On Wednesday, Enel Chile (NYSE:ENIC) discussed first-quarter financial results during its earnings call. The full transcript is provided below.
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Summary
Enel Chile reported a 16% increase in EBITDA for Q1 2026, totaling $423 million, despite a 7% decrease in net income due to higher depreciation and financial expenses.
The company initiated construction on three battery energy storage projects to enhance portfolio flexibility, with projects expected to be operational by late 2027.
Hydrological conditions were favorable during the quarter, aiding stable operational performance and a forecasted hydro generation of 10.7 TWh for 2026.
Strategic agreements, such as the LNG supply deal with Shell, aim to optimize gas supply and align with Enel Chile’s long-term vision.
The regulatory environment is challenging, with tariff resettlements postponed, affecting expected cash flows; however, the company remains engaged with regulators for future tariff reviews.
Management highlighted the importance of electrification in Chile as a growth driver and emphasized a focus on investment in renewables and battery storage.
The company’s financial position remains robust, with $454 million in cash and available credit lines totaling $640 million to support ongoing operations and investments.
Full Transcript
OPERATOR
Good morning ladies and gentlemen and welcome to Enel Chile first quarter 2026 results conference call. My name is Carmen and I’ll be your operator for today. At this time all participants are in a listen only mode. After the speaker’s presentation there will be a question and answer session. To ask a question during the session you will need to chat through the webcast. 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 statements may include Enel Chile’s Current Expectations, Intentions, Plans, Beliefs and Projections. Forward looking statements are based on management’s current assumptions and expectations, do not guarantee 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 the Enel Chile’s press release on its first quarter 2026 results. In the presentation accompanying this conference call, NEnel Chiles annual report on Form 20F on the risk factors. You may access our first quarter 2026 results press release and presentation on our website www.nl.cl and our 20F on the SEC’. 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 Ms. Isabella Clemis, head of Investor Relations of ENEL Chile. Please proceed.
Isabella Clemis
Buenos Dias. Good morning and welcome to Enel Chile’s 2026 first quarter results presentation. We greatly appreciate you taking the time to join us today. My name is Isabella Clemis. I’m the Head of Investor Relations. Joining me this morning are our CEO Gianluca Palongo and our CFO Simone Conticelli. Our presentation and related financial information are available on our website www.enel.cl in the investors section as well as through our Investors app. In addition, a replay of the call will soon be available. At the end of the presentation there will be an opportunity to ask questions questions via webcast chat through the Ask a Question link. Participants are connected in listening mode. Gianluca will kick off the presentation by covering key highlights of the period, our portfolio management actions and providing updates on the regulatory contest. Following that, Simone will offer an overview of our business, economic and financial performance. Thank you all for your attention and now let me hand over the call to Gianluca.
Gianluca Palongo (Chief Executive Officer)
Thank you Isabella, Good morning and thank you for your participation. Let’s start the presentation with our main highlights of the period. Let’s begin with portfolio management. During the quarter, hydrological conditions were favorable which helped us reduce portfolio risk and supported a stable operating performance across the business. We will come back to this point in more detail later on. At the same time, through EGP Chile, we started the construction of three battery energy storage projects in the northern part of the country. These base projects will add around 0.5 gigawatts of additional capacity and will play a key role in strengthening the flexibility of our portfolio while supporting our commercial strategy. In addition, Enel Generacion Chile signed a new LNG supply agreement with Shell. This agreement allows us to better valorize surplus gas volumes already available and to optimize LNG and Argentine gas supply for our generation business. Importantly, this initiative is fully aligned with our long term business vision for Chile. This is particularly relevant in the context of the growing deployment of battery energy storage systems which are essential to ensure a more flexible and efficient portfolio. Let’s now move to the country and regulatory context. Starting with the VAD 2020-2024 process, tariff resettlements have been postponed until July 2026. At this stage, the regulator is working on alternative solutions to fund this payment with the objective of avoiding any impact on regulated customers tariffs. Turning to the VAD 20242028 process during the quarter, the regulator published the Preliminary Technical Report Volume 2 in January 2026. Over the next few months, we are awaiting the publication of the final report. Let’s now turn to business profitability. The first quarter of 2026 delivered consistent financial results. EBITDA showed a solid improvement compared to previous years plus 16% during the period. The extraordinary General Meeting approved a capital increase of CLP 360 billion at Enel Distribution Chile, reinforcing the company’s balance sheet and overall financial flexibility. In addition, the annual General Meeting approved the final dividend, fully in line with our commitment to shareholder returns and value creation. In the next slides, we will go deeper into each of these areas and provide further details on the key drivers behind these results. Let’s move to slide 4 to talk about hydrology and the progress of our battery energy storage project. Let me begin with our hydro generation. Hydro generation during the quarter remained broadly in line with last year’s level. As shown on the left hand side of the slide for 2026, we are forecasting hydro generation at 10.7 TWh. This assumption is based on a conservative view on hydrology. Fully consistent with the average evolution observed over the last 13 years. That allows us to confirm our 2026 guidance. This is the case even though the probability of an El Nino event has increased in recent weeks, with potential impacts mainly expected in the second half of the year. This level of performance is supported by our well diversified hydro portfolio together with continuous operational optimization. Moving now to gas activities on gas sourcing, we have signed contracts with Argentine gas suppliers with a longer tenor compared to previous years. These contracts secure firm volumes at more competitive prices, providing stable supply until April 2027. In parallel, in the context of high gas prices and the more flexible demand outlook for our thermal fleets, we concluded a negotiation related to our long term LNG agreement. This approach is well aligned with our view of a gradual ramp up of battery storage in the coming years, supported by a solid and reliable gas supply from Argentina. Finally, let me focus on battery storage. We continue to strengthen our generation portfolio through the development of battery energy storage systems. These investments will increase the flexibility of our portfolio and support the long term resilience of our generation mix. In addition, they will continue to optimize our sourcing strategy. In this context, approximately 450 megawatts of new battery capacity are currently under development and will gradually start operations from 1227 ahead in line with our planned investment schedule. And now let’s move to slide 5 where we will review our generation portfolio and the energy balance. Let me start with our generation portfolio. We entered 2026 with a solid and well diversified portfolio. In fact, our total net installed capacity stands at 8.9 gigawatts, of which 78% comes from renewable energy sources. Therefore, this structure enhances flexibility and supports a balanced and resilient energy mix. Moving now to our energy balance during the first quarter of 2026, net production remains stable compared to the same period last year. This performance reflects the flexibility of our generation portfolio. Higher contributions from wind, solar and efficient natural gas combined cycles more than compensated for the slightly lower hydro generation. Physical energy sales amounted to 7.5 TWh, fully in line with the level recorded in the first quarter of last year. This confirms the stability of our commercial positioning supported by our diversified sourcing mix. On energy purchases during the quarter, we maintained a similar purchasing mix compared to last year. This included 1.3 TWh of net spot market purchases and 0.8 TWh sourced from third parties. And now I would like to take a moment to share with you some key topics related to the distribution business which we will cover on the next slide. Let me start with the tariff review shown on the left hand side of the slide. We are in the 2024-2028 Distribution Tariff Review process. In January of this year, the regulator released the second version of the technical report. The remaining technical steps are expected to lead the final tariff determination in the second half of 2026. Overall, the review is progressing in line with the regulatory timetable. Turning now to the VAD 2020 24, the settlement of the outstanding debt with distribution companies which was …
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