Good day, ladies and gentlemen, and welcome to Enel Chile 1Q 2020 Results Conference Call. My name is Gigi, and I will be your operator for today. Questions will be taken through the webcast chat. This call is made for investors and financial analysts and the press is not allowed to ask questions.

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 the Enel Chile's press release reporting its 1Q 2020 results, the presentation accompanying this conference call and Enel Chile's Annual Report on Form 20-F, including under Risk Factors.

You may access our 1Q 2020 results press release and presentation on our website, www.enel.cl and our 20-F on the SEC's website www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which may speak only as of their date.

Enel 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. Isabela Klemes, Head of Investor Relations of Enel Chile. Please proceed. .

Good morning, ladies and gentlemen and welcome to Enel Chile's first quarter 2020 results presentation. I hope you are all safe in your homes and are following all the required safety measures that with prevailing circumstance request as off. I am Isabela Klemes, Head of Investor Relations.

Our presentation will be hosted by Giuseppe Turchiarelli, our CFO. In occasion of these events we have adopt appropriate prevention measures. We are all connected through our homes or individual officers -- office previously sanitized located in our corporate building.

The ones that eventually have translated are using a mask when in a common space and also gloves. Giuseppe will open with the main highlights and I will give us -- all an update on the global situation that we are facing. We will then walk you through our financial results and our operation performance. The usual Q&A session will follow.

Please note that questions will be received only via chat available in our webcast at www.enel.cl at the Investors section. At any time during our presentation, you can submit your questions. Just select the link at the top of the webcast page, Ask a Question.

After this call and Q&A, our IR team will continue to be available to provide with you any detailed information you may need with respect to figures included in this presentation. Thank you all for your presence. And now let me hand over to -- the call to Giuseppe..

minus 0.5 terawatt or lower consumption of distribution company, mainly associated to the termination of regulatory PPAs with Fitch and Enel, secured in 2006 auction, partially offset by 0.4 terawatt hour of higher free-market sales as a part of our strategy to capture new clients and the ones that recently migrated to the free market.

In slide 9, we have a summary of the performance of our Generation business, including Enel, Enel Generacion and Enel Green Power. On Generation EBITDA, I have already get you through the main variation in the previous slide.

What I would like to recall you is that we have produced 66% of our generation with renewable sources, 5% higher when we compared to last year results. As a result of the already mentioned element, our Generation EBITDA margin reached 41% in the first Q 2020, despite lower hydro production and commodities.

Regarding our net installed capacity, 65% of our capacity is based on renewable sources. This is part of our strategy plan to increase presence of free emission generation by closing our coal facility, which was the case of our [Indiscernible] Tarapaca that was closed in 31st December last year, and adding new renewable capacity.

Let me explain the most relevant operating fact of our distribution and Enel X business. We are in the slide number 10. We have been advocating that the role of customer is set to change, opening up new business opportunity that has been captured by Enel X.

On that, we have secured new contracts on public lighting this quarter where we will change the lightening infrastructure by LED ones, which will bring a more efficient system to the local municipality.

On the digitalization of our distribution business thinking on the medium-term and continue working on the quality of our services we have reached 2,206 telecontrol equipment installation in our grid. In the next two years, we are planning to install 585 additional units.

Please let's move now to slide 11 to explain the most relevant operations results of our network and Enel X business. As of March 2020, the EBITDA of Enel Distribución and Enel X had a minor barrier when we compare it to the last year results, mainly due to new smart lightning contract adding $1.9 million.

Tariff Indexation totaling $1 million offset by a $1.4 million income from 26 electric buses registered in 2019 that started the operation in the public transportation system in January last year.

And higher losses, mainly due to the logistic restrictions to the social distancing in Chile during the first Q 2020 of $1.6 million, as you can also see from the right side of the slide amount that main KPI.

Our customer base increased by 45,000 clients, when we compare the first quarter of 2020 with the last year figures, reaching 1.98 million of clients also reflecting an increase on the energy distributed of 0.1 terawatt hours that reached 4.3 terawatt hour in this quarter.

Following logistics restrictions coming from the social unrest in last week from the pandemic situation, our interruption in the SAIDI had an increase of 4% in the first quarter of 2020 compared to last year results. This index still, remaining being a group benchmark in LatAm.

