Enel Chile SA

NYSE:ENIC

Earnings Call Transcript 2020-Q1

[Operator]

Good day, ladies and gentlemen, and welcome to Enel Chile 1Q 2020 Results Conference Call. My name is Gigi, and I will be your operator for today. Questions will be taken through the webcast chat. This call is made for investors and financial analysts, and the press is not allowed to ask questions.

During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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 anticipated in the forward-looking statements as a result of various factors. These factors are described in Enel Chile's press release reporting its 1Q 2020 results, the presentation accompanying this conference call and Enel Chile's annual report on Form 20-F, including under Risk Factors. You may access our 1Q 2020 results press release and presentation on our website, www.enel.cl, and our 20-F on the SEC's website, www.sec.gov.

Readers are cautioned not to place undue reliance on these forward-looking statements, which may speak only as of their date. Enel Chile undertakes no obligation to update these forward-looking statements or to disclose any development, as a result of which these forward-looking statements become inaccurate, except as required by law.

I would now like to turn the presentation over to Mrs. Isabela Klemes, Head of Investor Relations of Enel Chile. Please proceed.

[Isabela Klemes, executive]

Good morning, ladies and gentlemen, and welcome to Enel Chile's first quarter 2020 results presentation. I hope you are all safe in your homes and are following all the required safety measures that the prevailing circumstance request of all.

I am Isabela Klemes, Head of Investor Relations. Our presentation will be hosted by Giuseppe Turchiarelli, our CFO. In occasion of this event, we have adopt appropriate prevention measures. We are all connected through our homes or individual offices, previously sanitized, located in our corporate building. The ones that eventually have [ translated ] are using a mask when in a common space and also gloves.

Giuseppe will open with the main highlights, and I will give us all an update on the global situation that we are facing. We will then walk you through our financial results and our operation performance. The usual Q&A session will follow. Please note that questions will be received only via chat, available in our webcast at www.enel.cl at the Investors section.

[Operator Instructions] After this call and Q&A, our IR team will continue to be available to provide with you any detailed information you may need with respect to figures included in this presentation. Thank you all for your presence. And now let me hand over to -- the call to Giuseppe.

[Giuseppe Turchiarelli, executive]

Thank you, Isabela, and good morning, ladies and gentlemen. Let's start by mentioning the highlights of the period. Today, the world is facing one of the biggest health crisis we remember. Immediately after the first alert of COVID pandemic, we have taken several actions to implement different measures to protect the health of our collaborators and to ensure the continuity of our services.

Thanks to our investment in digitalization, we have developed a storage platform that has been able to ensure our business continuity. In the last year, we have been promoting remote working methodology by adopting new systems in the cloud. Today, we have been able to switch immediately to work remotely, efficiently and effectively. In line with that, today, all our generation and network activities are fully operational. We have been taking care of -- minimize risk in order to protect our people and guaranteeing that our services are fully available.

This year, we were awarded in the top 10 in LatAm and second in Chile in terms of corporate governance. Among the topic evaluated, Enel Chile was awarded with the first place in transparency and compliance practices. This confirm our solid commitment with our governance practices and in being a transparent company. Also on January this year, we were included for the first time in the RobecoSAM Yearbook, receiving Bronze Class distinction, which also reflects our strong commitment towards a sustainable business model.

With reference to 2019 dividend distribution, as announced, it will not be impacted by one-time effects related to the decarbonization agreement as we were announced an extraordinary dividend amounting to CLP 1.66 per share, charged from the return in net income in order to have a 60% payout on the pro forma net income, excluding the onetime decarbonization effect. This is a clear demonstration of our commitment with our shareholders and our ESG attitude.

Lastly, as we will demonstrate in the next slide, our liquidity put us in a solid position to face these global challenges. First of all, let me start by thanking all our people for their incredible positive reaction and strong commitment of responding to this contingency event.

