Earnings Call: Q2 2020

Jul 30, 2020

Good afternoon, everyone, and welcome to ENGIE Energia Chile's Second Quarter 2020 Results Conference Call. If you need a copy of the press release issued yesterday, it is available on the company's website at www dotng energia.cl. Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties, and actual results may differ materially. Please refer to the detailed note in the company's press release regarding forward looking statements. We would like to advise participants that this call is dedicated to investors and market analysts, not to the press. We ask all journalists to contact ENGIE Energia Chile's PR department for details. I will now turn the call over to Mr. Eduardo Milligan. Please go ahead, sir. Thank you. Good afternoon, and thank you for attending this call. I hope you and your families are safe and doing well. So today, again, from Home Office, Bernalinde Infante, Head of Corporate Finance and Marcela Munoz, Head of Investor Relations, and I are very pleased to be once again with you to present this time our first half results. On today's call, we will focus on the following main relevant developments. 1st, how we are managing the current context and the actions carried out by the company in relation to the COVID pandemic. 2nd, the transformation of our portfolio of PPAs. As we explained last quarter, we are doing a new PPA structure with our client of Alasta Minerals, AMSA. Considering this agreement, we have already renegotiated more than 75% of our annual related portfolio of free client PPAs. But in addition, we also signed this year new PPAs that will certainly allow ICL to keep a 12 year contracted portfolio and hopefully more to come. 3rd, we will discuss our first half results, the impact of COVID on contracted demand and, of course, our guidance for 2020, together with some sensitivities on demand evolution during the second half. 4th, we will discuss the progress of our investment plan. We recently acquired Euolica Monterredondo with wind and hydro capacity of 82 megawatts. We continued with the construction of 2 renewable projects, Win Kalama and Simic Capricornio, where we just started the construction of our 3rd project, Pimitamayes. And last but not least, we will present the status of transmission projects under construction or recently awarded. Let's go through the presentation to discuss these topics in more detail. So please, let's move directly to Page 10. So last year, we announced the execution of an ambitious asset rotation plan, which involves the construction of approximately 1,000 megawatts of renewables between solar and wind generation units. The plan will require an investment of approximately $1,000,000 We already launched the execution of half of this plan. Back in 2019, BCL acquired 2 PV plants. We combined 55 megawatts at the beginning of July. We also completed the acquisition of Aerolica Monteredondo, or EMR, including 44 Megawatt wind farm and a 34 Megawatt hydropower plant. We will explain in detail the transaction in a few minutes. And we also started the construction of our first three renewable projects with combined capacity of 3.62 megawatts spent. We are covering almost half of the 1 gigawatt already announced. At the same time, we continue preparing additional projects to complete this first phase and we're prepared to even launch the construction of more projects. This means we already committed a total investment of approx EUR 389,000,000, and we will discuss the status of these projects in a couple of minutes. On Page 11, as we mentioned last quarter, we summarized 2 recent important events on the financing side. First, last January, we replaced the existing EUR 400,000,000 with original maturity on 2021 with a new issuance and larger amount. Italo issued EUR 500,000,000 with new maturity in 20 30. Now this transaction improved our liquidity as we extended the average maturity of our debt to almost 8 years, and we lowered the average cost of our debt to around 3.8%. Because of the MECO, we reported an approximate EUR 13,000,000 loss affecting our first half financial statements. We consider this nonrecurring, so it should not affect our dividend payment decisions in the future. At the same time, we will report $5,500,000 per year in interest expense savings. Now in 2nd place, we as we mentioned in previous quarter, during the COP27 V, we signed a letter of intent with IBV Invest to structure an innovative type of financing to promote the construction of renewable projects. This financing is for an indicative amount of around BRL 125,000,000. The new Lilian's process has been completed, and we are finalizing the organization to close the transaction in the upcoming weeks. Now please move to Slide 12, and then we will discuss where we are in relation to the price stabilization mechanism. We have already explained in detail how this law and mechanism works. The main two variables that will determine the size and recovery pace of the fund is the demand and the peso dollar exchange rates. Since the underlying exchange rate of the price is approximately ARS 6.40 per dollar, while the FX rate is currently close to ARS 7.70 per dollar. As of June 2020, the size of this account receivable in our books was EUR 112,000,000. As of March, it was EUR 94,000,000. It represents an around EUR 6,000,000 monthly increase. As we