Good morning, ladies and gentlemen, and welcome to Enel Chile Fourth Quarter and Full Year 2022 Results Conference Call. My name is Gigi, and I'll be your operator for today. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised 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 fourth quarter and full year 2022 results. The presentation accompanying this conference call and Enel Chile's annual report on Form 20-F, included under Risk Factors. You may access our fourth quarter and full year 2022 results press release and presentation on our website www.enel.cl, and our 20-F on the SEC's website, www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. And 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 Mrs. Isabela Klemes, Head of Investor Relations of Enel Chile. Please proceed.

Good morning, and welcome to Enel Chile's Fourth Quarter and Full Year 2022 Results Presentation. Thanks to you all joining us today. Joining me this morning, our CEO, Fabrizio Barderi; and our CFO, Giuseppe Turchiarelli. 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 of the call will be available soon. At the end of this presentation, there will be an opportunity to ask questions via phone or webcast chat through the link, ask a question. Media participants are connected only in listener mood. The following slides, Fabrizio will open the presentation with our key highlights later passing by market and portfolio management actions. And Giuseppe will continue with our business economic and financial performance. Thank you all for your attention. And now let me hand over to Fabrizio. Fabrizio?

Thank you, Isabela. Good morning, and thanks for joining us. Let me now start with the highlights of the period on Slide 3. 2022 was a very complex year, but it also was a year in which we had the opportunity to take several actions necessary to recover our company's financial position faster than expected. Today, I will give an in-depth look in today and how Enel Chile is in a better shape to continue addressing the challenges and taking advantage of the opportunities with [SIC]. We are very pleased to announce that the 2022 year was a turnaround in our story, mainly through the asset rotation activities such as the sale of our transmission assets and portfolio management through the renegotiation of our LNG contracts we share and last but not least, our gas trading and optimization activity. All these actions plus the recovery in our business performance allowed us to significantly outperform the everyday net income target for 2022 announced SST 2021 Investor Day. Moreover, we have exceeded the net income projection presented in November during our last Investor Day. These results were achieved despite a very challenging market context. Spot prices were and continue to be under pressure given the commodity scenario and the bottlenecks in the national transmission systems. Nevertheless, improved hydrology and several optimization alternatives EBITDA are offsetting this situation. Hydrogeneration increased by 2 terawatt hours compared to 2021. Regarding our decarbonization path, we added around 0.8 gigawatts of additional renewable capacity into our portfolio during the year. Also, in December 2022, we started the commercial operation of our free nitrogen pilot project in Southern Chile. As a result of all our actions and strategy, we have continued to be a venture as one of the region's best ESG performer. In fact, we became the…

Many thanks, Fabrizio. Good morning to all our investors connected. I will start my presentation on Slide 12, where I show a summary of our main results and the mean adjustment of the period. The full year 2022, the EBITDA is adjusted by the impairment made to the full stock of the period, which amounted to $59 million and $61 million related to the rest of adjustments commented the generation development process, as geothermal, hydropower plants and thermal facility. That according to our strategy and evaluation, we have decided not to execute. On the last quarter of 2022, we have also adjusted our EBITDA, but the already mentioned record booked in the period by $61 million. All these 2022 adjustments affected the bottom line by $80 million in the full year and $39 million in the quarter. Now let me recap the 2021 adjustment. The 2021 EBITDA figures were adjusted by the coal stock and the voluntary retirement plan that totaled $80 million in the full year and $38 million in the last quarter of 2021. In this case, only adjusted by the post impairment. All these 2021 adjustment and to the impairment related to Bocamina to book in the Q4 2021 resulted in an adjusted net income of $74 million and $42 million in the full year and the fourth quarter of 2021, respectively. As you can see in the slide, all earnings indicator represented an important improvement versus 2021 keys. I will detail later on our performance on our EBITDA and net [indiscernible]. But before moving on, I would like to reinforce the results of our efforts to reduce our leverage. Our net debt to EBITDA has decreased by 60% as of December 31, 2022, versus the same period of the previous year. This was mainly explained by…

Many thanks, Giuseppe. Now I will point out some closing remarks on Slide 20. Despite the very challenging environment during 2022, we have been able to deliver a more than solid operating and financial performance. This is represented by our earnings, along with our unlocking value actions that represented a turnaround story for our assets. These outstanding results led to an important improvement in our financial position, giving us room to continue pursuing our strategy towards decarbonization, electrification, demission, value creation forward as we have presented in our last Investor Day. We will continue working to leverage our set of assets, people and expertise through our integrated and sustainable business model, putting our clients in the trend. This gives us confidence that Enel Chile is more than prepared to operate in a volatile environment and to take advantage of the offer. Let me now hand over to Isabela.