Now on Page 2. As anticipated, we have taken important measures in order to face this crisis. We are constantly monitoring the information concerning COVID-19, taking preventive measures and all necessary action. As a matter of fact, we have created a committee with the representatives of different areas on the company to analyze the situation on a day-by-day basis and to coordinate all the required actions we may need to take. The aim is to ensure the health and safety of our staff while guaranteeing the continuity of the services we provide.

We have immediately activated the remote working for our all employees. Today, almost 100% of our personnel that can work remotely are doing so. In terms of total figures, as of yesterday, 75% of our total employees are working from home. For the ones that needs to be in our activities, we have reduced the number of people present, the physical interaction and implemented workplace sanitization, with a continuous check of personnel symptoms and the use of additional safety equipment. Crucial activities like switch control and plant dispatch are performed with 3 safety measures.

In this exceptional situation, we have temporarily closed our distribution commercial facility and improving at the same time, our digital and online services. We have also temporarily suspended the residential meter reading in order to reduce risk for our collaborators and customers. Finally, Enel Group has drawn up an insurance policy to cover the group's over 68,000 worldwide employees in event of hospitalization if they contract the COVID-19 virus. This solution is the first insurance tool in the world aimed to guaranteeing support at the global level for the current pandemic.

As a company that provides an essential services, Enel Chile is adopting all necessary measures to protect the most vulnerable client and local community.

Now on Page 3. Considering the measures I have mentioned before on distribution business, we are also providing distribution client support by telephone, online and app. Our clients are invited to use our digital platform, that has been announced, to manage their bills and to get all the information they may need. On that, let me highlight that on March 31, we have reached the amount of 292,000 clients that have downloaded our app, designed exclusively to cope with our clients' needs. The same at March 31, 65% of the payments were performed by via digital channel. This represents an important growth when we compare to 51% ratio as of March 31, 2019. As an additional support to our clients during the emergency period, we are offering special payment plan for our most vulnerable clients with no interest or fee. There will be no power cast and we will not disconnect this client due to the nonpayment of electric bill.

We are also introducing a special meter reading program to support small business that were forced to close or to reduce their operation as we know that their consumption on this time will be different when compared with the previous month.

Last week, we launched a campaign called Codo a Codo, elbow-to-elbow, to support local community close to our activity and the most vulnerable part of our population against COVID pandemic with urgent needs in health and nutrition. Our first package of measures include the donation of the first 100 (sic) [ 100% ] electric ambulance to the Chilean Red Cross as well as contribution to other public hospitals and an e-bus that will be used as the mobile laboratory to the university, Universidad Católica.

Let me now present you the financial highlights for the first quarter 2020 summed up on Slide 5. Our EBITDA amounted $243 million in first Q 2020, a negative balance of $37 million when we compare it with March 31, 2019, figures that has been adjusted by the PPA early termination booked last year of $151 million. Group net income is 23% lower than first Q 2019 adjusted figures, mainly by the lower EBITDA results, higher depreciation in our distribution business due to the last year investment, accelerated depreciation as a part of our decarbonization strategy and partially offset by lower financial expense as a result of the liability [ merger ] executed in the second quarter 2019.

Our total CapEx amounted to $117 million, 65% higher than previous years, focused on our decarbonization strategy and digitalization of our distribution business and new connection. FFO decreased 57% or $174 million, mainly due to a residential impact on EBITDA and the CapEx developed in 2019, whose payments were made in 2020.

Our net debt in the period increased $122 million, mainly due to higher CapEx plan executed on March 2020, and the interim dividend of the 2019 results, which were paid in January. I will give you more detail in the following slide.

