Enel Chile S.A. Q1 FY2026 earnings call

Portfolio Management

• Favorable hydrological conditions reduced portfolio risk and supported stable operating performance. Started construction of three battery energy storage projects in northern Chile adding ~0.5 GW capacity. Signed new LNG supply agreement with Shell to optimize gas supply for generation business.

Country and Regulatory Context

• VAD 2020-2024 tariff resettlements postponed to July 2026; regulator working on alternative funding solutions. VAD 2024-2028 process: regulator published Preliminary Technical Report Volume 2 in Jan 2026, awaiting final report.

Business Profitability

• First quarter 2026 delivered consistent financial results with EBITDA up 16%. Extraordinary General Meeting approved capital increase of CLP $360 billion at Enel Distribución Chile. Annual General Meeting approved final dividend.

In the first quarter of 2026, EBITDA reached $423 million with a 16% increase compared to the same period of last year. Net income amounted to $162 million, a 7% decrease compared to first quarter 2025. FFO reached $122 million, a 12% increase compared to the same period last year. Investment of $111 million was made, with 41% ($46 million) in renewable and storage, 31% ($34 million) in thermal power projects, and 28% ($31 million) in grid investments. Hydrogeneration in Q1 2026 remained broadly in line with last year's level, forecasting 10.7 TWh for 2026. Gas sourcing secured firm volumes at competitive prices until April 2027. Around 450 MW of new battery capacity is under development.

Forward-looking Statements

• Forecasted hydrogeneration for 2026 at 10.7 TWh based on conservative hydrology view. Anticipate COD of best projects during third and fourth quarter of 2027. Plan to refinance short-term debt using long-term financing under negotiation.

Risks

• Volatile operating environment may impact results. Regulatory developments and their potential impacts on business. Uncertainty around hydrological conditions, especially with increased El Niño probability in second half of year.

Q: Apart from the gas valorization agreement, which is a positive one-off in your results, Could you please indicate which other one-off negatives you have incurred in your first quarter 2026 figures? Basically, I'm interested in knowing the recurring EBITDA booked in the first quarter 2026.

A: In this course we have more than one non-recurrent effect. The first one is the impact of the agreement with Shell, that is a positive impact, but then was partially offset by some problem with the transmission line that impacted in our efficiency. And on the other side, this impact can be around $15 million. And then around $16 million of adjustment coming from the previous year. The main part from 2023, it was related to an adjustment of the ancillary services book in this year after quite a long discussion with the system, we finally take the final decision and this as an impact of minus $30 million. So to make a synthesis, if you normalize all these non-recurrent effects, our result is around $360, $370 million for the quarter.

Q: Can you update on the key factors on the ongoing negotiations with regulator of the distribution regulatory framework?

A: The VID 2024-2028 process is still ongoing. The methodology remains based on the reference model company with a regulated real post-tax work of 6%. We believe that there is still room for improvement in the CNL proposal and we are actively participating with the distribution association in the observation and the discrepancy process. The final technical report is expected by June 2026 and the tariff decree in early 2027. Regarding the postponement of the VFD 2020-2024 settlement, the estimated impact is around USD 65 million. The recovery mechanism was defined by the SEC in February 2026, but collection was postponed by three months. Our current planning assumption is collection from July 2026, while the Ministry of Energy is also evaluating an alternative mechanism, including potential debt factoring.

Q: Can you give more details on the profitability of the best project in Chile in terms of IRR?

A: Enel is developing new best and following the strategical goal to balance our portfolio. We launch this kind of project only if the return is at least 300 basis points above our work. And also that we make also some stress tests trying to change the market condition to see the resilience of this kind of project also to some more stressed and critical scenarios.

Q: Why did energy purchase cost in the generation segment increase so much if volumes were similar versus last year and spot prices were significantly below the first quarter 2025 levels even in the non-solar hours?

A: In this course we have more than one non-recurrent effect. The first one is the impact of the agreement with Shell, that is a positive impact, but then was partially offset by some problem with the transmission line that impacted in our efficiency. And on the other side, this impact can be around $15 million. And then around $16 million of adjustment coming from the previous year. The main part from 2023, it was related to an adjustment of the ancillary services book in this year after quite a long discussion with the system, we finally take the final decision and this as an impact of minus $30 million. So to make a synthesis, if you normalize all these non-recurrent effects, our result is around $360, $370 million for the quarter.

Q: Energy losses in the distribution segment continued to deteriorate during the first quarter of 2026. Can you comment on what is driving that, how you expect to evolve, and what can be done to reverse the trend?

A: Energy losses increased mainly due to tariff adjustments and some change in customer behavior, which have led to a rise in no technical losses such as the depth. In the first quarter, losses were also impacted by lower than expected demand and the more competitive market environment. That said, our loss levels remain below the regional averages, and we have a clear plan to reserve the trend. We are strengthening our loss reduction strategy through this plan. First of all, improved inspection targeting using better analytics. Second, expansion of micro and macro metering. This is an action to help the micro balance. Increased field action and controls, considering the better analysis that we will do. And finally, enhanced coordination with authorities to address illegal connection. Looking forward, we expect losses to gradually decline, targeting around 5.7% by 2028.

Q: Will this capital increase in distribution be subscribed by Enel fully using cash? How does the company plan to finance it or it's a red covert? How much would it take to recover the money?

A: The capital increase is intended to strengthen annual distribution financial position and it's expected to be supported by controlling shareholders in line with its long-term commitment to the business. From a financial perspective it will be covered through group level financial resources ensuring obviously efficiency and flexibility. This is not a short-term recovery investment. It supports the long-term sustainability of the business through improved financial structure, lower financial costs.

Q: Does this optimization imply lower contracted volumes or changing pricing terms with Shell? And regarding the three best projects highlighted in the presentation, can you provide more details on the expected timeline for each project to reach COD and enter in EGP capacity?

A: This is an agreement that has the goal to optimize our portfolio. We have a very valuable portfolio of gas contracts. Part of the contract is for Genel, part of this contract is for gas from Argentina. What we have done in this agreement is try to rebalance the amount of the general contract to make coherent our portfolio. Regarding the best projects, during 2025 we focused on engineering permitting and project preparation and with the regulatory framework now in place, we are starting construction in 2026 and expecting the COD during the third and fourth quarter of 2027.

Q: Where do you see Nelchili next avenues for growth, given that lower demand from unregulated customers? He's mentioned about the determination of the regulated PPAs. How is Nelchili position itself for long term? And can we expect the company to maintain the current earnings level for growth?

A: Enel will confirm its strategy. In this moment, clearly, we see a reduction in the volumes of regulated contracts, but this is related in how the auction will rise in the market. What we have to stress is that we won the full last two auctions also at a valuable price on the market. So we have a very good portfolio in terms of price in the short term. Also, we can stress the fact that the price of our portfolio, the average price in the next three years, we will maintain the same value, even if the price on the market is going down. And for the following year, we will keep on looking to a good mix among short-term opportunity and also long-term contract. There can be new regulated auction, but also long-term contract with the big customer.

Q: What is the minimum cash position you are operationally comfortable with? You currently have a cash position of around $454 million. Do you plan on using your credit lines this year, or will you refinance your short-term debt?

A: Our business has a strong seasonality with some needs in terms of financing in the first and in the second quarter, and then a higher cash production in the second half. So we have an internal model to define the comfortable minimal cash position to cover the networking capital needs. And then for the future financial needs, we plan to refinance using long-term financing that in this moment is under negotiation.