On that matter, we continue to focus on critical areas for SAIDI and safely replacing approximately 52 kilometers of cable in our low extension grid and executing more than seven kilometer of major extension network in grid expansion and reinforcement in this quarter.

The energy losses increased 42 bps, reaching 5.25% due to a lower activity on-site inspection. This decision was adopted in order to safeguard the safety of our workers. Now on slide 12, let's go through the main drivers of our next order in net income. As already mentioned before, the 2019 EBITDA includes the PPA early termination.

Depreciation and amortization reached $76 million related to the higher depreciation in distribution business due to higher investment in the last year and new calculation of the useful life of Bocamina 2 as part of our decarbonization strategy, partially compensated by the closure of Tarapaca on 31st December last year.

The impairment and bad debt increased $4 million mainly in our distribution business as a result of the social unrest in account.

Financial results and Others amounted to an expense of $32 million, a decrease of $5 million mainly due to the foreign currency exchange rate appreciation in the first Q, 2020 and a lower average cost of our debt due to the renegotiation on EGP debt with EFI. Income taxes and Minorities reflects mainly the EBITDA performance.

As a consequence of all the above the ordinary first Q 2020 net income reached $88 million, decreasing 59% when it compared to first Q 2019. The first Q 2020 net income compared with adjusted net income by the CPI and termination with has decreased 23%. Let me now go through our debt on slide 13.

Our gross debt increased by $585 million versus December 2019 amounting to $4.17 billion in March 2020 mainly due to the Enel Chile new filing with EFI.

The average cost of our debt was reduced from 5.2% in December 2019 to 4.7% as of March 2020, showing an important improvement in our financial condition as a result of our constant effort to optimize our financial expense. The average sales of our loan is almost seven years.

Our FFO reached 70 -- $57 million also affected by energy stabilization making an effect of $47 million [ph] and the CapEx developed in 2019 and whose payment was made in 2020. Our net debt as of March 2020 compared to the same in 2019 increased $122 million.

Finally on our debt amortization on slide 14, I would like to highlight that with our liquidity position, we are able to finance our CapEx plan respecting commitment to our shareholders in face possible worsening scenario in account. On our debt amortization with an annual average of $281 million maturity in the next year.

Our liquidity allows us to support the maturity over the next year. Before starting the Q&A section, I would like to mention some relevant takeaways on slide 15.

In this global contingency, we have taken action timely and proactively since the first day in order to protect the health of our people, support our client and community, and to guarantee business continuity.

We are continuously monitoring the evolution of the situation in order to quickly react and at the same time preparing a mid-term plan to keep our company at the best efficient level. Digitalization is key to support this contingent period and we believe that we should take this opportunity to follow and shape new EBITDA [ph] of our guidance.

Sustainability continues to be the pillar of our business model, which has coped with any business disruption and to maintain our strategy on the medium to long-term basis despite current pandemic. To conclude, I would like to reinforce that today we have a liquidity that will allow us to cope with this global quarantine. Thank you for your attention.

Let's now open the Q&A section. I will hand over to Isabela..

Thank you, Giuseppe. As we have anticipated in this occasion we received questions via chat in our webcast. So I will start with our first question from Mourinho Riccini from Santander. The first question is the following.

Could you please give us more details regarding the 38.6 year-over-year retraction in operation cash flow? How much of that was affected by the stabilization mechanism, and how much for lower collections? Is there any other relevant effects impacting the number maybe payments to suppliers it grow 10% year-over-year? The second question from Mourinho is regarding Generation.

Are there ways to mitigate the issues that Bocamina one and two were unavailable? What could you do to avoid suffering that kind of impact in the coming periods? Please Giuseppe..

Thank you, Isabela. Okay. So what concerns the FFO? I have to say that the main balances in comparison with 2019 is coming from the EBITDA reduction and the CapEx executed in 2019 that has been paid in 2020.

On top of that, I would like to remember that, this year we paid a higher amount in terms of e-buses in comparison with the last year roughly $25 million. I don't have -- we don't see any major impact in comparison with the last year of what's concerned the stabilization mechanism neither for what concerned the collection at least in March 2020.

For what concern the Bocamina one and two well as you may know we have -- we had to shut down our Boc plant after the addition person in one of the transmission line that wasn't owned by our company as a part of project. We truly believe that this process has not started considering that we are fully committed.

