Enel Chile (NYSE:ENIC) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.
Benzinga APIs provide real-time access to earnings call transcripts and financial data. Visit https://www.benzinga.com/apis/ to learn more.
View the webcast at https://edge.media-server.com/mmc/p/iqq6fq9w/
Summary
Enel Chile reported resilient financial performance with a 2% increase in EBITDA and an 11% rise in net income for the first nine months of 2026, supported by improved hydrological conditions and higher renewable generation.
The company continues to focus on strategic investments in renewable energy and battery energy storage systems (BESS), with four BESS projects under construction, totaling approximately 0.6 gigawatts of storage capacity.
The National Reconstruction Law and ongoing grid reform discussions are seen as opportunities to enhance the regulatory framework, supporting investment in grid resilience and modernization.
Enel Chile maintained a sound liquidity position with available committed credit lines of $650 million and cash equivalents of $371 million, while gross debt reached $3.8 billion.
Management expressed confidence in achieving 2026 financial guidance, driven by improved operational performance and strategic portfolio management, despite ongoing regulatory discussions and market challenges.
Full Transcript
Victor (Operator)
Good morning, ladies and gentlemen, and welcome to Enel Chile’s third quarter and nine months 2026 results conference call. My name is Victor, and I’ll be your operator for today. 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.A.’s current expectations, intentions, plans, beliefs, or 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 Enel Chile’s press release on its third quarter and nine months 2026 results, in the presentation accompanying this conference call, and in Enel Chile’s annual report on Form 20-F under Risk Factors.
You may access our third quarter and nine months 2026 results press release and presentation on our website www.no.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 will now turn the presentation over to Mrs. Isabella Clemens, Head of Investor Relations of Enel Chile. Please proceed.
Isabella Clemens (Head of Investor Relations)
Buenos días. Good morning, and welcome to Enel Chile’s third quarter and nine months 2026 results presentation. Thank you for taking the time to join us today. My name is Isabella Clemens, and I’m the Head of Investor Relations. Joining me today are our CEO, Gianluca Palumbo, and our CFO, Simone Contricelli. Our presentation and related financial information are available on our website in the Investors section, as well as through our investor 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 through the webcast chat using the Ask a Question link. Gianluca will begin by covering the key highlights of the period, our portfolio management actions, and recent regulatory developments. Simone will then provide an overview of our business, economic, and financial performance. Thank you for your attention, and I will now hand the call over to Gianluca.
Simone Contricelli (Chief Financial Officer)
Many thanks, Gianluca, and good morning everyone. Let me start with our key financial highlights of the period. In September 2026 year to date, EBITDA reached $1 billion, an increase of 2% year on year, reflecting the resilience of our integrated business and the stable performance of our grids operation. While third quarter EBITDA reached $336 million, remaining broadly stable compared to last year. In the first nine months of 2026, net income totaled $390 million, increasing 11% year on year, supported by improved operating performance and positive D&A effects, while third quarter net income reached $118 million, confirming the growth trend.
FFO also delivered a strong performance in the first nine months of 2026 totaling $770 million, an increase of 25% compared to the same period of 2025 thanks to EBITDA resilience and net working capital improvement. Third quarter FFO increased 28% to $271 million, further confirming the positive cash generation performance for the year. We will go into more detail later in the presentation, so let’s move to the next slide to talk about the investment made during the quarter.
During the first nine months of 2026 we invested $492 million, doubling capex compared to the same period last year. Our capital allocation remains focused on our strategic priorities with 63% of investments directed to renewable generation and 25% to strengthening and modernizing the distribution network. The remaining investments were mainly aimed at ensuring the reliability and availability of our thermal fleet. Let me provide some additional details on our investment allocation in the renewables segment.
Our investments were focused on the development of our grid-forming BESS projects in line with the objectives set out in the strategic plan, the optimization of hydro facility performance, and the fleet maintenance. In the thermal segment, the priority continues to be the maintenance and performance enhancement of the power plant fleet. Regarding grids, we continued advancing our network modernization and resilience plan, supporting service quality improvements and strengthening the distribution network.
Looking at capex breakdown by nature, development investments equaled $295 million, represented 60% of total spending, and were mainly allocated to BESS, which accounted for 79% of the spending; networks representing 40%, mainly driven by development, reliability and quality of service investment, and digitalization; and hydropower plants with 6%, mainly driven by performance enhancement projects. Asset management capex totaled $146 million, accounting for 31% of total capex, mainly allocated to the maintenance of Atacama, Quintero and San Isidro CCGT, the maintenance of the renewable fleet aimed at ensuring plant availability, and some activity for the predictive maintenance and digitalization of grids. And finally, customer capex totaled $52 million, mainly invested in low- and medium-voltage grid connection projects and initiatives to support load increase.
