Good day, ladies and gentlemen and welcome to Enel Chile Fiscal Year 2020 Results Conference Call. My name is Carmen and I will be your operator for today. After the speakers’ presentation there will be a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

[Operator Instructions] 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 Enel Chile's press release reporting its fiscal year 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 fiscal year 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 those forward-looking statements, which 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 forward-looking statements become inaccurate, except as required by law. I would now like to turn the presentation over to Mrs. Isabela Klemes, Head of Investor Relations of Enel Chile. Please proceed..

Good morning, ladies and gentlemen and welcome to Enel Chile's full year 2020 results presentation. Thanks to you all for joining us today. I hope this finds you and your family is doing well and stay healthy. Our presentation and related financial information are available on our website www.enel.cl in the Investors Relations section.

A replay of the call will also be available. There will be an opportunity to ask questions after the presentation via phone or via chat through the link Ask A Question. Joining me today are CEO Paolo Pallotti; and our CFO Giuseppe Turchiarelli.

In the following slides, Paolo will open the presentation with the main highlights on business and targets, then Giuseppe will walk you through our financial results and operational performance. Let me remind you that media participants are connected only in listen-only mode.

As always our IR team will continue to be available to provide you with any detailed information you may need concerning the figures included in this presentation. Thank you all for your patience and now let me hand over the call to Paolo. .

Thank you, Isabela. Good morning and thanks for joining us. Let me start with the main highlights of the period on Slide number 2. Last year was a challenging one at the global level as a consequence of the COVID outbreak. With reference to Chile, according to the last estimate, Chilean GDP decreased by 6% during 2020.

A demand at country level was almost flat and is being reported by certain sectors like the mining industry-wise in certain areas of the country such and some sectors the decrease were double-digits. Despite this unprecedented green scenario, our operations have shown a larger and a continued support to our clients.

We have decided to review our guidance for 2020 adjusting it to the new market conditions commodities volatility, implementation of lockdown measures and several other regulatory adjustments that weren’t surprising our estimates.

With a consistent effort to all our company we have achieved our target on adjusted EBITDA and net income reaching amounts of over US$1.2 billion and US$0.6 billion basis. We continue to be on the decarbonization advancing in the discontinued to our core facility accelerating at the same time new onboard capacity additions.

Today, we have more than 1.3 GW in generation projects under construction. We continue to focus our action to fight climate change.

We have already announced one of our ambition targets to reach a 64% reduction in our direct CO2 emissions by 2023 compared to our electricity generation business in 2017 meaning that Enel Chile is committed to making actually 90% of its electricity generation carbon free. Our effort is reflected in our ranking in several ESG indexes.

We have been recognized as one of the best performing ESG in Latin America.

Finally, regarding our dividend policy, our Board of Directors will propose at Annual Shareholder Meeting an eventual dividend of approximately $3.9 per thousand shares to comply with our strategy and to avoid best accounting effects of the decarbonization process will affect our shareholder remuneration.

Let’s now have a look at our main 2020 results. I already mentioned our adjusted EBITDA and net income were in line with our 2020 revised guidance. On capital deployment, despite the effects of the lockdown that have affected several areas where our projects are located and the delays – by the processes for the ecological permits.

We have been able to advance in the construction works in our working sites doubling our CapEx of 2020 versus 2019 guaranteeing at the same time the safety of our people in contracts on the field.

Finally, on decarbonization, we successfully disconnect the first unit of Bocamina contributing to the 1.5 cent increase scenario targets and making Enel Chile the most advanced company in decarbonization process of the country. Let’s now move to some data that shows the consistency of our strategy.

Sustainability is the backbone of our strategy aimed at decarbonization and electrification of the final consumption. Our plan is accelerating the energy transmission showing our compromise to our secondaries, maintaining and delivering sustainable value for all.

During 2020, our company improved its core in all the main ESG ratings maintaining the positive trend of the previous year.

As you can see, this approach has been reflected in most of the main sustainability indexes, as well as an being distinguished as prime by the IFS ESG and have received a Silver Class rating in the Sustainability Yearbook from Standard & Poor’s Global, meaning that our company is within 1% and 5% of which industry’s most sustainable companies worldwide.

Enel Chile is the only Latin American utilities looking in that position. Let’s now have some more details on our decarbonization strategy on Page 6. During 2021, we will consolidate our position in the Chilean market reaching 72% of renewable capacity within our portfolio generation assets.

Our team that is focused not only on the execution of this project but also on sizable opportunities targeting the best features, developing new projects and seeking higher sustainable results.

As a reference today, we have more than 14 GW in our pipeline in different stages of development, which gives us enough flexibility to continue our decarbonization goal and releasing our generation portfolio from commodities and hydrology.

As an example of that, we have been recently confirmed that after competitive bid process organized by the Ministry of National Assets, we were awarded over 2,500 hectares to use in the development of new solar plants and storage systems, expected to contribute with more than 1,700 MW of clean energy to the country.

As you would see, during the year, we continued to strive new opportunities in the market coping with our target to reach net emission by 2050. On Page 7, you can see more details on the status of each project under construction. Today, we have more than 1.3 GW in renewable capacity under construction.

