Hi, good morning. In the name of Banchile Inversiones and Banchile Corredores de Bolsa, I would like to welcome you to this webinar. Today, we have one of the most important financial market companies, which is Aguas Andinas. For that, we have the presence of Daniel Tugues, who is the CEO of the company, Cristian Torres, controlling and accounting manager, and Raquel Bernardin, production resources manager. I will also like to take this opportunity to mention that Daniel Tugues is the new CEO of the company. He is a civil engineer from the Polytechnic University of Catalonia, MBA from IESE Business School, and Master in Integrated Water Management. He also has more than 15 years of experience in the infrastructure and development of the utility sector.
We also have his presence so that he can present the results, and so that you can share with him and make the question you may have about the results of the first quarter. Thank you very much for being with us, and I give the floor to the company. Daniel?
Good morning, everyone. It's a pleasure for me to be here. As you know, I took the CEO role in May 2022 after a peaceful process of transition with the previous CEO. I didn't wanna miss the opportunity to be here with you in the presentation of the results of the first Q of the year, and to greet you and share with you the messages of the most important topics of the first quarter. First of all, the climate change is still with us, and it's still surprising us. When we thought that we have seen everything, the events we are facing are getting more and more complex. This first quarter, we have faced scarcity, really low flows. I think these are the lowest we have seen since 2020. These have been worse.
Also in regards to turbidity, in 2021, we had an event with more than 80 hours with turbidity over the capability of treatment. This year, we had 100 hours that affected the Central Valley. The good news is that with the investment plans that the company has been developing lately, with a focus more in resilience, these events have been dealt with without major disruption in the city service. This first quarter, this has been the first summer we have been able to have the Cerro Negro wells and also the works of Padre Hurtado, and also the agreement with canalistas that we presented and that is now working with normality. This has also allowed us to increase the reserves of the dam
up to 90 hm³, which has been a record.
It's the highest level that we have had since 2017 with, since we had the normal rain. We're still being surprised and amazed with the climate change, but we're ready to overcome. The second part is the transformation plan, what we have strengthened in the same topics that we have been addressing, the risk mitigation, the financial sustainability, and most of all, better CapEx, optimization of CapEx. That gives us a very good investment rhythm to be facing the challenges of the climate change and also the new organizational culture. In this first semester, regarding the last one, the commercial management has been very successful and has been restrained in certain topics as well. For instance, we have some decrease in the revenues.
The inflation also compared with the last year where we had 3.4%, this year, we have 1.8%. We also have financial expenses associated with the revaluation of the UF with respect of the same period of last year. The new tariff indexation from last February with 1.6%, and it has been activated, the new indexation. It's part of the increase of the revenue that the company are reporting during this semester. Another highlighted event is the distribution of the dividend, where we had the profit last year, 100% of the profit. We're very satisfied that Fitch ratifies our...
Aguas Andinas's solvency, rating, and public debt issuance as AA+ with stable outlook. I would like to wish us a very positive seminar, and now I leave you with the team with some more details and some more information. Thank you very much. Thank you so much, Daniel. Good morning to everyone. It's a pleasure to be sharing with you in this outcome, in these results of the company's work, and I would like to talk about the first quarter. As Daniel was mentioning correctly, we are presenting and we're maintaining growth of the EBITDA, which is very robust with an 18.9% which is in the same line of our outcome before of the pandemic and before of the social unrest.
We're growing 19.5% with the polynomial indexing and pricing of new infrastructure, and we also would like to make some remarks of the trends in terms of consumptions. To keep this growing EBITDA, still one of the company's objectives to keep these plans working with efficiency and in general, growing the expenses in the operational costs and also the climate change. The summer has been very hot, very dry, and also has an impact in the costs of the company. All the management that we have been doing during the last year, we're clearly seeing a positive impact of the day-by-day management. It's very intense of terms of contingencies, operating contingencies, and also the collaborative management with the Maipo River. We keep a service standard which has no bigger problems, no bigger issues.
