Enel Americas SA
SGO:ENELAM
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Earnings Call Analysis
Q3-2023 Analysis
Enel Americas SA
The company has successfully continued its drive towards renewability, now boasting a power matrix that is approximately 90% renewable. Operationally, the addition of nearly 1 gigawatt of renewable capacity over the year signals strong progress towards sustainability goals. Financially, the company appears robust, with an Adjusted EBITDA for the quarter increasing by 20% year-over-year, despite facing changes in consolidation perimeters and achieving a group net income of USD 0.8 billion for the first nine months of 2023, recovering from a negative figure in the previous year.
There has been an 11% increase in production after accounting for deconsolidation effects, with 87% of the power being emission-free, a significant improvement from 74% in the same period of the last year. Despite an overall decrease in energy sales, this trend demonstrates the company's commitment to environmental excellence.
The company's strategic investments seem to be paying dividends; they invested USD 1 billion in renewable energy and added almost 1 gigawatt of new renewable capacity in the first 9 months of 2023. This includes wind farms in Brazil and solar plants in Colombia, Peru, and Central America. With 1.4 gigawatts of capacity currently under construction and projected operations beginning in the years ahead, the company is actively bolstering its position in the renewable energy sector.
Net debt has been reduced by 12% to USD 6.1 billion since the end of 2022, denoting a disciplined approach to debt management. Concurrently, the company has overseen a 4% increase in electricity distribution and a substantial increase in smart meter installations, reaching 23.6 million customers.
The third-quarter earnings show an 11.8% increase in EBITDA to USD 1 billion, underpinned by robust performance in the Generation and Distribution segments. Furthermore, the quarter witnessed a reversal from a negative to a positive net income, arriving at USD 307 million, thanks to improvements in operational efficiency and EBITDA growth.
The company achieved solid operational results across all business segments, handling an increased energy demand and maintaining a strong financial standing conducive to future capital expenditures. Looking forward, the company is poised to unveil a strategic plan for 2024–2026 in the latter part of November, which will be pivotal in charting future courses of action.
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Good day, ladies and gentlemen, and welcome to Enel Américas Third Quarter 2023 Results Conference Call. My name is Gigi, and I'll be your operator for today. [Operator Instructions] Please be advised that today's conference is being recorded.
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, Enel Américas cost reduction plans, trends affecting Enel Américas financial condition or results of operations, including market trends in the electricity sector in Chile or elsewhere, supervision and regulation of the electricity sector in Chile or elsewhere and the future effects of any changes in the laws and 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 the 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 United States or elsewhere, adverse decisions by government regulators in Chile or elsewhere and other factors described in Enel Américas' integrated annual report.
Readers are cautioned not to place undue reliance on these forward-looking statements, which state only as of their dates. Enel Américas undertakes no obligation to release publicly the results of any revision to these forward-looking statements, except as required by law. I would now like to turn the presentation over to Mr. Rafael de la Haza, Enel Américas' Head of Investor Relations. Please proceed.
Thank you, Gigi. [Foreign Language]. Good afternoon, ladies and gentlemen, and welcome to our third quarter 2023 results presentation. I'm Rafael de la Haza, Investor Relations of Enel Américas. And in the coming slides, our CEO, Mr. Aurelio Bustilho, who will be presenting the main figures of this period. Let me remind you that this presentation will follow the slides that you can find in the company's website. Following the presentation, we will have the usual Q&A session. Please remember that questions can be made only through the telephone line. Now let me hand over the call to Aurelio, who will start by outlining the main highlights of the period in Slide #3. Aurelio? The floor is yours.
Thank you, Rafael. During the last few months, we have continued with our renewable generation plant execution, adding more than 400 megawatts of new capacity this quarter. With this, our matrix is now around 90% renewable in line with our energy transition goals.
Adjusted EBITDA in this quarter increased by 20% compared to the third quarter of last year. This considers homogeneous perimeters, meaning that we're including results from Peru in both periods and excluding from 2022 results, Fortaleza, Goiás, CIEN, Costanera and Dock Sud, as we do not consolidate these -- those companies anymore. We're also excluding FX effect, which had a positive impact of USD 7 million during this period. This improvement is mainly explained by better results in Distribution business in Brazil and Generation business in Colombia.
We also saw an important recovery on our group net income for the first 9 months of 2023, which reached USD 0.8 billion, a significant increase compared to last year, which was minus USD 100 million. This increase is mainly explained by the impairments related to sales of Enel Goiás and Enel Fortaleza and better adjusted EBITDA.
Regarding net debt, as of September 30, we reached USD 6.1 billion, which is 12% lower than year-end 2022. This is mainly explained by lower debt consolidation related to asset disposals.
