Enel Chile Q4 Earnings Call Highlights

Enel Chile (NYSE:ENIC) executives told investors they met 2025 guidance despite what management described as a “stress test year” for operations, driven by extreme drought, renewable plant maintenance and transmission limitations. On the company’s full-year 2025 results and strategic plan call, CEO Gianluca Palumbo and CFO Simone Conticelli outlined how the utility plans to increase flexibility across its portfolio through battery storage, selective renewable additions and continued grid digitalization during 2026-2028.

Chile market backdrop: electrification, policy change and resilience

Palumbo framed the strategy around a rapidly evolving Chilean power system, pointing to accelerating electrification, rising complexity in system operations and the need for resilience amid climate volatility. He highlighted Chile’s renewables resource base and policy framework, while also emphasizing the need for regulatory evolution, particularly in distribution.

Management cited data center load as a growing source of demand, noting 325 megawatts of connected capacity as of 2025 and public estimates that capacity could rise to around 1,200 megawatts by 2030. Palumbo also pointed to areas where clearer rules would help unlock investment, including frameworks for behind-the-meter solutions for large customers and updated system coordination rules for a more variable generation mix.

2025 operations: lower hydro and renewables, offset by thermal and sourcing

Conticelli said net production fell 12% versus 2024, driven by lower hydro dispatch during an “extreme drought,” reduced renewable output linked largely to extraordinary maintenance at two solar plants, and higher curtailment associated with transmission constraints. The decline was partially offset by higher production from the company’s combined-cycle gas turbine (CCGT) plants.

Energy sales totaled 30 terawatt-hours (TWh), down from 33.3 TWh in 2024. The decrease was attributed mainly to lower regulated sales following the expiration of regulated auctions from 2008 and 2013. Free-market sales were described as stable at 19.4 TWh.

In the grids business, management emphasized the selective use of capital spending to increase flexibility, including additional remote-control equipment for automation and expanded digital metering.

Financial performance: EBITDA up, net income down

Enel Chile reported 2025 EBITDA of $1,473 million, an increase of $52 million versus 2024 on an adjusted basis that excludes the impact of the prior-year functional currency change, according to Conticelli.

He detailed key drivers in the year:

• Generation: A $286 million decline in PPA sales, primarily due to termination of high-priced regulated contracts that affected both volume and average regulated prices. This was partly offset by positive pricing effects from indexation in free-market contracts and the absence of exchange-rate hedge impacts recorded in 2024.
• Sourcing: A positive $172 million impact despite a $34 million negative effect tied to transmission restrictions, supported by lower spot and third-party energy purchases, lower transmission costs and insurance provisions related to the solar maintenance events.
• Gas trading: An $87 million margin increase due to higher gas trading activity versus 2024.
• Grids: Improved results driven mainly by provisions reflecting higher expected tariffs in the 2024-2028 regulatory period, partially offset by higher O&M tied to a “comprehensive winter plan.”

Net income was $538 million, which management said was 14% lower than the prior year’s adjusted figure. Conticelli cited higher depreciation, amortization, impairment and bad debt expense of $93 million, including a $59 million impact from commissioning new renewable capacity and an $80 million increase in grids bad-debt provisions. He also referenced financial result headwinds tied to lower capitalized expenses on renewable projects and higher financial expenses linked to a methodological adjustment referenced in a National Energy Commission technical report, partly offset by lower average debt levels and interest rates. Corporate income tax expense fell by $4 million.

Cash flow, debt and liquidity

Funds from operations (FFO) totaled $1,067 million in 2025. Management noted a $299 million contribution from the recovery of PEC receivables, aided by factoring executed in April 2025 related to PEC 2 and 3 and tariff recovery of a portion of PEC 1. Conticelli said working capital increased by $248 million, reflecting CapEx payments and lower collection in the grids business, among other effects.

Gross debt was $3.8 billion at December 2025, down 2% from December 2024. The average debt maturity decreased from 6.2 years to about 5 years, with 87% at fixed rates. The average cost of debt edged down to 4.9% from 5.0%. Liquidity included $690 million of committed credit lines and $462 million of cash and equivalents.

Strategic plan 2026-2028: storage-led growth and grid digitalization

Management’s plan calls for $2.0 billion in investment over 2026-2028, including about $1.6 billion for generation and about $0.5 billion for grids. Palumbo described the approach as disciplined and selective, prioritizing flexibility, technology and geographic diversification.

Key plan elements discussed on the call included:

• Integrated margin CapEx: About $1.6 billion for 2026-2028, with roughly $1.0 billion for development focused on battery energy storage systems (BESS) and new wind projects.
• Capacity additions: Approximately 1 gigawatt of renewables added through 2028, bringing installed capacity close to 10 gigawatts. Three projects under execution—Valle del Sol, Azabache and Las Salinas—total about 0.5 gigawatts in northern Chile and are expected to enter operation in 2027. An additional 0.5 gigawatts is planned across new BESS and wind.
• Generation mix: Renewables are expected to reach around 80% of Enel Chile’s generation mix by 2028.
• BESS costs and duration: Conticelli said BESS unitary CapEx is trending down, with new systems expected to cost roughly $0.8 to $0.9 (per megawatt, as discussed on the call) versus around $1.0 in the prior plan. The first wave is expected to be 4-hour systems, while a second wave would range from about 4.5 to 6 hours.
• Grid investment focus: Cumulative grids CapEx of roughly $0.5 billion, with 47% allocated to connections, 30% to quality/resilience/digitalization, and 23% to grid management.

On targets, management said it expects integrated margin of about $1.8 billion by 2028, and presented a 2026-2028 cumulative EBITDA range of $4.5 billion to $4.7 billion. For 2028, EBITDA is expected to range from $1.5 billion to $1.7 billion, with net income projected between $0.5 billion and $0.7 billion.

The company also reiterated its dividend approach, with Conticelli stating the plan assumes a minimum payout of 50% of net income, while leaving room for potential increases depending on opportunities and market conditions, subject to shareholder approval.

During Q&A, management addressed several investor topics, including gas supply and geopolitical risk, distribution concession headlines, and the pace of demand growth from data centers. Palumbo said the “large majority” of the company’s thermal gas needs for the year were already secured via firm Argentine gas contracts and LNG contracts, and that the firm Argentine agreements were six-month terms structured at fixed prices. On distribution, he said the company had not been notified of any administrative or legal proceeding regarding potential concession forfeiture, while acknowledging media reports that the Energy Ministry had tasked the SEC with preparing a technical report that could take 6 to 18 months.

About Enel Chile (NYSE:ENIC)

Enel Chile SA, traded as ENIC on the NYSE, is one of Chile’s leading integrated electric utilities, with core businesses spanning electricity generation, transmission and distribution. The company serves a diverse customer base that includes residential, commercial and industrial users, striving to deliver reliable power across both urban and rural regions.

In its generation segment, Enel Chile operates a balanced portfolio of assets, including hydroelectric plants, thermal power stations and an expanding suite of renewable energy facilities such as wind and solar farms.