Interconexión Eléctrica S.A. E.S.P.

Good morning. I'm Mateo Ochoa, a member of ESA's Investor Relations team. Thank you so much for joining us for the 2026 Third Quarter Earnings Conference Call for ESA and its companies. During the presentation, please submit your questions through the window that appears on the right side of your screens. Please include your name and the company you represent. At the end of the conference our management team will address your questions. Let's move on to the next slide. Joining us today are Patricia Castano, Interim CEO of ESA, Jaime Falquez, CFO, Gabriel Melguizo, VP of Power Transmission, Natalia Pineda, VP of Road Concessions, Juliana Suso, VP of Institutional Relations, Sonia Bouchard, Legal Affairs VP, and other support teams. Patricia Castano, the interim CEO of ISA, will begin providing an overview of the key events of the third quarter of 2026, followed by an explanation of the financial results led by Jaime Falquez. Next, we will have an explanation of the financial results by Jaime Enriquez, and then we will return to Patricia Castano for some closing remarks, and we will end with a Q&A session. Let's move on to the next slide, please, and let's give the floor to Patricia Castano. Thank you, Mateo. Thank you and the team for providing us this space. Good morning, everyone, and thank you for joining us. Today, we will be presenting our results as of the end of September, starting with a brief overview of our progress so far this year. And this way, we can give you a context for those that join us for the first time and also those that have been with us before to remember data of previous reports. Let's move on to the next slide, please. This year, we've had major advances for the business continuity. Firstly, we have been awarded projects with estimated investments of $2.7 billion, among which we would like to highlight the following. In Colombia, we will bundle stakes of very urgent works to enhance the national grid, especially in the Caribbean coast, for a value of In Brazil, we have an unbundling of stakes in a moneda in which there were 1,700 points of reales, that is 20,000 billion pesos. We told you back then that this is an energy transmission line of direct current that takes the energy from Madeira in Mato Grosso to the Araraquá station in Sao Paulo, with a total of 2,300 km. Also in Chile, we were awarded the Ruta de los Lagos concession, which connects Río Bueno with Puerto Montt, with a reference investment of approximately $821 million. Secondly, I'd like to underscore that during the year, we've carried out several transactions to increase our financial capacity, enabling us to leverage growth. One example is the recent issuance of preferred shares in Brazil for 1.2 billion reales, that is, about 750 billion pesos, intended primarily to finance the Madeira project that I mentioned before. Next, which is very relevant for this year, has to do with the commitments we've already made that go hand in hand with the commitments we have gained and meeting the times and schedules we have, as I will share with you later in this presentation. As evident, our operations continue to generate value. And this positive cycle is reinforced when we grow through awards and allocation of strategic projects and we make progress and transform those investments into recurring revenue and sustainable value creation for the future. And I'd like to end these highlights At the end of September, with something that shows our ESUN built during the 60 years, and is that at the end of September, we participate in Climate Week, an international platform that connects leaders and accelerates initiatives to address climate change. And this was held for the first time in Medellín. There we shared our sustainable infrastructure model and our contribution to energy transition through different activities such as TED Talks, executive participation in manuals on energy storage and carbon markets, and organization of the event of Instructure for Sustainable Resilient Energy Transition in Latin America. Next. As I said in the previous slide, during the first nine months of the year, we were awarded projects with estimated investments of $2.7 billion. And on the other hand, I told you that we've been executing investments according to the timetable to turn them into revenue when in operation. So, turning specifically to the third quarter, we commissioned several projects. At ISEN in Ria, Brazil, we have 13 upgrades and improvements put into operation to enhance the reliability of our circuits with a reference investment of 81 million dollars. That is close to 285 billion pesos. and this represents an estimated annual revenue of nine million dollars which is about 31 billion pesos In Colombia, projects totaling $29.6 million, which is about 103 billion pesos, came along. We're talking about the installation of smart files at Termo Guajira, which is a technology that allows us to maximize the capacity of the existing infrastructure, providing stability and control to the transmission system in the Caribbean region. In terms of the projects that we have for the third quarter, When it came to the previous slide, we saw the Madeira in Brazil. And on July 31st in Israel and here Brazil completed the share swap transaction. And as a result, acquired 49% of the remaining of EIE Madeira, transferring its stake in Guaranuz with a net investment E.S.A. E.S.A. E.S.A. E.S.A. E.S.A. E.S.A. Eléctrica S.A. Eléctrica S.A. Eléctrica S.A. Eléctrica or 531 billion pesos. And in Peru, ISARAP was awarded an expansion project with an estimated investment of 8 billion pesos. Let's move on to the next slide. With the various transactions as of the end of September 2026, the investment commitments made through 2030 total 28.1 trillion pesos. 