Thank you, Fabrizio, thanks you Giuseppe. Thank you all for your attention. As I have anticipated, we will receive questions in our phone and chat in the webcast on this occasion. The Q&A session is now open. Gigi please you may start.

[Operator Instructions] Our first question comes from the line of Javier Suarez from Mediobanca.

Many thanks for the presentation and for taking my questions. I have three. The first one is on the Slide #18 and the impact on the stabilization mechanism, and that has played an important role in 2022. So the question for you is, which is your expectation of that stabilization mechanism impacting cash flow generation in the next year to come, for example, in 2023 and '24. So any light on the possible recovery of this working capital cash flow absorption would be helpful. Then the second question, I think, is in one of the expenditures. You are mentioning the regulatory framework evolution and particularly interesting on your expectation from the capacity regulation of own capacity payment. I think that on the presentation, you are mentioning that the new regulation should be published during the second half of 2023. So if you can help us to understand the implications for Enel Chile of the new regulation on capacity payment. And the third question is on the balance sheet structure of the Company. There has been a significant improvement in the net debt-to-EBITDA of the Company following the extraordinary operations. I think that as we expect net debt to EBITDA is along the lines of 2.7x. So the question for you is what is -- what do you consider an optimal net debt to EBITDA for a company of the profile of Enel Chile. And if you intend to continue through 2023 and 2024, with this strategy of asset rotating asset and management of your portfolio? And the very final thing is if you can share with us your cost of debt in 2022 and expectations for 2023 and '24. Thank you.

Thank you, Javier. I will hand over now to Fabrizio. Fabrizio?

Yes. Let me address the second question, then I hand over to Giuseppe for the first and the third question even if I think that the third question, of course, is a very general one. And usually, the magic number that I've always heard about it 3, but anyway, Giuseppe will give you some more comments about that. And the second question about the capacity payment connection. Well, first of all, let me highlight that this is still something that is under discussion. Of course, there are some documents that are available to the different stakeholders for their comments. So we know quite well which is the current statement of the proposal. And well, let me say that we don't see any particular impact in the short term. Basically for two reasons, that is -- this is something that has to be approved. And the second reason is that there is a very quite long transition period in which the old and the new [indiscernible] there will go in parallel. We don't envisage any big impact in Enel [indiscernible] portfolio. In general terms, let me say that I think that the what the news in these new regulations are quite aligned with our long-term objectives. And they are regional because in the end, the most important changes will affect net capacity payments. So there will be some specific method in order to assess which would be the contribution for storage facility to receive this capacity, remaining payments, and we are very interested about that. And the other issues are more like detail like, well, reducing a little bit dollar capacity payments, but existing and under construction plan, could decide to stay with the old mechanism, and that's the reason why we don't see a big input for us. And there is also organization for less competitive thermal plants like these plants. So the more costly units of -- and this is a penalization for them, but we are not involved in that part of the business, so it doesn't affect us. So let me say, in general terms, no stronger impact on our results. And in general terms, we are aligned with the intention of the regulator in introducing this change.

Okay. For what concern the recovery of the receivables that has been raised because of the new law according to the mechanism, we expect to receive most of the amount by the end of 2023. We are talking about around $450 million. Clearly, it depends on the regulatory decrease that has been issued in order to start with the process of collection. And on the other hand, we are already organizing structuring the after of this receivable with the -- so we believe that if everything is going to be according to the plan, starting from the second quarter, we should start recovering part of this amount. But many case by the end of the year, the amount to be or should be around $150 million. But what concerned the leverage, the optimal level of the leverage, let me say that below 3x net debt EBITDA is our target. This is basically something that is in compliance with the requirement that we have with raising guidance. So we believe that by the end of this year, we are able to achieve this ratio. For what concern the cost of debt 2023, we are going to have a little bit an increase in terms of cost of debt that we had in 2022 because we are going to repay some short-term debt and that clearly have more cheaper cost. So we believe that we are going to close lower than 5% between 4.5%.