Let's now give a deep view on company financials, starting with our CapEx in Slide 6. Our total CapEx amounted USD 117 million, 65% higher than previous year, focused on asset development. This quarter, our development CapEx reached $91 million, mainly allocated on renewables as part of our decarbonization strategy, which recorded $83 million and on digitalization of our network that is bringing to us operational flexibility. On our renewable projects, considering the current restriction due to the COVID pandemic, we have been reviewing the logistic and construction plan, taking into account the additional safety standards in order to keep the development and construction of our project on track. From our total CapEx estimate for payment in Chile, we have deployed around 10% in the first Q 2020 as expected. The remaining 90% of our CapEx will be concentrated in the third, fourth Qs, seeing 23% allocated in the second Q, 37% in the third Q and 30% in the last quarter of this year.

During the first quarter 2020, almost 95% of our investment was allocated to achieve the SDG targets that Enel Chile has committed.

Let's start with EBITDA breakdown on Slide 7. As you can see in the graph in the first Q 2019, Enel Chile had a nonrecurring effect regarding the early termination of PPA payments, which amounted to $151 million. Excluding this effect, our adjusted EBITDA decreased 13% or $37 million, mainly in our business generation due to a lower hydro generation as a consequence of a drop that has been affected the country, amounting in negative impact of $10 million, less commodity coverage instrument that has a negative effect in our EBITDA due to the drop on international Brent price that brought us a negative impact on the settlement of our NG coverage of $25 million, partially offset by $9 million on saving on commodity, mainly to lower prices. Sales of 2 LNG cargoes in the first Q 2019 that wasn't executed this year due to lower price of the commodity in the international market with an impact of $70 million. These effects were mainly offset by higher CPI prices, mainly due to the indexation of contracts by CPI and U.S. dollar, partially offset by negative effect of the early stabilization [ happening ].

Now let me go deeper on generation business. Moving to Slide 8, I will present our KPI for the period. The net production decreased 13% amounting to 4.8 terawatt hour, driven by minus 0.5 terawatt hour of lower thermal production, mainly in our local fired plants due to the closure of Tarapacá power plant on the 31st December 2019 and the impact of the lower system and marginal cost in our production strategy. And minus 0.2 terawatt hour or lower generation in our hydro power plant, reflecting the hydrology. We can also see this trend of lower hydrology within the Chilean system, as we show on the right in this slide.

In terms of our energy balance, we remain a spot buyer in the market with the purchases of 1 terawatt hour in the first Q 2020, a variance of 0.6 terawatt hours versus first Q 2019. This is mainly explained by low hydrology and low marginal cost in this season, as we are showing in the right side of this slide. The lower fees and marginal costs coming from the Argentinian natural gas availability, new transmission line fully in operations starting from June 2019 and renewable development in the country, explains our production strategy for this quarter, particularly in the month of January and February. Our physical energy sales is almost in line with 2019, thanks to the fact that we were able to secure new clients on the free market. The balances is explained as the follow: minus 0.5 terawatt hour or lower consumption of distribution company, mainly associated to the termination of regulatory PPAs with [ Paesa ] and Enel which [indiscernible] in 2006 option, partially offset by 0.4 terawatt hour of higher free-market sales as a part of our strategy to capture new clients and the ones that recently migrated to the free market.

In Slide 9, we have a summary of the performance of our generation business, including Enel Generación and Enel Green Power. On generation EBITDA, I have already get you through the main variation in the previous slide. What I would like to recall you, is that we have produced 66% of our generation with renewable sources, 5% higher when we compared to last year results. As a result of the already mentioned element, power generation EBITDA margin reached 41% in the first Q 2020, despite lower hydro production and commodity [indiscernible].

Regarding our net installed capacity, 65% of our capacity is based on renewable sources. This is part of our strategy plan to increase presence of free emission generation by closing our coal facility, which was the case of our coal facility Tarapacá, that was closed in 31st December last year and adding new renewable capacity.

