snowing episodes during the first semester, bringing us the bright hydrological perspective for the second semester. Also, there have been some regulatory updates, like the approved second energy stabilization the distribution bed service flow that will enter into fourth in August, and some recent updates related to the 2020-2024 slide. Regarding our economic and financial performance, we have faced some temporary headwinds over the margins related to the commodity pressure. But thanks to many actions we have put in place and the positive hydrology perspective for the second half, we are comfortable that we shall execute our 2022 guidance as will be detailed in this presentation. Finally, as we have just released, the asset rotation process as part of our sustainable balance sheet proposition is ongoing and evolving as expected in terms of both timing and multiple supplies in the transition. confirming the quality of our assets and our proposal to unlock new values for all our shareholders. Today, we signed the Pays and Purchase Agreement with Sociedad Transnistora Metropolitana S.P.A., a company fully owned by Investiones Grupo Taesa, for an equity value of $1,345 million for the sales tax held by the Chair. We hope everything will be closed by the end of the year, as Giuseppe said. Now let's move to slide five to briefly talk about the market situation. The national electrical system has been impacted by a set of factors correlated with the Russia-Ukraine conflict and the last year's critical ideology. Commodities continue their uptrend, particularly coal prices, that associated to a lower annual dispatch resulted in the sharp increase of the spot price in the period. This scenario has been softened due to the presence of Argentinian natural gas up to April and several actions in terms of thermal grid optimization that we put in place. The four crises in the period were also negatively impacted by declared energy force measures in the system, thermal fleet maintenance and outages, and some transmission constraints. Despite this strong adverse scenario, we have been able to put in place several actions that contributed for around $130 million in the period. Our solid LNG supply position, which includes our long-term LNG contract with Shell and the Argentine gas supply, which was successfully delivered up to April this year, enabled us to increase the generation volume and optimize our operating natural gas thermal fleet, contributing to the first half of the year with $27 million, and some natural gas trading activities that contributed more than $34 million in the first half. In addition, our commodity hedging instruments contributed an additional $58 million in the first half. Complementing these short-term actions and also having in mind the new configuration of the market, we also decided to enter into long-term PPAs with some pure renewable as an anticipated move of the review of our portfolio strategy to reduce our non-hedge state position. Renewable growth has been one of the main pillars in the energy transition. So let's now look at how we are consolidating our renewable position on slide six. The current context has unquestionably meant an important challenge for the energy sector. and we have acted as necessary to adapt to this new environment. In that sense, we have been one of the principal driving forces in the energy transition process in the country. One proof of the aforementioned is our strong position in the renewable market, where we have consolidated our leadership, connecting more than 1,000 megawatts of renewable capacity since 2020 During this year, we have already connected 216 megawatts of solar capacity. Moreover, our efforts and capital are committed to connect until the end. A more significant part of our project in construction is exemplified in this slide. We are strongly convinced about the potential of Chile as a renewable development pool in the region. and we will continue contributing to consolidate this position, aiming for a clean energy metric. Now, on page 7, let's take a look at the neurological condition and the outlook for the second half of the year. During June and July, there has been a significant increase in rainfall and