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…

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

Okay. Thanks, Paolo. Let me start with a summary of our financial highlights, which we'll go through details in the following slides. But first, let me explain the adjustment we made in our figures for both 2019 and 2020. As Paolo mentioned before, we accomplished the goal of EBITDA and net income committed in our last strategic event. For 2019 we have adjusted EBITDA and income excluding in the PPA early termination effect and the net impact of impairments of Bocamina 1 and Tarapaca power plants. For 2020, we have adjusted EBITDA and income considering the effects rising from the impairment of Bocamina 2 power plant asset and the consumption associated both the unit of Bocamina and the organization of the current costs, all the details are described in the bottom of the slide. In the following slide, I will address in more detail each of these figures. Let me start giving you some detail about EBITDA and bottom-line net of COVID impact of 2019. Net of COVID-19 impact, our adjusted EBITDA would have been around $100 million higher than the 2020 adjusted figures reaching a total of $1182 million. Factors behind this are; $89 million related to the reduction of demand impacting our sales in both distribution and transmission business net of energy passes in the period. $12 million mainly related to the higher energy losses extraordinary custom and care cost other OpEx needed to face the contingency and Enel X lower EBIT. Moving down the profit and loss, we recorded a negative impact related to the bad debt provision of $9 million mainly driven by temporary expansion of the historical collection period. Therefore, net of COVID-19 our 2020 adjusted net income would have reached $640 million. Now let's go to our CapEx on slide 20. In the 4Q…

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…

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…

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,…

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…

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.