It's important to remark that the company keeps leading communicational campaigns associated to have a responsible management of the resource water with the municipalities and the different authorities. In this context, the cash flow is another topic that we are taking care of and where we can highlight positive aspects during the first quarter. With this decrease, we can still go further with our plan and keep the debt in a restraint and the objectives that we are in line with the company's policies. Regarding this, we can deepen the evolution of the outcome. Firstly, as mentioned, we had a revenue of 18.9%, CLP 80,000 million with the exercise, within rate indexations. We had four indexations last year, plus 1 extra in this year. This is the base of the growth of our sanitary income.
In the first semester, we had a 2% growth of the consumption, higher consumption, 1.4%. We have two main effects. One would be the temperatures during the summer, very, very high, much, much higher than last summer, and some months, particularly, where we had a temperature up to 32 degrees Celsius, and that generated a change in the behavior of consumption. Together with that, we had another behavior in the measurement, in the client service to break this trend. In the income, in the revenue, we had other services like the household services, the sanitation infrastructure, modifications, and the environmental services subsidiaries. Also, we would like to highlight the growth that we had in our environmental services.
In this context, in terms of EBITDA, we could observe a growth of 18.9%, which allows us to go over the level of EBITDA to overcome the previous level and to strengthen the transformation. Another positive aspect of the first semester was the bad debts, lower bad debt with 1.7%, which is half of what we have registered in the same date last year. We have the expectation that this behavior would remain stable in terms of 2%. We still need to monitor it, but the important thing is that the active management with our customers allows us to contain the debt level and to increase the behavior or to optimize the behavior. The operational costs, it's important to remark, as one aspect of the first semester, is the energy costs.
Our base of production of water, sweet water, has been changing over the years, and nowadays, the big weight of the underground waters in percentage is 25% of total water that we produce, and that increases the costs, the electrical costs. Associated with this, with the electrical market of our country, the price and the regulated tariff, we have important element of our management of the company. Also, as mentioned, our summer was very intense, and we had some operational costs, and Raquel will let us know about it as an independent factor and some relevant things of the public life, like what happened in Recoleta. This scenario has been critical at the end of last year. Another central aspect of our account is that this year, we don't have that much inflation.
That's why our financial outcome is also better compared to last year because we have a lower financial debt. As mentioned, this will leverage in the first quarter with CLP 44 million. It's 44.9% increase compared to last year. In this context, our company is recovering of their financial states comparable to 2019 and beginning of 2020. In the next slide, we have a cash flow as one of the main objectives of our management, growing importantly in almost 20% and 52.5%, the FCF. We have CLP 14 million more compared to last year. The satisfaction level of customers remains the same, and we also paying the suppliers. We keep all the expenses. The working capital stays in this positive line.
This allows us to have this cash flow of CLP 10 million more compared to the last year, allowing us to monitor our financial state, staying within the objectives of the company.
This cash generation and this management of the financial debt that we can observe. Today we have a more diversified basis of debt between local bonds, international funding, bank loans, and promissory notes, which consider reimbursable expenses. This has decreased our financial debt, and the result of the cash generation has been higher. It's part of the explanation of the variation. Our debt is focused in an 80% of UF and 90% approximated its fixed rate. This allows us to being able to monitor in a better way the financial indicators. As I mentioned in the beginning, the investment plans. It's still a strategic element for the company that allows us to face in a better way all the effects of the climate change, the drought, to ensure the continuity of the business.
Another main focus of the strategy is to implement higher resources. These three main axes have been part of a plan and a long-term focus, this means CLP 27 million in investment, a lot more than last year. This reflects the efforts of investment of the company, always taking care of the cash generation, period by period. This is confirmed in the financial indicators that we have presented. First, I would like to begin with the leverage with 1.72 by the end of March, which ratifies what we have been discussing in previous meetings in which we saw a positive behavior of this indicator. Also, EBITDA, which closed with 7.59.
