Good day, ladies and gentlemen, and welcome to Enel Américas' third quarter and nine months 2026 results conference call. My name is Victor, and I will be your operator for today. This presentation contains statements that could constitute forward-looking statements. These statements appear in a number of places in this presentation and include statements regarding the intent, belief, or current expectations of Enel Américas and its management with respect to, among other things, Enel Américas' business plans, trends affecting Enel Américas' financial conditions or results of operations, including market trends in the electricity sector in Chile, the countries where the company operates or elsewhere, supervision and regulation of the electricity sector in Chile, the countries where the company operates or elsewhere, and the future of effect of any changes in the laws and in regulations applicable to Enel Américas or its subsidiaries.
Such forward-looking statements reflect only our current expectations, are not guarantees of future performance, and involve risks and uncertainties. Actual results may differ materially from those in forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets, an increase in the market rates of interest in the U.S. or elsewhere, adverse decisions by government regulators in Chile, the countries where the company operates or elsewhere, and other factors described in Enel Américas' integrated annual report. Readers are cautioned not to place undue reliance on those forward-looking statements, which state only as of their dates. Enel Américas undertakes no obligation to release publicly the results of any revisions to these forward-looking statements except as required by law. I will now turn the presentation over to Mr. Jorge Velis, Enel Américas' Head of Investor Relations. Please proceed.
Thank you. Good morning, ladies and gentlemen, and welcome to our third quarter 2026 results presentation. I am Jorge Velis, Head of Investor Relations of Enel Américas. In the coming slides, our CEO, Giuseppe Turchiarelli, and our CFO, Rafael de la Haza, will be presenting the main figures of this period. Let me remind you that this presentation will follow the slides that have already been uploaded on the company's website. Following the presentation, we will have the Q&A session. If you want to make a question, please send it through the webcast or write us to our corporate email, ir.enelamericas@enel.com. Now, let me hand over the call to Giuseppe, who will start by outlining the main highlights of the period on slide 3.
Thank you, Jorge. During the third quarter of this year, we continue to deliver strong results across our businesses, with solid growth in investment, EBITDA, and net income, fully aligned with the priority of our strategic plan. Regarding investment, total CapEx reached $0.65 billion, 20% higher versus the third quarter of last year. In Argentina, investment increased by 43%, supported by improvement in the tariff scheme. In Brazil, grid CapEx increased by 30%, mainly focused on digitalization and network resilience. Finally, in Colombia, CapEx was broadly in line with last year, explained by higher investment in grids and currency appreciation, offset by lower investment in generation due to the completion of renewable project. Regarding our financial performance, EBITDA reached $1.42 billion in the third quarter, an increase of 38% compared to the same period of 2025. Growth was supported by strong operational performance and currency appreciation.
In Argentina, EBITDA increased mainly due to tariff indexation. In Brazil, solid performance in grids together with the appreciation of Brazilian real led to a 2% EBITDA growth. While in Colombia, EBITDA increased by 76%, mainly reflecting strong growth in generation and depreciation of the Colombian peso. Finally, net income reached $0.39 billion, increasing 86% compared to the same period last year, supported by the strong EBITDA performance. Our board recently approved an interim dividend equivalent to 15% of the net income as of September, payable in January 2027. In addition to this, during the quarter, we successfully completed a buyback program for 5% of our shares. Let me provide more details on this transaction in the next slide. The buyback program involved the repurchase of approximately 5.1 billion shares and was very well received by the market, with subscription reaching 2.17 times the amount offered.
The transaction represented a cash payment of approximately $510 million, fully funded with the company own cash. This buyback program, combined with the one completed last year, reinforced our commitment to improving shareholder returns. For our remaining shareholder, the buyback provides an immediate accretive effect on dividend per share, while the shareholder participating in the program benefited from a 15% premium over the market price. Following the transaction, treasury shares represent 5% of the company total shares, and under Chilean regulation, these shares must either be canceled in an extraordinary shareholder meeting or will be automatically canceled after two years if not sold before in the market. As a result of the buyback, our free float now stands at 9.3%.