explained before, to improve our cash flow position, we are evaluating different alternatives to monetize these materials. But of course, it will depend on the available facilities and the potential costs. An important question you may have is when we expect the fund will be fully consumed. Well, this will depend on the demand and FX evolution. But if we maintain the current FX rate ranges, it could happen between mid next year and 20 22. An appreciation of the Chilean peso will benefit the duration of the fund and vice versa. Now an update about the COVID pandemic, Let's go to Page 13. As we explained during our last call, the COVID pandemic has created several challenges to adapt our processes and operations and to respond very fast, ensuring the safety of our teams, ensuring the operational continuity and finally, the way we do business and work together with our stakeholders. We continue running our business through a crisis committee and have implemented contingency plans, adopting several sanitary measures in our sites to comply also with the authorities' instructions. Similarly, we have monitored the situation and actions taken by our suppliers and contractors, asking them to comply with the same standards that we apply to our staff. At present, approximately 70% of our staff continue working from home, while employees and contractors are working in shifts in 10 different sites. Our operations are functioning normally. And in this line, I want to recognize the strong efforts from our operational teams to keep running all our assets across the country. We have experienced some mix of delay in the construction of our renewable and transmission projects, but we are working to recover these weeks. We will discuss in some minutes the current status of each project under construction. Now let's turn to Page 14. As we explained in last quarter, we signed a new agreement with Antofrasta Minerals for the 186 Megawatt contract. Following a similar approach to previous solutions, we agreed to modify the current co linked PPA and transform this contract into a green corporate PPA with a larger duration, providing our clients a solution for their needs and also including an important reduction in CO2 emissions. The agreement also involves that NCO will take control of Invernessernitos, of 100% impact of Invernessernitos. And this means full control of CTH units, which was previously 40% owned by Intofaasta Minerals. Then as a result, we are no longer reporting minority interest in our financial segments starting March 2010. This new contract and price will allow us to continue our reconversion to renewables. We consider now this PPA transformation into a green corporate PPA, a very significant achievement as we have already restructured more than 75% of our free client portfolio. So we are now ready to focus our efforts on providing, again, a winning solution to CODELCO 150 megawatt contract, which is still linked to coal and to CPA units. Now let's please move to Page 16. We are also showing additional green corporate PPAs that were recently awarded to ICL. Therefore, we have signed more than 700 gigawatts hour per year. PPAs with CAP and Parque Arauco are amongst the most important. In addition, we were awarded and secured 2,400 hectares in the northern region with the purpose to develop 3 20 megawatts of additional renewable projects, mainly wind. The message behind these new slides is that despite one of our main objectives was to transform what we already had in relation to PPAs and assets, an additional objective, of course, is to grow, capturing additional demand and clients. Now Italo structure and processes have evolved over the last 3 years for this new phase. As just mentioned, there is only one PPA in our free client portfolio that is still linked to coal. This means the transformation process we started 3 years ago to transform all PPAs into green corporate PPAs It's almost in the final part. Half of the renewals linked to this process are ready or under construction and that we can move forward towards a new phase of additional growth, leveraging Omicio's new structure and business culture. The entire organization and our new commercial VP, Luis Mertson, who recently joined ICL will be fully focused on this important objective. So in this line, on Page 16, we present the recent acquisition of Euolica Norte Rondo. I think this slide includes all the main elements of the due diligence and the decision process. But what are the main assumptions behind this acquisition? Well, this company has to regulate its PPAs until 2021 and 2023, which means afterwards will become un contracted and therefore a good match for ICLR's long PPA portfolio. The contracted demand is around 2.75 gigawatts hour per year, but the expected demand is closer to 180 gigawatts hour or 65% consumption factor. How much we expect these assets will contribute to its yield generation portfolio? Well, close to its current demand, around 180 gigawatts hour per year. We are, of course, evaluating some alternatives to optimize both of them. What then will be the contribution of this acquisition to ICL in terms of EBITDA? Well, I can say around EUR 7,000,000 in EUR 20,000,000 for half of the year, around EUR 15,000,000 in EUR 20,000,000 10,000,000 in 2022 and 2023. And afterwards, it will depend on the marginal costs. But in my view, it