Good afternoon, ladies and gentlemen, and welcome to Enel Chile’s Full Year and Fourth Quarter 2023 Results Conference Call. My name is Carmen, and I will be your host for today. [Operator Instructions] Please note that today’s conference is being recorded. During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors. These factors are described in Enel Chile’s press release reporting its full year and fourth quarter 2023 results, the presentation accompanying this conference call and in Enel Chile’s annual report on Form 20-F, included under Risk Factors. You may access our full year and fourth quarter 2023 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 dates. 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.

[Foreign Language] Good afternoon, and welcome to Enel Chile’s 2023 fourth quarter and full year results presentation. Thank you all for joining us today. Joining me this morning is our CEO, Fabrizio Barderi, and our CFO, Giuseppe Turchiarelli. As announced yesterday by our Board of Directors today is the last day of our CEO, Fabrizio Barderi, after 2 years in charge of our company, assuming a new position within Enel S.p.A in Italy. During the period that – the new CEO shall be decided, Giuseppe Turchiarelli shall accept being as Interim CEO of Enel Chile. I take the opportunity to thank Fabrizio for all his contributions to our company over the years. Now our presentation and related financial information are available on our website, www.enel.cl in the Investors section and in our app investors. In addition, a replay for the call will be soon available. [Operator Instructions] In the following slides, Fabrizio will open the presentation with our key highlights of the period then go through our portfolio management actions, regulatory context updates and guidance achievements. Finally, Giuseppe will give you a view of our business economics and financial performance. Thank you all for your attention. And now let me hand over the call to Fabrizio.

Thank you, Isabela. Good afternoon, and thanks for joining us. Let’s start our presentation with our highlights on Slide 3. I want to start with our portfolio management highlights. During the year, we added around 600 megawatts of new renewable energy capacity, including our first BESS project. All these additions will support us in our long-term mission of decarbonization and the continued optimization of our portfolio. As of today, we have received a commercial operation date and cost from the system operator for around 1.4 gigawatts, which is in line with our expectations announced in our last 2 Investor’s Day. This year, we had a remarkable performance of our Generation portfolio. The better-than-expected hydrology due to the El Nino phenomenon and all the gas trading activities’ outstanding performance supported the achievement of our goals and targets. On the regulatory side, we have some important news to share. First, the Chilean government presented a draft bill to congress introduced the stabilization mechanism. The PEC 3.0, a very important positive and important sign of stability to the energy market. At the same time, the regulator has published the final technical distribution record. Referring to the 2020-2024 cycle, this step was very important to reduce events or uncertainties to the Distribution business remuneration. I will deep dive into most topics later. Finally, I am pleased to announce that will beat all our financial targets for 2023. which reflects our confidence in Enel Chile’s future and solidity. Giuseppe will give you more color on this. To conclude, during 2023, we recovered around $358 million related to the stabilization mechanism, the PEC 2, include the current project, which represented around $180 million, a positive impact in our net income. Now let us move to Slide 4 to review how we executed our goals and strategy…

Many thanks, Fabrizio. Good afternoon to all our investors connected. I will start my presentation with a summary of our main results of this year. To better evaluate our company earnings performance, we present the 2022 figures as a pro forma that includes the following adjustments. First, the full year 2022 EBITDA has been adjusted by the impairment of the coal stock and the write-off of generation projects totaling $124 million. This adjustment was $63 million in Q4. Likewise, these adjustments affected the bottom line by a total of $83 million in the full year and $41 million in the Q4 of 2022. Additionally, we have excluded from these figures in order to better evaluate the operational performance of our company, two one-off effects. The operational results and capital gain of the sale of Enel Transmision and the impact of the agreement with Shell, both executed in December 2022 totaling $643 million in the full year and $568 million in Q4. These adjustments affected the bottom line by a total of $1,230 million and $1,185 million in the full year and in the Q4, respectively. Regarding the FFO, the figure for 2023 – in 2022 have been adjusted only by the sale of Enel Transmision. It means that 2022 figures include the Shell agreement, in 2022, in terms of cash, the adjustment to $20 million in the full year and $2 million Q4. In 2023, we have excluded $310 million paid in taxes on capital gains obtained from this transaction. Considering these adjustments, let’s see how the earnings indicate on an FFO performance. As you can see in the full-year period and the fourth quarter 2023, our earnings indicator present an important improvement compared to the 2022 figures. Regarding EBITDA and net income, the improvement is mainly explained by a…