On Slide 4, I will highlight our positive performance during this year. This slide shows a summary of our main indicators in a homogeneous view. This means excluding for both periods sold assets, Fortaleza, Goiás, CIEN, Costanera and Dock Sud and including Peruvian assets, which, as you know, are in a sale process, but still are part of our operation perimeter.
In Generation business, we significantly increased our installed capacity and net reduction, thanks to the deployment of new renewable power plants.
In Grids business, we increased our customer base and energy sold while Smart meter grew by almost 3x.
Our financial indicators showed a very positive performance, improving EBITDA, increasing our CapEx and maintaining our net debt and ratio is basically in line with the last year. All those -- all these reflect that we're performing in a solid manner and our main indicators are improving across our businesses. Let's now analyze the following slides, our operational highlights.
In Generation business, during this year, we have added close to 1 gigawatt of renewable capacity. After the sale of Costanera, Dock Sud and thermal Cartagena, we reached 14 gigawatts of installed capacity, of which 90% is renewable. Net production in the third quarter reached 13.9 terawatt hour, a decrease of 7% compared to the same period of last year, explained by the deconsolidation of Costanera and Dock Sud. Isolating these effects, production would have increased by 11%, explained by higher generation in Colombia and Peru.
From our total production, 87% is emission-free, a significant growth compared to the 74% of the same period of last year. Energy sales decreased by 3% during this quarter, reaching 18.8 terawatt hour mainly due to the change in the perimeter. Isolating this effect, sales would have increased by 4%, mainly explained by higher sales in Colombia.
On the Slide 6, we'll focus on our development of renewable capacity. During 2023, we have added almost 1 gigawatt of new renewable capacity, 593 megawatts of our wind farms located in Brazil and 381 megawatts of solar plants located in Colombia, Peru and Central America. We have invested USD 1 billion in renewable energy during the first 9 months of this year, mainly located in Brazil and Colombia. We're currently working on additional 1.4 gigawatts of capacity under construction located in Brazil and Colombia. 300 megawatts are wind projects and 1.1 gigawatts are solar projects.
During 2023, 400 megawatts will begin operations while 1 gigawatts or 1,000 megawatts will enter in 2024. Regarding our pipeline, we're considering 51 gigawatts of new capacity. From this amount, 23 gigawatts are in early stage and 25 gigawatts are in mature stage. In addition to this, we have around 1 gigawatts of battery energy storage system, and we're also considering 1.4 gigawatts of projects under construction already mentioned.
Let's continue with Grids operational highlights on Slide 7. Electricity distributed reached 27.8 terawatt hour in the third quarter, which represents an increase of 4% compared to the same period of the last year in homogeneous perimeter, explained by higher sales in all our distribution companies. Regarding number of customers, without considering customers of Enel Goiás last year, we had an increase of around 420,000 in the last 12 months, reaching 23.6 million customers.
Smart meters increased around 2.6x, reaching 605,000 during this period, mainly due to the deployment in Sao Paulo. Our net RAB has increased by 19% in the last 12 months, reflecting the significant investments that we have done in our Grids. The ratio net RAB per customers also reflects an important growth of 17%.
In terms of quality indicators, we can see an important decrease in Argentina, mainly explained by the extremely high temperatures that we saw during the summer of last year -- of this year, sorry. In the rest of the countries, our quality indicators improved or remained flat, except for SAIDI in Peru, which increased due to a change in calculation criteria compared to last year. Finally, in terms of energy losses, it improved in Argentina, Brazil and Peru and it remained flat in Colombia.
Let's analyze our investments of the period in the coming slides. During the third quarter of this year, our CapEx decreased by 8% compared to the same period of last year, reaching $766 million, mainly explained by the disposal of Fortaleza, Enel Goiás, Enel CIEN, Costanera and Dock Sud and lower investments in Generation business in Peru.
If we exclude this -- the perimeter impact, the CapEx would have increased by 5.5%. This is mainly explained by higher investments in Colombia and Renewable business in Brazil. From the total amount, 67% was invested in Brazil, while in terms of business, 51% was devoted to renewables and 40% to Grids. Growth CapEx reached $431 million and was mainly devoted to renewables with 83%.
Now I will comment on the financial results of the period in the coming slides. EBITDA in the third quarter reached USD 1 billion, 11.8% higher than the same period of last year, mainly explained by better results in Generation business in Colombia and Distribution business in Brazil. This was partially offset by the fact that we do not consolidate Enel Fortaleza, Enel Goiás, CIEN, Costanera and Dock Sud in this period. If we exclude this effect and also include results in Peru and isolated effect, we get to an adjusted EBITDA of $1,142 million, an increase of 19.6% compared to the same period last year.