Let me underline that despite the reduction in the free float, we have not observed a decline in the trading volume of our shares, which have remained at level broadly consistent with those seen before the transaction. In the coming slide, let's see the main regulatory news for the period. Starting with Argentina, the energy sector bill discussed during the previous month has now been enacted and was published on October 13. The new law establishes a framework to recognize the revenue shortfalls accumulated by regulated electricity distribution company as a result of the tariff freezes and insufficient tariff adjustment in previous years. The next step is an administrative process to determine the amount attributable to each company and update those balances according to the mechanism established by the law. Once this process is completed, the corresponding amount and their treatment will be formally determined.
Further developments are expected during the fourth quarter. Moving to Brazil, the administrative process regarding the Enel São Paulo concession continues. On October 6, an ANEEL board resumed its review of a potential recommendation for early termination of the concession. The discussion was subsequently suspended following a request for additional review by one of the board member and is expected to resume within 60 days. The process, therefore, remains pending at ANEEL. Any potential recommendation would be then submitted to the Ministry of Mines and Energy, which is ultimately responsible for the final decision. Finally, in Colombia, CREG activated preventive measures aimed to preserving reservoir level and safeguarding the reliability of power system during the ongoing effect from the 2026-2027 El Niño phenomenon.
These measures include minimum thermal generation requirements and other operational action aimed at preserving hydro reserves and strengthening security of supply during a period of heightened hydrological risk. Now, let's analyze our investment on the period in the coming slide. Gross CapEx reached $650 million in the third quarter, increasing 20% year-on-year. This growth was mainly driven by higher investment in grids, particularly in Brazil, and was partially offset by lower CapEx in generation business. Brazil represents 65% of total investment during the quarter, followed by Colombia with 24% and Argentina with 10%. By business line, 86% of our quarterly CapEx was allocated to grids, while the remaining 14% corresponded to the integrated business. Grid CapEx amounted to $560 million, increasing 29% year-on-year.
This growth reflects the continued deployment of investment aimed at strengthening network resilience, improving quality of services, and supporting the modernization and digitalization of our distribution infrastructure. Within this category, investment in network upgrades increased by 12% compared to the third quarter of 2025. On a cumulative basis, gross CapEx reached $1.6 billion during the first nine months of the year, representing a 10% increase compared to the same period of 2025. Grid CapEx rose by 28%, supported primarily by higher investment in Brazil, while cumulative CapEx in the integrated business declined following the completion of renewable project in Colombia. Let's now analyze grid operational highlight on slide 7. Electricity distributed reached 26.1 terawatt-hours in the third quarter, 3% higher than the same period of last year. This is explained by higher demand in Brazil and Colombia.
Regarding the number of customers, we added 349,000 customers over the last 12 months, reaching 23.2 million at the end of September. Smart meters increased by 56%, reaching more than 3 million units, mainly driven by the continued deployment of our digitalization plan in São Paulo. Net RAB increased by 12% to $14.8 billion, while net RAB per customer increased by 10% to $639, excluding the impact of exchange rates. This evolution reflects the significant investments we continue to make in our distribution networks. Moving to quality indicators, SAIDI improved in Edesur, São Paulo, Ceará, and Colombia, with a particularly strong improvement in Edesur, where interruption duration decreased from 18.4 to 16.3 hours. Enel Rio was the only distribution company showing a slight increase. Regarding SAIFI, we saw improvement in Enel Rio, Ceará, and Colombia, while the indicator increased in Edesur in São Paulo.
Finally, regarding energy losses, performance was mixed across our distribution companies. Losses improved in Ceará, remained broadly stable in Colombia, and increased in Edesur, São Paulo, and Enel Rio. Let's continue with generation operational highlights on slide 8. Starting with our installed capacity, let me highlight that we reached an important milestone this quarter with the start of commercial operation of the Atlántico Solar Project in Colombia. Considering this, our total installed capacity increased to 12.4 gigawatts. Moving to the net production, we recorded a 4% increase in the third quarter, reaching 11.4 terawatt-hours. This growth was mainly driven by Colombia, where production increased by 14%, supported by higher generation across all sources compared to last year. This more than offset a 6% reduction in Brazil. Overall, 96% of our generation during the quarter came from emission-free sources.