And since 2018 Enel Generacion has been working with 1,370 corona families to apply international standards to the resettlement process already carry out. We have installed criteria of transparency and objectivity based on the audit of standards to end differences between agreements signed at this time.

However, in this process some leaders have appeared who only demand monetary compensation in addition to what they are already obtaining. So, this is the situation as of today.

Isabela?.

Thank you, Giuseppe. We have now our second question coming from Javier Suarez from Mediobanca. He actually has two questions, okay? The first one is, can you help to understand the reasons why FFO has decreased by [Indiscernible] during first quarter? That I think we have already answered. But if you wanted to also give any other information.

And the last one from Javier is that, does the company feel the necessity to revise downward its latest guidance? Thank you, Javier.

Giuseppe?.

Okay. I believe that for FFO factor I have already answered. Again, the main variances are the EBITDA and the CapEx executed in 2019 which had a rebound in 2020. For what concern the guidance? The truth is that, as of today, we don't see a major impact in terms of COVID.

And it's really is hard to believe that we are not able to recover the delta, the situation. So, frankly speaking as of today, I'm not in a position to say whether we're going to have a different guidance. So I won't confirm the guidance..

Okay. Thank you, Giuseppe. Well we have now a question from Rodrigo Mora from Moneda. The first question from Rodrigo is that, about forced disconnection of Bocamina and I understand that was also responded to you -- by you now.

And the second question, if you can give more details about the renewables project COD for this year that was included in the business plan from the company that was presented last December, last year? And then we have a third question from Rodrigo.

If we can give us more details about the supply contract entered with [Indiscernible], how many gigawatts hour it has? Thank you, Rodrigo for your question. Now Giuseppe, I'll hand it to you..

Okay. For what concern the CapEx? And despite of the international situation, we can't confirm our arrangement. As a matter of fact we found a way in order to keep on tracking in our construction. So except for a few weeks that can be recovered, I confirm our plan for 2020. Regarding the supply contract that ended in first quarter.

Give me a second, I will check it and I will give you. It's around 100 – if I'm not wrong 100 – yes, we are talking about 0.4 terawatt hour, the contract that ended up with the regulator with the dissolution of sales and Enel. This amount of terawatt hour that has been compensated by the new distribution we didn't do contrary with the free market.

Isabela?.

Okay. Thank you, Giuseppe. We have – let me check here another question now from Arturo Murua from Toesca. Hi, everyone. My question is regarding to announcement indexation purchase with Enel Green Power. If we see the physical sales between both companies it declined almost 20%. However, the total purchase costs remain the same. Thank you.

So Giuseppe this is the question. Thank you, Arturo for your questions. And handing now to you Giuseppe..

So basically..

Yes the question on – repeat again..

Yes. Okay. Repeat it, please..

Okay. I'll repeat again instead. So this question is regarding Enel Generacion purchase with Enel Green Power the PPAs with both companies. We see the physical sales between both companies decline almost 20%.

However, the total purchase cost remains the same in the period with the comparison between the first quarter this year with first quarter last year. So this was the question from Arturo Murua from Toesca Asset Management..

Right. If you see in the Slide 8 in the presentation where we compare the whole picture of Enel Chile, it is clear that the reduction in the production is coming from ticking out the impact of Tarapaca is coming from the fact that we have a worse performance in hydro, okay? And of course, last year the system margin and cost was pretty high.

So it was convenient for the company to produce with its own – our plants. In this year the situation is different at least in the last month and this explain why we increased the – than the past if this was the question..

Yes. And he's also questioning Giuseppe the fact why there is an increase on price on the PPA between wind power, Enel Green Power and also Enel Generacion..

Between the – I mean all the PPA among Enel Green Power and Enel Generacion are made according to the market price. So I mean it reflects basically the situation that we are in the market..

Okay. Thank you, Giuseppe. And now we have another question from Alex Varschavsky. The first question that Alex has is – thank you, Alex for your question.

Are you expecting that the delay in collection bills from distribution segment could be transferred to Transmission and Generation sector? Have you run an analysis for that? And I believe this is the question from Alex regarding the discussions on the most vulnerable clients.

And then the second question that we have is that COVID-19 context, we reflect the ramp-up of our growth projects.

What are you seeing in that process?.