accumulated snow, especially in the south of the country. In fact, in the eight regions where the basins of Laja and Biobío are located, the rainfall recorded today is equivalent to one recorded in the area with normal hydrology, something that we haven't seen for a while in Chile. As you can see on the left side of this slide, the snow cover in the mountains is clearly better than the last year figures, and therefore, in the past statistics, highlights a very good situation. allowing us to foresee an optimistic hydro scenario for the rest of the year, especially for the fourth quarter. On the other hand, we have also been carrying out various actions to maintain our portfolio's resilience, mainly thanks to the higher availability of Argentine gas. During this year, we have been able to reroute our energy capacity, increasing our trading activities and optimizing our thermal generation. This year, we have rescheduled part of our LNG delivery from Quintero to the port of Mejillones. For the second half of the year, the presence of the Argentinian gas and the carbon we still receive will permit us to continue going forward with this optimization. On Argentinian gas, during June and July, the government has organized the three options in which several Argentinian gas suppliers have participated to deliver natural gas to Chile. Two of these auctions were focused on the electric of the electrical system. In both bids, we tackled 4.7 million m3 per day of natural gas from October 2022 to April 2023 at competitive prices that will allow us to maintain a resilient portfolio. All in all, we are convinced that there are signs that the world is leaving us behind. recovering our performance in second half and confirming our targets for the full year. Regarding the new stabilization mechanism project and other regulatory methods for the energy sector, let me highlight some topics on this on slide 8. On July 13, the second FECLU that creates an energy stabilization and emergency fund and also established a new mechanism for the transitory stabilization of energy price for regulated clients was approved. The approval of this law seems positive for our company and also for the sector as a whole, to bring back system rationality, since it means that the generators will not continue financing sectors to liquidity. Now, with the new mechanism, we expect to reduce the impact on our cash flow, as the retrievable shall be backed by the new energy stabilization mechanism. Regarding the basic service law in early February 22, a new law was approved to solve the problem of the debt accumulated between March 20 and December 21. An electricity consumption limit of 250 kilowatt hours per month was established to define the customers that will be vented. replacing the criteria of vulnerable profiles and other institutions. The collection system of this law shall begin in our concession area in August. In June, the contractor report was published on the distribution tariff review, and we have already addressed more than 100 comments to the regulators, who shall review it. Any potential discrepancies between the companies and the regulators shall be reviewed by the expert partners in the next phase. On transmission, the process is pretty completed. The larger sector of company arguments were attended by the panel of experts, and we expect a new bus to be published during the second half. Now, let me recap our strategy based on electrification and decarbonization. Despite all the temporary headwinds we see in our market, we continue pushing our long-term goals. Now, on slide nine. As you well know, Our strategy invests sustainability. That is why the quality and digitalization of our network remain a key enabler for the decarbonization and electrification of our final customers. As you can see in our main KPIs, we are improving in all qualities, digitalization, decarbonization, and electrification indicators, as demonstrated by our network and NLX business. All the strategy is backed by a solid ESG structure that is aligned with the UN SDG and is well recognized, confirming our leadership on the main SDG indices and in transparency and report. Let me now hand over the presentation to Giuseppe, our CFO.