doesn't matter because afterwards, it becomes an uncontracted asset that contributes its energy due to this year longer PPA position since we are already contracted. This means we didn't assume during the New Orleans process any PPA renewal or any similar process, but just valid linear renewals produced by both assets. So a very fair approach, considering this was a related part of the transaction. Finally, the acquisition of Ilimar, it's important and good news because these assets were the last generation assets, 100% owned by ENGIE in Chile. So as you know, last year, we also acquired the PIM plants of Los Olros and Andacollo, which were also owned 100% by AIM. So this transaction is important because it also helps to confirm the role of ECL in Chile and avoids any future potential competition between ECL and other engine vehicles in the generation business in Chile. Now on Page 17, we want to highlight the recent developments in our PPA portfolio, the progress of our renewables plan and also the recent upgrade in ECS rating by Fitch from BBB to BBB plus something that's very common, I can say, during these days. The upgrade of ECL's rating, I think, is a result of the strategy in action plans, which started back in 2016, 2017. Then on the dividend side, I want to be cautious. We mentioned during our previous call that we will closely follow NCL's cash position and evolution during 2020 before we propose a promissory dividend or move to a next phase of higher dividends. We need to consider that between 2020 2022, we will add an important amount of long term receivables related to the tariff stabilization fund that will certainly reduce our cash flow generation, while during the same period, we have a heavy CapEx plan. In summary, we will come back with the proposal once we secure our funding needs for future investments. Now let's move to next section and go through the first half results and also discuss where we are with our projects under construction. Let's go directly to Page 21. Total revenues reached 650 $7,000,000 in the first half, down 14% from the first half of last year despite the 7% increase in physical sales. This was because average prices decreased in turn due to the decrease in fuel prices. But costs also decreased. Our own generation increased mainly due to the commissioning of IEM in May 2019. The increase in generation led to an increase in fuel costs despite a drop in fuel prices. However, our spot energy purchases increased significantly from 3 terawatts hour to less than 2 terawatts hour. All in all, EBITDA is 29% lower compared to the previous year. Despite there is a complete impact embedded in these results, the relevant decrease in comparison to 2019 is mainly explained by the 75,000,000 LVs registered back in 2019 paid by IEM contractor due to the delay on start up. Excluding this impact, in 2020, EBITDA is slightly below the EBITDA of previous year. But what is important, in my view, is the expected EBITDA for 2020. So where are we? Well, in a couple of minutes, we will discuss our guidance and some sensitivities. In the same line, the recurring net income was EUR 76,000,000, half of 2019 results, mainly explained by 2 effects, the earnings received from IEM contractor and higher interest expenses because interest expense ceased to be capitalized upon the completion of the IEM project back in May 2019. In summary, physical energy sales had a relatively positive performance considering the current context. EBITDA fell in line with average lower energy sales prices as a result of the indexation to fuel prices, which was partially offset by lower costs of energy and fuel prices. On Page 22, we present ECL's supply curve, which, as every quarter, is very useful to understand our results. As you can see, IEM, CPA and CPH continue to operate as base load units, while they reported some limitations in production. Our 2 combined cycle units running with natural gas plus the generation by Gas Atacama using our gas represented close to 20% of our energy supply, while the rest of Ityel's coal units were less dispatched, as you can see in the table on top of this slide. Just a reminder, we already announced the closure of Units 14 and 15 in Toquepilla by the end of next year. And for CPM 1 and CPM 2, around 224 or even sooner if conditions are appropriate, something that we will continue analyzing over the next quarters. Finally, ICL bought almost 35% of its contracted demand between the spot market and a supply agreement with another generation company. This means that we buy from the spot market at a lower cost than we can produce with our less efficient coal units, which still act as a physical hedge to limit the production costs at a certain level. On Pages 23, 2425, we present the evolution of our contracted portfolio and how each quarter we enlarge the green area shown on Page 25, while the gray area has considerably reduced over the last 8 quarters. Now let's see where we are with the projects under construction. On Page 26, we can see the full picture of the current plan, the 2 acquisitions, the 3 projects under construction and the projects under development. The good news is that we just started the construction of Pivotal Magia, which is before the date we were expecting. If you recall, last quarter, I said at the beginning of Q3, this means we expect the 3 first renewal