Enel Chile S.A.

Good afternoon, ladies and gentlemen, and welcome to NL Chile nine-month and third quarter 2024 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 participate, you will need to press star 11 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply 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 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 Chile's press release reporting its nine-month and third-quarter 2024 results. The presentation accompanying this conference call and NL Chile's annual report on Form 20F included on the risk factors. You may access our nine-month and third-quarter 2024 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. NLGLA 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 NLGLA. Please proceed.

Buenas tardes, good afternoon, and welcome to NL Chile 2024 third quarter and nine-month results presentation. Thanks to all joining us today. My name is Isabela Clemes. I'm the head of investor relations. Join me today, our CEO, Giuseppe Turchiarelli, and our new CFO, Simone Conticelli. Simone is a nuclear physicist and holds an MBA from Lewis University of Hong Kong. He joined the Enel Group in 2006, working in the administration, finance and control of Enel SBA. From 2018 to 2022, he was in Chile as the CFO of Enel Generacion Chile. Before becoming CFO of Enel Chile, he held the position of CFO at Slovenske Elektron, another company within Enel Group. Our presentation and related financial information are available on our website, www.nl.cl, in the Investors section, in our app Investors. In addition, a replay of the call will soon be 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, Giuseppe will start the presentation with our key highlights of the period. He will then cover updates on our portfolio and regulatory context. Finally, Simone provides an overview of our business economic and financial performance. Thank you, you all, and now let me hand over the call to Giuseppe.