On average, the overall process of the project help us more than 50%. A large part of our project already has the equipment on sites which produces 13 weeks of material supply. I would like to give more details on the first hydrogen project in Chile, a 61 MW solar project located in the same site of the wind farm at Valle de los Vientos.

We have finalized the connection of five projects on our funnels during December. The CD works and balance of plants are expected to be continued during the third quarter of this year. The project is an example of hydrogen projects, in which we are increasing the efficiency of our land usage bringing more competitiveness to our platform.

The solar projects Sol de Lila, Domeyko and Campos del Sol are expected to be into operation during the first quarter of this year. During the next call, I will continue to keep you updated on the status of the construction of our projects. Still on generation let me go through our main fourth quarter industrial KPIs on Page 8.

The total net production for the fourth quarter increased a 4% amounting to 5.3 terawatt hour mainly due to higher hydrogenation reflecting the melting season of the last quarter of 2020.

In terms of energy balance, as a consequence of lower spot price, we remain the next spot buyers in the market with a purchase of plus 0.2 terawatt hour higher than fourth quarter 2019.

On physical energy sales, we increased 8% or 0.5 terawatt hour mainly displaced by 0.7 terawatt hour of higher free market sales including spot sales as part of our strategy to capture new clients and the ones that recently immigrated to this new market, partially offset by minus 0.3 terawatt hour or lower demand from the production companies primarily related to the termination of the regulated PPAs with Endesa and Enel securing 2006 auction and the lower energy demand related to the lockdown measures established in different cities in the country.

Now the full year figures on Slide 9. Net production for the full year 2020 decreased 80% amounting to 19.3 terawatt hour. The variance between 2020 and 2019 came mainly from minus 0.9 terawatt hour over lower generation in our hydro power plants reflecting the very drought first half of 2020.

Minus 0.8 terawatt hour or lower thermal production may lead in our core fire plants due to the closure of Tarapaca power plant in December 31st, 2019 and the impact of a lower system marginal costs.

In the year, we remain a net spot buyer in the market with a total purchase of 3.6 terawatt hour during 2020 plus equivalent to plus 1.2 terawatt hour higher than 2019, mainly due to low hydrology and lower marginal costs.

On the other hand, our physical sales decreased 2% or 0.6 terawatt hour, mainly explained by minus 1.9 terawatt hour of lower demand from distribution companies, primarily relating to the termination of regulatory PPAs with Endesa and Enel and the lower national energy demand associated to lockdown and economic restrictions.

This was partially offset by plus 1.3 terawatt hour of higher free market sales including spot and as part of our strategy to every market. Now on hydrology, Slide 10. We referenced to our hydro power generation business we are presenting the cumulative rainfall for our most significant river basins, Maule, Bio-Bio, Laja and Rapel.

In the chart, you can find the new metrics, the green line that highlights the average cumulative rainfall over the last ten years. Since now, we really took this new reference under our materials.

If you turn to 2020 performance, as we recorded in the quarter a recovery in rainfall in June and July hydrology was rather poor during 2020 may be feasible in the fourth quarter 2020 was lightly approximately the same quarter of 2019 explaining better performance in the periods.

Therefore, our hydro generation was 5% higher in the fourth quarter 2020, which led us to reach 6 terawatt hour of hydro generation during the second half of 2020 meeting the expectations we have anticipated during the nine months 2020 result conference call.

For 2021, based on the information available today, modest rainfalls are expected continuing the current conditions according to the La Nina phenomena that will remain until the second quarter.

Nevertheless, Pacific temperature should move to a natural condition during southern winds which should imply an improvement in rainfall for the second half of 2021. During the last weeks, a review of the regulation on the infrastructure the NSG in the country is under discussion.

In our view, considering the volatility of the hydrology data has been experienced during the recent years and the stability of the Argentina gaps has been a terrible source, which is important to avoid frequent induction in the current availability of gas.

This may create a situation where the overall cost of generation will increase with dispatching of less efficient and high contaminate in plants that is to the opposite of the country’s goals on decarbonization. Now, network business line on Slide 11.

Energy distributed in the period reflects the lockdown measures in our concession area, slightly offset by the increase in the household segment consumption. Our customer base continue to expand. During 2020, we had an increase around 36,000 new clients, 33.3000, 2000 commercial exceeding the two million clients by year end.

The quality of our services will continue to improve our SAIDI and SAIFI indexes, performance is associated with investment made in our concession area despite our logistic restriction that we had faced and with the digitalization of our networks.

The effect of the social unrest at the end of 2019 and the convenience explained a 0.200 basis points increase in the total losses. We continue working to recover these KPIs to periodical level.

We continue to improve the digitalization of our services to provide more efficiency and agility nearing to our customer app, we supported the rise of digital interaction from 60% in 2019 to 62% in 2020. As of December, Enel Distribución App reached approximately 450,000 downloads, 72% higher than in December 2019 cumulative figures.

We are still in the digital channels as the main way to communicate with our clients. In 2020, we will forecast a growth in digital payment as we show in Slide 12. The increase of the digital channel and the new payments agreement executed during 2020 supported the collection levels maintained at 97% versus historical level of higher than 100%.