projects to reach COB during 2021. Let's go through each of them. I am on Page 27 now. You can see the progress of the Kalama wind farm. This 100 and 51 Megawatts wind farm considers 36 mills, each with 4.2 megawatts. As of the end of June, construction showed 59% of advance, while the overall progress rate was 30%, twice the progress we reported 3 months ago even during this complex period. The concrete foundations for 29 out of the 36 mills have been completed, while the substation is showing a 35% progress. We maintain the same COB announced last quarter and budget is under control. This means we expect COB during the Q3 of 2021. On Page 28, you can see the progress of our 94 Megawatt Capricornio PV plant, which as of the end of June presented a global state of advance of 75%, while 3 months ago was slightly above 50%. We maintained the same COD announced last quarter, which considered some weeks of delay due to COVID but without changes in budget. This means we expect COD during the Q2 of 2021. If our construction team can recover some weeks, maybe the projects would be ready during the Q1 of next year. Now on Page 29, we show for the first time the details of Pivita Maya, a 114 megawatts PV plant located in the northern region close to our mining clients with EUR 68,000,000 investment and expected COD also during the Q2 of 2021. The mobilization started 1 month ago. The main contractors are Tosi, Trina and Sandro. And this means between Capricornio and Kamaya, Next year, we will add more than 200 megawatts of solar PV capacity to our portfolio. On Pages 3031, we show an update on transmission projects under construction or recently awarded. First, on transmission, we continue with the construction of 4 national or Sonar projects awarded back in 2018 with a total investment of approximately $43,000,000 As you can see in the picture, the construction of these projects is also making progress. 2 of them will reach COD during 2020 and the other 2 next year. 2nd, on Page 31, you can see an overview of the national transmission projects corresponding to the option awarded during this year, representing an overall investment of approximately 28,000,000 dollars Both are in pre construction phase. And once the decree is issued, we will finalize the procurement process and we'll start also construction. On Page 29, we show that in 2019, we completed the construction of IEM project. Even considering our asset rotation plan with a significant investing activity in renewables, CapEx levels are lower than those of 2016 2017, while our cash flow generation capacity has increased. For 2020, we have updated our CapEx forecast, and we expect BRL 340,000,000 mainly focused on our renewable and transmission projects as well as some maintenance. As you know, we plan to finance these capital expenditures with a mix of internal cash generation and also bank finances. In this line, our net debt to EBITDA ratio should increase in 2020, following the additional debt we raised to finance a portion of our CapEx needs. We intend to keep our leverage ratios not exceeding 2.5x on a structural and regular basis. Then we need to consider, however, that in 2020, we will have most of the negative impact related to the regulated tariff stabilization mechanism, which will need to be financed by ECL until these long term materials are collected in the future or until a monetization structure is put in place. Let's talk now about our guidance for 2020. And please turn to Page 30. So we decided to keep this page unchanged, but adding a message, this guidance is under revision, which I'm sure makes sense to everyone. But even considering a certain degree of uncertainty, I think we can provide some elements on where we could end this year. For 2020, we were expecting a higher contracted demand compared to 2019 but a lower operational and recurring EBITDA during the year, mainly explained by the termination of the same year PPA in the second half of the year. And we were also considering a more conservative average spot price for the guidance we provided for this year. We do know that COVID-nineteen will affect our results in ways that, as we mentioned before, are difficult to predict. However, I can say that after 3 months, we can share some facts. So first, so far, our unregulated demand increased in the first half compared to previous year. Mining and other new clients demand was higher in close to 0.4 terawatts hour compared to the same half of previous year. But on the other hand, we can say that regulated demand remained almost flat compared to previous year, but we need to consider that COVID only impacted the 2nd part. We need to recall that we were having a nice start this year with a higher than expected demand during the 1st 2 months of 2020. So this means we have been experiencing over the last 2 months an average decrease of around 6% in regulated demand compared to the same months of 2019. So now we can say that COVID is impacting the regulated demand compared to 2019. Now these are facts compared to 2019, but our guidance is not based on the previous year. Our guidance considers our own set of predictions. And as you can imagine, we were expecting a higher demand in 2020 compared to 2019 because some regulated PPAs signed with lower generation companies matured back in 2019. This is the case for unregulated clients. We can