Let me explain the most relevant operating fact of our distribution and Enel X business. We are in the Slide #10. We have been advocating that the role of customer is set to change, opening up new business opportunity that has been captured by Enel X. On that, we have secured new contracts on public lighting this quarter, where we will change the lightening infrastructure by LED ones, which will bring a more efficient system to the local municipality. On the digitalization of our distribution business, thinking on the medium-term and continue working on the quality of our services, we have reached 2,206 telecontrol equipment installation in our grid. In the next 2 years, we are planning to install 585 additional units.

Please let's move now to Slide 11 to explain the most relevant operation results of our network and Enel X business. As of March 2020, the EBITDA of Enel Distribución and Enel X had a minor barrier when we compare it to the last year results, mainly due to new smart lightening contract adding $1.9 million; tariff indexation totaling $1 million, offset by a $1.4 million income from 26 electric buses registered in 2019 that started the operation in the public transportation system in January last year; and higher losses mainly due to the logistic restrictions to the social unrest in Chile during the first Q 2020 of $1.6 million, as you can also see from the right side of the slide around that main KPI.

Our customer base increased by 45,000 clients when we compare the first quarter of 2020 with the last year figures, reaching 1.98 million of clients, also reflecting an increase on the energy distributed of 0.1 terawatt hours that reached 4.3 terawatt hour in this quarter. Following logistics restrictions coming from the social unrest and last week from the pandemic situation, our interruption in the SAIDI has an increase of 4% in the first quarter of 2020 compared to last year results. This index still remains being a group benchmark in LatAm. On that matter, we continue to focus on critical areas for SAIDI, safely replacing approximately 52 kilometers of cable in our low-tension grid and executing no more than 7 kilometer of medium-tension network in grid expansion and reinforcement in this quarter.

The energy losses increased 42 bps, reaching 5.25% due to a lower activity on-site inspection. This decision was adopted in order to safeguard the safety of our workers.

Now on Slide 12, let's go through the main drivers of our net ordinary net income. As already mentioned before, the 2019 EBITDA includes the PPA early termination. Depreciation and amortization reached $76 million related to the higher depreciation and distribution business due to higher investment in the last year and new calculation of the useful life of Bocamina 2 as part of our decarbonization strategy, partially compensated by the closure of Tarapacá on 31st December last year. The impairment and bad debt increased $4 million, mainly in our distribution business as a result of the social unrest in account. Financial results and others amounted to an expense of $32 million, a decrease of $5 million, mainly due to the foreign currency exchange rate appreciation in the first Q 2020 and a lower average cost of our debt due to the renegotiation on EGP debt with EFI. Income taxes and minorities reflects mainly the EBITDA performance. As a consequence of all the above, the ordinary first Q 2020 net income reached $88 million, decreasing 59% when it compared to first Q 2019. For first Q 2020, net income compared with adjusted net income by the PPA early termination with [ AAS ] decreased 23%.

Let me now go through our debt on Slide 13. Our gross debt increased by $585 million versus December 2019, amounting to $4.17 billion in March 2020, mainly due to the Enel Chile new filing with EFI. The average cost of our debt was reduced from 5.2% in December 2019 to 4.7% as of March 2020, showing an important improvement in our financial condition as a result of our constant effort to optimize our financial expense. The average sales of our loan is almost 7 years [indiscernible]. Our FFO reached 70 -- $57 million, also affected by energy stabilization making an impact of [ $600 million ] and the CapEx developing in 2019 and whose payment was made in 2020. Our net debt as of March 2020 compared to December 2019 increased $122 million.

Finally, on our debt amortization on Slide 14. I would like to highlight that with our liquidity position, we are able to finance our CapEx plan, respect the commitment to our shareholders in case possible worsening scenario in the country. On our debt amortization, with an annual average of $281 million maturity in the next full year. Our liquidity allow us to support the maturity over the next year.

Before starting the Q&A section, I would like to mention some relevant takeaways on Slide 15. In this global contingency, we have taken action timely and proactively since the first day in order to protect the health of our people, support our client and community and to guarantee business continuity. We are continuously monitoring the evolution of the situation in order to quickly react, and at the same time preparing a midterm plan to keep our company at the best efficient level. Digitalization is key to support this contingent period, and we believe that we should take this opportunity to follow and shape new habits of our clients.