OpEx decreased by 9%, mainly explained by the change in the consolidation perimeter. Net financial results increased by 38.1%, mainly due to lower financial income related to regulatory assets in Brazil. Group net income in the third quarter reached $307 million, which compares with a negative net income of USD 680 million last year, due to the negative impact coming from the sale of Enel Goiás and Enel Fortaleza. This positive net income is a consequence of good operational results and growth in EBITDA. Finally, in terms of debt, we see an important reduction of 11.5% compared to December 2022. We will analyze in detail our debt later on.
On Slide 11, we will analyze EBITDA evolution and breakdown. Starting from $894 million of EBITDA of third quarter of 2022, we have to exclude $105 million coming from Enel Fortaleza, Goiás, CIEN, Costanera and Dock Sud in order to make it comparable with third quarter of 2023. Then we see that we have positive operational results in renewable Grids, Retail and Enel X, while thermal generation decreased. With this, we get to an EBITDA of USD 991 million for third quarter of 2023, which is 26% higher than last year, considering the same period.
FX had a positive impact of $8 million, resulting in a reported EBITDA for this quarter of USD 1 billion, 12% higher than reported EBITDA of same period of 2022. As already mentioned, Peruvian assets are considered discontinued operations, meaning that its result is considered below EBITDA level. If we consider EBITDA coming from Peru, we get an EBITDA of $1,149 million. From our reported EBITDA, 54% came in from Brazil, 43% from Colombia and 3% from Central America. In terms of business lines, Grids represent 47% of our EBITDA and Renewables 46%. Retail and Enel X contribute with 6% and 1%, respectively.
Let's see EBITDA breakdown on a cumulative basis in the coming slides. Starting from $2,930 million of EBITDA of these first 9 months of 2022, we have to exclude $341 million coming to the asset disposals, then we see that we have a positive operational results in Renewables and Grids businesses, while Thermal generation, Retail and Enel X decreased. With this, we get to an EBITDA of $3.1 billion for the period, which is 19% higher than last year, considering the same period.
FX had a negative impact of $172 million, resulting in a reported EBITDA for this half of -- for this period of USD 2,899 million, 1% lower than reported EBITDA in the same period of 2022. EBITDA from Peruvian operations was $516 million, reaching with this and EBITDA of $3,415 million. From our reported EBITDA, 59% came from Brazil, 38% from Colombia and 3% from Central America.
In terms of business lines, Grids represent 50% of our EBITDA and Renewables 42%. Retail and Enel X contributed with 7% and 1%, respectively.
On Slide 13, we'll have our focus on the cash flow of the company. Starting from an EBITDA of $2,899 million, we see that net working capital amounted to minus $926 million, mainly explained by water scarcity account in Brazil, PIS/COFINS credits use in connection with reimbursement to final customers, CVA impact in Brazil and FX and higher inflation impact in Argentina.
Taxes paid during this period amounted to $553 million, while net financial expenses amounted to minus $479 million. With this, funds from operations amounted to $942 million, a decrease of $830 million compared to the same period of last year. After investment of -- for $2,044 million, including $1,132 million of growth CapEx, we get to a free cash flow of minus $1,102 million.
Let me now analyze the debt of our company in the coming slide. Gross debt amounted to $7.2 billion, a decrease of 11% compared to December 2022, mainly explained by the deconsolidation of assets available for sale in 2022. Isolating this effect, gross debt would have increased by 1.7%, mainly due to higher debt in Enel Colombia and Enel Ceará, partially offset mainly by lower debt in Enel Brazil, Enel Américas Holding and Enel Sao Paulo.
Net debt reached $6.1 billion, a reduction of 11% compared to the same -- to the end of 2022. This includes free cash flow for minus $1,102 million, net dividends paid for minus $199 million, extraordinary operations for $1,530 million related to the sales of Goiás, Costanera, and Dock Sud, net debt deconsolidation for $906 million and FX effect for minus $346 million. In terms of currency and country, we see that Brazil remains as the largest contributor, while the debt at holding level represent 8% of the total.
Finally, regarding the cost of debt, we can see an increase for this period going from 9.8% to 12.5%, mainly explained by higher interest rates in Brazil and especially in Colombia and to the fact that in December 2022, we had the Peruvian operations, which had the lowest cost of debt.
On next slide, I will conclude this presentation with some closing remarks. During the third quarter of 2023, we had solid operational results across all our businesses with relevant increase in energy demand. We maintain a solid financial position, which allows us to execute our CapEx plan. We're strongly delivering and executing the new capacity coming from renewable sources in line with our strategy. Regarding our corporate simplification, let me comment that our asset disposal plan is on track with no relevant news from the moment.
