Enel Chile Q3 Earnings Call Highlights

Key Points

• Financial performance remained resilient: Enel Chile’s nine-month 2026 EBITDA rose 2% to $1.021 billion, net income increased 11% to $390 million, and funds from operations climbed 25% to $770 million. The company remains on track to meet its full-year EBITDA and net-income guidance.
• Hydropower conditions improved sharply: Heavy rainfall in August and September lifted third-quarter hydro generation 88% sequentially to 3.9 TWh, although low spot prices may limit the EBITDA benefit. Full-year hydro generation is expected at 11–12 TWh.
• Investment is accelerating in storage and grid modernization: Capital spending doubled to $492 million, with four battery projects totaling roughly 0.6 GW under construction and 25% of spending directed to distribution-grid upgrades. Three storage projects are expected online in 2027, with Finis Terrae scheduled for 2028.

Enel Chile NYSE: ENIC reported resilient results for the first nine months of 2026, supported by improved hydrological conditions late in the period, a diversified generation portfolio and higher cash generation, while continuing to invest in battery storage and distribution-grid modernization.

Chief Executive Officer Gianluca Palumbo said hydrological conditions improved substantially in August and September after exceptionally dry conditions through July. The stronger rainfall lifted hydroelectric generation and helped the company remain on track to meet its full-year EBITDA and net-income guidance, he said.

For the first nine months of 2026, EBITDA totaled $1.021 billion, up 2% from a year earlier, while net income rose 11% to $390 million. Funds from operations, or FFO, increased 25% to $770 million.

Hydrology rebounds after dry first half

Palumbo said cumulative rainfall in the Maule and Biobío basins moved above historical averages following heavy precipitation associated mainly with a strong El Niño event. Reservoir levels also recovered during the third quarter, with the company’s Ralco and Pangue plants operating at full capacity in the Biobío region.

Hydroelectric generation rose 88% sequentially to 3.9 terawatt-hours in the third quarter, from 2.1 terawatt-hours in the second quarter. Nine-month hydro production reached 8.2 terawatt-hours, 3% above the prior-year period.

The company expects full-year hydro generation of between 11 terawatt-hours and 12 terawatt-hours. Palumbo cautioned that additional hydro output should not translate directly into EBITDA growth because much of the increase offsets drought-related impacts from the first half, while spot prices are currently low.

Chief Financial Officer Simone Conticelli said the third quarter experienced sharply changing market conditions. Early July remained dry, leaving Enel Chile in a buyer position when spot prices rose, while improved water availability later in the month increased hydro output as selling prices declined to between $20 and $30 per megawatt-hour, he said.

Battery storage program advances

Enel Chile said it has four battery energy storage system projects under construction, representing about 0.6 gigawatts of capacity. In August, the company began construction on the 100-megawatt Finis Terrae BESS project, while the 206-megawatt Las Salinas BESS completed its first synchronization with Chile’s national grid.

• Las Salinas: 206 megawatts, integrated with a hybrid wind and solar facility.
• Valle del Sol: 153 megawatts of storage capacity added to an existing solar plant.
• Azabache: 94 megawatts of storage capacity at a hybrid wind and solar platform.
• Finis Terrae: 100 megawatts of storage capacity added to an existing solar facility.

Las Salinas, Valle del Sol and Azabache are expected to begin commercial operations in 2027, while Finis Terrae is expected to enter service in 2028. The projects include grid-forming technology intended to support voltage, frequency and broader grid stability as renewable generation expands.

Palumbo said Chile’s regulatory framework should formally recognize and compensate inertia and other system services currently provided by thermal units. He said Enel Chile is not yet providing specific guidance on potential remuneration for grid-forming battery capabilities, which will depend on market conditions, regulation, project location and technical characteristics.

Capital spending doubles as grid investments rise

Capital expenditures reached $492 million in the first nine months, doubling from the prior-year period. Renewable generation accounted for 63% of spending, while 25% was directed toward strengthening and modernizing the distribution network. The remainder primarily supported thermal-fleet reliability and availability.

Development investments totaled $295 million, or 60% of total capital spending. Battery storage accounted for 79% of development spending, followed by networks at 14% and hydropower projects at 6%, according to Conticelli.

In the distribution business, energy distributed increased 2% to 11.1 terawatt-hours, while energy losses remained stable at 6.4%. The number of remote-control devices rose 22% to 4,300 units. Distribution capital spending totaled $122 million, up 21% year over year, as the company accelerated investments in service quality, digitization and resilience.

Palumbo said regulatory discussions remain underway around tariff normalization, investment rules under the Electricity Tariff Protection Law and a broader Electricity Grid Reform. The government is expected to submit a grid-reform bill to Congress in March 2027. Enel Chile expects authorities to publish a detailed proposal for public consultation on the investment framework under the tariff-protection law in the coming weeks.

Financial position and outlook

Third-quarter EBITDA was $336 million, broadly stable from a year earlier. Conticelli said a $9 million year-over-year decline reflected $16 million of unfavorable sourcing effects and a $10 million lower gas margin, partly offset by a $17 million improvement in grids and other activities.

For the nine-month period, integrated-business EBITDA increased $15 million, aided by gas optimization initiatives that contributed more than $90 million, as well as lower thermal production costs and lower natural-gas costs. Grids EBITDA was broadly stable at $127 million.

Gross debt stood at $3.8 billion at the end of September, down 1% from December 2025. Fixed-rate debt represented 84% of total debt, and average debt maturity was 5.1 years. The company had $650 million of available committed credit lines and $371 million in cash equivalents.

Conticelli said a recently approved corporate tax reduction is expected to have a positive one-time deferred-tax impact of about $11 million in the October closing, with further benefits to net income and cash taxes expected in subsequent years as the lower rate takes effect.

Looking ahead, Palumbo said Enel Chile’s firm Argentine gas agreement provides contracted volumes through April 2027. He said the company sees no evidence of a material gas-supply risk for 2027, citing its diversified approach combining Argentine gas, LNG and active portfolio management, though it plans to provide further details with first-quarter 2027 results.

About Enel Chile (NYSE:ENIC)

Enel Chile SA is a Chilean electricity company and part of the global Enel Group. The company operates across the power sector, with activities that include electricity generation, distribution and the development of renewable-energy projects.

Through its generation businesses, including Enel Generación Chile and Enel Green Power Chile, Enel Chile produces electricity from a diversified mix of sources such as hydropower, solar, wind and thermal generation. Its renewable-energy operations support the development and operation of utility-scale clean-energy facilities in Chile.

Enel Chile also provides electricity distribution services through Enel Distribución Chile, serving residential, commercial and industrial customers in the Santiago metropolitan area and surrounding locations.

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