By December 2020, we executed almost 83,000 agreements with clients which has been supported the decrease in bad debt as Giuseppe will show later. On average, we executed more than 1 million contacts with our clients during the last quarter through direct calls, SMS and other communication channels. Moving to Enel X and Electrification on Slide 13.

Despite the COVID-19 pandemic outbreaks in the country, we continue to consolidate our leadership on electro-mobility and electrification. In 2020, we secured new contracts on public lighting upgrading the lighting infrastructure bringing more efficiencies and in favorable of the local municipalities.

Only mobility in 2020 Enel X signed partnership with McDonalds with Enex and with Shell, Saba concession area via ISA among others to continue the development of the ElectroRuta Project. Today, more than 22 partners have joined us in this initiative.

Additionally, at Enel X, we are developing the first project with the retail sector to a standard as the last my logistic boosting e-trucks in Chile reaffirming our commitment to the energy transition towards the use of clean energy in transportation.

In 2020, we have also secured new contracts with large real estate groups to provide energy efficiency solution based on the industrial services and new challenging infrastructure for their projects.

During this year, we are promoting several projects with mining which the use of – such as the use of electric buses combined with solar energy and storage. The first project in the mining sector developed with AngloAmerican will begin operation in the next few days.

Finally, and thanks to the agreement with all public and private partners, forty companies have participated with Enel.

We continue our effort to promote efficient substitute the use further executing energy use and public automation, 8,000 devices have been restored since 2017 and we estimate that these have already 27,000 tons or zero to 100 a year. Now to conclude this part of the presentation, a quick view on the main regulatory discussion ongoing on Slide 15.

Starting with distribution, on COVID contingent products in January 2021 the basic services has been expanded from its original time line to support the most vulnerable clients for a more extended period.

Enel intends to support the volume of clients that had the option to postpone under the way the payment of their bills with up to 36 installments without interest. The loan valid until May 5th included benefit to vulnerable clients which our company already voluntary offer before they are offered to us.

Nevertheless, they will keep this on special of service capturing to more companies other institutions and all households. As of today, we have almost 21.9000 agreements under the basic study deal and an additional 20.9000 under our voluntary programs.

On network tariff, on distribution, we have the government shall present its final letter during second quarter 2021 followed by a final regulatory report on the value which can be challenged in the expert panel expense. Consequently, we expect the release of the final distribution tariffs drafting to November 20 to be released in early 2022.

On transmission, according to the transmission tariff cycle 2020-2023, by the second quarter we are expecting the regulators to report which can also be challenged in the expert panel with us. Transmission tariff decreased are expected to be published by the fourth quarter in the year 2021.

Moving to Slide 16 on our recent updates, on tariff stabilization mechanism during December 2020 the report published by the Chilean Energy Commission show that the total balance accrual under the stabilization mechanism totaled $856 million for the entire Chilean market as of September 2020.

By the end of December 2020 and the Chilean balance total around $360 million. Earl this year, the sales of the current receivable generated by this mechanism were secured with government structured liabilities totaling around $290 million. The first tranche of around $90 million was a rank achievement during February this year.

A new law on energy efficiency has been recently published in which the government defines the regulatory framework for the rational and the efficient use of the energy.

This year the government established certain rules on energy efficiency like the implementation on management energy system for lights or requirements were all – to target levels of energy consumption as we currently have been developing.

In our view, this new important initiative at Chile is meeting towards the energy transition and at Enel we are required to support our clients and their needs to comply with these new rules.

We are now in a open public hearing phase for the process and expectation in the regulation related to the implementation of this law shall be passed during this year. Now, I will turn over to Giuseppe. .

Ladies and gentlemen, please stand by. Your conference call will resume momentarily..

lockdown measures that affect the energy demand net of positive results both generation and distribution business by $53 million mainly related to the COVID-19 pandemic effects; lower hydro generation impacting our adjusted EBITA $42 million sales of six LNG cargos during first half 2019 that wasn’t executed in this year due to the lower price of commodity in the international market with an impact of $26 million, lower EBITDA of $10 million in Enel X due to the electric bathrooms incorporated in the public system during 2018; higher depreciation on local currency versus US dollar of $34 million related to the translation of U.S.

dollar-denominated loan in our books and lower $70 million mainly due to higher energy losses in distribution business and transmission of status the new distribution tariffs. In Slide 23, I will show a summary of the performance of our generation businesses including Enel Chile and Enel Green Power Chile.

The main variances between the periods we have already detailed in the previous slides let me remind you that 2020 adjusted EBITDA basis 2019 adjusted resulted by the PPA sale and termination increased by 8%.

Moreover, I would like to highlight that our generation adjusted EBITDA margin reached 65% in 4Q 2020 and 52% in the full year still higher than 2019 figures by impacted the early termination of PPA. Now, on distribution network and Enel’s business on Page 24.