Thank you, Fabrizio. And let me... Giuseppe, are you on the line? Yes. Are you hearing me?

Giuseppe?

You hear me? Yes. You hear me? No.

So sorry, you all. We just have a problem connection with Giuseppe. Just a second. You hear me?

Giuseppe, we can hear you. Okay.

That's fine. That's fine. Okay, sorry for the problem. Many thanks, Fabrizio. Good evening to all our investors connected. I will start my presentation on the slide 11 with a quick summary of the adjustments applied in the period in the quarter. In the first half and in the second quarter of 2022, we applied an adjustment in the EBITDA due to the impairment made to the cold stock of the period. which amounted $62 and $41 million, respectively. This adjustment had an effect at the bottom line of $42 million in the first half and $28 million in the second quarter. Through the same period of 2021, we applied an adjustment due to the cold stock and the voluntary retirement, which amounted $40 million in the first half and $27 million in the fourth. At the bottom line, this effect amounted $28 and $19 million in the first and the second quarter, respectively. The second quarter 2022 adjusted EBITDA had a decrease of 54% or $110 million, mainly due to the higher commodity prices, which increased the spot prices and had an increase in the variable cost of the period. This effect had also impacted the first half 2022 adjusted EBITDA performance, which decreased of 21% for $82 million. In terms of adjusted net income during the first half 2022, this decreased by 3%, reflecting the lower EBITDA of the period which was offset by the lower financial costs coming from the factory of the PEC account made in the first half of 2021 to improve the liquidity of the company. In the second quarter, the net income decreased 65% due to the same reason mentioned before. First half 2022 CAPEX almost reached $500 million, a 12-year 12% higher than the first half of 2021, mainly due to the construction of the new renewable capacity. In the second quarter, our capex reached $336 million, 63% higher than the same period of the previous year. FFO reached minus $219 million, representing a significant reduction in the first half of 2022, mainly coming from the stabilization mechanism effect in the second to 2022. Now, let's review more about our CAPEX on slide 12. In a consistent trend throughout the last year, our primary efforts have been mainly focused on boosting the country energy transition. As a result, during the 2022 first half Accumulated capex reached $499 million, of which 95 were linked to the main leverage. Customer capex totaled $35 million and was mainly allocated to enhancing our network, building new connections, and improving the experience for our customers. Asset management CAPEX reached $68 million, mainly related to maintenance activity in order to increase the resilience of our thermal capacity, thus reducing unavailability risk. Development CAPEX reached $397 million, representing an increase of 10%, mostly due to the activity of our project under construction. as a clear signal that our renewable expansion plan is still on track. Let's move now to slide 13, where we have the summary of the second quarter adjusted EBITDA breakdown accounting for $92 million. This variation was mainly related to an increase in our PPA sales of $100 million, primarily explained by the higher devaluation of the Chilean pesos against dollars. New renewable capacity, which was connected in December 2021 and during 2022, adding $12 million in EBITDA of the period. Gas trading activities that generated $21 million on margin, mainly due to the sales of gas as a consequence of the Argentina natural gas availability and LNG during the second quarter of 2022. All these effects that I have just mentioned in generation size were offset by $11 million due to the lower hydrology and negative effects on variable costs mainly due to the higher thermal generation costs driven by higher commodity price. This was partially offset by a more efficient thermal generation in the period and by the aging commodity coverage instrument in the period. And the higher spot price in the system in the second Q2021, mainly due to the higher commodity price and several system facilities that were into outages during the period. Following on the slide, let me talk about the other elements that explain our EBITDA. Network remuneration and demand accounting for a positive impact of $16 million related to tariff indexation in both network and transmission business, the recovery of the regulated demand in the period, which increased 9% in the Q2 2022, compared to the last year period, reaching pre-pandemic level. Other effects accounting for $6 million, mainly related to the ageing instrument associated with the bond debt. Let's move now to slide 14, where we have the summary of the first half adjustment in the breakdown, accounting for $313 million, 21% lower versus 2021 figures. This valuation was mainly related to $190 million higher PPA sales in the first half 2022, primarily explained by the higher foreign exchange of the Chilean pesos against dollar. New renewable capacity, which was connected in December 2021 and during 2022 first half, added $20 million in EBITDA of the period. gas trading activity that generate $24 million on margin, mainly due to the sales of gas as a consequence of the Argentina natural gas availability and LNG, largely during the second quarter of 2022. All these effects that I've just mentioned in generation side were offset by lower hydrology with an impact of $27 million, A negative impact of $100 million on variable costs mainly related to higher thermal generation costs due to the commodity prices and higher regressification costs in the period due to the higher volume, partially offset by a more efficient