Enel Chile S.A.

Overview Key strengths Key risks Largest vertically integrated utility in Chile, given its leading position in the generation and distribution sectors. Exposure to hydrological conditions, because as of March 31, 2022, 44% of net installed capacity comes from hydropower plants. Under scenarios of severe droughts and high spot prices, the company needs to buy energy in the spot market to serve its contracts, which results in significant cash outflows. Enel Chile?s distribution business is stable in nature. The company's generation segment holds contracts with creditworthy counterparties and with an average maturity of nine years, providing certainty to prices. We expect a peak in leverage in 2022 due to operating underperformance and high investments. However, we believe the company should be

...We continue to expect Enel Chile S.A.'s financial performance to improve in 2022, although its metrics would remain leveraged. For 2022 and 2023, we forecast EBITDA of $1.0 billion and $1.4 billion, and net debt to EBITDA of close to 5x and 4x, respectively. Last year's adjusted EBITDA of $690 million was the lowest of the past six years mainly because of very dry conditions in Chile, but also due to higher fuel costs that lowered efficiency of the generation mix. Our analysis continues to incorporate adverse weather conditions as well as relatively high electricity prices that eat into Enel Chile's cash flows due to its net purchaser position. However, the entrance of new renewable projects during the year (such as solar 126 megawatt [MW] Finis Terrae and 398 MW Campos del Sol II) will partly offset the impact of these factors. In addition, the company continues to take actions to mitigate volatility in its cash flows, such as maintaining a solid supply contract position, which includes...

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