Thanks, Giuseppe. Enel Chile’s sustainable business model demonstrated its resiliency and rationale and this while sustaining operating and financial results in the management group to conclude the company’s strategy towards decarbonization, electrification and profitability. As planned, the Arcadia transaction was concluded last October. With this, our asset rotation plan was successfully concluded. The 2023 results showed a solid operating performance. The better-than-expected hydrology and the gas trading activities during this year, complemented by the several managerial actions we have taken over the last year, supported us in achieving our commitment towards our shareholders. Finally, we would like to announce that the 2024 Annual General Meeting will be held on April 29 during which our shareholders will deliver on the final dividend for the 2023 results. Let me now hand it over to Isabela.

Thank you, Fabrizio, and thank you all for your attention. So now let’s begin the Q&A session. We will receive questions via phone and chat in the webcast. The Q&A section is open. Operator, please, you may start.

Thank you so much. [Operator Instructions] And our first question comes from the line of Javier Suarez with Mediobanca. Please proceed.

Hi, good afternoon and thank you for the presentation. Several questions on the regulatory side, on Slide 6, you detail several significant improvements in the outlook for regulation when it comes to the stabilization mechanism and also the regulation for distribution. So the question for you is, if you can again clarify the amount of receivables that you have on your balance sheet related to the stabilization mechanism and your latest expectations on the time frame with the recovery of this amount. And how this new guidance may impact your guidance as presented in the recent business plan of November 2023? And a similar question for the distribution regulatory cycle, you are expecting the publication of the decree by – during the second half 2024. You can share with us your latest expectations on this regulatory review and how this compares with the assumptions embedded in your business plan. Then the third question is related to the hydro production and reservoir levels, you can kindly elaborate on how these higher reservoir that you have for 2024 compared with your assumption in the business plan for 2024 and what we may expect in terms of additional contribution from this additional hydro capacity, I guess. And the final question is, this year, we have seen a significant contribution as well from gas trading optimization opportunity, you can share with the expectation for 2024. Many thanks.

Okay. Thank you very much. Well, several questions. So let me try to answer starting from the last one. And I will probably to change the order in my – the order in my answer. So gas trading is pretty simple. In the end, we usually have, let me say, between $30 million and $40 million margin in a normal year. And 2024 will be a normal year. So this is the range in which you have to consider our gas trading margin activities for 2024. As we usually experience also in the past, we have some, let me say, growth in gas tariffs, as I said, some million dollars we are talking about that. The order of magnitude changed actively in the last 2 years because of the very particular condition that we experienced in the international LNG market in 2022. That was the moment in which we materialized all our sales that we benefited from in 2022 and 2023 performance. So basically, the standard, let me say, expectation for natural gas trading activity is between $30 million and $40 million. Then hydro production. As I said, we have some through – we have some higher-than-expected levels in our reservoir. And of course, it would help us to probably perform better than expectation in our third quarter. It is difficult to project this in terms of yearly production because starting from the first of April, the [indiscernible] period would end and the new rainfall would affect the overall production of the year. So what can I say it is that we are pretty confident that first quarter results will be boosted by this additional hydro production and additional water in our reservoir that we have been experiencing in this first part of the year. Distribution, regulatory, yes. Well, as…

Yes. Thank you, Fabrizio. Basically, we believe that the lowest is going to be booked in end of March, beginning of April we are seeing to recover $450 million approximately. It is the amount that we expect to be collected and factorized in 2024, and this is what we put in our projection for the year.

Okay. Thank you, Giuseppe and Fabrizio. I think we have reached all the questions from Javier. So now do we have any other questions coming from the line, operator?

No, we don’t have any more. I can hand it back to you for to mention any questions we have on the chat.