Q4 2020 adjusted EBITDA reached $52 million or 29% lower compared to the same period 2019 due to; $5 million lower energy consumption in both regulated energy market clients as a result of lockdown measures applied by the government to contain the spread of COVID-19; $4 million of higher energy losses as a result of cutting logistic restriction and COVID-19 effects on economy; higher OpEx in order to maintain the safety measure in the distribution activity which amounted to $8 million in the quarter; and provision on the effects of the new distribution of the third quarter; and finally, on annualized higher activity that offset the following previous effects.

On the accommodated figures, EBITDA was low by $64 million mainly to; from Enel X and negative impact of $8 millionmainly due to the recognition of 183 deducted from level two which were incorporated in the public association season.

On network, reduction of $56 million coming through lower demand, higher energy losses, higher OpEx in order to maintain effective management and provision of the sites of the new distribution tariff. Now, on Slide 25, let’s go through the main driver of our group net income.

D&A and bad debt reached $310 million, a variance of $2 million mainly relating to lower D&A in Enel Generación, mainly due to Tarapaca and Bocamina both trending in 2019 and in 2020 both from [Indiscernible] partially offset by higher depreciation and in EGP Chile due to the devaluation of Chilean pesos; higher bad debt provision due to COVID outbreak; higher depreciation and distribution business due to the higher investment.

The impairment increased by $727 million mainly due to Bocamina 2 in June 2020 related to the power plant closure scheduled for mainly 2022.

Financial results totaled an expense of $142 million, a decrease of $49 million mainly due to lower average cost of our debt as a result of the renegotiation of EGP debt with EFI, Enel Finance International, lower net debt – net financial expense coming from the accounting impact of the energy stabilization mentioned in duration profile and higher capitalized interest, primarily related to the development of renewable energy project, offset by the depreciation on foreign exchange rate in 2020.

Results from equity investments increased mainly due to decrease of internal service suspension line in December 2020. Income tax and minorities reflects the impact related to the Bocamina 2 impairment and the merger of Gas Atacama Chile into Enel Generación Chile in 2019.

The adjusted 2020 net income results reached $1260 million, 9% higher than last year adjusted net income. Moving to cash flow on slide 26.

2020 FFO reached $1.67 billion, higher than previous year mostly due to; higher net working capital mainly explained by cash management action of around $150 million in the last quarter, EBITDA sales to the AMP capital, which totaled around $100 million and other net working capital initiatives, higher LNG payments in 2019 versus 2020 of $59 million, partially offset by lower receivables due to COVID-19 of around $100 million.

Lower income tax during 2020 explained by the lower results of the company due to the decarbonization expenses of Tarapaca Power Plant and tax payment postponement as a consequence of government COVID program, and lower financial expense mainly explained by the reduction in the interest rates of inter-company loan between EGP and EFI, and lower company compensation initiatives.

Let me now go through our debt on Slide 22. Our gross debt increased approximately by $400 million versus 2019 due to the energy with EFI to finance our decarbonization plan, partially offset by the amortization of Enel Finance and Chile and the EGP’s debt. As a result of our net debt, as of December 2020 compared to 2019 increased $254 million.

The average cost of our debt was reduced by 5.2% in December 2019 to 4.6% as of December 2020 showing us an important improvement in our financial condition as a result of our cost of peso to optimize our financial expense. The average spend on our debt over $6 million. Finally, on our debt amortization on Slide 20.

In terms of liquidity, we maintained a level of $1 billion enabling us to finance our CapEx plan and have a comfortable position with the current economic scenario. Our debt amortization as we can see in this slide, have been very small. Now, I will hand over to Paolo.

Thank you, Giuseppe. Let’s go to the closing remarks.

Despite the challenges we represented and achieved a confirmed resilience and the strength of the strategy continue to push for fleets and drive decarbonization, concentrating the leading position in electrification and renewables in Chile, contributing to the fight against climate change, our clients will remain at the center of the strategy and note this applies we continue to focus on client needs and support them in the path to work with them.

Our business resilience and sustaining strategy is supported by our balance sheet strength, and long-term vision promoting value creation to work. Thank you for your patience and let’s now open the Q&A session. I will hand over to Isabela. .

Thank you, Paolo. Thank you all for your attention. As we have anticipated we have received questions via phone and chat in the webcast on this occasion. The Q&A section is open. Operator, please you may start..

[Operator Instructions] Our first question is from Javier Suarez with Mediobanca. Your question please. .

Hi. Good morning and many thanks for the presentation. I have several questions. The first one is on the regulatory review and recent regulatory changes. So I am interested on the basic service law that is basically changing the capacity of the company to deal with the bills.

So, the question here is, how do you see these new law affecting your profitability in 2021 and 2022? How significant do you think that that is going to be in the – of your cash flows, and working capital and in general the profitability of your business? Then, on the energy efficiency law that is trying to promote rational utilization of energy sources, I have seen in the presentation that hydrogen has been the clearance of approval, so the question for you is that, if you can update us on how do you see hydrogen and the hydrogen opportunity affecting the Enel Chile’s business model in the next years to come? So any updates on that would be appreciated.

The third question is on the free market – the service to the free market. So it seems on part of your clearance letter on the free markets.