And now let me walk you through the key drivers behind the EBITDA performance during the third quarter of 2026. Our EBITDA reached $336 million in the third quarter 2026, remaining broadly stable year on year. The $9 million decrease compared to the third quarter 2025 is mainly explained by the following. Starting with PPA sales, the results were essentially flat compared to the prior year with no material impact during the period. Moving to sourcing, we recorded a negative impact of $16 million, mostly due to energy resettlements from previous periods, higher spot energy purchase costs mainly during July, and lower insurance recovery provisions compared to 2025. These effects were partially offset by lower natural gas production cost reflecting lower thermal generation volume. Regarding gas margin, we recorded a decrease of $10 million reflecting the contribution from gas cession activity recognized in Q3 2025, while in 2026 this activity was largely concentrated in the first quarter.
On the other hand, grids and others increased by $70 million, mainly due to, first, higher grids margin contribution driven by new connection activity and other distribution-related services, partially offset by a previous-year one-off settlement adjustment recorded in the third quarter 2025; second, the optimization of the O&M processes of our renewable facilities. And now let’s move on to the next slide to review the EBITDA evolution during the first nine months of this year. In the first nine months of 2026, EBITDA increased from $1,004 million to $1,021 million, reflecting resilient business performance despite the challenging scenario of the first half of the year. Starting with the integrated business, we recorded an increase of $50 million mainly due to gas optimization initiatives that increased for more than $90 million EBITDA and contributed to optimize the portfolio, and lower thermal production cost due to the lower production volumes and lower natural gas costs.
These positive impacts were partially offset by lower capacity payments reflecting structural energy market dynamics, including the incorporation of new renewable capacity, and the higher spot energy purchase cost mainly due to the higher spot price and the net impact of energy and transmission cost settlements. Moving to grids, EBITDA remained broadly stable totaling $127 million, mainly due to the higher margin from distribution-related services and the positive impact of exchange rate, partially offset by the one-off positive settlements recorded in 2025.
And now let’s move on to the next slide to review the net income evolution. In the first nine months of 2026 our net income amounted to $390 million, higher than the same period last year, mostly explained by, first, the already mentioned EBITDA improvement of $70 million; second, the decrease in depreciation, amortization, impairment and bad debt expenses of $40 million, mainly due to positive effects from impairment charges recorded in September 2025 along with the recovery of value of certain thermal generation assets previously impaired, partially offset by higher depreciation and amortization for the new renewable assets; third, the negative variation of $70 million of financial results, mainly explained by lower capitalization on generation projects, negative foreign exchange differences, and the recognition of financial interest in 2025 related to PEC balances; and finally, the increase of income taxes for $4 million, mostly due to improved results. Focusing on the quarter, net income improved by $12 million, mainly resulting from a positive change of $70 million in financial results, mainly due to positive foreign exchange rate effects; lower depreciation, amortization and impairment expenses of $1 million, mainly due to the last-year impairment-related effects on generation assets; partially offset by a $9 million reduction in EBITDA, as previously explained.
And now, passing to the next slide, let’s analyze the FFO composition. In the first nine months of 2026 FFO amounted to $770 million as a result of the following. First, EBITDA totaled $1,021 million, as previously discussed. Second, we recovered $42 million of PEC receivable during the period. Third, the net working capital decreased by $52 million, mainly due to positive effects of payment optimization of development capex, seasonality of energy payments, partially offset by the increase in annual distribution receivable.
Fourth, financial expenses amounted to $172 million, including financial costs related to foreign exchange instruments. Finally, income tax payments amounted to $172 million, mainly related to the generation business. Turning to the year-on-year comparison, FFO increased by $156 million compared to the first nine months of 2025, mainly supported by higher EBITDA, which increased by $70 million; the decrease in the collection of PEC receivable by $243 million, mainly due to the PEC 3 factoring transaction executed in April 2025; the positive net working capital variation of $381 million, mostly due to higher commercial debt related to the newly developed capacity, the positive effects of energy payment optimization, and the voluntary compensation paid in 2025 regarding the extreme climate events from May and August 2024; the higher financial expenses for $58 million; and the lower income tax payment for $60 million, net of the negative impact from higher monthly payment tax rates in the generation business.
And now let’s take a look at our liquidity and leverage position. Our gross debt reached $3.8 billion at the end of September 2026, decreasing by 1% compared to the gross debt as of December 2025. In terms of debt movements, we amortized $150 million of debt over the period, partially offset by a $40 million drawdown under the revolving credit facility to support working capital needs. In addition, we recognized $28 million of new lease liabilities under IFRS 16.