say that demand is in line with what we forecasted for before COVID, but this is not the case for the regulated demand. We are between 5% 10% lower than what we were expecting, and this is why on next Page 34, we present an estimated COVID impact during the first half of twenty twenty of minus EUR 10,000,000, which already materialized in our P and L. So then the question would be what could be the impact of the lower related demand during the second half? We present in this page 2 simple scenarios, 5% 10%, affecting oil related or both related and unregulated demand. We don't know what is going to happen, but I hope this sensitivity will provide some guidance over the previous guidance. If we assume a moderate case, my favorite, of course, of minus 5%, then we will be close to minus EUR 20,000,000 over the initial guidance, considering real first half results and projected second half impacts. So if my math is correct, this puts our average EBITDA guidance around EUR 20,000,000 lower due to COVID. But bear in mind, it could be a bit higher following the reference of last 2 months. So we can conclude something in between €20,000,000 €30,000,000 The lower demand could, of course, be compensated by lower energy purchases costs given the fuel prices and hydro conditions. Some of them are already considered in this exercise, but this positive impact may not be sufficient to fully compensate the lower regulated demand we could expect during the second half of this year. Then in 2021, ETL should be able to see a recovery in EBITDA. Once the 3 renewable projects I just mentioned are in operation since ECO will be able to replace spot purchases at spot market prices by producing at almost zero cost. So now we will move to next section. Hopefully, Veronika was able to connect. She will give us more details on our financial results. Well, thank you, Eduardo. I hope you can hear me well. Yes. Okay. So hello, everyone. I'm on Slide 36. Our EBITDA decreased 29% to BRL 202,000,000 in the first half of this year. So we can blame COVID for part of the decline, but it was mostly due to other factors. As you may remember, last year, we received BRL75 1,000,000 in liquidated damages paid by the main contractor for the IEM power plant to compensate us for the delayed start up of the project. So this corresponds to operating income because it will replace revenue we would have received had the project been running. But we recognized this amount in one shot in 2019, while we should have recognized roughly half of this amount in the second half of 2018 and the other half in 2019. Another reason for the EBITDA decrease is the drop in our electricity margin, which had an impact estimated impact of roughly BRL 11,000,000 if we consider its different components. So one of them is prices, which affected our electricity revenues. Prices fell because the indices to which our tariffs are linked, that is coal prices, Henry Hub and CPI, fell significantly. In addition, we had PPA negotiations, the most important being the contract with Vinelas Centinela controlled by Antopagasta Minas. This renegotiation not only involves the commercial terms of the PPA, but also the transfer of control of Indecena Fortunitas. Under the agreement signed at the end of March, the PPA price discount is bigger in 2020. And through this bigger discount, every month, NTA is acquiring a 40% stake in Inbarcenas Amidos. So the tariff decrease affected our electricity margin, but it was countered by the income related to the acquisition, which amounted to $15,000,000 in the first half of twenty twenty. Therefore, the effect of this agreement on EBITDA was almost neutral. We reported higher fuel costs despite the drop in fuel prices, and this was because our generation increased mainly to the start up of IEM in May 2019 and also because we had higher gas generation as we had more gas supply this year. Then if we look at the bars at the left of the slide, we can see the positive impacts. The increase in our own generation meant a decrease in electricity purchases on the spot market. This together with lower spot prices, which averaged about $45 per megawatt hour in the first half of the year, had a $65,000,000 positive impact on EBITDA. Now despite COVID, our physical sales increased. Here, we need to give a closer look to each of the 3 clients and the regulated segments, which behave differently. The demand from our 3 clients recovered from low demand observed last year, mainly because last year, mining operations were affected by a hard, ultraplanning winter, temporary stoppages for the upgrade of emission reduction system and the 14 day strike at Chutikamata. So this year, demand for mining clients returned to normal and increased by 12%. Now the behavior of our sales to distribution companies was different. When comparing the first half of 2020 2019, we see virtually no change in physical sales, but only after looking at each quarter we can see the effects of COVID. In the Q1, physical sales to distribution companies increased compared to the Q1 of last year because starting 2020 ENGIE reported an increased share of the PPAs with the distribution companies in the South Center segment of the FEM as older PPAs from other generation companies came to. So the physical sales increase in the Q1 reflected ECL's increased pro rata of all regulated contracts, while the