With the addition of Atlántico, we continue to strengthen our generation portfolio in Colombia, highlighting our continued commitment with the generation business in the country. Let me now take you through this evolution in more detail on the next slide. With the completion of Atlántico in September 2026, our solar installed capacity increased by 59% compared to last year, also reflecting the contribution of Guayepo III, which began operation in the first quarter of this year. This growth reflects our continued effort to expand and diversify our generation mix, with solar now representing around 30% of our total installed capacity in Colombia. With Atlántico now in operation, and together with Guayepo I and II and Guayepo III, we operate the largest solar fleet in Colombia, with a combined installed capacity of 985 megawatt.
Atlántico alone contribute 256 megawatt of installed capacity and is expected to generate approximately 525 gigawatt-hours per year, energy equivalent to the consumption of approximately 737,000 people. Overall, our solar assets represent around 50% of Colombia's centrally dispatched solar capacity in operation, reflecting the significant expansion of our solar portfolio in recent year, and reinforcing our leading position in solar generation in the country. Rafael will comment on the financial results of the period in the coming slide.
Thank you, Giuseppe. [Non-English content ] EBITDA this quarter reached $1.42 billion, representing a 38% increase compared to the third quarter of 2025. This strong performance was mainly driven by higher results from generation in Colombia, supported by a favorable scenario where prices have increased due to El Niño phenomenon, but our hydro capacity is higher than the average of the country. In addition to this, we had a solid performance in grids across all countries, and the appreciation of the Colombian peso and the Brazilian reais also contributed positively to EBITDA growth. Net income reached $0.39 billion in the quarter, 86% higher than in the third quarter of last year. This increase was mainly explained by the positive EBITDA performance in Colombia, Argentina, and Brazil.
Cash from operations remained solid, reaching $0.88 billion in the quarter, representing a 15% increase to last year. This growth was mainly driven by higher EBITDA, partially offset by higher net working capital requirements and financial expenses. Ahead in this presentation, we will provide further details on cash from operations performance. On slide number 12, we will see this quarter's EBITDA evolution and breakdown. Starting from reported EBITDA of $1,029 million in the quarter of 2025, integrated business delivered a strong performance, contributing an additional $169 million, mainly due to the favorable market conditions in Colombia already mentioned. Grids added $23 million, and other effects, including Enel Piura in Peru, and services contributed a further $18 million. As a result, adjusted EBITDA reached $1,239 million, up 20% year-on-year.
In addition, favorable FX dynamics had a positive impact of $179 million, bringing reported EBITDA for this quarter to $1,417 million. That means 38% above the same period of 2025. In terms of EBITDA contribution, Colombia was the largest market, representing 54% of the total, followed by Brazil with 39%. Argentina and Central America accounted for 3% each, while Peru contributed 1%. By business line, the integrated business represented 52% of EBITDA, while grids accounted for 47%. Now, on slide number 13, let me analyze EBITDA breakdown on a cumulative basis. Adjusted EBITDA in the first nine months of 2026 reached $3,425 million, representing a 14% year-on-year increase on a comparable basis. This positive evolution was supported by both business segments, integrated business, that contributed an additional $219 million, while grids added $188 million. Other effects contributed a further $11 million.
After including FX effect, which had a positive impact of $420 million, reported EBITDA amounted to $3,845 million, representing a 24% increase versus the first nine months of 2025. Looking at the EBITDA mix, Colombia became the largest contributor, accounting for 46% of total EBITDA, closely followed by Brazil with 45%. Argentina and Central America each represented 4%, while Peru contributed with 1%. By business line, grids accounted for 55% of total EBITDA, while the integrated business represented 44% of the total. Now, on slide number 14, we will review the cash flows of our company for this period. Starting from EBITDA of $3.85 billion, net working capital for the period amounted to negative $1.14 billion, higher than last year. This is mainly explained by Brazil and Colombia.