Okay. Thank you, Giuseppe. Gigi, do we have more questions or any follow-up on Javier, please?

Yes. One moment for our next question. Our next question comes from the line of [Fernand Gonzalez] from [BTG Pactual].

I have three questions here. One is about the distribution segment and some of the headwinds that it has been facing. I've seen some publications through Enel distribution about the electrical cable theft that happened last year and how much it increased? And also, we've seen comments in the press release related to fines, but by the regulator. Could you walk us through what exactly is happening to that business segment and what you can actually do to improve any problems that you may be facing? My second question is on the generation segment. And I would like to hear your thoughts about the massive amount of renewable capacity that's going to be added this year and how the system is going to absorb that? And whether or not you believe we may be getting into an overcapacity situation here? And my third question is about your green hydrogen pilot project in Magallanes, which is already producing. What's the next step here? And what will be your role in this JV. Are you going to be the supplier of energy? Or are you going to be participating in the whole production process and exporting of the product eventually?

Thank you, [Fernand]. Fabrizio?

Okay. Let me start with the third question. There is quite simple to address. We are not only delivering energy, but we are also in a 50%-50% joint venture with [indiscernible] in degree, hydrogen part of the project. So for what -- the green hydrogen production is concerned, we are in a perfectly 50-50 joint venture in all the relative issues. We are not involved in the consequent processing of the green hydrogen to transform it in a fuel that is actually the final product of this pilot project in which the offtake is pushed. But we are not in this part of the industrial development. As I said, we were not interested because in the end, as a company, we are much more focused in green hydrogen production. This is what's really interest to [indiscernible]. The second question was about the generation segment. Well, let me say that it's difficult to predict that there would be a structural overcapacity in the system soon. Of course, there are huge development in this segment. But we also know that there are some transmission constraints that should be sold in some way. And so we don't -- we are not foreseeing a very different market results in the short to medium -- to medium term. That's basically our view -- and in general terms, let me say that, of course, we are actively managing our portfolio in terms of selling energy to a final country that final current that, of course, help us also to manage potential overcapacity is. But that I say, I don't see any way changing drastically the situation in the short to medium term. And first question about distribution. Well, actually, what you mentioned is something that core let me say, defined, at least the define something that is quite recurrent, let me say. And I hand over to Giuseppe if you want to give some more details of the word. But [indiscernible] is something, of course, that is recurrent because this involves many activities, and we are not experiencing any peculiar issue in debt. This issue that -- that is true, that is quite an increasing problem about the electric wires that are stolen. This is something that, of course, is let me say, it's about -- it's a more general concern, okay? And this is something that is absolutely in line with the situation that Chile is facing another -- another situation about the increasing problems with the situation about security and unfortunately, it's true that the number of these events is drastically increased. There is a focus also by the government in order to introduce some more strict regulations on more [stricter] loans in order to prevent and [desensitize] this kind of situation.

The only point that we can add is that part of this energy coming from the previous year something relative to before the 2020. And clearly, every time that we see such a tenant we are filing in order to support our reason because sometimes these plans are not really in agreement with our view.

Thank you, [Fernand].

Thank you. At this time, I'm showing no further questions over the phone line. I would now like to turn the conference back to Isabela Klemes.

Thank you, Gigi. So we have received some questions for the chat and also for [Mayo]. So Fabrizio due the first question here is coming from [Rodrigo Mora] from [Mones] Asset Management. Rodrigo is asking two questions to us. The first one, if we could explain more about the gas optimization gains that were booked in the fourth quarter of this year and also in the full year of 2022 was the meaning of the [optimization]. And the second question is related to the distribution business. What are the actions that we are doing as a company in order to improve the performance of this business. And Fabrizio do that pick?

