Enel Chile S.A.

Good morning, ladies and gentlemen, and welcome to NL Chile first half and second quarter 2023 results conference call. My name is Gigi, and I'll be your operator for today. At this time, all participants are in a 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 star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. 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 meeting 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 Enel Chiles' press release reporting its first half and second quarter 2023 results. The presentation accompanying this conference call and Enel Chiles' annual report on Form 20F included under risk factors. You may access our first half and second quarter 2023 results, press release, and presentation on our website at www.nl.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. NL Chile undertakes 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 Clemes, Head of Investor Relations of Enel Chile. Please proceed.

Buenos dias, good morning, and welcome to Enel Chile second half 2023 and first half results presentation. Thanks to all for joining us today. Joining me this morning is our CEO, Fabrizio Barderi, and our CFO, Giuseppe Turchiarelli. Our presentation and related financial information are available on our website, www.enel.cl, in the Investor section, and in our app, Investors. In addition, a replay of the call will be soon available. At the end of this presentation, there will be an opportunity to ask questions via phone or webcast chat through the link Ask a Question. Media participants are connected only in listening mode. In the following slides, Fabrício will open the presentation with our key highlights of the period, our portfolio management actions, and regulatory and market main updates. Later, Giuseppe will give us a view of the business economic and financial performance. Thank you for your attention and let me now hand over the call to Fabricio. Fabricio?