In Brazil, this is due to higher CVA, that is the mechanism that we have already explained, which is a regulatory balancing account that records differences, actual and tariff recognized energy purchase cost, and by timing effects related to CapEx. In Colombia, this is explained by timing effects related to account receivables and CapEx payments. Taxes paid during the period amounted to $0.52 billion, increasing by $0.21 billion compared to last year. This is mainly due to the better result recorded. Net financial expenses reached $0.57 billion, increasing by $0.21 billion compared to last year, mainly explained by higher debt in Brazil. With this, cash from operations remained positive, amounting to $1.62 billion. After investments of $1.63 billion, our free cash flow was broadly zero. Let me now analyze the debt of our company in the following slide.
Gross debt amounted to $7.9 billion, an increase of 15% compared to December 2025, mainly explained by higher debt in Brazil and the appreciation of the Brazilian reais and Colombian peso. Net debt reached $6.5 billion, an increase of 35% compared to the end of 2025. This evolution was mainly explained by dividend payments of approximately $0.5 billion, the $0.5 billion that we paid for the share buyback completed during the third quarter of this year, and a negative FX impact of $0.7 billion. Our net debt on EBITDA ratio increased from 1.1 times at the end of 2025 to 1.3 times, remaining at a sound level. In terms of currency and country exposure, Brazil represents the largest contributor, representing 52% of gross debt, followed by Colombia with 34%.
Regarding debt at the holding level, as of September, it consisted of a $600 million Yankee bond. This bond was fully repaid in October this year using the company's own cash resources, and therefore, as of today, we have no financial debt at the holding level. In addition, Enel Américas secured a $2 billion committed credit facility with leading financial institutions, further strengthening our liquidity position. This provides additional financial flexibility to address the potential funding needs of Enel Brasil and its subsidiaries and the holding company. Finally, regarding the cost of debt, we saw an increase of 130 basis points from 11.4% to 12.7%, mainly reflecting higher interest rates in Colombia and higher stock of debt in Brazil. On the next slide, Giuseppe will conclude this presentation with some closing remarks.
Thank you, Rafael. Disciplined capital allocation continues to be central to our strategy. We remain focused on investing in grids where we see attractive risk-adjusted returns and clear opportunities to strengthen network resilience and improve services quality for our customers. During third quarter, we delivered a strong performance in our integrated businesses, particularly in generation in Colombia, together with the positive results in grids. This operational performance, combined with the positive effect of currency appreciation in Colombia and Brazil, supported the strong results delivered during the period. Regulatory advocacy remain a key priority for the company. We continue to engage constructively with the regulators and other stakeholders to support business continuity, protect value, and advance toward better regulatory framework across our markets.
Finally, based on the solid performance delivered during the first nine months of the year, we confirm our full year 2026 guidance for both EBITDA and net income, remaining confident in our ability to deliver our targets for the year. Now, I will give the floor to Jorge for the Q&A session.
Thank you, Giuseppe. We begin now the Q&A session. First questions from several analysts asking about an update on the São Paulo concession. What is the current status, and what do we expect for the coming months?
Okay. Let me say, on October 6, 2026, ANEEL Board of Director confirmed the decision to reject the company request for an independent technical expert assessment and began deliberation on administrative proceeding concerning a potential recommendation to forfeiture the concession agreement. The reporting director voted in favor of recommending forfeiture, and her position was supported by another director. However, deliberation were suspended following a request for further review, the so-called pedido de vista, by one of the other directors. As of today, no recommendation for forfeiture has been issued to the granting authority, and the administrative proceeding remain pending a final decision. Let me highlight three important points. First, no final recommendation has been issued, and nothing has been referred to the Ministry of Mines and Energy. Should ANEEL recommend forfeiture, Enel São Paulo can still file an administrative appeal with suspensive effect before the agency.