thermal generation in the period and by the ageing commodity coverage instrument in the period. due to the higher spot price in the system in the first half. The remaining variation of our EBITDA comes from $35 million due to the network remuneration and demand, explained by $14 million mainly due to the release of the final transmission type technical report issued by the regulator in the first quarter of 2022. This final tariff allowed us to reduce the provision we have been made since the beginning of the new regulatory cycle that started in January 2020. And $16 million of tariff indexation in both network business and the recovery of the demand in the period which increased 7% in the first half of 2022 compared to the first half of 2021 reaching pre-pandemic levels. Other effects accounted for $9 million, mainly related to the aging instrument explained before, partially compensated by lower OPEX in network business due to the union agreement signed in the first quarter 2021. Let's now give you more detail on generation KPI on page 15. Net electricity generation grew by 11% to 10.2 T during the first half of 2022, mainly as a result of higher dispatch of our combined cycle power plants and the additional capacity coming from our new connected solar units in the period. During the second quarter of 2022, net generation increased 8% to 5.1 TWh also due to the higher thermal dispatch coupled with higher solar mainly due to the new project and wind generation. Even though our first semester regeneration was affected by poor hydrology, during the second quarter there was an improvement in rainfall that enabled a recovery in our repertoire level. and there's no cover in the mountain that brings a new and better perspective for the second half of the year. Nevertheless, since there is a preventive electricity rationing decree in force until September 13th, 2022, 0.4 Tarawa Tower has accumulated as a virtual water reserve for the whole national electricity system, out of which 0.2 are in our reservoir. The impact of this water reserve is basically natural since the accumulated water belongs to the system and will be generated and returned to the system once the liquid expires in proportion to the sales of H generated. Our energy sales increased 18% during the first half of 2022, mostly related to the higher sales to free customers primarily due to the new contract coupled with an improvement in sales to regulated customers. During the second quarter 2022, physical sales increased 10% as a result of higher sales to both free and regulated customers. Let's quickly see the bid up performance on the payload by business line on page 16. As it was mentioned previously, our first half 2022 EBITDA decreased by 21%, mainly due to the performance of our generation business, which was affected by the increase in commodity prices worldwide and the doubt that has affected the country and the consequence that these effects have had into the production costs and into the spot market. On the network business side, this had an increase of $41 million, mainly due to the reduction of the provision as a consequence of the technical status report published in the first quarter of 2022 and the recovery of the demand during the 2022. Besides these effects, the one-off effect of the union agreement made in the first quarter of 2021 had a positive effect in the OPEX this year. Others reflect mainly the holding OPEX of the period and the effect of the debt hedge. Now, on slide 17, let me show you how our 22 EBITDA guidance will be accomplished. During this presentation, Fabrizio indicated our portfolio's central elements and strengths that make us reasonable, confident that the current headwinds shall not jeopardize either our guidance or our long-term goals for our assets in Chile. Let me give you a few words on our adjusted EBITDA guidance for the year end. As you may know, our generation business is quite seasonal. That is mainly related to the fact that from June to August, start of the raining period in Chile associated with the starting of snowing. At the beginning of our spring, during October, we start to have higher hydro generation in the country associated with the melting seas. All this in October, we start to have higher hydro generation in the country associated with the melting seas. All these effects associated with the return of Argentina natural gas results in the reduction of the spot prices and higher generation of our hydro facilities, generating a higher EBITDA in the second semester of the year versus the first one. This seasonality that I have just introduced, associated with the several active portfolio management actions in place and a better than expected hydro season year, supports our view that we will be able to tackle this year's guidance. Next quarter, I should give you more detail on the evolution of our EBITDA performance and our action. Now, on slide 18, let's go through the main drivers of our group net income. Our first half adjusted net income amounted $102 million, representing a flat variation versus the last year's year. The main variances are coming from lower adjusted EBITDA, which decreased $82 million or 21%, mainly explained by the effect of higher commodity prices and its consequence in the spot market and variable cost generation business. Higher DNA impairment and bad debt by $28 million versus last year mainly related to higher depreciation and amortization in energy and power assets, primarily explained by the exchange rate effect in the period and the initial commissioning of new solar power plants, and the higher depreciation in the distribution and transmission segment related to the new project and higher amortization of intangible assets related to the new commercial system recently upgraded at NLDC. Also, we had a