Thank you, Isabella. Good afternoon, and thanks for joining us. Let's start the presentation with our main highlights of the period on slide 2. During the first 9 months, our hydro portfolio performance was very robust, with hydro generation increasing by 20% compared to last year. This improvement was due to higher reservoir levels at the beginning of the year, influenced by the El Niño phenomenon observed in the previous year. and a solid rainy season this year. This resulted in an efficient generation portfolio mix for the video. We are pleased to announce that the Los Condores project is nearing completion. After several years of construction, the project has reached the pre-commissioning stage. We expect Los Condores to be connected to the grid by the end of the year. As everyone knows, an extreme climate event severely impacts the central and southern part of the country, including our concession area in the metropolitan region. Further, in the presentation, I will give you more details to you regarding the unforeseeable and irresistible climatic events that affected our distribution segment. On the regulatory side, we have some important news to share. The factoring related to the PEC 3 receivable was successfully executed last week. We have carried out the factoring totaling $630 million. The PMP decree for the second semester was published on October 6th, which will result in a lower PEC accumulation for the year-end. and the draft bill for the electricity subsidies for vulnerable customers is still under discussion. Today, the Energy Commission is renewed to evaluate government proposals. I will give you more color to this topic during the presentation. Regarding profitability, I'm glad to announce that our EBITDA and net income results were better than last year's figures. fully confirming our guidance for the year. We achieved a positive SPL, even though during the first nine months of this year we recovered only a small portion of the receivables related to the PEG. As I mentioned before, much of the recovery of the PEG-3 receivables was made through the factoring executed last week. So we will see them in the presentation of the full year results. And finally, for the 2024 nine-month results, we present a strong and sound level of liquidity. I will provide more details on this later. Now, let's look at some updates on the hydrological situation on slide three. In addition to the positive hydrological conditions during 2023 that allow us to have greater water availability this year, Higher than expected rainfall recorded during 2024 has allowed us to increase our hydro production, exceeding 20% in the same period of 2023. Therefore, during the first nine months of 2024, we have accumulated 1.6 TWh of additional hydro generation compared to last year. The hydraulic field situation in our reservoir is also very positive year-to-date compared to the last year figures, particularly in the south. In fact, with the water accumulated in our reservoir today, we have sufficient availability to supply our energy demand until the end of this year, even with the possibility of laminar phenomena in November and December. It is worth mentioning that the snow melting season has already started. Unfortunately, there has been rainfall and a rapid increase in the temperature in the south, generating increases in the affluent flows of the river. In fact, we had to carry out discharges in Pehuenche power plants a few days ago, and on October 24 in the Ralco and the Pang power plants as well. Of course, these manuals were coordinated and previously informed to the competent authorities and the communities. Based on this fact, we have updated our hydro generation estimate to approximately 13 TWh for 2024 and 3.3 TWh for the fourth quarter. of which we have already produced 1.3 trillion. Let's move to the next slide to review how we continue improving our portfolio on generation assets. We continue consolidating our renewable capacity through a diverse portfolio of projects distributed across various country regions. This year, we increased our exposure to battery energy storage, the BES system. In recent months, we received authorization from the National Electricity Coordinator to begin conventional operation of 101 megawatts associated with the two projects, El Manzano BES, located in the metropolitan region of Santiago, and La Cabaña BES, located in the south of Chile. Considering this latest authorization from the coordinator in 2024, we initiated the commercial operation of a portfolio equivalent to 511 megawatts and 1,735 megawatts since 2023. In this nine-month period, we reached a total nesting soil capacity of 8.7 gigawatts of which 6.8 gigawatt are renewable, representing 77% of the total. As good news, the Los Condores hydropower plants had significant updates in this period. We have concluded the filling of the tunnels and started the pre-commissioning test. We expect to be connected by the end of the year. Now, on the next slide, we will review the performance of our generation KPIs. Net electricity generation totaled 18.6 TWh as of September 2024, exceeding by 6% the production during the first nine months of 2024, mainly due to higher hydro and renewable generation, resulting from the improved hydrology this year and the operation of new projects. During the third quarter of 2024, Net generation decreased 8% to 6.5 TWh, mainly due to better hydrology recorded during the same period of 2023 and lower thermal dispatch during the third quarter 2024, partially offset by greater wind generation. Our energy sales total 25.3 TWh as of September 2024. 9% higher than the level recorded in the first nine months last year, resulting from higher sales to both regulated customers and free customers. Our commitment with our clients were fulfilled with a higher portion of our renewable generation, which also led us to lower energy purchases in the spot market. During the third quarter of 2024, Physical energy sales grew by 8% to 8.4 TWh, mainly due to higher sales to regulated customers. In terms of our balance, during the first nine months of the year, we increased our purchases from third parties by 2 TWh as part of our continued effort to diversify and optimize our energy sources. Now, I would like to take a few minutes to talk about the extraordinary weather events of the last August. I would like to present this slide to discuss the extreme weather events that impacted the country and not just our concession area, which impact was higher than the earthquake occurred in 2010. On August 1st and 2nd, the metropolitan region of Santiago was severely hit by an extraordinary and unpredictable storm with winds of up to 124 kilometers per hour, significantly exceeding the forecast and warnings issued by authority and technical experts. This storm caused the fall of more than 2,000 trees over 1,000 utility poles and large branches, which destroyed part of our electricity distribution network, causing widespread power outages. The damage is comparable only to that caused by the earthquake already mentioned. Enel Distribución Chile deployed all available resources going much further than required by Chilean electrical legislation, and it adopted extraordinary and special measures to restore power to its customers as quickly as possible. Reaching this amount of Q was only possible as part of an energy group. We have requested support and received more than 100 technicians and experts in this type of event, coming from different parts of Latin America and Europe. Furthermore, it is worth noting that for this weather event, we spare no expense to recover and normalize the power supply as much as possible. This is reflected in the number of field crews 383 crew at the peak of the event versus 108 considered in the reference model company of the current TARIS. Re-establishing the system was extremely difficult and we have already submitted to the local regulator and the course the resistibility and unpredictability of this event. Therefore, We clearly face a fourth major climatic event, the severity of which exceeded all the possible measures to be adopted under the Chilean electric legislation. It will appear clear to all the different stakeholders in Chile once the pertinent data will be disseminated. As Enel, we have been working on proposing different kinds of regulatory models to make the regulatory and physical systems more resilient to future weather barriers. We clearly understand that it is urgent to modernize and digitalize the Chilean electrical distribution systems. Now, I would like to talk about some regulatory framework milestones in the next As you may recall, during last call, we indicated that in January this year, the Ministry of Energy presented a bill related to the energy stabilization mechanism, which the purpose of continuing the effect mechanism and mitigating the projected size increases for final customers. At the same time, They also aim to improve the client protection mechanism, known as the MPC mechanism, to allow gradual repayment and accumulated debt to the generator and establish a transitory subsidy for the most vulnerable clients. This new law was discussed and approved by the Chilean Congress in April and came into force at the end of April. Following this, the first half and the second half EMP decrees were published and the regulated tariff was updated. After the publication of the second half decree, all clients, including those with a consumption of less than 350 kilowatt hours, which are basically households, are paying the regulated EPA real price. The consequence of this is that no further debt will be accumulated during the tariff stabilization, an outcome that has not been achieved since 2019. This shift marks a critical step towards financial stability, reflecting a significant change in managing tariff-related obligations. The issuance of the sovereign guarantee decree, as well as a complementary set of rules and regulations to the new law, the factoring was executed. We were able to factor $630 million last October 2024. As of September 2024, we had an account receivable related to the fact, a rating net of factoring and including the readjustment and interest of around $1.1 billion approximately. So taking into the new factory realized in October, we are expecting to the end of the year with accruals in the range of 500 up to $550 million. Let me go to the right side of the slide where we will recall the main topic related to the proposed law the government is introducing to increase the subsidies, which currently cover 1.2 million families, to reach approximately 4.9 million families, representing the 40% of most vulnerable families in Chile. now congress is discussing with executive authorities potentially increasing this benefit to increase the number of the families supported by these subsidies currently the energy and money committee of the senate is deliberating on the matter which includes in general terms doubling the green tax emission from the current five dollar per ton of co2 emitted For reference, last year we paid around $15 million related to it. Allocating the additional VAT revenue that the station is collecting due to the increase in the tariffs, doubling the fines imposed by regulators and allocating them to support the subsidy funds, applying new charges to the small and medium distributed energy units known As PNGDs, as Enel, we support the government effort to find alternatives to assist the most vulnerable families in the country, especially in light of potential economic challenges. However, we have observed that over the years, government solutions have often disrupted the market. The same companies that have been impacted by various regulatory measures since 2019 are once again being called upon to support these subsidies mechanisms. To maintain Chile's reputation as a quality marketplace, it is crucial that such measures are reconsidered. Otherwise, we risk severely impacting long-term investments, competitive investments, and the health of energy sector. Among the proposed measures, we believe that allocating the additional EBIT revenue is the most viable and sustainable option. To conclude, regarding distribution EBIT 2024-2028, there have been no significant developments since our last call. Our perspective on the next step. in the processes detailed in the annex of our presentation. Now, I will hand over to our CFO, Simone Conticelli.