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01/10 05:05
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary shows strong financial performance with a significant increase in EBITDA and net income, but concerns about increased debt and subsidy costs. The Q&A reveals management's unclear responses on key issues, adding uncertainty. The company's market cap suggests moderate stock movement. Overall, the positive financial metrics are offset by potential risks and unclear guidance, leading to a neutral prediction.
EBITDA (Q2 2024) $301 million, 6.4 times higher than Q2 2023, mainly due to higher PPA sales, lower variable costs from thermal generation, and lower prices in the spot market.
EBITDA (First Half 2024) $597 million, 74% higher than the first half of 2023, driven by higher PPA sales, lower thermal generation costs, and improved commercial sourcing.
Net Income (First Half 2024) $267 million, increased by 2.2x compared to last year, primarily due to improved EBITDA results.
Funds from Operations (FFO) (First Half 2024) $52 million, an improvement of $56 million compared to the same period in 2023, mainly due to higher EBITDA, offset by increased tax payments.
Total CapEx (First Half 2024) $290 million, 9% lower than last year, with 66% related to renewable and storage projects.
Gross Debt (End of June 2024) $4.8 billion, an 8% increase compared to December 2023, mainly due to higher working capital and CapEx needs.
Average Cost of Debt (June 2024) 5%, slightly above the 4.9% recorded in December 2023, primarily due to bond maturity.
Cash and Cash Equivalents (June 2024) $305 million, with an additional committed credit line of $750 million.
Net Electricity Generation (First Half 2024) 12.1 terawatt hours, 15% higher than the first half of 2023, mainly due to improved hydrology and new projects.
Energy Sales (First Half 2024) 17 terawatt hours, 10% higher than the same period last year, driven by increased sales to regulated customers.
New Renewable Energy Capacity: Added approximately 250 megawatts of new renewable energy capacity and BESS project.
Hydropower Plant Completion: Concluding Los Condores hydro power plant, with wet test starting in September 2024.
Long-term PPA: Secured a 20-year term regulated PPA for around 3.6 terawatt hours.
Distribution Tariff Update: Distribution tariff for 2024 came into effect in June 2024.
Hydro Generation: Hydro production exceeded by 72% compared to Q2 2023, with updated estimates of 12 terawatt hours for 2024.
Net Electricity Generation: Net electricity generation totaled 12.1 terawatt hours, exceeding production by 15% compared to H1 2023.
Regulatory Changes: Chilean Congress approved law related to stabilization mechanism, awaiting sovereign guarantee decree.
CapEx Allocation: Total CapEx reached $290 million, with 66% related to renewable and storage projects.
Regulatory Risks: The Chilean Congress approved a law related to the stabilization mechanism, which is expected to impact tariffs and customer protection mechanisms. The company is awaiting the sovereign guarantee decree to start the factoring process.
Tariff Changes: The distribution tariff for 2024 came into effect, with a significant increase for customers consuming above 350 kilowatt hours, which could affect customer satisfaction and demand.
Economic Factors: The company faces potential increases in subsidies for vulnerable families, which could impact financial performance and regulatory compliance.
Supply Chain Challenges: The company has experienced critical weather events affecting electricity supply stability, impacting quality indicators such as SAIDI and SAIFI.
Debt and Financial Risks: Gross debt increased to $4.8 billion, primarily due to higher working capital and CapEx needs, which could affect liquidity and financial stability.
Tax Receivables: The company has significant accounts receivable related to the PEC, amounting to $904 million, which could impact cash flow and financial performance.
Renewable Energy Capacity Addition: Added approximately 250 megawatts of new renewable energy capacity and BESS project.
Long-term PPA: Secured a 20-year term regulated PPA representing sales of around 3.6 terawatt hours.
Hydro Generation Estimate: Updated hydro generation estimates to approximately 12 terawatt hours for 2024.
CapEx: Total CapEx reached $290 million in the first half, with 66% related to renewable and storage.
Regulatory Updates: Chilean Congress approved stabilization mechanism law and distribution tariff for 2024.
EBITDA Guidance: Confident in guidance for solid EBITDA and net income results for 2024.
Accounts Receivable: Expect to execute factoring of current accounts receivable during the second half of 2024, ranging from $550 million to $650 million.
Net Income Projection: Expect net income to remain strong due to improved EBITDA performance.
Hydro Generation: Expect to complement hydro generation estimates with snow melt forecast results.
Liquidity Position: Maintain a solid liquidity position with available credit lines and cash.
Accounts Receivable related to PEC: As of June 2024, we had an account receivable related to the PEC already net of factoring of $904 million. Considering the readjustment in the interest of around $115 million, we reached an accrual of $1 billion approximately. We expect to execute the factoring of the current accounts receivable during the second half of this year ranging from $550 million to $650 million.
Subsidy for Vulnerable Families: According to the law approved, $100 million are coming from subsidies paid by the consumer particularly repeat customers and $20 million are coming from the treasury of Chile. This $120 million would support around 1.2 million families.
Potential Increase of Subsidies: Congress is discussing a potential increase of this benefit to increase the number of families supported by the subsidy to around 4.7 million families, increasing the total subsidy to around $300 million per year.
The earnings call reveals several negative factors: a decline in net production and energy sales, increased energy losses, and substantial financial obligations. Although FFO improved, the overall financial performance is weakened by debt and miscalculation costs. The Q&A highlights management's lack of clarity on future strategies and potential risks. Despite confirming guidance, the absence of new partnership announcements or strong positive catalysts suggests a negative sentiment. Given the market cap, the stock is likely to react with a negative movement in the range of -2% to -8%.
The earnings call presented strong financial metrics with increased EBITDA and net income, alongside reduced debt and CapEx. The Q&A confirmed conservative guidance and strategic plans. Despite minor concerns about potential fines and regulatory impacts, the overall sentiment is positive with strong financial performance and future guidance. The market cap suggests a moderate reaction, likely resulting in a positive stock price movement of 2% to 8%.
The company demonstrated strong financial performance with significant EBITDA and net income growth, and a solid liquidity position. Despite increased debt, the net debt-to-EBITDA ratio improved, indicating effective leverage management. Positive guidance and new contracts, particularly in renewable energy, contribute to optimism. However, concerns remain regarding regulatory uncertainties and debt management. Given the company's market cap, these factors suggest a positive stock price movement of 2% to 8% over the next two weeks.
The earnings call summary shows strong financial performance with a significant increase in EBITDA and net income, but concerns about increased debt and subsidy costs. The Q&A reveals management's unclear responses on key issues, adding uncertainty. The company's market cap suggests moderate stock movement. Overall, the positive financial metrics are offset by potential risks and unclear guidance, leading to a neutral prediction.
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