The average maturity of our debt decreased to 5.1 years at the end of September 2026 compared with 5.8 years in December 2025. Fixed-rate debt represents 84% of total debt compared with 87% in December 2025. The average cost of our debt reached 4.9% as of September 2026, in line with December 2025. Regarding liquidity, we remain in a comfortable position to support our capital needs and meet upcoming maturities. As of September 2026, we had available committed credit lines of $650 million and cash equivalents of $371 million.
So thank you all for your attention, and now I will pass the floor to Gianluca.
Gianluca Palumbo (Chief Executive Officer)
for the closing remarks. Thank you, Simone. Now on slide Closing Remarks, first, our results were resilient and demonstrated the value of our diversified generation and distribution platform. After weaker hydrological conditions through July, hydrology improved significantly in August and September, supporting hydro generation and a stronger energy balance. Thermal generation has been an important contribution during all year for the stability and security of the system, providing inertia, especially in the North.
Together with higher renewable generation and our gas optimization initiatives, we delivered resilient earnings and remain on track to achieve our 2026 EBITDA and net income guidance. The expiration of a certain regulated contract and a lower gas margin weighed on the third quarter. Nevertheless, the underlying execution of our integrated business remained solid, supporting our confidence in achieving our full year targets. Second, regulatory discussions continue to evolve alongside our grid and integrated margin investments. Plan on grids, the Electricity Tariff Protection Law and the proposed electricity grid reform address different but complementary aspects of the distribution business. We continue to see opportunities to strengthen the distribution framework while advancing significant service quality, resilience and network modernization. We will continue to engage constructively with the regulator and the industry as these discussions progress.
On the integrated margin side, our decision to invest in grid-forming technology reflects our conviction that system reliability will become increasingly important as Chile advances toward a more renewable generation mix. As Chile moves toward a generation matrix with a higher share of renewable energy, the market framework will also need to evolve to recognize the broader set of services required to maintain system stability and security. We support an open and constructive discussion on these topics as we believe a well-designed reliability framework is essential to enable further renewable integration while preserving a secure and resilient power system.
Third, our portfolio flexibility, solid liquidity and disciplined capital allocation continue to support future growth. Our CAPEX remains focused on executing of our best portfolio with around 0.6 gigawatts under construction and clear visibility on future growth opportunities. We do this from a solid financial position. 84% of our gross debt is at a fixed rate, the average maturity is 5.1 years, and our liquidity covers upcoming maturities. Looking ahead, we remain focused on execution, financial discipline and long-term value creation, supported by a flexible portfolio and a solid financial position.
Thank you for your attention. I will now hand the call back to Isabella for the Q and A session.
Isabella Clemens (Head of Investor Relations)
Thank you all. Thank you, Gianluca. Now let’s move on the Q and A session. We will be taking questions via chat through the webcast. The Q and A session is open. As we have received some questions that are related to the same topic, I’ll try to join all together. Okay, so we have received questions from Alessandro De Vito, Media Banka, Juan Felipe Becerra from credit Corp, Andrew McCartney Larinville, Tomas Peruchin from Balance. So I will start with the first one that several analysts are asking about the hydrology. So Gianluca, I put this for you. So we have basically two questions here. One is what is the hydrology outlook? Rainfall, El Niño, reservoirs levels, snowmelt and how will it affect hydro generation, spot prices and EBITDA?
And also on the same line, also the analysts are asking about guidance for 2026 that we have already presented, but if we have any preliminary estimates for 2027.
Gianluca Palumbo (Chief Executive Officer)
Okay, thank you for your question. As I mentioned, after a very challenging first half we have seen a significant improvement in hydrological conditions since August. First of all, rainfall and snow accumulation recovered materially. Second, precipitation continued through October, which further strengthens our hydro availability going forward. With the year now well advanced, we have much greater visibility, and so we expect full-year hydro generation to be between 11 and 12 TWh.
That said, and this is an important point, higher hydrology should not be translated one to one into higher EBITDA. I mean a large part of the additional generation is simply offsetting the impact of the drought that we experienced in the first half. And as you mentioned, spot prices are currently very low, so the economic value of this additional water is also lower than it has been historically. Overall, the stronger hydrology clearly supports our operational position and reinforces our confidence in the full-year outlook.
So to conclude, regarding the 2026, as we said during the presentation, we remain on track to deliver our 2026 EBITDA and net income guidance. And regarding the 2027, it’s too early to define the guidance on the hydrology at the end of the year.