Finally, let me announce that we're going to present our strategic plan for the period 2024, 2026 during the last days of November. Soon, we will send you the invitation to all of you.
Well, thank you, Aurelio. Very clear. So now we're going to pass the call to the operator for the Q&A session. Operator, please proceed.
[Operator Instructions] Our first question comes from the line of Javier Suarez from Mediobanca.
Three questions. The first 1 is on Slide #13 on the cash flow of the period and the net working capital absorption that is close to $1 billion. So you can help us to understand the evolution of that working capital by the year-end? And when you are expecting that net working capital negative impact to be reabsorbed in your account? That would be the first question.
The second question is on the cost of debt in Slide #14. There has been -- we have seen a significant increase in the cost of debt that has been explained by higher cost of debt in Brazil and Colombia. So the question for you is, how do you see that cost of debt in 2000 -- for the rest of the year in 2023 and then in 2024, and which implication this has for the Grid of the company -- as a company, which is the level of net debt to EBITDA with which Enel Américas feels comfortable with?
And the final question is on that statement that you have made at the end of your presentation on the asset disposal plan. You can give a little bit more of granularity on how the process is proceeding, and you -- we may expect some significant news flow before the year-end?
Thank you, Javier. Thank you for your questions. Regarding for net working capital, Javier, there is an impact, right, that we're recovering that we're -- that was due to the -- especially for the account CVA regarding the hydrology in Brazil, right? And also -- but this is the great part and also part of the PIS/COFINS issues. I mean this is something that we're just correcting or adjusting effects from previous period.
I mean, this is not something that we'll repeat on next year. So from this $926 million, half of this -- roughly half of these amounts is due to all the support that we had in the previous period related to hydrology, related to the PIS/COFINS issues that we're giving it back because it's not for the company, right? We're giving it back to the consumers, the clients in Brazil. So for these amounts, this part -- it's not -- it's extraordinary so we're not repeating the -- in the coming periods. right? This is the mechanism that in Brazil, you see that we have this delay of 1 year of impact in terms of CVA, right? Different from, for example, if I can say, in Colombia, Colombia 2 months after you have it -- you received it or give it back. In Brazil, you'll have this delay of 1 year, regulatory delay.
So that's why we're seeing impact, it's not due to this year to this -- the current EBITDA that was generated. It was from the previous period, but of course, it affects our cash flow.
Related to the cost of debt, yes, exactly. We're -- we follow -- the major part of our debt coming from variable costs. So this is index basically in the Brazilian CDI and the benchmark also in Colombia, right? So of course, it affects us. But we're projecting a reduction like everybody in a different, let's say, in a slower pace, but we're projecting a reduction. This is very important because we see more room to a reduction also in our capital or in our cost of capital. But this is not something that concerns us. This is not our concern because we have a very low leverage of this company. I mean, we're talking about a company that is 1.4x net debt to EBITDA. Even if we include the pension fund of Sao Paulo, it is around 1.6x, which is very low. And I mean, this is something manageable.
As Enel Américas, we have this possibility to better choose the way we -- where we increase the debt of our company. Of our perimeter, we see that Brazil and especially Colombia, they are higher interest rates, but we can manage with this very low leverage level. So this is something that -- of course, we need to be very proactive also in the debt and liability management of this company, but something very, very manageable.
And last but not least, the disposal questions, the asset disposal question. We're seeing that -- well, as you know, we give all the information since our strategic plan of where we're advancing and we're very proactive in giving you from time to time information about this. From the Peruvian side, the Distribution business is advancing on the Antitrust front. And the Generation, we're -- as announced, we're advancing on the negotiation front. We expect it according to the time frame and the time line that usually move in this kind of transactions. We expect that this transaction may be concluded by the first quarter of next year.
Regarding the Argentinian assets, we're -- we launched the process, and we're expecting also in parallel, how the situation of the country evolves and to give you more color in the -- probably in the beginning of next year.
And also in Brazil, we're moving the process of our distribution in Ceará. We're analyzing and seeing especially the condition for renewable, concession renewal to have a more clear view of this process in analyzing the possibilities to give you more color of this process by the beginning of next year. So the process are -- they were launched. I repeat what I said in the previous call that, of course, we'll not sell the assets at any price. We will sell if it's in the right price, the correct price. So -- but we understand that this kind of situations in the countries can give more clarity of this process and we expect to give you a more clear view in the coming months.
Thank you. [Operator Instructions].