This cash generation that comes along with the development of investment fund allows us to get these indicators with a good liquidity indicator and the robust constitution of our financial management can help us to confirm our rating. As you can see in the next slide. In AA+ for April, Fitch Ratings evaluated us and confirmed our rating as AA+. This is the continuity of the financial management of the company that allows us to face the short-term challenge. As a long-term goal is to have a financial balance to support the company. As I mentioned before, this is also Alas Veinte has classified us as a company that has a corporate governance according to the standards of international standards.
In summary, a really good first quarter that confirms what we have been talking about in a context that is still pretty complex, it is still a challenge. About this topic, Raquel's gonna talk more of, especially in the operating management of the company. Thank you very much, Cristian, for your presentation. Now I'm going to present the part of everything that has to do with climate change. As Daniel and Cristian mentioned, we are in the fifth year with an extreme drought. In 2022 and 2023 was the same, was as hard as the four previous years. Today, this makes us to be more robust and excellent in our operations. This is here in the decisions that we're taking.
If we go to Río Maipo, as you can see, and Río Mapocho at the right of the slide. If we compare the flows of these rivers in January, February, March, as we said, they have been really hot. These are inferior to 2020, which is the highest drought year. Obviously, we have inferior values if we make an average of the last 70 years, and the same happens with Mapocho. If we go into rainfall, in 2022 and 2023, we had 260 millimeters, which is really low. If we consider the average of all of these drought years, we had 700 millimeters in El Yeso Dam, but now we have this value. In January, February, and March, we have this precipitation, which was superior to previous year.
The rivers are not reacting that much. During the melting of the snow is where we see the most presence of water, and we're still seeing riverbeds that are too degraded and that the climate change is there, it's present. We've seen the glaciers' contributions that have been decreasing throughout the years. If we go to the next slide. In regards to the hydrologic level. In Maipo River, we have 135 cubic meters per second. If we only take the drought in the last three years, we have an average of 18 and an average in 2023 of 2024, 52%. The same happens in Mapocho River, in which we have an annual average of 4.4.
This makes us have more transfer from the riverbed of Maipo to Mapocho and makes us take more of underground water in order to cover for the necessities. What have we done to survive in this extreme climatic conditions? We have a really ambitious plan that we try to highlight during all of these meetings. We can say that up to date, what we have presented, we have 4.5 fulfilled, which have been the wells that we made during the summer. This is already operative and functioning. The works in Padre Hurtado plan that helps us have a more robust resource to bring more water to the sector, the same that happened last year. The agreement with the canalistas of the first section of Maipo River that we have been talking about in these sessions.
This gives us some peace of mind to ensure the levels of the El Yeso dam for the next years, during the next hydrological cycle, and the existence of the hydrological planning during the water treatment plans. We've had some contingency plans for the operative plans of the drinking water plants. Now we have pretty optimistic indicators that have allowed us in seven years to reduce the 44% of raw water to compensate for the drinking water. This is a plan that has worked out well. We can move forward, of course. In the management, advanced management of the wells, we have all 48% of cubic meters per second. In the systems of supply, we have been identifying the places we can only supply with underground water. We have the hydraulic efficiency plan.
It's a pretty ambitious plan that's been in the company for many years, in which you need to make many stages before seeing an important result.
Now we also have some robust elements and also progress in the network, which has 14,000 kilometers of networks. We're supplying Santiago with latest up-to-date gen technology, also covering the leakage where we needed the sanitary authorizations. Now we are having some good outcomes with this to manage the leakages. 15,000 leakages in one year with 23 different teams to fix. It's not only finding the leakages, it's also to fix them. Once we found a leakage, we have to fix it, replace it, and sometimes we also need to put the cement on top. This is intense work, but we also have the valves. Sometimes the valves, we need to change them, repair them without cutting the service, so it's a whole management. We're working with the meters as well.
All of this plan, action plan helps us to have stabilized the indicator, and in mid-term, we would like to diminish the indicator to find it in a lower position. Without further ado, a lot of energy in this part of the work. Some other topics are the wells. Antonio Varas is one of the emblematic projects of the company. Alto Maipo also, where we're gonna have the transfer of the waters. We're bringing the water from the Maipo River for drinking water and giving the water back to the Mapocho riverbed. Our will is to balance both riverbeds and to have 3,000 cubic meters per second from the Mapocho to the first section of the Maipo, and to have a bigger disposal of waters for the sanitary use. These are slow projects. A lot of work is behind the scenes.