So, how do you expect the free market evolving in 2031? How should be the expectation on free market evolution in 2021 and impact on your profitability? And the fourth one and final question is on working capital.

So there has been a positive impact in the fourth quarter, new companies saying us why this positive impact has happened during the fourth quarter of the year. Many thanks. .

Thank you, Javier for your questions. Let’s say very interesting and probably lot of things. Let me start on the regulatory aspects and then I will hand over to Giuseppe for clarification on numbers.

Regarding the basic service law, I would say that, this is not a, let’s say regulatory manager is more a law that I was believing an issue during managing in the period of the economic crisis to support category of clients that is remarkable for clients. This is something that, let’s say, approached since the beginning of the company.

We are offering more or less the same approach of letting people at or say, an agreement for – the extension of the expected payment terms. What means designed decision, this is all the decision taken generally but honestly it was expected considering that the people’s law efficiently in our work.

Once, let’s say the time to cover the energy that was expected by year end.

In this question, clearly, the likely change that has been is to a large ramp up of installment for the payments, the first law – the time was 12, but now the client can choose up to 36 and this is clearly is quite reasonable, because if we are talking about more and moving of clients adding one year debt the extension of the payment who should have to cover the exposure.

The element that we honestly and we often said, we do not agree on this law in the minting our whole exclusion – our capability to cap off all the, let’s say domestic debt payers, also the larger consumer in the sector.

So, clearly, let’s say they have an influence of they have to choose it of the client that may pay their bill, so they have resulted during the – let’s say contingency period what to pay to the bill and waiting till the end of the – the law will expire by the 5th of May.

So, this is the situation we have, let’s say published and we push for earnings much agreement possible in order to let’s say 12 that is confirmed with the client in order to start recording our exposures, when the law will expire. So, in this situation, we said we can give you later the, let’s say how it is reflected in our numbers.

Regarding the energy efficiency law, this is, let’s say, I think - we think that this is an important step in Chilean country crazy as sometimes we, let’s say, develop because it tied to five year plans in order to present, now we are in the process we expect that these, let’s say we had real by – during the next couple of years.

Regarding hydrogen, as you know that we are part of the consortium that we are in the first pilot project in the south of Chile regarding the production of green hydrogen using a turbine generation plant and this is let’s say, is a part of our strategy in evaluating and monitoring the evolution of this opportunity.

This is for us is an opportunity, we are a significant player and it could be a very important – as part of the green economy.

Clearly, we are focusing what are, let’s say, the use of hydrogen in – and we think that it may give, let’s say, strong upsize changing the process and adopting as much as possible agreement volume as a vector for green energy.

And we think we can be available in winning the place producing the given volume through our generation fleets for this cover. And we have a wind energy pipeline. We had 2.4 GW that we plan to construct by 2023, but we have large partners.

So, we can add all the capability in order to cope to a potential increase in demand in Chile for the green hydrogen. Regarding the free market evolution, this is, let’s say, a question that’s touch base across the different people because you know that portability law has been presented to commission of the senate. This is under discussion.

There is an hearing ongoing. They are debating about this. And these are certain conditions for opening in the market.

For the time being, what we are seeing is, for one side, clients that have the possibility to create from the regulators to the market due to the conditions that they are being in a conventional capacity [Indiscernible] 500 kilowatt or 500 kilo than 5 MW are moving and so the clients that are moving from regulated to the pre-market.

And the other plan is free client that are switching into a full subscription that they are requiring to provide them with green energy. And we see these two elements for the time being are good track for us, because you know that we have signed recent contracts with various clients based on green energy.

Some clients are to reach further into an agreement and we are, let’s say, targeting that are more informed regulated markets to the free markets in our concession area and outside our concession area. I mean, Giuseppe, the answer regarding details on the basic service law and on the working capital. .

Well, as I indicated for the net working capital the action that we put in place in the last quarter has been in the Slide on 26 of around $100 million and basically, we are putting some action in terms of factoring – and that’s factored in.

And especially the second one, taking into account of the people from – a very important amount of CapEx in the last quarter. So, these are basically the action concerning the net working capital.

And for what percent the lay of this – I would say that, we believe that considering the depreciation that we have in terms of recovering issue and an additional impact in the following year, [Indiscernible] to see now, we are going to see in the following months how to be the impact of this first of all on the accessories. .

Yes, and also the impact of the evolution of the pandemic here in Chile. You know that the – what the cost affordable vaccine is going to, that’s seasonal, so, we hope that in the next and the following months, there could be, let’s say, a recovery from the submitted volume. .

Interesting. Many thanks. .

Thank you. Our next question comes from Enrico Bartoli with Stifel. Your question please. .

Hi. Good afternoon and thanks for taking my questions. So I have also a few. A first one is on the outlook for 2021. We saw a recovery of electricity production in the power generation business, demand on the distribution business. You are indicating and expecting improvement of the hydrology.

So, can you elaborate a bit more in detail the scenario that you see for this year? And if possible, if you can give us some indication of the level of EBITDA that you expect for 2021. And related t this, you are also expecting 1.3 GW of additional renewable capacity.