Sustainability continues to be the pillar of our business model, which has coped with any business disruption and to maintain our strategy on the medium to long-term basis despite current [ pandemic ].

To conclude, I would like to reinforce that today, we have a liquidity that will allow us to cope with this global quarantine.

Thank you for your attention. Let's now open the Q&A section. I will hand over to Isabela.

[Isabela Klemes, executive]

Thank you, Giuseppe. As we have anticipated in this occasion, we received questions via chat in our webcast.

So I will start with our first question from Murilo Riccini from Santander.

The first question is the following. Could you please give us more details regarding the 38.6% year-over-year retraction in operation cash flow? How much of that was affected by the stabilization mechanism? And how much for lower collections? Is there any other relevant effects impacting the number, maybe payments to suppliers? It grow 10% year-over-year.

The second question from Murilo is regarding generation. Are there ways to mitigate the issues that Bocamina 1 and 2 were unavailable? What could you do to avoid suffering that kind of impact in the coming periods?

Please, Giuseppe.

[Giuseppe Turchiarelli, executive]

Thank you, Isabela. Okay. So what concerns the FFO, I have to say that the main balance is in comparison with 2019 is coming from the EBITDA reduction and the CapEx executed in 2019 that has been paid in 2020.

On top of that, I would like to remember that this year, we paid in higher amount in terms of e-buses in comparison with the last year, roughly $25 million. I don't have -- we don't see any major impact in comparison with the last year of what's concerned the stabilization mechanism, neither for what concerned the collection at least in March 2020.

For what concern the Bocamina 1 and 2, well, as you may know, we have -- we had to shut down our Boc plant after the [ addition ] of one person in one of the transmission line that wasn't owned by our company, as a part of project. We truly believe that this process has not passed [ tests ], considering that we are fully committed. And since 2018, Enel Generación has been working with 1,370 [ quarantined ] families to apply international standards to the resettlement process already carry out. We have installed criteria of transparency and objectivity based on the audit of standards to any differences between agreements signed at this time. However, in this process, some leaders have appeared who only demand monetary compensation in addition to what they are already obtaining. So this is the situation as of today. Isabela?

[Isabela Klemes, executive]

Thank you, Giuseppe. We have now our second question coming from Javier Suarez from Mediobanca. He actually has 2 questions, okay?

The first one is, can you help to understand the reasons why FFO has decreased by [indiscernible] during first quarter? That I think we have already answered. But if you wanted to also give any other information.

And the last one from Javier is that, does the company feel the necessity to revise downward its latest guidance?

Thank you, Javier. Giuseppe?

[Giuseppe Turchiarelli, executive]

Okay. I believe that [ promotions ] for FFO factor, I have already answered. Again, the main variances are the EBITDA and the CapEx executed in 2019, which had a rebound in 2020.

For what concern the guidance, the truth is that as of today, we don't see a major impact in terms of COVID. And it's really is hard to believe that we are not able to recover the delta, the situation. So frankly speaking, as of today, I'm not in a position to say whether we're going to have a different guidance. So I won't confirm the guidance.

[Isabela Klemes, executive]

Okay. Thank you, Giuseppe. Well, we have now a question from Rodrigo Mora from Moneda.

The first question from Rodrigo is that, about forced disconnection of Bocamina and I understand that was also responded to you -- by you now. And the second question, if you can give more details about the renewables project COD for the year that was included in the business plan from the company that was presented last December last year?

And then we have a third question from Rodrigo. If we can give us more details about the supply contract ended with [ Faesa ], how many gigawatts hour it has?

Thank you, Rodrigo, for your question. Now Giuseppe, I'll hand it to you.