Isabella Clemens (Head of Investor Relations)
Okay, thank you, Gianluca. Then we have received some questions about the gas, Argentina gas and LNG. So I’m reading one that is looking into 2027. Your firm Argentina gas contract runs through April. How comfortable are you with your gas supply position beyond that date? And do you see any potential supply risk for the year, I mean the 2027?
Gianluca Palumbo (Chief Executive Officer)
Okay. As I mentioned during the presentation, our current firm Argentina gas agreement gives us contracted volumes through April 2027. Beyond that, I think it’s still too early to draw conclusions on gas supply conditions for the rest of the year. So for commercial reasons we expect to give you more color with our first quarter 2027 results. What can I add? That there are several variables that we need to consider: hydrological conditions, the evolution of Argentina gas production and exports, and overall market conditions.
But importantly, our strategy does not rely on a single source of gas. As you know, we manage our needs through a diversified approach that combines Argentina gas, LNG and active portfolio management. So, concluding, based on the information available today, we don’t see evidence of a material supply risk for 2027. And we will continue to actively manage our position as market conditions evolve.
Isabella Clemens (Head of Investor Relations)
Perfect. Thank you, Gianluca. Now I move to you, Simone. So we have a question, actually two questions. One is regarding the potential one-off accounting effect related to the tax regime change. So could you explain the impact of the recently approved corporate tax reduction on Enel Chile? And how much of the benefit will be recognized in the fourth quarter 2026 relates to the one-off accounting effect.
Simone Contricelli (Chief Financial Officer)
Okay, thanks for the question. Of course the impact will be positive starting and will be recorded in the October closing. There are two kind of effects. One that is one-off effects and this is related to the deferred tax. With the change of tax rate we have to re-evaluate the deferred tax, and so we will have an impact around, I don’t know, $11 million. And then there will be another effect in the next year, so an increased effect during the decrease of the tax rate.
In this case the effect will be an increase in terms of net income, but also a reduction of the cash out. So this effect will increase until 2029 and then we will go to an asymptote.
Isabella Clemens (Head of Investor Relations)
Thank you, Simone. Now I’m going to another one about inertia and also grid-forming. So Gianluca, this is for you. So the framework for inertia is still not very clear. How do you expect inertia services to be remunerated going forward? And what role could grid-forming BESS play in supporting system stability? And actually just to add on the same, can you provide any guidance on expected remuneration of the grid-forming attributes of your BESS? So this is the two questions, Gianluca.
Gianluca Palumbo (Chief Executive Officer)
Okay, thank you. Let me start by saying that this is a very relevant topic, especially in the northern part of the system, due to renewable penetration keeps increasing. As we mentioned today, thermal units can be dispatched to provide inertia and support system security, but without any specific economic recognition for that service. So, in our view, to ensure reliability and at the same time send the right price signal, inertia should be formally recognized and properly compensated as a system service.
And this is exactly where grid-forming batteries can play an important role. Our BESS projects currently under construction were designed from the start with grid-forming capabilities even before the new technical requirements were published during this year. So these capabilities allow batteries to contribute to frequency regulation, fault response and, in general, overall system stability. So, concluding, we see the regulatory direction on grid-forming as a positive.
At the same time, it’s important to move forward with a proper framework that recognizes and pays for the system services needed to ensure security and reliability and. and the second one? Yes, exactly. Okay. At this stage we are not providing specific guidance on remuneration from grid-forming attributes. And what I can say on this topic is that the Chilean power market and regulatory framework evolve. Storage may capture additional value from capacity remuneration and system support services. However, the contribution of these value streams will depend on market conditions, regulation, project location and technical characteristics.
So we continue to assess based on its overall contribution to our integrated portfolio, rather than on any single revenue stream.
Isabella Clemens (Head of Investor Relations)
Perfect. Thank you, Gianluca. Now, Simone, turning to you. So we have received also a question from Alfredo from Universiones Manchique. Why did you, your company, purchase energy at high spot prices, while the hydropower it generated was sold at lower spot prices? Basically asking about the difference on spot price, purchase and sell.
Simone Contricelli (Chief Financial Officer)
Okay, thank you, Alfredo. I think that you are referring to the last quarter. That is, it was like a roller coaster quarter. So at the very beginning, I mean, until the 10–11 of July, there was few orders to produce for our. In this moment we are in a buyer position, and you know that the price went up. Why? Because it was the last part of very dry season, not starting at the end of 2025. And so no more water to support the system going ahead. Starting from the 10th of July, the quarter was much better, a lot of water.
But in this moment the prices went down. And so the selling price of our idle production was at lower price, I would say something between 20 and 30 US dollar per megawatt hour.