Any recommendation would not automatically terminate the concession, since the final decision rests with the Minister of Mines and Energy, and ANEEL recommendation is not binding. In parallel, the TCU recommended that the ministry and ANEEL assess the impact of an eventual forfeiture and demonstrate a net benefit for customer, which is in line with the Enel São Paulo request. In the end, Enel Américas continue to fully cooperate with the authorities and to exercise its right of defense. We remain confident that any decision will be grounded in due process, legal certainty, and regulatory predictability.
Thank you, Giuseppe. We have a couple of questions regarding the buyback of Enel Américas. Are we considering any additional measures that could imply a reduction in the free float, and are we expecting to cancel the 5% of treasury shares?
Well, as of today, we don't have any kind of decision made by our shareholder, and nothing has been discussed in our board of directors. As of today, I cannot mention any kind of additional information. As I said before, according to the Chilean regulation, the shares can be canceled in an extraordinary shareholder meeting or can be canceled after two years, always if has not been sold before. But as I said before, we don't have any kind of additional information about these shares that are owned by the company.
Thank you, Giuseppe. Next question is from Andrew McCarthy. "Is there any update on the renewal of the distribution concessions of Rio and Ceará?
Let me say that both processes remain under analysis by the Ministry of Mines and Energy. ANEEL has already issued a favorable assessment of both Enel Rio and Enel Ceará, recommending the extension of their concession for another 30 years. So, Enel Rio concession will expire on December 9 of this year, and we don't see any reason to see a possible not renewal of concession. ANEEL already confirmed the compliance of its quality indicator, so I believe that there is no any kind of issue on this side. Let me just underline that it's not the first time that the concession has been renewed the last day of expiring. It already happened to other two distribution companies. So, we remain confident that both renewals will move forward in accordance with the applicable legal and regulatory framework.
Thank you. Next question also from Andrew. "Do you expect to continue investing in new generation capacity in Colombia?
Yes. Yes, we will continue to assess selective investment opportunity. As we presented in our 2026-2028 strategic plan, we expect to increase our capacity by another 0.1 gigawatt. Of course, in February next year, we are going to present the next strategic plan, so we're going to have the chance to discuss what we're going to see in the future for the Colombia. But yes, the answer is we're going to go ahead increasing our capacity in Colombia.
Thank you. Now, we have some questions regarding Colombia, in line with what are the impacts from El Niño phenomenon in the generation business in that country?
Okay. Well, thank you very much for the question, Andrew and Fernand. Enel Colombia, as you know, is closely monitoring the El Niño phenomenon and has factored its potential effects into its 2026 planning. This is just to be very clear. Based on the scenarios currently addressed, we do not anticipate material negative impacts on our 2026 targets from a financial perspective. Exposure to hydrological risk is geographically diversified and further mitigated by a solar portfolio of approximately 1.4 gigawatts, including the 0.3 gigawatts Atlántico Solar project that our CEO mentioned before at the beginning of this conference, which is now in commercial operation. To support system reliability during El Niño, Enel Colombia voluntarily rescheduled major works at El Guavio, helping preserve its availability during the most critical period of El Niño.
Thermal resilience is secured through maintenance plans aimed at preserving high availability of Termozipa, which are backed by stable coal supply contracts. The company's commercial policy mitigates dry hydrology risk through a diversified portfolio management strategy, which is very clear, including energy purchases, disciplined reservoir management, and active management of our market exposure. So, we are comfortable with the current situation, Andrew and Fernand.
Thank you, Rafa. Let's give you one minute in case you have more questions. Okay, one additional question. "Do you confirm your 2026 guidance?
Well, thank you for the question. This is very important at this point. With the third quarter of 2026 already completed, we confirm our 2026 financial guidance that we announced on February this year for 2026. As year-to-date results are in line with our expectations, so no news here. To date, no operational or financial factors have been identified by the company that will warrant material revisions to our targets communicated, as I said, at the beginning of this year. We continue, for sure, to closely monitor macroeconomic, foreign exchange, and regulatory developments across our footprint markets. But for the moment, I repeat, we confirm the guidance for 2026.
Thank you, Rafa. Well, as there are no more questions, I conclude the results conference call. Let me remind you that the investor relations team is available for any doubt that you may have. Thank you for your attention.
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.