COVID effect did not begin until the very end of the quarter. It was the Q2 the one reflecting the COVID impact. In the Q2, physical sales to distribution companies decreased by 5% when compared to the same quarter of 2019 and by 13% when compared to the Q1 of 2020, which already included the pro rata increase. So therefore, overall, for the first half of the year, we can say that the COVID effect was completely offset by the increased pro rata of the pool of contracts with distribution companies. To have an idea of how much of the EBITDA decrease is explained by the operating margin of the electricity business, we must add the effects on prices, volume sales, fuel costs and energy and capacity purchases. This is how we get to the €11,000,000 reduction that I mentioned earlier. And the main reasons behind all of this were the decrease in Henry Hub, the decrease in regulated demand in the second quarter and plant failures that led to a higher than expected marginal cost in March 2020. The remainder of the EBITDA reduction was primarily explained by the liquidated damages reported in 2019. Now please turn to Slide 37. At the center of the slide, we can see each of the after tax variations in net recurring income, which decreased from BRL144 1,000,000 in the first half of twenty nineteen to BRL76 1,000,000 in the first half of this year. As mentioned earlier, the drop is primarily explained by the decrease in EBITDA incurred caused by the liquidated damages of 2019. Increased depreciation costs as a result of Esparta of I'm and higher financial expenses explain the difference. As you know, in January, we completed the liability management transaction in which we issued a new bond to repay an old one. Our average interest rate decreased in such a way that even though we increased bond debt by $100,000,000 we will report 5,500,000 per year in interest expense savings. So the increase in interest expense in the first half is only explained by a lower amount of capitalized interest in the projects under construction. In the first half of twenty twenty, only $1,400,000 of interest expense was capitalized. Finally, we can see that minority interest disappeared as according to IFRS rules, ECL took full control of CTH upon the execution of the agreement with AMSA at the end of March. If we look to the right of the slide, we will see a nonrecurring impact in the Q1 of 2020 related to the $13,600,000 premium paid on the early redemption of the $400,000,000 144A bond. This had an after tax impact of almost 10,000,000 on the first half net income in 2020. On the left side of the slide, we can observe what happened last year. The big nonrecurring loss reported in the first half of twenty nineteen explained by the impairment of the coal trans Units 1415 in Tukopilla, which will be closed by year end 2021. Now going to Slide 38, there we can observe an increasing net debt as a result of the following cash flows in the first half of the year. So in terms of uses of cash, capital expenditures amounted to BRL 84,000,000 mainly in the renewable and transmission projects. In the next bar, we show the payment of $14,000,000 in premiums to bondholders. The next two bars correspond to factors that had a direct effect on debt balances, but no effect on cash. The first bar includes accrued interest and mark to market variations and the second one includes land and vehicle leases that were classified as financial leases as a result of the implementation of IFRS 16. Finally, we paid BRL 58,000,000 in income and expense. Now our cash sources included in the orange bars with negative numbers as they led to a reduction in net debt included $75,000,000 cash payment from $10,000,000 and $101,000,000 in operating cash flow. So let's go to Slide 39 for details of our liquidity and debt structure. The main changes are the follow. The net debt to EBITDA rate increase was still comfortable 1.7 times. EBITDA for the last 12 month period ending June 2020 was €452,000,000 while the net debt reached 772. Dollars Our gross debt increased by $83,000,000 to $1,000,000,000 basically due to the new $500,000,000 bond, which was issued to repay a €400,000,000 bond and the €22,000,000 increase in IFRS 16 leases, primarily explained by new land concessions or Concesiones onerossas in Spanish, for the development of our renewable projects. A $30,000,000 net reduction in our short term debt partially offset the gross debt increase. As Gerardo already mentioned, we are very happy to inform that Fitch Ratings upgraded our long term debt international rating to BBB plus and our local rating to AA. On Slide 14, we can see our share price evolution clearly marked at the beginning of the Q2 by the COVID 19 driven recession. We note, however, that our stock performed better than the market in the last 12 months. While the ECL stock price fell 4% over the last 12 months, the EBITDA index fell 22%. This and the rating upgrade are demonstrations of the resilience of our business in the context of this very tough pandemic. Well, this is all on my side, and I'll leave you with Eduardo for the final remarks. Thank you, Bernadette. As always, and to conclude this presentation, we would like to end with some final messages we want to share with you. So first, today, we presented our first half results and some sensitivities on demand and potential impacts on EBITDA for the