Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Engie Energia Chile SA (XSGO:ECL, Financial) reported a 36% increase in EBITDA compared to the first nine months of 2023, reaching $424 million.
- The company successfully issued its first green corporate bond in the Swiss market, raising $225 million to enhance funding sources and debt duration.
- Physical energy sales increased by 3% to 9.4 terawatt hours, driven by stronger demand from both unregulated and regulated customers.
- The company has accelerated the implementation of batteries and committed significant investments in renewable energy projects.
- Net income significantly improved, reaching $201 million, almost tripling compared to the first nine months of 2023.
Negative Points
- Total revenues dropped by 20% to $1.31 billion, mainly due to an 18% decrease in average realized prices.
- The company reported a 22% increase in energy purchases, with spot market purchases climbing 31%, indicating higher dependency on external energy sources.
- Own generation decreased, with gas generation falling by 44% due to the absence of a tolling agreement in 2024.
- Net debt increased by $284 million to $2.1 billion, driven by significant CapEx and accounts receivable buildup.
- The company faces ongoing risks related to exposure during nonsolar hours, which it aims to manage through strategic investments.
Q & A Highlights
Q: Can you clarify if the 80 to 90 million receivables to be monetized in the first quarter of 2025 will be the last of the receivables? Also, do you have a target for net debt to EBITDA, and are there plans to resume dividend payments in 2025?
A: Yes, the 80 to 90 million is the last portion of accumulated receivables to be monetized in the first quarter of next year. We aim to maintain a net debt to EBITDA ratio closer to four during our intense CapEx investment period. Regarding dividends, we plan to propose paying the minimum 30% as per local regulations, likely in the first half of next year.
Q: Could you explain the guidance for 2024 and provide some insight into the 2025 outlook? Also, what are the financial costs associated with the receivables monetized in October?
A: We expect to be at the high end of our guidance for 2024, though not exceeding it significantly. For 2025, with the full contribution of new renewable projects, we anticipate an improvement, contingent on stable market conditions. Regarding financial costs, there are no costs in the third mechanism for receivables, and we have a positive interest recognition due to delayed monetization.
Q: What are the main drivers behind the EBITDA recovery, and how do you plan to manage market risks?
A: The EBITDA recovery is driven by lower fuel costs, reduced average energy purchase prices, and increased physical sales. To manage market risks, we are reducing exposure during non-solar hours and expect further risk reduction with new projects coming online next year.
Q: How is Engie Energia Chile progressing with its investment plan, and what are the expected impacts?
A: We are on track to reach 1.5 gigawatts of renewables and batteries soon. We plan to invest around $650 million in 2024, which will contribute additional margins. The figures for 2025 could be updated with new projects as they are ready.
Q: Can you provide details on the company's debt profile and recent financial activities?
A: Our net debt increased to 2.1 billion, but strong operating cash flow and proceeds from receivables sales have moderated this. We issued our first green bond in the Swiss market, extending our debt maturity profile and reducing refinancing risk.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