85% of the investments through 2030 will be allocated to power transmission, 13% to the rail business, and 2% to telecommunications. The investments consist of different tenders. We have calls for proposals, awarded expansions in each of the countries where we operate, As well as optimizations, reinforcements, and improvements to the ISA and ETIA Brazil grid and equipment replacement, among others. Of these investments, 47% will be allocated to Brazil, 28% to Colombia, 15% to Chile, and 8% to Peru and 2% to Panama. And if we look at these investments in terms of projects, today we are advancing to build 37 projects distributed in 34 power transmission projects and 3 road projects. which will total more than 4,500 kilometers of circuit for the transmission business and interventions in 296 kilometers of roads. On the right hand side you can see the annual estimated projects to execute these projects. We have to clarify, of course, that the figure that you see of 2026 includes investments made between January and September totaling $5.2 trillion, which we will explain on the next slide. Let's move on, please. Now, let's look at the execution of our investments in the third quarter. During the third quarter of 2026, we executed investments totaling 2.1 trillion pesos, up 24% compared to the third quarter of 2025. The chart in the middle shows the breakdown of consolidated CapEx by region, and the one on the right shows the breakdown by business segment. 88% of investments are in the power transmission business, 11% in roads, and 1% in telecommunications. These figures include power transmission projects like Itataya and Serra Durada in Brazil, Quimal Lagunas in Chile, and La Loma Sogamoso in Colombia, as well as the construction of the Pan American East Highway in Panama and Orbital South Highway in Chile. Let me end this part of my talk. And that's why I'd like to dedicate some time to it. Mateo, let's look at the next slide please, and let's listen to Gabriel Melguizo, who is our leader of the transmission area. Thank you, Patricia. I'd like to tell you with regards to the Caribbean region, this today is the country's energy hub. The demand in the Caribbean region has been growing more than 7% and it holds the greatest potential for renewable energy generation. But really, that potential can only be realized if there is a robust transmission grid and that's where ESA has been building for years. Today, more than 35% of our infrastructure in Colombia is set in this region with assets nearly $2 billion in operation of that total. About $500 million correspond to projects set to come online from 2021 to 26, including Cerramotoso Chinucopay, Copay Cuestecitas, and the new El Río substation, as well as the smart bulbs at various substations. And not only that, we're accelerating. With more than $1.2 billion, the region accounts 86% of our portfolio currently under construction in Colombia. That is 18% of our consolidated portfolio. of ISA, including synchronous compensators that provide 1,650 MVARs of stability to the road. This stability will allow us to integrate more renewable energy from the north of the country, make the most of our resources, and ensure Colombia's energy supply. Now, what's coming next is even bigger. We expect more than $1.8 billion in upcoming projects, including the Colectora II, which is Colombia's first high-voltage direct current project, and renovation and repowering work at key substations, such as Barranquilla, Cartagena, Copay, and Sabana Larga. In all of them, ESA, will indeed play an active role. So all of this means that we have a more reliable and resilient system capable of meeting growing demand and accelerating the energy transition, and it's ESA's long-term commitment to the Caribbean and to the country. So with this, I'll wrap up and move on to the financial section and give the floor to Jaime Falquez. Next slide, please. Gabriel, thank you so much. Good morning and thank you for joining our third quarter earnings call today. Let's move on to the next slide, please. Let's begin this financial chapter by highlighting the sound operating performance and financial results impacted by the revaluation of the Colombian peso against the regional currencies. When you consolidate all the balances in this currency, as Patricia mentioned, we continue to invest at a significant pace in line with the 2040 strategy, reaching an investment of 2.1 trillion pesos during the quarter, up 24% compared to the same quarter of the previous year. We continue also to actively manage our debt portfolio, always, of course, seeking to optimize financing terms and the company's cash flows. We're talking about those from our bonds in Brazil. Similarly, we have undertaken transactions to increase our financial capability. or capacity to leverage growth. And this is very relevant, especially to serve the challenges with our 2040 strategy, for instance, the recent issuance of preferred shares in Brazil that total 1.2 billion reals. Next slide, please. Okay, looking at this slide, we're really looking at the EBITDA and net income for the first nine months of the year. For this period, the EBITDA and net income for the first nine months show the macroeconomic variables, especially the appreciation of the Colombian peso against regional currencies. Another important element that we can see on these results are the provisions for the ERE account, which amounts to about 257 billion pesos. So far, 2026, and we have a cumulative total of 750 billion pesos. Although when you make a comparison, you do not see a big difference because there was a big impact in 25 and 26. It is a relevant figure that has been reflected on the results, net results of the company. Likewise, In 2025, we experienced some special events in Brazil, primarily related to the update of the form of payment for the financial component of the RBSE. which is the base grid of the existing system and this event reduced revenue for that period but has no impact on the 2026 results on the top you can see the EBITDA which is 7.1 trillion pesos The increase in MIDRA is attributable to projects coming online, which we've been executing, the stronger growth in the contractual escalation