second half of the year. Despite we could expect a negative impact on our 2020 guidance, we believe the company is well prepared to absorb this temporary impact. And hopefully, we may find some additional creative ideas to offset part of them. 2nd, today, we also mentioned additional green corporate PPAs that were recently signed. After 3 years preparing the company for a different future, restructuring PPAs with very important clients and developing renewals, we are ready to add a new impulse to our business. And in addition to the company's transformation, look for additional opportunities to grow in the market. And third, I'm glad to say that we have reached almost 50% of the renewables plan we announced last year. We will continue developing an important portfolio of renewable projects to bring them to a ready to build stage. And hopefully, in some months, we will be able to announce the construction of our regional renewable projects. So well, with these final messages, we're concluding our first half results presentation, and we hope this presentation was helpful and wish you the best in these difficult times. Thank you, and we are ready for any questions that you may have. Thank you. Thank you. The floor is now open for questions. The first question will come from Andrew McCarthy of Credicorp Capital. Good afternoon, everyone. Many thanks for making the presentation and taking my questions. My first question was just on the issue of collection. I was just wondering if you could comment if you had any issues with collection from either regulated or free segment clients. And then my second question was to get your sense on how you're seeing the dividend outlook as we go through the next sort of 12 months. You mentioned obviously, perhaps the slightly lower EBITDA than you'd originally been anticipating, that you're advancing well with all the CapEx deployment, very good news on the Tamayo project. And obviously, we have the issue of the stabilization mechanism and perhaps not having necessarily in the very short term sort of a financing solution there. So just trying to get a sense for how you see that dividend, the likelihood of dividends and the amounts going forward, where you see that? Thanks very much. Hello, Andrew. Thank you for your both questions. So in terms of collections, I think we are having how can I say this? We have been proposing to some of our regulated and unregulated clients some payment flexible conditions in order to help them go through this complex period. But most of them are, let's say, small accounts, nothing material. So we are still looking at different options to help part of our clients. But so far, we haven't been impacted by the current context in terms of increasing bad debt or having bad receivables in our balance sheet. And in terms of the dividend outlook, what I can say is that it will depend, of course, on how the situation evolves over the next 12 months. As I mentioned before, we have a heavy CapEx plan in front of us. We also want to grow more and capture additional demand. So we are still keeping the minimum of 30% in our radar. And if conditions allow us to increase the 30%, it's something that we will discuss at a certain moment with the Board and make a proposal. But so far, we are not ready to make any announcement in relation to dividends or any change in our policy. I think this is something that will be analyzed in further detail in the future, depending on how the whole situation evolves. Fantastic. Thanks very much, Eduardo. Thank you. The next question will come from Juan Carlos Petersen with Inverciones, Jefferies. Good afternoon, Eduardo. Can you hear me well? Yes. Hello, Carlos. Good afternoon. Regarding the Page 33, again, thank you for that slide. It's very helpful. You just mentioned that the dividend, of course, is at least 30% of the profit. If that's the case, the 30% would apply over the net recurring income or another figure? And second question, does the 33 page figure of EUR 160,000,000 to EUR 180,000,000 of net recurring income include the possibility of minus $20,000,000 or minus $30,000,000 regarding COVID impact for the full year? Thank you very much. Okay. Well, in fact, yes, our plan and what we have mentioned before is that we since 2018, 2018, considering that we had some nonrecurring impacts and impairments of related to the closure of coal units in our P and L, we said that our dividend policy will consider the net recurring income. So the answer is yes. We'll consider the net recurring income and not the net result. And second, when we presented this guidance last year or at the beginning of this year, we considered the amount that we are showing here. So this is the previous guidance. Then we need to see how these results will evolve during the second half. And of course, the potential 20% or minus 20% or minus 30%, which is something that is just a sensitivity, will need to be subtracted from the previous guidance, of course, the same with the EBITDA. And this concludes the question and answer session. At this time, I would like to turn the floor back to ENGIE Energy of Chile for any closing remarks. Well, just to say thank you to everyone for attending the call and see you soon hopefully during the next one. Thank you. This concludes today's presentation. You may disconnect your line at this time and have a nice day.