Environmental work, the rains, engineering, a lot of things that we need to address in high-speed work, but we need some years before we're gonna have the plan completely executed. What we can show in the lower part is that our management having some results. If you look at 2019, we had a big drought, and also the year 2019, where we had a situation getting much worse. Each moment, we had less available waters from our rights. We had about 49% and 18% of waters from the underground, and the rest were transfers from users to the sanitary infrastructure.
2021, we signed this agreement with the users, with other users, and in 2022, with all the situations that I already mentioned in terms of underground waters, we went from 18% of underground waters in 2019 to 24% in 2022, and we're not depending so much on the other users in 48% to an 18%. The result is positive. We are progressing in the right way with our indicators. Now to strengthen what I've been mentioning. In 2017, during the summer of 2017, our reservoir of El Yeso, we could fill it, and then we had this mega drought where we're living through.
The last years, they have been very complicated, but we still can see with the signing of the agreement of the Maipo section allowed us to keep the levels of El Yeso dam very high, and also at the end of March of 192 hm³ to face the autumn and its challenge. To finish my presentation, I would like to say that we're not only part of a very, very big drought, the worst in the last 70 years, but also we're having some events which are very complicated. Each decade, we are facing big challenges. 2020, we had 45, and now we have more than 55 turbidity events. These events are each time much, much longer. As you can see on the right-hand side to show you two events where we had to cut the water supply.
We had one in 2013 with 20 hours of turbidity, and we had to cut the water. In 2017 as well, 44 hours. Then we had this atmospheric river, more than 80 hours with this indicator. We didn't have to cut the water supply, the water outage. We had some events without further complications, and we thought we were all right. In this summer, there was no risk of water supply for the city. We had 130 hours with this average turbidity, where we had the treatment system, they are designed to work with the water, and then they stop working. We maintained them working even though we had these turbidity conditions. Another problem that we're just seeing with the climate change is the amount of stones that the river is bringing.
It's something that we started to see during the last 2 and 3 years. A lot of sand, a lot of stones. It's another problem in operational level because the plants are not designed, but we are adapting, of course, to these changes in order to ensure the service and the water supply for the city. Now, I would like to give the floor to Cristian. Gracias. Thank you. To Alberto. Thank you. Thank you so much for your presentation. Before we continue with the Q&A, I would like to remind you that you can send your questions through the chat box, and then we will address them to the company. I would like to remind you that at the end, we will send a survey with a link in the chat box for you to answer these questions.
It's very important for a feedback for further presentations of the company, and we will be very thankful if you could answer the survey. We can start with the question. The first question, if you could give us a vision or how are you viewing the issue of water rights?
[Foreign language]
Morning. Can you hear me?
Could we go down? Could we stop sharing the screen so we can see the people? Just one second, please. Alberto, would you mind to repeat the question, please?
Of course. What is your vision or how are you viewing the issue of the water rights? As you know, in the first proposal of constitutional draft, it was one of the main things that could have impact the company, the water rights. Now with the concessions done of the political power, is the reject of this constitutional proposal. We need to see the new constitutional draft, but we consider that the risk that this could have a negative impact in the company is very, very low. We need to see the final draft at the end of this year, but we consider that the risk is very low. Perfect. Let's continue with the next question about the drought. It has been a problem for the sector for years now. What do you expect for this year?
What are you doing to face the drought? Is there any new project in this line? Do you take that question, Raquel? Raquel?
I think that-
You need to mute yourself. I think I answered with the presentation. What do we expect for this winter? It's a good question. We have done it a lot of times to the meteorologists. They say that we should have a bigger rainfall because we have El Niño year, and in the Pacific Ocean, we're gonna have a higher temperature, so we are expecting a higher rainfall. We had rain last weeks. We hope to have more rain over Chile and not only in Santiago. We are optimistic that we're gonna have higher rainfall, but it's not a fact. We know that the climate change crashed all the different models about El Niño, La Niña. Nothing is working as it used to do in the past, according to the ecological models.