Definitely. We have received some questions here from the audience coming from the chat. So I will start with the first question here that we received from Felipe Torres from [indiscernible]. Felipe Torres is asking us about can you give us more detail regarding this ordinary shareholders’ meeting to be held after the ordinary shareholders’ meeting in April 29? So Felipe, I will answer this one here. So soon all the topics of our shareholders’ meeting will be available in our website, okay? And then once it’s available, we will be here, the Investor Relations team, available for your questions and any other requirements you may have, okay? So coming from the second question now from [indiscernible] Capital. Martin is asking about the PEC Fabrizio and Giuseppe. Will the IDB offer to monetize the PEC 3 receivables as they did with PEC 2, do you expect any financial cost from generators? Giuseppe?

Yes. Well, consider that the new system, we have seen a full pass-through costs for what concern the generation every time that they’re going to do the factoring except for the legal cost associated to the deal. And IDB is going to – already got the mandate from the government in order to arrange the new factoring. So we believe that the situation is going to be smoother than the previous one. So we do not expect significant cost associated with the factoring.

Okay. Thank you, Giuseppe. So now we’ll go to another question coming from Francisco Paz from Santander. The first question of Francisco is what level of gas commercialization do you expect for this year. I think we have already answered not this one. And the second one, what level of hydrogenation are you forecasting for this year in the context of El Nino, La Nina phenomenon, if you see any kind of change in the forecast because of these events that we may have this year. Thank you. Fabrizio?

Yes, let me deliver a general answer to that. We already experienced in the past that having El Nino phenomenon or La Nina phenomenon doesn’t imply as a direct consequence – drastic change in hydrology in Chile. Sometimes it happens, sometimes not. So hydrology condition in Chile has not, as in other countries, a natural consequence of this phenomenon. So of course, we monitor this phenomenon, and we also adjust when we have some strong evidence of this phenomenon affecting our hydrological condition. But so far, we don’t see any particular, let me say, impact on what we could expect on 2024. So we have elaborated our budget, and we are still projecting an overall hydrology – an overall directed production for the year, in -line with the last 5 years average. And so meaning 9.6 terawatt hours. This is the reason why we have not changed at least so far, our assumptions about hydro production for this year.

Okay. Thank you, Fabrizio. We have one more question coming from Florencia Mayorga from MetLife. So the question is from Florencia. First, she’s giving us the congrats from the results and then how much of PEC 2 receivables are you expected to monetize in 2024? What’s your plans for the 2024 notes due in April? Florencia is asking about the Yankee bond, okay? Giuseppe?

Yes. I mean, for what concern, the factoring of PEC 2 in 2024, basically, I’ve already answered. So we are talking about around $450 million in the second half of this year. Concerning the maturing of Yankee bond that is going to be repaid in the second quarter of 2024, as I said in my speech, we are basically exploring all uncertainty that we have in our hands. So it’s going to be – we are going to use cash that is available, but also the committed lines that we have outstanding and – of the use. And we are exploring also the possibility to issue a new loan. Now we are, as I said, already in advanced stage of negotiation with some banks and institutions, and we are deciding in this month – we are going to decide in during the March basically, which kind of alternative to apply benefit for our firm. Again, in the first quarter, results, we are going to give you more color on that.

Okay. Thank you, Giuseppe. Now questions coming from Rodrigo Mora from Moneda. Rodrigo asked about Los Condores. So the first question from Rodrigo coming about how – if we have some news on the project Los Condores, and also how much resources we will need to enter the construction during this year of 2024. This is the first question. And then the second question that Rodrigo is asking is about the agreement with the Argentinian gas producers. So he’s asking more details about what we have already signed with the Argentinian gas products for 2024. Thank you, Rodrigo, for the question. Fabrizio?