So, if you can give us an indication of the EBITDA that you expect from a full year level from that capacity. Then I have a question regarding the regulatory environment, as well you have likely some deadlines for the presentation of the new regulatory framework for distribution and transmission.

If you can update us on the impact that you expect from this two new models for your distribution business. And the last one is related to the PPA.

You are likely to impact on – from PPA from the taxation to ForEx, commodities, CPI, if you can remind us how this mechanism work and if you can provide some details on this positive impact that you had in 2020. Thank you. .

Okay. Thank you, Enrico for your questions. The gap in the outlook of 2021, let’s say, may confirm what we have discussed during our, let’s say people’s plan with some details regarding, let’s say, I would say that the key issues here is, how the country is evolving from the 2020.

So, the wealth management and the positive growth of adding a limiting – not strong infection in the lockdown in the movement of people is a very key indicator on how the country and so as a consequence the demand, the ability for paying in 12 new contracts can be support the recovery in the economy.

On our side, what we are doing is, working with our clients in any case we can do. I mean, I am referring to the small, medium clients. We are targeting them with agreement in order to let them to come out from this situation. On the other side, the advanced clients confirmed the resilience. So we don’t see any negative impact on this.

Regarding the hydrology, we, let’s say, confirm our, let’s say, nation based on a – in number of units sold average and the analogy of the evolution. So, we can be more specific during the next month, during the next calls, in order to see effectively how the country - and weather and conditions may change okay, sustaining to the numbers.

Regarding projects, the power generating projects, I would say that during 2020, the response we working in sites, movement of people, the impact of a linear more pent-up and we appreciated very much the work made by our teams to manage things in a very difficult situation. We have a balance in all the projects that were on site.

We have opened new working sites and we managed to have people working both during the lockdown has affected our areas for the new projects, especially in the north of Chile.

So, again, we have balanced, I think in 2020 during these conditions, also the lengthy projects – the lengthy process that arriving from, let’s say the – the second half as I mentioned where the timing for operating any kind of where large and so much – our people the office and working with us.

In the situation we have today, as we mentioned 1.3 GW of projects under construction. We are advancing and we have managed this year but also especially the last year – also some, let’s say, with outbreaks of COVID during the past year, but we managed very well and so today, we have very, very, very limited number of people affected in the company.

And what we expect is to advance, we don’t tolerate closing time with the construction of the plant. Also in this case, we will keep updated for any steps on our plants. There are clearly different measures of advancing, but we are, let’s say quite positive on the work that we are doing on sites.

Regarding the impact of distribution tariffs on regulatory, yes, I see that – what I can say is that, first, the process may get some month of delay in terms of the legal, a very final target definition because of the work we are doing with regulators, with the consultants.

We do not expect according to the information that we received until now, we do not expect a difference from the number that we have projected in our business plan. So, it is neither in distribution, as well as in transmission.

So, as we think, it is a lengthy problem, but it is, let’s say, going on all aligning with all the parameters and don’t have this data as the units shipped and defined at the beginning. Regarding the PPA discussion I will let Giuseppe to give you some rough level on this. .

Yes. Well, the PPA, we are certainly leaning through by about like US PPA or essentially the law in commodities. So the paying off the notion of the commodity we have mentioned in our PPA.

Of course it’s not so easy to explain the lean to be paying that the trend of the commodity and the impact of the PPA, because for example, for a commodity , we have the rate trends for the indexation is coming through, for example, six months, month previous the train of the commodity.

So, we have different kinds of indexation and periods through a reference period or each on the[Indiscernible]. But basically, these are the drivers of our PPA. .

Okay. Thank you very much. .

Thank you. [Operator Instructions] Our next question is from Murilo Riccini with Santander. Your question please. .

Hi, good morning guys. Hi, Paolo, Giuseppe and Isabela. This is Murilo Riccini from Santander. Thanks for the call. Could you provide us more details on the gas supply situation in Chile? And specifically, the dynamics for Enel Chile, we know that you are mainly negotiating gas supply during the pandemic and now you are benefiting from that.

How long can we expect availability of gas for Enel Chile? And what are you expecting for the winter in terms of gas availability and spot prices? This is the first one.

My next one is regarding CapEx and we’d like to understand how could you handle CapEx in order to avoid renewable energy oversupply in the system? And could that be a strategy more focused on storage systems and – than renewable capacity? And finally, if you - could you share for us more – your expectations about collection and provisions, should provision increase during the first half of 2021 in your field? That’s all from my side.

Thanks. .

Hi, Murilo, thank you for your questions.

And let’s start from gas supply, a very interesting question, time being, let’s say, first of all let’s look on in gas supply in Chile, because you know that did not – let’s say, a very easy currently to supply, in the sense that the gas is coming from LNG facility, especially in the center, in the north and then, there are the interconnection with Argentina.

And the manner of managing the two, let’s say, the two elements, the two areas for providing of gas is quite different, also in terms of seasonality. Because, you know that Argentinean gas is on - in the sense that we can use that gas in certain periods of the year.

But we can be interrupted by the seller, especially by a reduction and actually by the government agency. On the other one hand to manage the imports and dispatching on LNG is quite important except if we go to a quiet period planning in order to manage the both is coming to the gas.