Okay. So what concern the collection of our distribution company? And in general, their distribution, we don't expect any, how can I say, rebound on the transmission and production costs -- on transition and production company.

We believe that, we are working actually together also with the BID, Banco Interamericano de Desarrollo, in altogether, the sector -- the distribution sector, in order to develop a way, in order to reduce as much as possible -- the possible impact of the collection on the distribution company and avoiding any kind of break in the payment chain along the sector.

So, we do not expect any rebound on the transmission and production company. For what concern the CapEx impact of COVID in our project. As already said, is it true that part of our equipment is coming from China, but we have -- we had already checked the regular supply of the our -- the equipment as a matter of fact, they are already coming.

So we don't see any kind of impact on that. And this is the reason because we assume a respect of the project construction timing, at the end of this year..

Okay. Thank you, Giuseppe. And that question was from [indiscernible] CrediCorp and now, yeah, the question from Alex Varschavsky. I hope, I have said correctly your surname, Alex.

So could you please provide some color regarding your LNG obligations? And the impact then could have in a scenario of lower international gas prices and higher availability of the Argentinian gas. So this is the question from Alex. So Giuseppe, I'm going to hand it to you..

Yeah. As we mentioned last year, during the investor presentation, we are basically -- we have basically two kinds of sources. In terms of gas supply, one is, of course, the Argentinian gas, and the other one is the contract -- that LNG contract. The LNG contract is a contract that, guarantee us any possible interruption of Argentinian gas.

So basically, we have long-term contract that gives us the right guarantee of the supply. The contract provides a special amount of gas that has to be we buy every year. We have some condition among them, in order to organize them, to align the buy of the contract, according to our needs.

So the contract is basically very positive for us, in terms of flexibility.

Is it clear that, the international price in the market will have an impact of what concerned this content for two reasons? First, because, of course, as we did the last year, and as we did in the past, in general, sometimes we use this contract in order to make margin in trading it.

So in other words, we buy from the contract and we sell on the market. This year we don't have this kind of opportunity. But it doesn't mean that, we are not -- we are going to be affected, in the important way. This is basically the main impact because the Argentinian gas probably follows different kind of chain.

So basically, again, we buy from Argentina where we need to use it in case it's cheaper than LNG. Otherwise we need to utilize that in our contract..

Okay. Thank you, Giuseppe. And now we are going to go to a question from Enrico Bartoli from MainFirst..

So the first question is, do you see any risk of increasing bad debt due to COVID emergency? Are there any discussions with the regulator on how in case to manage and recover unpaid bills, okay? And the second question is the COVID emergency is affecting in a way -- in any way the construction schedule for new renewable capacity?.

Okay. It is clear that the COVID emergency in some way could affect the bad debt provision. In March, we didn't see it. We are also -- we are also pushing a lot our digital channel in order to reduce it at the minimal level possible in the bill.

Again, as of today the impact is coming more from the tail of social unrest that we faced in October last year more than on the COVID. The COVID impact as of today at least in March we don't see any kind of impact. For what concern the second question, we don't have a specific discussion on the unpaid bill with the regulator.

What we have as I said before is -- of course, what we have is the discussion with BID in order to find a way -- in order to cover the possible delay in the payment, so in possible delay with the collection that of course will take care about also start compartment of the unpaid.

Clear that we are again in contact with the regulators to understand how to face this situation..

Okay. Thank you Giuseppe. And now we have another question from Rodrigo Mora..

And the question is related to Los Cóndores project. So Giuseppe, just to the -- let me just rephrase here the question. To defend the needs that we are facing will somehow affect this COD that we are expecting for the Los Cóndores project. If you can give a color on this..

Thank you, Rodrigo, for questions.

Giuseppe?.

Yes. For what concern on Los Cóndores, as we mentioned before, we are reviewing all our projects to be in line with the new safety standard. And is the kind of stuff that we used to do pretty often of course to review and to understand how the project is going.

So, as soon as we have the next review we're going to communicate in case we signed a different in comparison with our declaration in the past..

Okay. Giuseppe, thank you. I think we have answered and follow the questions. So I would like then to -- as we do not have any more questions then I conclude the results conference call. And let me reminding you all that ones are connecting that our team Investor Relations is available for any doubts that you may have.

And thanks for your attention and stay safe. Thank you. Bye-bye..

Bye-bye..

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect..