Enel Chile S.A.

Good afternoon, ladies and gentlemen, and welcome to Enel Chile's four-year and fourth quarter 2023 results conference call. My name is Carmen, and I will be your host 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 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw the question, press star 11 again. Please note 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. These factors are described in NL Chiles' press release reporting its four-year and fourth-quarter 2023 results, the presentation accompanying this conference call, and NL Chiles' annual report on Form 20F included on the risk factors. You may access our full year and fourth quarter 2023 results press release and presentation on our website, www.nl.cl, and our 20F on the SEC's website, www.sec.gov. Readers are cautioned not to place undue reliance on those 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 Ms. Isabella Clemes, Head of Investor Relations of NL Chile. Please proceed.

Buenas tardes, good afternoon, and welcome to a New Chile 2003 quarter and full year results presentation. Thank you all for joining us today. Joining me this morning is our CEO, Fabricio Bardelli, and our CFO, Giuseppe Trucchiarelli. As announced yesterday by our board of directors, today is the last day of our CEO, Fabricio Bardelli, after two years in charge of our company. assuming a new position within LSPA in Italy. During the period that the new CEO shall be designing, Giuseppe Turchiarelli shall step in as the interim CEO of Enerchili. I take the opportunity to thank Fabrizio for all his contributions to our company over the years. Now, our presentation and related financial information are available on our website, www.aneo.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 mystery mode. In the following slides, Fabrizio will open the presentation with our key highlights of the period, then go through our portfolio management actions, regulatory contest updates, and guidance achievements. Finally, Giuseppe will give us a view of our business economic and financial performance. Thank you all for your attention, and now let me hand over the call to Fabrizio.