higher provision of bad debt in the distribution business mainly due to the increase in overdue debt in the retail clients and municipalities. Financial results and equity investments recorded a $53 million, declining by $59 million in the first half of 2022, mainly due to lower expenses related to the factoring executed in the first half of 2021 in generation business on the accounts receivables that arose from the Tariff Stabilization Law. Income tax decreased by $49 million, mainly related to a higher tax credit due to the higher monetary correction in the period, among the lower EBIT results of the company and Bedwell account in the first half of 2021. The adjusted net income of the second quarter 2022 reached $15 million, which represents a reduction of $28 million in the quarter, mainly explained by the same aspect of the health. Moving to the FFO of the first half 2022 on slide 19. The first half 2021 FFO amounted at negative $219 million in the period. mainly explained by the cumulative stabilization mechanism accounted in the first half of 2022 for $211 million, has reduced the cash conversion of the period. During the second quarter, this effect had a significant impact in our FFO, accounting $144 million out of $211 million. The working capital in the period account for a negative impact of $187 million, mainly due to $57 million related to the Delta payables in June 2022, mainly coming from the CapEx execution. $43 million related to the lowered collection and distribution, mainly associated to the final turning on the commercial system update most of this impact shall be recovered within this year. Another effect in the period mainly related to $62 million, referring to the cost of payment, not including the bid adjusted, transmission, tariff revision, provision and bed debt. Let me just underline that regarding the working capital in 2021, It included the PEG factoring instrument that we have executing totaling $189 million. Income taxes reached $35 million. With regard to the variation versus last year period, I would like to recall that last year number were impacted by effect losses resulting in a lower payment of tax. The financial expenses amounted to $100 million, related to the debt cost payment in the period. For what concerns the last figures, which include the expense related to the fact-factoring instrument that I have just mentioned. Moving to our debt on page 20, our gross debt increased by $600 million. $65 million amounting to $5.7 billion as of June 2022 due to intercompany loans provided by Enel Finance International in Chile for $400 million and third parties for $300 million in the second year 2022, offset by the amortization of Enel Accreditation Chile and amortization leasing contract as of June 2022 18% of our debts are LPG linked to our CO2 scope 1 PAP reduction for 2023 and 2024. In terms of debt amortization, our schedule remains comfortable with an average of five years. For the current year, we have around $400 million debt at the annual Shiller level with EFI that has been matured in December. and that we aim to renegotiate looking at the opportunities in both local and international markets. Regarding the depth of maturity in 2023, we will use the proceeds from the sale of transmission to repay this maturity. In terms of liquidity, we continue to have a comfortable position. We are reserving some available committed lines considering the possible headwinds in debt market coming from the international conflict in Eastern Europe. Despite the increase in our debt, its average cost in June 2022 decreased to 3.9% versus 4.4% as of December 2021 as a result of our financial management carry out during the last month. As a part of our goal to strengthen the sustainability of our balance sheet, we have put in place an asset rotation strategy focusing on optimizing our indebtedness and creating value for all the shareholders. Let me spend a few words on the recent material facts regarding the sales of Enel Transmissions. On slide 21. As we have just informed the market, Enel Chile has signed today with Sociedad Transmisora Metropolitana , a company 100% controlled by Inversiones Grupo Taesa, an agreement to sell its entire stake in Enel Transmision Chile, equal to 99.09% of the share capital. In Santiago metropolitan area, Enel Transmisione in Chile operates 683 kilometers of transmission lines, managing 60 substations. The purchases and sales transition will be carried out through a public tender offer by the purchaser group of sales, and it's subject to certain condition precedent customary for this kind of transition. like the approval from the Chilean Antitrust Authority, Fiscal and National Economics. The agreement provides the group of AESA will pay an equity value of $1.345 million for the entire state held by Enel Chile equal to $1,526 million of enterprise value. The capital gain embedded in this transaction shall generate an estimated impact in our net income in 2022 of $783 million. The pricing is subject to a price adjustment mechanism based on the interest rate from January 1st, 2022 until the launch date of the public standard offer mentioned before. The closing of the transaction is expected by the end of this year. The transaction is part of our asset rotation initiative, focusing on the capital recycling of our company and contributing to optimize our leverage. The timing and the pricing we have reached on this negotiation clearly express the quality of our portfolio and our continued path to unlock the value of Enel Sida. We are going to give you further update about the process in the next quarter call. But what I can anticipate is that the sources we obtain in this operation shall be used as an input of a liability management we are pursuing And now I will hand over to Fabrizio. Many thanks.