Okay. So let me try to address this question. But in general, [indiscernible] about Enel distributions, let me say that, of course, this is something that is related to regulation, this is something that -- of course, we are trying to manage to improve through very careful management of our investments in order to improve quality indicators and to enable potential future opportunities that will arise with electrification process that I think that will give some more opportunities to the distribution segment. But as a matter of fact, finally, we also welcome the fact also the government and specifically the Energy Minister recently stated that distribution segment is absolutely a priority in order to review in general terms, the regulation that we think is not appropriate. In terms of gas optimization, gas optimization is something that is absolutely core to our portfolio management and that has become particularly relevant in 2022 and will be very relevant also in 2023. And the activity is -- this, of course, is there are several activities that we do in order to optimize our position and take advantage of all the potential opportunities. But of course, the most impact is driven by the sale of LNG in the international market. And we sold three LNG cargoes in the last year between August and December. That, of course, was a particularly high-priced content in the market, and that was the reason why we benefited in our results as we showed during the presentation. And we are doing the same for 2023, in which we already sold four cargoes in the international market that also delivered to us a very interesting margins because we handing out this activity during the second half of 2022 and the international [market] prices were much higher than today. And of course, there are a lot of other optimization activities that we do also locally in terms of exchanging gas with other players in the market and also to optimize our own production between the different power trends that we have in the country.

Okay. Thank you, Fabrizio. We also have another question coming from a [Mariana Corridors] [indiscernible]. And Maria is asking a question that is more related to our controlling shareholders, but she's asking with the political situation in Latin America, in which countries have you considered divesting? As we were not answered by our controller shareholder, I would say about -- Fabrizio, if you could give you some words about the -- what is Chile, including the portfolio. And if you're seeing any kind of investments on our perimeter here?

No. In general terms, of course, let me say that we cannot answer about any plans, but it seems quite clear since Enel Chile was included in the list of Tier 1 countries for any group, that means that the countries where the group can promote and foster value creation through the integrated presence along the value chain. We think that this would be something that would be confirmed in the future. More locally, so for what is concerned directly to Enel Chile, of course, we commented the sale of [Enel] transmission. We mentioned that we are continuing always continue to see if there is any other opportunities for value creation. And according to, of course, what is the -- what is the optimal risk return profile for our assets in our portfolio. But we don't see any big divestments, any disposal. There is not any big disposal in our plan. And so as I said, we will look -- we are looking in the future with this value creation view, but nothing big is in at the moment.

Okay. Thank you, Fabrizio. We have another question coming from [Tomas Gonzalez] from [Scotiabank]. Tomas is asking us two questions, related to the gas agreement. After the agreement with Shell, which is going to be the new amount of LNG shipments per year this year and who is going to be the supplier now about this contract the price of this new shipment is going to be higher or lower than before given the drop in international fuel prices.

Okay. Well, let me say that what in general sense, the contract with shell is still there. The agreement that we made was just reduced partially as we showed during the presentation, the amount that is under the long-term contract but we are still -- Shell would continue to be our LNG provider. And for what concerned 2023, let me say that after the agreement the amount of the contract would be reduced from the original 18 cargoes to 16 cargoes, out of which, as I just mentioned, 4 were already sold in international markets. So now we are foreseeing to receive its time to be delivered 12 cargoes to Chile that would be like 33 terabit this year under the same agreement we share, the price is linked to particularly down to heavy up. So it's benefiting partially from the drop in the commodity and we already signed some agreements to be supplied also from Argentina gas. We already contracted [16 terabit] upto [indiscernible]. And we expect also to potentially shut some additional volumes for the rest of the year. And about the price, also Argentinian gas cut, of course, is pretty aligned with LNG long-term contract prices located in Chile. That is significantly lower than the international market price. So let me say that in general terms, we are continuing to look for additional opportunity to actively optimize our gas portfolio and trying to extract the maximum value from.

Thank you, Fabrizio. We also have one question from [Alejandra Aranda] [indiscernible]. The question is also relating to the LNG and natural gas. So can you give us a ballpark idea of what the margin is for those LNG cargo sales during 2022.

Well, 2022 was significant was quite a very past situation and of course, as we already mentioned, this activity almost totaled like some of $150 million last year, and it was related to 3 cargoes plus some additional optimization updates that we carried out. So let me say that in that context, we achieved up to $40 million per capita, but this is something really unusual. And of course, it was much related to this particular moment. Even if, as I said, we also benefited -- we are going to benefit in 2023 of some of these optimization activities because we closed the sale during the second half of 2022.

Okay. Perfect. Thank you, Fabrizio. Okay, I'm checking here. We don't have any more questions. So I will conclude our results conference call. Let me remind you that our Investor Relations team is going to be available for any doubt you may have. Many thanks for your attention. See you soon.

This concludes today's conference call. Thank you for participating. You may now disconnect.