Okay. Well, look, regarding Los Condores, we are finally at the end – the final stage of this very particular project, very challenging project, and let me comment, first of all, that all the main civil works that were related to all excavation demand and so the promise that we experienced with this project has concluded. So this is something that, of course, is really important for us to announce that main work that were, let me say, a little bit more risky from a geological point of view are final. They were finalize at the end of December. So about the time the timing we could expect Los Condores online, it would be in the second semester. With this – some months there is a bit more of what we projected previously. And this is – this is related to the big rainfalls that we had last year that, of course, on the one hand, were really positive to our performance in 2023. But unfortunately, on the other hand, make us impossible in some months to continue working on Los Condores project. And so we have some months delay due to this unexpected stop that is related to the heavy rainfall that we experienced last year. In relation with how much investment we need to finalize the project, well, I would say, relatively small amount because we are talking about $60 million. This is our projection for 2024 CapEx needed for – to conclude the Los Condores project. So as I said, finally, we are expecting this important project to be online this year. And we are also pretty optimistic since the main critical work were already finalized. Second question – about the Argentinian gas. Well, I can repeat the numbers I gave you during the speech. But let me first make a general comment. We have been committing to sign several agreements with the Argentinian suppliers because we want to be, let me say, sure about gas availability because the risk profile is really estimated in case hydrological conditions could change versus the ones that we projected in our budget. So of course, we wanted to be sure and to secure enough gas availability in order to be ready to face at best agrological conditions in case more gas production would be needed from our plants and from also from competitors power plants. So the figures I was referring to, it is 4.1 million cubic meters per day in the current period, so starting from October 2023 to August ‘24. Then in the winter period, we secured 2.6 cubic meters per day – millions per day, of course, sorry – and 2.6 million cubic meters per day, and then in the following period, October ‘24, December ‘24, 3.5 million cubic meters per day.

Okay. Fabrizio, now we have a last question coming from [indiscernible] from Itau. David is asking about the transmission costs that we had in 2023. So he’s asking, I would like to ask about the transmission costs in fourth quarter, we can see a lower cost in comparison to the other quarter of this year. What explains this difference? Can we expect the same level going forward?

Well, in the fourth quarter, the cost of transmission has been offset by the recovery of the cut in costs to the transmission tools. So basically, it’s a net cost on that we released in 4Q. Difficult to predict whether we are going to have again this kind of a recovery. So the kind of stuff that requires more analysis once we have the closing of the book. So right now, I cannot say that we are going to repeat the recovery.

Okay. Thank you, Giuseppe. Then we have a last question coming from Fernan Gonzalez from BTG. So Fernan Gonzalez is asking about the reservoirs. So the question is, given the current levels at reservoir and assuming dry conditions, do you see that it could support hydro generation beyond the first quarter and into the second quarter as well. So the question is about reservoirs throughout the next month.

Well, of course, this is a very challenging question. because it will depend, of course, also on the level that we are going to experience in the next weeks about inflows generated by the last part of this [indiscernible] season. Of course, the inflows are decreasing, as expected, of course, as always, during the [indiscernible] season. But it is true that this year, we are experiencing a smoother [indiscernible] season when compared to the last year. So that is the reason why we have been accumulating more water in our reservoirs, and we are generating more hydro production compared to our budget expectations. Now saying – commenting if it’s possible to predict if would be also of some comfort in April or during the second quarter is difficult today. It will depend also on the level of inflows that would materialize in the next weeks. Anyway, as I said, of course, it’s a very good business news for Q1. Difficult to comment about Q2.

Okay. Thank you, Fabrizio. As there are no more questions, I will hand over to you, Fabrizio for your final words. Thank you.

Thank you, Isabela. Well, as may you know, today is my last day as CEO of Enel Chile. Tomorrow will assume another position within the Enel Group back to Italy. And I would like to take this opportunity to thank all the colleagues in Enel Chile and the management team who worked together with me for all the support during this year during which we worked together to unlock the value of this asset and to reshape the financial sustainability of Enel Chile. Being able to deliver all the commitments agreed to with our shareholders. Also, I would like to sincerely thank all of you for all the engaging interactions we had during our call and meeting. It has provided me with considerable professional growth. So thank you very much again, and all the best.

Thank you, Fabrizio. Thank you all. So with this we conclude our conference call. The Investor Relations team is available for any doubt you may have. Many thanks for your attention and see you soon in our Annual Shareholders Meeting in the end of April. Thank you. Bye-bye.

Thank you, everybody, for your participation, and you may now disconnect.