Many thanks, Giuseppe. Just to point out some closing remarks. During our presentation, we have detailed the several actions we have taken to face the utility sector's extreme externalities, starting from the impact of an international conflict in the commodities market. All these scenarios led to main messages for us. First, we are on the right path to continue conducting the energy transition through the decarbonization of our magic and electrification of the consumption. Second, continue to reshape our actions to bring value to all our stakeholders. The asset rotation transaction was released today and our action plan gives us confidence that we will reach our 2022 guidelines. Let me be clear that there are no low-hanging fruits on this path, but we know that we are trading the right world and we continue to unlock the value of our quality and resilience portfolio. Let me now hand over to Isabel.

Thank you, Fabricio. And let us open now the Q&A section. As anticipated, we will receive questions via phone or chat in the webcast during today. Operator, please, you can start the Q&A section.

As a reminder, to ask a question, you need to press star 1 1 on your telephone. Once again, that's star 1 1. Please stand by. We'll compile the Q&A roster.

One moment for questions.

Our first question will come from Murilo Rossini from Santander. Your line is open.

Hello, guys. Many thanks for the call and information provided here today. So considering the level of water and snow stored so far in the reservoir and in the mountains, Would it be possible to generate approximately 10 terawatt hour of hybrid generation this year? This is my first question. The second one is, could you provide us your view on the availability and prices of fuel during the second half of this year after these lower shipments that we are currently seeing to Europe? Do you believe or do you see the possibility that your gas provider can cancel any gas ships during the winter in Europe, even if they need to pay a fine, for example? And the third question is, do you have any other asset rotation in process or under analysis? Thank you.

Okay. Let me go with the first two questions. and let Giuseppe answer on the third one. Well, yes, we are quite optimistic on the second semester and we think that we could reach almost 10 terawatt hours of hydro production this year. This is our best estimation today, of course, The rainfall and snow season is not yet finished, so it depends also on how it goes on in the next week. But as of today, this is our best estimation to be close to the center of a tower that you mentioned. Second question, no. We don't foresee any problems in our gas supply. Our contract is very tight, with many processing closes in our favor in this case. So no, we are not worried about any potential cancellation of shipping to our range.

Giuseppe, do you want to? Well, for what concerns possible other asset rotation, Murillo, I mean, we are always looking whatever opportunity could come up from the market. We don't have so far anything on the table, but as soon as something will concretize, for sure we're going to share this information with everybody. But again, it's a regular process to look uh to our asset in order to find a way to unlock the value for the company that is very helpful thank you thank you morillo a operator do we have another question on the line

Our next question comes from the line of Ezequiel Fernandez from Balance. Your line is open.

Hi. Good afternoon, everybody. Thank you very much for the materials. Very complete, as always. I have four questions, and I would like to go one by one, if you do not mind. The first one is pretty much an accounting thing. We saw an unusual jump in the other operational expenses pnl line uh not related to fuel which affected evita um could you please tell us a little bit what was behind this yeah may you explain exactly which line you are referring to because uh yes um before getting to it yes before getting to evita you have four different uh operational expenses lines, and in the second quarter, the last one that says other operational expenses, that's the one that jumped quarter over quarter significantly.

If it's too specific, I can take it by email with the... Yeah, maybe it's better because I'm not sure that I understood in which line or which topic you are referring to. No worries. Yeah.

No worries. We'll do that. My second question is related to the Bocamina 2 shutdown and what's the latest on the timing?

to fulfill the schedule that was defined with the Minister of Energy. Of course, as you well know, it was expected to close in May. Then we received an instruction, a formal instruction to postpone this at the end of September. And to be honest, we don't see Thanks to the meteorological conditions that we mentioned, thanks to the availability of the Argentinian gas, the system is not expected to be on stress anymore. And for the rest, going forward, we have also considered come into operation of the renewable plants. So we don't see any reason why we should postpone again for Camino.

Okay, great. My third question or actually topic has to do with the sale of the transmission lines. I wanted to get a sense of how much tax you expect to pay on the gain of that sale? And when should Nel Chile pay that?

Well, for what concerns the tax is going to be paid next year. The amount of the tax, if you look at this, the capital gain impact we are talking about around 350 million dollars but we have to consider that we have some losses that we can use in order to offset such amount that you know we are estimating around 100 110 million dollars so In short, we are talking about $240, $250 million next year.

Okay, perfect. And, well, also, Giuseppe Turchiarelli mentioned that Enel Chile plans to use the proceeds from this sale to pay down $1 billion debt amortizations due 2023. And I wanted to know how much of that are intercompany loans.

Well, let me say that all the loans, all the funds, they are going to be dedicated to the repayment of the loan. The criteria based on which we are going to select the loan that is going to be repaid are basically the expiration date and the cost associated to the like breakage fee for other kinds of costs. I would say that a good portion of this amount is going to be used in order to repay the revolving credit facility that we got this year during this year and that they are going to expire next year.

we are talking about most of them are in the company the company revolving okay perfect that's very clear my final question is um also well after selling the lines collecting the cash paying down the debt i think you might still be a little bit above your comfort level regarding leverage is the nl group thinking about an eventual equity injection a capital race

Well, of course, I mean, the answer is going to have to be done by an SPA. For what concern, I mean, what I know as of today, there is no plan of capital injection on the table. Okay.

That's great. Thank you very much for your time.

Thank you. One moment for our next question. Our next question comes from the line of Enrique Peretti from JP Morgan. Your line is open.

Thank you. Good afternoon, Giuseppe and Fabrizio. Thanks for the question. I have a couple of ones. The first one would be, so if the tax payment is about $250 million and the equity value is over $1.3 billion, so the cash inflow with the sale is going to be about $1.1 billion. Is that correct?

Well, either.

No, I would say just the lining, we weren't able to hear you, so you can just be closer to the line to be more easy to us to listen from here.

Oh, I'm sorry. I was using the headphones. I'm going to try again. So the question was, if the equity value is $1.3 billion and the tax payment is about $250 million, so can we tax the cash inflow of about $1.1 billion if the asset fails?

Yeah, you have to consider that, of course, Enel Transmissione has a loan, an intercompany loan, owned by Enel. Basically, also, this loan is going to be paid, but, you know, out of tax, we are talking about 1.1 roughly. Again, the correct amount for, you know, having the correct amount, we need to wait the end of public tender offer because there is a price adjustment mechanism that will change a little bit the amount of the equity value. So, you know, roughly this is the calculation that you made is correct.

Thank you. The second question would be if the annual EBITDA of the traditional business is still about $70 million. And the third question would be, you mentioned the company could consider other opportunities in the market if they arose. My question would be, what type of assets would a notary consider selling or a minority stake in case other asset rotation measures

would have to be taken well again we used to evaluate all kind of assets clearly and transmission was out of our strategy you know that we we are focused basically on the renewable generation side and distribution because of the client together with the new services of NLX. Having said that, is it clear that renewable projects are easy to split in the model distribution and NLX is, you know, it's all together. So we are analyzing everything. We still not have a clear view of the potential opportunity, but if something will come up, for sure we're going to do.

Okay. And just to confirm the EBITDA of the transmission line. Thank you so much.

it's around the 70 million dollar if i'm not wrong give me a second

Yeah, roughly.

All right.

And I'm not showing any further questions in the queue. I'll turn the call over to Isabella Glamis for any webcast chat questions.

OK. Thank you, Victor. Thank you all for your questions. Now I go through the chat that we received several questions. from different analysts and investors connected. One of the questions here, Giuseppe, is just to say again the numbers of this transaction, the sale of an L-transmission. Some analysts are requesting more details about the amount that we are expecting that is going to be the cashing of this operation. And how much would be an estimate of the reduction of the net depth of the company considering this caching?