clauses to which our revenue is indexed in the region, Also, the revenue from the acquisition of Medina in Brazil on favorable terms, and this is new and is reflected in this period, given this acquisition on favorable terms. This means that we paid a value below the company's valuation, which is a benefit that's shown In the results of this period and also is reflected because the higher construction profits after the developments of the projects that we are executing in the region. When it comes to the breakdown of the cumulative EBITDA bisegment, 81% of our EBITDA focuses on the business of power transmission, 16% on transportation business, and 3% on the telecommunications business. On the lower right corner of the slide, we can see the performance of the net income, which stood at 1.8 trillion pesos, reflecting a 3% decrease compared to the first nine months of 2025, excluding the impact of currency translation and the special events I mentioned. The effect on net income would be 1%, so practically it's similar in terms of magnitude of 1.8 trillion pesos. The change in net income is explained by two things. First, the increase in the EBITDA. And this is offset by a lower net financial income as well as the higher financial expenses that we are financing our projects with in Brazil and the monetary correction of the same debt. And this is mainly because of the higher inflation that we've seen in the region. And we have Debts Index by the UF in Chile and the IPC in Colombia. In terms of the breakdown of our net income by country, Colombia, Chile, and Peru, 20% about each, Brazil, 34%, 6% in Panama and Bolivia. So you can see that our operations are still creating value, and most importantly, we are advancing in the development and reaching our 2040 strategy. Next slide please. In terms of the balance sheet, as of the end of September 2026, we can see our sound financial position. Where do we see this? Assets totaled 81.7 trillion pesos, up 7% compared to what we saw at the end of 2025. This is primarily reflecting the consolidation of IEMA data, progress made in the projects that we are building and that we told you in the previous slides about. The concession revenue generated during the period and the recognition of the intangible asset related to Ruta de los Lagos in Chile. This is the new concession that we incorporated to our portfolio. It's in operation now with financing obligations in the future that we will reflect in this quarter. The obligations that we have to execute the future capital and the intangible assets that we'll receive from this concession. In terms of liabilities, these increased by 11% compared to what we saw at the end of 2025. This is mainly due to financing transactions and the consolidation of my data. We have entirely incorporated it in our balance sheet and the recognition of liabilities related to Ruta de los Lagos Concesión. You can see the dividends that we declared in 2026 as well. So this is partially offset by the translation effect of the consolidated figures into Colombian pesos in terms of equity as of the end of September this year. This stood at 17.2 trillion pesos, down 4% due to the dividends that were declared by the General Shareholders Meeting, which moved from equity to liability and the currency translation effect, which was partially offset by profits generated during the year.

Next slide, please.

As always, we share with you how we managed debt, which is fundamental for the growth and to achieve this strategy. As of September, the consolidated financial debt stood at 34.7 trillion pesos, a 2% increase compared to the end of 2025. We are showing in this figure the net change in debt of 759 billion pesos, and this is primarily attributable to disbursements made to finance the projects. The amortizations in accordance with the payment schedule and the effect of currency conversion, given the appreciation of the Colombian peso against the U.S. dollar, the Chilean peso, and the Brazilian real mainly. The main transactions carried out were, first, In Brazil, ISA Energía Brasil carried out its 23rd debenture issuance, which are bonds in the capital market of Brazil, to finance projects. We're talking about 1,500 million reals. Also... When we had the share uncrossing process between IEMA, DATA, and GARANUS, this was carried out, and as a result, loans totaled $535 million. In Colombia, through Transelca, we received a loan disbursement of $80 billion to support the company's financial and operating management of this subsidiary. In Peru, Consorcio Transmantaro received loan disbursements to keep financing its capital investments that we have been making in this country, while in Chile, the Quimalagunas project received two disbursements totaling almost $15 million to advance the project's implementation. And in Panama, we also made developments. Ruta El Este keeps advancing in its rehabilitation work, and the syndicated loan that we had that ended, it totaled $56 million so far this period. In terms of the gross debit to EBITDA ratio, we closed the period with an indicator of 3.6 times, and this is within the range suggested by Fitch ratings for investment-grade entities. Also, our operating cash flow The net debt ratio was 23%, also very consistent with the benchmark metrics for a BAA3 rating, according to Moody's. In addition, the consolidated average maturity of Visa's debt is nine years, in line with the long-term nature of the company's businesses. And something else. The maturities of our debt are below 10% of total debt, closer to 7%. And this is a message that's important because we have controlled the liquidity and refinancing risks. More than 90% of our debt has maturities in terms higher or longer than one year. Next slide. When it comes to the performance of ESA stock, as of the end of September, the stock rose 16%, reflecting a very positive market performance. Something that we monitor a lot, and it's quite relevant, is the stock's liquidity, which continued to strengthen.