We have the Yeso dam very high, a high volume of water, and we also transferring voluntary the water from users. They finished their harvest, so they have a lot of water that they can transfer to us if they're not using it in this moment. That's this is what we are doing in our management. We will see. At this moment, the level of the dam from the last week, now we have 25 millimeters that fall with the rain last week. The last year at this date, we had 41 millimeters of rainfall in the same period. It's a little bit worse than last year's, but it's recently, May 26, so most of the rainfall is usually concentrated in June or July. We're still on time. Thank you so much. Let's go with the next question.
How much was the transfer of water in terms of volume in the quarter? According to the current level of Yeso, given the current level of the Yeso, how do you foresee water transfer for the second and third quarters? This would also be my question. Should I answer? I will answer in terms of volumes. In the first quarter, 63 hectometers. Very similar, what we transferred in the first quarter in 2022. About what we are expecting for the second semester will depend on what's gonna fall as snow during the winter. What we do with the other users of the Río Maipo Association is that there is an agreement of transfer.
Strictly, we update it according to what we have in our reservoir in the mountains, so we can assess that in terms of available cubic meters according to the period of spring and summer. We have two important objectives to fulfill in October, to have a minimum benchmark in the Yeso dam and 160 in March. We regulate according to this. If we had a high rainfall or snowfall or it start to reduce the transfers during the second semester, depending on the will of the other users as well, the agricultural in their agricultural activities, the harvests, we're trying to have as much water as possible and afterwards we have enough water for the users in their agricultural activities. Very good.
Let's go with the next question, which has to do with the first question a little bit in terms of investment in the new project. If looking forward, does the company feels comfortable with the plans and the policies regarding the future? How do you see the evolution of the company? In terms of investment, what we are seeing in the medium term is a very similar level of investment like during 2022. Very similar, 2022 to 2023. A similar level of investment. In terms of revenue, we maximize the distribution in function of the context in which we are in. So we need to assess the scenario every once in a while. Then determine each milestone, not only the management, but also the different stakeholders of the company, and then we will see the level of distribution.
We maximize the distribution as much as possible. Currently, we feel very comfortable with the level of investment.
[Foreign language]
Perfect. Next question.
[Foreign language]
In this scenario of good hydrology with the phenomenon El Niño.
[Foreign language]
The question makes reference is the purchase of water to third parties are according to the availability of resource, and it should be less pressure with the availability of the dam.
[Foreign language]
I can answer this on the part of the technical.
[Foreign language]
After that, the economic part.
[Foreign language]
Effectively.
[Foreign language]
We need to think that at the moment there are no water in the rivers. We still don't have any water. Right now, Río Mapocho is 3 cubic meter per second, and we need 18 or 19. If we have the order of magnitude of what we are facing right now, in theory, this situation is complex because if we don't have the minimum, we won't have a good flow. We will gonna purchase the water giving priority of the voluntary passes. Those are the least expensive ones because the other users don't have the necessity right now. They're still willing to transfer it to us. Later, effectively, when we have the dam at an important level, if we have an important qualification, we're going to minimize the water transfer in the peak of the second semester.
That is going to depend on how are we doing with the rainfall. We always have to ensure something in the El Yeso dam, because I was mentioning, we can't surpass the limits, at least not 100, because if we reach a level of 100 in the dams, this will make us, they will make us make many purchases in the second semester if we don't have rainfall. We always have to keep a balance to a level that gave us peace of mind for looking at the next year.
[Foreign language]
I think the answer has been really complete. I have nothing else to add.
[Foreign language]
We go to another question regarding to agreement with Algonquin and Essal. If you can confirm the amount to pay with Algonquin and if there's an impact in the cash flow because of it.
[Foreign language] 100%
The amount is 100% provisioned, so at a results level, it, there's not gonna be any impact. In regards to cash flow, yeah, there will be an outage in the cash flow, but we confirm that the amount is completely provisioned.