The usual, the mechanism is that, during the spring time, and until let’s say, January, February, the gas that is coming from Argentina, these are availability and the system often these are coming from Argentina.

During winter time, it is difficult to have gas from Argentina and so, there is – we purchase – we have planning – we are planning every year to receive gas from LNG.

So, in this scenario, we do not see, let’s say, a problem for us adding availability of gas, because we can plan the – both the required both during – available for winter time and the time using gas coming from Argentina in spring and summer.

What can happen, will happen during, let’s say, in January and February, where there is some lack of gas from in general, let’s say, deriving from general condition of the country. I mean, certain drop in water availability and gas unavailability for the players.

On our side, we also plan – we always plan to have gas mix in reaching from Argentina and LNG. So we don’t see a problem, especially, we don’t see a problem also this year starting from March also the plan of receiving LNG is clear.

During January and February, we have to manage the connection to cover our mills and especially due to the lack of gas coming from Argentina, that’s been during the recent months. In terms of our position, we don’t see a, let’s say, a problem because our LNG contract is a long-term contract.

And so we can cover our needs, we can plan to book our needs in every way. And we have also several contracts signed in place with Argentina over a course and so we can also benefit from the availability from Argentina.

Regarding next question on CapEx, and especially regarding we mentioned the oil supply in terms of, let’s say, oil supply of renewables. We have some elements here to share. For instance, you know that we are – let’s say a quite first mover in the sense that we have a project ongoing which we have connected to the agreement starting from this year.

The second element is that, there is also the decarbonization process ongoing that is linking the availability of – companies in capacity.

That aspect is very important, we fall short, let’s say, it’s client three months in the sense that they are switching more and more in the enquiries in LNG at the same time considering our portfolio of a contract, we have some clients located also in the north of Chile.

So, we may avoid those bottlenecks of the agreement in order to provide and with our advantage, it’s an very good element in advantage also considering the impact on price. The point of adding renewable plants with storage is a very interesting element. We are developing our plant based also on the strategy.

We are in discussion also with the, let’s say with the regulators or the technologists to manage the best way, let’s say, to regularize the investment in order to have a possibility towards that planning. The collection of partners, especially together with our solar plants.

But it is in earnest that we are monitoring and we are working on – we are in the – very closing. Regarding the collection and – let’s take the answer to Giuseppe. .

Yes, as I said, three pieces on the second half of bidding is what I believe that it’s going to be lower than what we had in 2020 for several reasons.

First of all, I believe that the anticipation in Chile is going to be better than last year, and also linked to the last scheme planned as to the companies the government is looking in new sales and also because the layoffs [Indiscernible] is excluding some clients with high consumption where we can manage in order to get the payment.

So, that will be better as of today. So really be closed on the center how it could be. .

All right. Thank you. And I will now turn the call back to Isabela Klemes for the webcast questions. .

Okay. Thank you. So, we have some questions on our chat here. So the first one is from [Indiscernible] So his first question is, we have been seeing higher spot market prices in Chile in early 2020, 2021.

Should we expect that to translate into higher net purchase expenses for long-term business? And the second question is, authorities in Chile appear to be resume the way gas costs are declared by power generators. What is Enel’s opinion on this? And what implications could be for the company? So, I will hand over to Paolo. .

Thank you, Andrew for the questions. And in answering to your question, I will recommend two things one made by, in the sense that the touching point is that here the, let’s say the way which the gas is imported in Chile.

And clearly, one of the most important – or I would say, the most important channel for import in Chile, gas in Chile in LNG, because, as I mentioned the gas supply coming from Argentina is uninterruptable and it interrupts the stable source for providing gas.

And LNG gas requires some planning, because the chain is based on both coming from the same time for discharging of the facility in the regasification.

In this situation there is cash and there is ongoing with the regulator that are reviewing what is called normal technical LNG is regarding the flexibility of the system for providing gas in the city in Chile.

And our view honestly in that, we have to define first goals to have the economicity of the system in order to have the less costly system overall. And second, to avoid any kind of use of the most contaminating, the most polluting generational assets.

And if we go through some require – some cash that we are ready and we are it imposes some regimes in the system also importing gas to LNG, the consequence of this is to have, let’s say, a system that can add the flexibility in optimizing the availability of gas and to the system where it is forced to bang to produce with the most contaminating and less economic, but the most expensive fuel.

And so, coming back to the – your first question on our position. We have very large mix of technology and capacity. We can use hydro renewable and gas and just for one year coal in Bocamina.

In this situation, we can be buyer of the spot if the, let’s say the cost of energy is below our cost of production or we have started well by our cost of production and we are importing gas, as well the long-term contract of LNG. So we are also better we have the – the need of gas.

So, on our side, we have the next stop in any condition of higher spot price.

And regarding the norma technica we are pushing in adding better – that allow to our availability of gas in the system, because it is important to run, but also for both other players that are managing gas facilities that again do not have long-term contract, but they are going to go spot on the LNG.