Okay. As I said, we are going to the projection that we have. is to get after the payment of the tax to have around 1.1 billion dollars. 1.1 billion dollars that is going to be dedicated to the payment of the debt and to the distribution of the dividend related to the 30 percent dividend policy. So we are talking about around $200 million dividend and around $100 million of debt. Because again, on top of the amount that you receive as the equity value, we're going to be paid also for the loan that is inside of an energy transmission. That we estimate at the end of the year around $170 million. we're going to reduce significantly our debt.

Perfect Giuseppe. And on the third, we also received a question regarding dividends. So the company is expecting to increase dividends related to the sale of this asset.

Well, we are not going to, let me say, we are going to increase the value of the dividends because we're going to have this capital gain. we are not going to increase the dividend payout that it will remain 30 percent. So since the 30 percent is mandatory in case of the company has a positive result, we are going to distribute the dividend associated to the capital gain. After tax, clearly. We're talking about roughly $200 million.

Perfect, Giuseppe. Thank you. Then the other question that was made by Rodrigo Mora from Moneda is he's requesting more details about Bocamina II. He's asking that the system is still very pressured due to the hydrology and commodities, and if you are indeed thinking of closing this facility, now in September, or if we're expecting to let this unit in the strategic reserve energy mechanism, Fabrizio?

Yes, as I already mentioned, we don't see the system to be anymore under stress. and this was also consistent with the creator of the phenomenon and I think that there's no reason to postpone again the closure of Cocamina and we were pretty clear since the beginning that we are not going to use the strategic reserve mechanism so we simply shut down the plant and finding an alternative user of the site.

Perfect. Thank you Fabricio. We have more questions here also from several analysts and investors regarding the LNG. So what we are, first of all, what we're expecting regarding sales of potential trading sales of natural gas in the second half of this year. And if we can give a detail on how much was sold to Endesa or any other place that Enel has sold gas during the first half of this year. So also the other questions. Yes, this is all the questions in terms of LNG and commodities. So Fabricio?

Yes. Well, basically, in the first half, what was the approximately 15 that a bit you out of which 10 was about the data. And then this is finally was the last year that was done last year in order to manage expected surplus that we thought to have during the first half of the year, so not a relevant contribution to the numbers I commented during the presentation, while the other states were more short-term, so contributed to what I mentioned as an action to cope with the challenging scenario and put in place something of our resilience. And about the second half, we expect to have, as I mentioned, a significant surplus considering the combination of gas availability and our long-term LNG contract with Shell. And so we expect another at least 10 terabitu to be available to sell in this second half. And the good piece of news about that is that I think that we have still to do. So we are trying to, of course, optimize expect the opportunity and to leverage on this very good market outlook about information.

Thank you, Fabrizio. We have another question also regarding the CapEx. What we are seeing regarding CapEx

for now Chile this year if we are estimating any kind of a reduction in the capex or Postponing to the next year Well for what concern the capex As you probably know, you know most of our projects are Projects already under construction actually all the projects are Projects already under construction and committed so We are confirming the capex at the end of the year because of course we need the energy that this product is going to produce in order to improve our market. So as of today, we confirm that the capex is going to be in line with our capital market day product.

Perfect. Thank you. And the final question here that we have is regarding the rating agencies. So have you had recently discussions with the rating agencies and what they are anticipating regarding the moment of the company?

Yeah. Well, we always are in touch with the rating agency. we discuss and we pass all the messages that we believe are needed for them. We discuss about the projection of the business and the design also about the evolution of the debt. I believe that we are in line with their expectation in terms of managerial action that are needed in order to deliver the company. So we don't really believe that rating agency is going to give a negative feedback about the situation that we have today. So we are fine with them.

Okay, thank you very much, Giuseppe, and also Fabricio, and thank you all for being connected today. In case you may have any other doubts or any other consultations, please let us know. And as always, our investor relations team is going to be available for any other information you may need. Thank you very much, and have a nice day.

This concludes today. Thank you for participating. You may now disconnect. You may now disconnect. Everyone, have a good day.