[Foreign language]
Before going to the next question, I want to remind all the invitees and attendees that we have a link for the survey of satisfaction. Please answer it after the meeting is over. On the same line with Algonquin line, what are the terms and what are the amounts that you can say about Aguas Andinas? What are the terms? How much is provision? What could be the amounts involved in the base scenario and in the worst scenario for Aguas Andinas? I don't know if the judicial part someone wants to answer, but for the financial part, the demand in 2029, maybe Jaime could also in the legal part, but I'm gonna talk about more about figures, but you know already the figures. They are all paid out, so there won't be any worst scenario.
I don't know, Jaime, if you want to talk about it. As you said, the litigation concluded after a transaction that was already presented to the arbitration entity and the amounts that it comprised, as always, already being paid for between the parties. Except for the really small amount that Aguas Andinas is already taking care of.
[Foreign language]
Let's go with the next question.
[Foreign language]
In regards to the covenants on the indebtedness level, do you see any risk of non-compliance from them for this year? Well, last year, we reached levels of leverage near to 0.84. As we know, our limit sits on two times. As Cristian explained, this year, the moderation of inflation, we see that this ratio is getting softer or below 1.8. We are in 1.74, so it's a lot more moderate. If the inflation rate continues as we have foreseen and as the Central Bank is doing, we can't predict any issues with the covenant in 2023.
[Foreign language]
It's more related to the financial. Yeah, if you have any target for EBITDA for this year, as you had in 2019 of 50%. Yes, as you know, the company as a result of the structural change of last year, we are suffering these effects and right now, especially in the energy cost and inflation, and operational costs are affected by this. We need to activate and accelerate a plan of efficiencies as we did last year, and as we are doing right now. What we are estimating is our margin similar to last year for 2023. The target would still be more or less the same as the previous year.
[Foreign language]
I have a question here for Cristian Torres. Is there any hope that the accounts to pay during the pandemic can be recovered? In regards to commercial management, we have to take into account that starting from last year, we recovered the corte por deuda. This has been developing. This is not the one selected. We are creating more instances for connection with the clients and empowering the commitment for payments. The debt has been shortened, and we expect to see diminish and decrease in the unpayable debt and the utility law, the utility service laws established a term of 18 installments. This is really important to consider regarding the more vulnerable sectors of the country as a matter to reincorporate them into the system so that they can recover their payment behavior of their debts.
Also, from a financial point of view, we need to highlight that the company did not make any changes in their policies. This is a really important aspect. This was assessed externally. All of these risks associated both during the pandemic and post-pandemic.
[Foreign language]
There's been a question on the chat on how the negotiation is going with the tariff cycle. The basis of the tariff cycle are going to be published in October. So far we have no negotiations or discussions on this. We need to start, and we need to wait until the end of the year to start them.
[Foreign language]
Let's go to the next question.
[Foreign language]
For Raquel What is the hydro source for Maipo and Mapocho? What we presented in our slides is the information that the Junta de Vigilancia de Ríos both for the first section of Mapocho and Maipo present us. Why do we use it? Because it shows the availability of water in the different captations of water, and the values are pretty different to the DGA. Because, for example, if we take the first point, it's in El Manzano, which is a very different point from where the distribution is. So the levels could be different as this river has a high flow, so we need to recalibrate it. It's not necessarily linear with the information that we need in regards to water distribution. So for Maipo and Mapocho, we take this information from the association.
[Foreign language]
Thank you very much, Raquel, for your answer. We are about to finish. I am thankful for all of your participation, for Aguas Andinas also for joining us with your results presentation of the first quarter. Before I say goodbye, I want to remind you that we have a link in the chat so you can give us feedback for this meeting. It's really useful for us so that we can comply with your requirements. Thank you very much for all the investors present today. I give the floor to Raquel for the last word. Thank you, Alberto and Banchile for organizing this presentation of results. Also thanks to all the people that have joined us to follow it, to see it.
I wish you a happy weekend and a good rest of the year on the part of Aguas Andinas. Thank you.
[Foreign language]
Thank you very much.