Thank you, Isabella. Good morning and thanks for joining us. Let's start our presentation with our main highlights on slide two. The first topic I would like to highlight and will give you more context is the status of our several portfolio management actions. Together, these actions target the optimization and flexibility of our portfolio in the energy transition scenario. Having followed this path during the first semester, we received the commercial operation authorizations for more than one gigawatt of our renewable project. All the growth projects added 0.8 TWh of additional production to our portfolio. Another important topic was all the management and timely effective measures carried out by our team to continue the operation of our plants and safeguard the neighboring communities after the heavy rains during June. These heavy rains contributed to accumulating almost 1 TWh of water in our reservoirs for the following period. which will be very positive also in terms of reducing spot mark prices for the second semester of this year. In terms of market context, the most expected positive news has arrived. The PEC 2 factoring process is very close to being initiated. On the regulatory side, we have some updates on the government's efforts to continue pursuing the faster decarbonization path for Chile. On the performance of our business, the second quarter presented a temporary mild performance, taking into account the complex pricing environment, as expected. But looking at the first half results overall, we continue to see a significant improvement in terms of EBITDA, increasing by 50%, mainly due to all the gas optimization efforts we have been performing. Net debt has temporarily increased mainly due to the delay in the Pact 2 factoring execution. Debt, once executed, could add $300 million to our cash flow. Higher contribution of our generation business in the second half of this year due to the seasonality embedded in the business and the closing of an asset rotation transaction named Arcadia are going to allow us to reach sounder level of net depth by the end of the year. Finally, let me then talk about Arcadia. As we announced two weeks ago, we signed an agreement to sell four non-strategic solar power plants in the north of the country. We expect this to be concluded at the end of 2023. I will give you more details on this later. We continue to develop our strategy toward a cleaner and more efficient generation matrix. During this first semester, we connected 98 megawatts of additional net capacity related to the final phase of our wind farm, Renico DOS, and the first phase of our solar plant, Sierra Gorda. New renewable projects added around 1.4 terawatt hour of additional generation. During this year, we have also received the commercial operation approvals from the system operator for around 1.1 gigawatts related to Campos del Sol, Valle del Sol, Finisterre Extension and Finisterre Tres. And one choice, the latter being the largest solar power plant in Chile with a capacity of 398 megawatts. All these projects together prevent the emission of around 2.5 million tons of CO2 into the atmosphere. We are maximizing all efforts to advance in the construction of diversified projects in different zones of the country, fully aligned with our strategy to increase exposure to wind, storage and solar close to the center of consumption. In the following days, we are also going to receive the authorization for Renaioco DOS, our 144 megawatt wind project located in the south. Today, we have around 0.7 gigawatts of projects in construction, which is performing as expected. The deployment of our renewables plants aims to improve our generation mix and increase the flexibility of our portfolio, which today is 76% renewable based. Now, on page 4, let's take a look at the hydrological condition and the outlook for the second half of the year. By the end of June, there was a significant increase in rainfall, especially in the south of the country. In fact, in the seventh and eighth regions where the basins of Maule and Biobio are located, the rainfall almost reached the level of hydrology for a normal year. Fortunately, we had no damage to the infrastructure of our hydropower plants. We also managed our reservoirs in a timely manner, regulating the flows permanently, enabling us to avoid impact on the neighboring communities. In addition, as you can see on the right side of this slide, snow cover in the mountains has been improving in Maule and Laha, particularly during July. So far, we cannot predict the volume of snow. We expect to have more details in August once the system coordinator performs a new inspection. The situation allows us to foresee an optimistic hydro scenario for the second half of this year. Based on this, we can fairly estimate at least one up to two terawatt hour of additional hydro generation for the full year 2023 when compared to our last strategic plan. Regarding our gas trading activities, let me highlight some topics on slide five. During the last semester, we have continued having plentiful gas availability thanks to the long-term LNG agreement with Shell and the contracts signed with Argentinian gas suppliers. Given the availability of Argentinian gas in the central zone, it has been possible to carry out LNG swaps in the northern zone, where natural gas is not unavailable enough. Multiple gas shipments have been sent from Quintero to Mecillones during the first half of 2023, totaling around 12 terabitu, and we expect to continue sending gas to the north during the rest of the year. As you may recall, during the first quarter of this year, we executed some opportunistic sales and negotiated during the year end 2022, taking advantage of attractive prices of natural gas in the international market. These transactions contributed around $150 million in the period. In addition, we have continued to perform trading activities with local industrial and mining customers that continue to bring additional margins for our business. In the second semester, we have already granted some additional sales for the end of the year, expecting an additional $50 million to come from this trading activity. To conclude, let me say that we are also anticipating additional volumes of gas from Argentina for the October-April 24th period. On page 6, let's review our performance and new initiatives in distribution and analytics with focus on electrification and decarbonization. Our main pillars include boosting electrification and decarbonization in the public and private sectors to face climate change properly. As a result, we have taken an active role and expanded our efforts to speed up these main goals. Let me highlight some indicators and projects executed during the last half, starting with the distribution business. In our concession area, the number of customers and distributed energy continue to grow. Therefore, New opportunities and challenges will arise. The important message is that looking at the last 12 months, we see a sound improvement in the CIDI index of around 4 million. In distribution, we continue to review our processes and intelligence on energy losses to better respond to the current environment and the current sound indicators level are a result of it. Finally, regarding digital payments, we have continued promoting payments through digital channels. Regarding NLX, some important milestones focused on electrification and decarbonization of our clients' energy consumption have occurred. Let me go through some examples from this period. Regarding the decarbonization of households, this semester we have replaced 104 households 1,420 hood stoves with efficient air conditioners, contributing to a reduction of around 2,600 tons of CO2 per year. Most of these replacements are due to contracts signed with companies that seek to offset their CO2 emissions. In the field of efficient lighting in our cities, NLX has replaced the National Stadium's lighting system for the 2023 Pan American Games. bringing efficiency and quality to this important event. Third, as leaders in electric public transport, we continue participating in new projects. We have signed an integrated offer with a bus operator called VOI. This offer includes 212 e-buses, two terminals, and a PPA for 10 years. To conclude, we continue working to increase the number of public and private charging points for electric vehicles and to be awarded more lighting projects throughout the country. All these efforts are noticeable once we look at the electrification indicator that is showing a significant improvement in the period. Now, regarding market context, let me comment on major updates on slide 7. Chile is a reference in the region for its commitment towards the net zero emissions and decarbonization of the matrix. Faster renewable growth and increase in electrification require the country's prompt response. Regulations should continuously adapt to continue giving the right signs for the further and faster achievement of the country's goals. In that sense, we received positive news on the changes in the main characteristics of the 2023 regulated auction, which introduced the concept of segmentation. Now the generators can choose the zonal areas they would like to beat in the auction and clear benefits for hybrid projects. In other words, renewable energy plus storage system of four hours. Also, the government has just submitted a draft bill related to energy transition. The government is proposing the realization of a storage auction in 2024 in the north and the definition of a national energy plan to better anticipate and efficiently plan the new transmission infrastructure required for the country. This process is still in the beginning phase, so throughout the year we might have further details to share with you and how this draft bill fits with our strategy. Now let's share some more good news. The factoring process of PEC2, also known as the Consumer Protection Mechanism, is very close to being concluded. At the end of this quarter, we accumulated around $633 million relating to this instrument. The important and most expected news arrived, allowing Gencos to start recovering the credits through a factoring mechanism guaranteed by the Chilean Treasury. Around half of the accounts receivable accumulated since the second half of 2022 will be paid through an additional fee levied on the final tariff, requiring the publication of decrees for recovery. A second decree is expected to be issued in the following months related to the second half 2022 period in order to reduce the gap between the tariff and the contract price, normalizing the process. Regarding the distribution tariff review, we expect the regulator to publish the final report in the following weeks. As for the process, we still see several lines for improvement, but we managed to achieve some positive outcomes, as the panel recognized some of our claims. Now, I will hand it over to Giuseppe.