[Giuseppe Turchiarelli, executive]

Okay. For what concern the CapEx? And despite of the international situation, we can't confirm our arrangement. As a matter of fact, we found a way in order to keep on tracking in our construction. So except for a few weeks that can be recovered, I confirm our plan for 2020.

Regarding the supply contract that ended in first quarter, give me a second and I will check it and I will give you. It's around 100 -- if I'm not wrong, 100 -- yes, we are talking about 0.4 terawatt hour, the contract that ended up with the regulator with the dissolution of [ Paesa ] and [ Mayan ] with amount of terawatt hour that has been compensated by the new distribution -- with the new [ founder with the free ] market.

Isabela?

[Isabela Klemes, executive]

Okay. Thank you, Giuseppe. We have -- let me check here, another question now from Arturo Murua from Toesca.

My question is regarding to announcement in [ RCM ] purchase with Enel Green Power. If we see the physical sales between both companies, it declined almost 20%. However, the total purchase costs remain the same.

So Giuseppe, this is the question. Thank you, Arturo, for your questions. And handing now to you, Giuseppe.

[Giuseppe Turchiarelli, executive]

So basically...

[Isabela Klemes, executive]

Yes, the question, I will repeat again.

[Giuseppe Turchiarelli, executive]

Yes. Okay. Repeat it, please.

[Isabela Klemes, executive]

Okay. I'll repeat again, instead. So his question is regarding the Enel Generación purchase with Enel Green Power, the PPAs with both companies. We see the physical sales between both companies decline almost 20%. However, the total purchase cost remains the same in the period, the comparison between the first quarter this year with first quarter last year. So this was the question from Arturo Murua from Toesca Asset Management.

[Giuseppe Turchiarelli, executive]

Right. If you see in the Slide 8 in the presentation, where we compare the whole picture of Enel Chile, it is clear that the reduction in the production is coming from -- taking out the impact of Tarapacá is coming from the fact that we have a worse performance in hydro, okay? And of course, last year, the system margin and cost was pretty high. So it was convenient for the company to produce with its own -- power plant. And this year, the situation is [ utilization ] and at least in the last month, and this explain why we increased the -- than the past, if this was the question.

[Isabela Klemes, executive]

Yes. And he's also questioning, Giuseppe, the fact why there is an increase on price on the PPA between wind power, Enel Green Power and also Enel Generación.

[Giuseppe Turchiarelli, executive]

Between the -- I mean all the PPA among Enel Green Power and Enel Generación are made according to the market price. So I mean it reflects basically the situation that we are in the market.

[Isabela Klemes, executive]

Okay. Thank you, Giuseppe. And now we have another question from Alex Varschavsky.

The first question that Alex has, is -- thank you, Alex, for your question. Are you expecting that the delay in collection bills from distribution segment could be transferred to transmission and generation sector? Have you run an analysis for that? And I believe this is the question from Alex regarding the discussions on the most vulnerable clients.

And then the second question that we have is that COVID-19 context, we reflect the ramp-up of your growth projects. What are you seeing in that topic?

[Giuseppe Turchiarelli, executive]

Okay. So what concern the collection of our distribution company. And in general, their distribution, we don't expect any, how can I say, rebound on the transmission and production costs -- on transition and production company. We believe that we are working actually together also with the BID, Banco Interamericano de Desarrollo, in order altogether, the sector -- the distribution sector, in order to develop a way in order to reduce as much as possible -- the possible impact of the collection on the distribution company and avoiding any kind of break in the payment chain along the sector. So we do not expect any rebound on the transmission and production company.

For what concern the CapEx, the impact of COVID in our project. As already said, is it true that part of our equipment is coming from China, but we have -- we had already checked the regular supply of our -- the key trend, as a matter of fact, they are already coming. So we don't see any kind of impact on that. And this is the reason because we assume a respect of the project construction timing at the end of this year.