Isabella Clemens (Head of Investor Relations)
Okay, thank you, Simone. We have another question now, Gianluca, from Alessandro McCartney. He’s asking about when do you expect the definition of the technical detail for the framework for the distribution companies under the Electricity Tariff Protection Law to be ready.
Gianluca Palumbo (Chief Executive Officer)
We expect the authorities to release a detailed proposal for public consultation in the coming weeks.
Isabella Clemens (Head of Investor Relations)
Okay, perfect. So we have another one coming. We have also from Jay from Scotiabank and also other analysts that are asking that I will summarize here as some of our legacy regulated contracts roll off. How are you thinking about recontracting the portfolio? And do regulated auctions represent an attractive opportunity for Enel Chile?
Gianluca Palumbo (Chief Executive Officer)
Okay. We continue to see commercial opportunities across different market segments, both regulated and free. Our approach is to actively manage the portfolio and place our energy on attractive terms, always keeping the right balance between returns and risk. On the regulated side, the upcoming auction is certainly one of the opportunities that we are evaluating. We see some of the improvements in the preliminary framework as positive. For example, the grid contractual flexibility and the mechanism to manage supply obligations.
As always, any decision to participate will depend on the final conditions, expected returns, and consistency with our overall portfolio strategy. At the same time, we will keep looking at opportunities in the free market. So for us, it’s not about prioritizing one channel over the other. It’s about finding the right commercial opportunities and creating value through active portfolio management.
Isabella Clemens (Head of Investor Relations)
Perfect. Thank you, Gianluca. Now we received one related to BESS, Gianluca. So the question is, can you provide an update on the BESS projects currently under construction? Should we expect additional battery investment beyond this project, or does this complete your current BESS development program?
Gianluca Palumbo (Chief Executive Officer)
Thank you for your question. As I mentioned during the presentation, our BESS projects under construction continue to progress according to plan, and our focus today is on executing them successfully. Battery storage remains an important part of our strategy because it gives to our portfolio greater flexibility, supports renewable integration, and helps reduce curtailment. Looking beyond the project already announced, I don’t want to get ahead of our next strategic plan as we are still evaluating different opportunities.
But what I can say is that we will remain very selective and disciplined in our investment decision. Any new investment needs to meet our return requirements and create value for our shareholders. And we will maintain flexibility in how we pursue opportunities, considering both organic and inorganic alternatives like M&A, when they make sense. So, concluding, we continue to see opportunities in battery storage, but always under the same principle: disciplined capital allocation and value creation.
Isabella Clemens (Head of Investor Relations)
Okay, thank you, Gianluca. Now, Simone, this is for you about Yankee bonds. Any update on how and when you have financed the Yankee bond?
Simone Contricelli (Chief Financial Officer)
Okay, thank you for the question. I think that it’s a little bit premature to talk about specific refinancing measures. What you know is that we are clearly continuously evaluating possibilities of liability management, and these possibilities go through, I don’t know, issuing a new bond or some long-term financing, or also use or partial use of liquidity to pay part of this bond. The fact is there is something like a trade-off in refinancing early and waiting a little bit.
Why? Because the current bond has a cost around 4.9% or something less. And in this moment, if we look at the market, for example a 10-year bond in US dollars, the interest rate should be around 6.2%. But in any case, for a company that has our credit profile, the market remains quite liquid and accessible to issue a bond. So in this moment we keep on working but are not worried.
Isabella Clemens (Head of Investor Relations)
Okay, thank you, Gianluca. Now this is the final question that we have received about distribution. As the regulatory discussion progresses, what specific change would be most meaningful for Enel Chile in terms of tariff recognition, investment incentives, and returns on incremental grid capex?
Gianluca Palumbo (Chief Executive Officer)
Okay. Regarding the short term, we expect the implementation of new quality and resilience investments under the law approved in August. In the medium term, as we have noted previously, we view distribution reform as a key priority for the energy sector. The continued electrification of end-use consumption, particularly through the growing adoption of electric mobility, will require significant investment in distribution networks to enhance grid resilience, increase flexibility, and improve service quality for our customers.
In this regard, we believe the Ministry of Energy proposal is broadly moving in the right direction as it transitions toward a regulatory framework that better reflects actual assets investment and incorporates performance-based incentives.
Isabella Clemens (Head of Investor Relations)
Okay, thank you, Gianluca. Thank you, Simone. So, as there are no further questions, I would like to conclude this results conference call. Let me remind you that the investor relations team remains available to address any questions you may have. Thank you for your attention and we look forward to seeing you soon again.
Victor (Operator)
Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
Recent Comments