Thank you, Isabella. Good afternoon and thanks for joining us. Let's start our presentation with our main highlights on the right page. I want to start with our portfolio management highlights. During the year, we added around 600 megawatts of new renewable energy capacity, including our first-best project. All these additions will support us in our long-term ambition of decarbonization and the continued optimization of our portfolio. As of today, we have received a commercial operation date and a cost from the system operator for 1.4 gigawatts, which is in line with our expectations announced in our last two investors' days. This year, we had a remarkable performance of our generation portfolio. The better-than-expected ideology due to the El Nino phenomenon and all the gas-trading activities' outstanding performance supported the achievement of our goals and targets. On the regulatory side, we have some important news to share. First, the Chilean government presented a draft bill to Congress introducing the stabilization mechanism, the PEC 3.0. a very important positive and important sign of stability to the energy market. At the same time, the regulator has published the final technical distribution report, referring to the 2020-2024 cycle. This step was very important to reduce eventual uncertainty to the distribution business remuneration. I will dig down into those topics later. Finally, I am pleased to announce that we beat all our financial targets for 2023, which reflects our confidence in energy, the future, and solidity. This article will give you more color on this. To conclude, during 2023, we recovered around $358 million related to the stabilization mechanism, the PEC 2, including our target project. which represented around $180 million as positive impact in our next week. Now, let us move to slide four to review how we executed our goals and strategies to work with more efficient generation of photovoltaics. Over the last few years, we have significantly increased our renewable capacity to a diversified pipeline across different areas of the country. increasing our exposure to solar close to the center of consumption, to wind, and more recently, to storage. During 2023, we connected almost 600 megawatts of additional net capacity. In Q4, we connected 106 megawatts related to the last phase of our solar plant, Sierra Gorta, 34 megawatts of La Cabana best, and 13.5 During the year, we have also executed some asset rotation in the form of the sale of 416 megawatts of solar generation assets to Solnitics in the north of Chile, and the sale of our Vasco gas turbine power plant. Both were initiatives aimed at optimizing our portfolio and enticing our capital. Regarding cost, since January 2023, we have received the authorization from the National Electricity Organization to begin commercial operations for 1.4 gigawatts. This includes projects such as Campos del Sol, Valle del Sol, Ciudad Serrae, One Choice, Reynaldo D'Or, and the businesses known as El Manzano and La Cabana. Now, let's look at some updates on the hydrological situation and gas optimization activities. Favorable hydrological conditions during 2023 allowed us to reach a higher-than-expected hydro production, exceeding by 25 percent the level recorded in 2022, and totaling 12.2 terawatt-hours of hydro generation, a scenario that we have not seen since 2010. The ecological situation in our reservoirs is also very positive. Yesterday, once compared to last year's figures, especially in the south, we have increased an updated view of our reservoir levels in the context of our presentation. Rainfalls during 2023 surpassed the last 10-year average period, allowing us to have comfortable water availability until the end of the first quarter of 2024. In fact, as of February 3, 2024, the total available for generation was at 1,800 gigawatt-hours, 150 gigawatt-hours more than the same date in 2023. Regarding our gas optimization and drilling activities, we have guaranteed natural gas and LNG supply to our fleet and executed some very profitable sales to local, industrial, and mining customers, and also to foreign markets. The foreign market sales were reoccurring during 2022 at very attractive prices. And the deliveries were mainly compensated during the first and the fourth quarters of 2023. Totally four cargoes sold abroad. All the hope contributed around $300 million at largest for 2023. For 2024, we also see the situation as very comfortable. For reference, we have already executed a new term agreement with several Argentina suppliers for up to 4 meters cubic meters per day. They are already in operation from October 3rd until at the end of April 2024. Allow me now to outline our combined cycle generation code. In addition, we have already secured new agreements for 2024 winter period with Argentine suppliers for up to 2.6 million cubic meters per day from May to September 2024, giving us security to optimize our portfolio during 2024. Now, let's look at some important updates related to the regulatory context. In January this year, the Ministry of Energy presented a draft bill related to the Stabilization Energy Mechanism with the purpose of continuing the PEC mechanism and mitigating the projected tariff increases to final capital. At the same time, they aimed to improve the Science Protection Mechanism, known as MPC Mechanism, to allow rather remaining of accumulative debt with the generators and establish a transitory subsidy for the most vulnerable clients. Also, during January, the draft bill was reviewed and approved by a special energy commission from the Senate. And now, after the Congress annual leave that ends during the month of February, the draft will be discussed first in the Senate Plenary and then in the Chamber of Deputies. Let me say that we consider the government proposals very solid and aligned with Chile's position and words in incentivizing investments towards the carbonization. Let me explain the TBI proposal, starting with how this mechanism is financed. The TBI considers the three sources of finance. First, a temporary state subsidy until 2026 of a total of $20 million per year. Then, the public service charge, which involves a regulation on official items and that amounts to around $200 million annually. And finally, the climate protection mechanism charge that will be applied only to the related customers up to 2035. Both charges shall have different P's depending on the consumption of each client. With this finance mechanism in place, and also the gradual increase in the targets, which will depend on the time consumption, shall support the recovery of the generator's accounts receivables generated since the enforcement of PEC 1 and PEC 2. In our case, on December 31st, we had an account receivable related to the PEC or readiness of factory of $759 million. In addition, the BDL has confirmed that PEC 1 separate should occur after 2027. Also, the PBL notifies effect 2 by extending the investment limit period from 2032 to 2035 and increasing the total amount of the fund by $3,700 million, totaling $5,500 million. We expect that the PBL will be approved and published soon, in the first semester of 2024. considering the urgency of the decision and the fact that the next regulatory option is scheduled to be held during April. Regarding the distribution tax review, the regulatory final report for the 2020-2024 cycle was published early this month of February, and the tax decree on the distribution 2020-2024 remuneration cycle shall be published within the next few months. And let me say that we had a more positive view of the process once comparing to its beginning. Additionally, by November 2024, we should start the distribution regulatory cycle compiling the 2024-2028 period. We are still at the very beginning of this process. Currently, the external consultant responsible for realizing the reference model company studies has started its work. The results of this study shall be known in the following months. Now, let us move to slide 7 to review our main KPI of 2023 versus our guide. In terms of renewables and best execution, we have achieved our goals, reaching 77% of renewables and best contribution in our metric on 31st December 2023. The latter also enabled us to reach our goal of 34 greenhouse gases pre-production over the total during 2023. Let me point out that our efforts intended to improve efficiency and quality of service to achieve our goals regarding network losses despite a more complex matrix analysis. On electrification networks, we have also achieved our goals. Now, let us review on slide 8 our main financial indicators for the 2020-2023 guidance. During 2023, we experienced a significant improvement in our operations. mostly explained by a more efficient generation mix related to a better agricultural situation and the contribution of our optimization portfolio action plan developed and executed during the last year. The latter, coupled with the conclusion of optimization initiatives such as the sale of Arcadia last October, enabled us to achieve our ABDA and net income commitment. On the last financial indicator, we have reached the upper range of the guidance announced during 2023 investor day. To that end, we provide details on our performance on EBITDA and net income in the following slides. All in all, guidance is our leverage and net debt to EBITDA commitments, making us comfortable recommending the maintenance of the committed payout, which was also the company's Board of Directors' recommendation and work and was also in line with our guidance. Now I will hand over the phone to Giuseppe.