[Isabela Klemes, executive]

Okay. Thank you, Giuseppe. And that question was from [ Wendy Caso ], the CrediCorp. And now, yes, the question from Alex Varschavsky. I hope I have said correctly your surname, Alex.

So could you please provide some color regarding your LNG obligations? And the impact then could have in a scenario of lower international gas prices and higher availability of the Argentinian gas?

So this is the question from Alex. So Giuseppe, I'm going to hand it to you.

[Giuseppe Turchiarelli, executive]

Yes. As we mentioned last year, during the investor presentation, we are basically -- we have basically two kinds of sources in terms of gas supply. One is, of course, the Argentinian gas, and the other one is the contract -- that LNG contract. The LNG contract is a contract that guarantee us any possible interruption of Argentinian gas. So basically, we have a long-term contract that give us the right guarantee of the supply. The contract provides a special amount of gas that has to be buy every year. We have some condition among them in order to organize them to align the buy of the contract according to our needs. So the contract is basically very positive for us in terms of flexibility. Is it clear that the international price in the market will have an impact of what concerned this content, for 2 reasons. First, because, of course, as we did the last year and as we did in the past, in general, sometimes, we use this contract in order to make margin in trading it. So in other words, we buy from the contract and we sell on the market. This year, we don't have this kind of opportunity, but doesn't mean that we are not -- we are going to be affected in the important way. This is basically the main impact because the Argentinian gas probably follows different kind of chain. So basically, again, we buy from Argentina when we need to use it in case it's cheaper than LNG. Otherwise, we need to utilize that in our contract. Isabela?

[Isabela Klemes, executive]

Okay. Thank you, Giuseppe.

And now we are going to go to a question from Enrico Bartoli from MainFirst.

So his first question is, do you see any risk of increasing bad debt due to COVID emergency? Are there any discussions with the regulator on how, in case, to manage and recover unpaid bills, okay?

And the second question, is the COVID emergency is affecting in a way -- in any way the construction schedule for new renewable capacity?

[Giuseppe Turchiarelli, executive]

Okay. It is clear that the COVID emergency in some way could affect the bad debt provision. In March, we didn't see it. We are also -- we are also pushing a lot our digital channel in order to reduce it at the minimal level possible in the bill.

Again, as of today, the impact is coming more from the tail of social unrest that we faced in October last year, more than on the COVID. The COVID impact, as of today, at least in March, we don't see any kind of impact.

For what concern, the second question, we don't have a specific discussion on the unpaid bill with the regulator. What we have, as I said before, is -- of course, what we have is the discussion with BID in order to find a way, in order to cover the possible delay in the payment so in possible delay with the collection that, of course, will take care about also start [indiscernible] of net unpaid.

Clear that we are, again, in contact with the regulators to understand how to face this situation.

[Isabela Klemes, executive]

Okay. Thank you, Giuseppe.

And now we have another question from Rodrigo Mora. And the question is related to Los Cóndores project. So Giuseppe, just to the -- let me just rephrase here the question. [ Do differing the needs ] that we are facing will somehow affect this COD that we are expecting for the Los Cóndores project. If you can give a color on this.

Thank you, Rodrigo, for questions. Giuseppe?

[Giuseppe Turchiarelli, executive]

Yes. For that concern, Los Cóndores, as we mentioned before, we are reviewing all our projects to be in line with the new safety standard. And it's the kind of stuff that we used to do pretty often, of course, to review and to understand how the project is going. So as soon as we have the next review, we're going to communicate in case we signed a different in comparison with our declaration in the past.

[Isabela Klemes, executive]

Okay, Giuseppe, thank you.

I think we have answered and follow the questions. So I would like then to -- as we do not have any more questions, then I conclude the results conference call. And let me reminding to you all that ones are connecting that our team, Investor Relations, is available for any [ doubts ] that you may have. And thanks for your attention and stay safe. Thank you. Bye-bye.

[Giuseppe Turchiarelli, executive]

Bye-bye.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.