And so it’s important to include some constrain or to base all the and let’s say, planning of the system based on a weekly basis by the coal power generated. These may have, let’s say an impact on the lot of other LNG or gas in some period of the year. So, we should avoid to have be in a situation but to look at the economicity of the overall system. .

Thank you, Paolo. So, now we have some questions also from Rodrigo Morales from Vanessa.

So, the first question is, could you explain the factorization agreement with Goldman Sachs and IDB? How much do you expect to receive for this first tranche? Then the second question that I believe was an answer that is related to the ability that we have with LNG to face the drop season in the country.

The third one is related to repowering project that now Enel Generación, so the - if the projects were concluded and the second one related is about Los Cóndores project.

So wondering what in the past? How much it was spent in the project at the end of 2020 and how much is the company forecasting to invest to conclude this project? Then the other one related to Bocamina 2.

So that considering hydro conditions that we are facing now and the lack of Argentinean gas, there is a possibility of the company to evaluate the postponement of the closure of Bocamina 2 in May 2022? And then, the final question is, for the sales on the postponement of the TOD of Los Cóndores to 2023? So this is the questions. Yes..

Okay. Yes, let’s start from, yes, yes, no, let’s – not all, some of it, so we can cover the plans. .

Okay. .

So, let’s start from – look, first of all, what about Los Cóndores. .

Yes..

Okay, Los Cóndores, what their expense is made by – related until 2020 was in the range of US$880 million. The reported amounts considering that what has been announced during the – that are published at the end of July, we announced the range of $1,1150 million as a total amount of CapEx.

Well, and today, they are in a very difficult situation, let me say this not because of the approach, but because the management of the pandemial effect in any working – we have a balance in our analysis in our works.

And so, we have, let’s say, going higher with the, let’s say, the element that, let’s say, create a requirement for deeper studies during the recent time.

So we have overcome these elements and so, we have a balance in the construction clearly managing also the – all the elements of safety regards in the people that are working on the sites, on the safety work and safety on, well, regarding the pandemic. What was on the other details, regarding…. .

The refining of Enel Generación project….

Regarding, Los Cóndores, there is no other questions?.

Of the CapEx included in. It’s okay. So, the other one is about the repowering project that – which is already concluded. .

Yes. .

And let’s go to the LNG question then. So, our ability to face the drop season in the country, concerning the LNG contract, I think you have already. .

Yes, I already mentioned. So, you have to consider that starting from March, we are going through the, let’s say the receiving of the ship that will deliver the required gas for all the winter period. So we don’t have any kind of dependency from Argentina for all the period for spring and summer starting.

So, we don’t see a problem starting from to-date with this kind of, let’s say, lack of gas coming from Argentina. .

And then the last one just on the standing up the credits with Goldman Sachs and IDB. .

Yes. We have already performed the Fed’s finance in - and as a matter of fact we already cashed in $58 million you are going to see reflecting the first quarter results when we present it.

And everything is going well, meaning that if the regulator will issue the decreases that are the base for the factoring, we are going to expect to have another $100 million along with the year. .

Okay. Thank you, Giuseppe. So, we have questions from the webcast through from Credit Corp. So, the first one, if you could share guidance for revenues, EBITDA and CapEx for 2021.

And then the second question is, are you going to pay the intercompany loan that you have with – in the short-term? Giuseppe?.

Yes. Well, for what comes with the guidance, we are going to confirm what we have been presented during our Capital Markets Day. So, just to recap, EBITDA is going to be in the range of $1.4 billion, $1.5 billion and same for what’s going on the CapEx. So we are going to spend or we expect to spend $1.2 billion.

And what comes on - in the intercompany loan, we don’t have any intercompany loan expiration by the end of this year. We have just a credit line that is going to be expire in June and we are evaluating whether it makes sense to renew in total or just a part of it.

We have - the only expiration that we have on top of the amortization on some loan is a loan that’s I am paying equity loan that is going to expire in December. And so, we are going to set out 2020. .

Okay. Thank you, Giuseppe. So, we have the last question now from Tomas Gonzalez with Scotiabank. So, Tomas is asking more details on the leverage of the company on 2020 and what we are expecting on to the leverages and also if facing CapEx would be an alternate. So if you can give more details on this.

And then the last question is, Tomas is asking color on the Chilean services that we reduced that $10 million recognition this year. So, he is asking what we are expecting for 2021 and for our company. Okay, so I am….

We are concerned on net EBITDA, net EBITDA we are around 3.1 times end of the quarter of we are going to see how the year is going to be, but also in this case, we are going to confirm or to the extent during our Capital Markets Day. But we are concerned on the services. This is going to be decision like that was changed a little bit.

So, we don’t see – we don’t believe that we are going by the – that by the same amount as we had in 2020. It is going to be a little bit lower and as of today, we believe it’s going to be similar level. .

With that, thank you, Giuseppe. Now, so we do not have any other questions, so I would like to thank you all for joining us today and also to mention that our team – investor relations team is going to be available for any other questions you may have. Okay. Many thank you for your questions. Stay safe to you all. .

Thank you. .

Thank you. Operator And thank you, ladies and gentlemen for your participation in today’s program. You may now disconnect. Have a wonderful day..