Okay. Gigi. We have received some questions by e-mail. The first 1 is related to -- this is from Andrew McCarthy, Credicorp. And the question is regarding Generation in Colombia. Andrew underlines that the results in the third quarter 2023 benefited from higher sales volumes and a strong price realizations. Considering the presence of El Niño and the position of your reservoirs, how are you approaching the commercial strategy in the fourth quarter 2023?
And the second question is, should this trend to pressure margins during the final quarter of the year end and into 2024? So commercial strategy in Colombia, taking into account the situation with El Niño and the position of our reservoirs in the country?
Thank you, Rafael. Thank you, Andrew, for your questions. Yes, we anticipated this. We're -- our reservoir, they are in a very good position in terms of hydraulicity compared to other regions in Colombia, as you mentioned, affected very strongly with El Niño. But we managed very well the reservoir by the beginning of the stations -- of the El Niño season. And also benefited from the position of our small hydro near the consumption area in Bogotá. So that's why we got -- we have this possibility to get these better results.
We expect that these better results -- well, you know that the season ends in the first quarter -- and in the first quarter of 2024, it will end the season. And when it ends, we probably -- it will be -- part of these impacts will be consumed by the Generation assets. But by the end of 2023, we expect to -- at least to maintain these benefits during this period. This is something that we cannot control, but the homework we did very well, as you well mentioned, because we entered in the season in the better position of hydraulicity, especially related to -- well, in the other side, we have the Distribution business, which affects the purchase of energy from the Distribution business.
But as I was explaining in the first question, this pass-through, its 2 months after the impact. So probably, you have a picture, a worse picture. But then you'll recover in the following 2 months. So this is something not -- and very fast, if you ask me. By the end of 2023, we'll have the -- probably the negative impact in the Distribution business, but in the other hand, compensated by the Generation business. And the negative impact in the Distribution business will be recovered in the first quarter of 2024.
So the Colombian assets we have this -- we have 2 important things here. First of all, you manage the reservoir. So we did a very good job in terms of El Niño, right, that we can save some months before the El Niño, the season ends. And on the other hand, we have this better or this fast recovery from the regulatory assets that compensates the distribution when we have a negative impact from the purchase side that we purchase energy, more expensive in the distribution side. So at the end of the day, this is a very good balance in the -- with the assets in the Colombia -- in the Colombia assets. I don't know if I answered...
No. No. Perfect. I think that you have a -- this is a very complete answer. Thank you very much Andrew.
Then we have a question from Scotiabank, Tomas Gonzalez. And the question is the following. It's about the liability management plan once the M&A transactions will be completed. And particularly, Tomas is asking about the plans for the Sao Paulo's pension fund and what are the strategy for Enel Américas in this regard?
Thank you, Tomas. Well, we still follow the same strategy since the beginning, right? We're working for derisk this plan, solving the -- removing the sponsorship. We do not have any change on this. We're facing some opposition from the unions on this, but we're pushing and we're moving forward in the -- probably in the next year, we'll -- well, we're starting to execute this strategy. But following that -- but the impact will be probably in the coming year.
Since -- Tomas, since we're moving lots of efforts, as I told you, also to manage this higher cost, we'll present our financial strategy and our initiatives in terms of liability management in the next -- when we'll publish our strategic plan. And I ask you to wait for the end of this month that we present in detail. But there's no -- I mean, no surprise or any issue related to this because we're moving exactly with this productivity in terms of liability management from one side. And in terms of pension fund, we're exactly moving in the same direction to reduce our exposure to the financial -- or to the pension funds, I mean, especially related to the time of the -- the discount rates, especially with life table of retire. I mean, this is not our business. So we want to derisk and execute the final derisk of this plan.
Thank you, Tomas. Thank you, Aurelio. Now let's move to BTG Pactual, Fernan Gonzalez's 3 questions. The first question is the following one. What are your thoughts of the recently published technical report that outlines the renewable distribution concessions in Brazil and in particular, the implications it may have on a real distribution concession?
Second question, any update in the stewardship model in Brazil, any progress being made?
And the third question from BTG Pactual, Fernan Gonzalez, of the total proceeds from the pending asset sales, how much will you actually get in cash after considering tax payments?
Okay. Thank you, Fernan, for the questions. Related to the concessions in Brazil, we're advanced a lot since you saw -- since we see the -- we saw the first proposal from the government, which was not let's say, a very good proposal. Then after all the public hearing and the discussions with the government, we -- the government reached a better proposal. Of course, this is preliminary, and it's been analyzed, but we have on the table, a very good proposal in terms of concession renewals. And we're confident that we'll move in the right way. I think the government is perfectly aware of the importance for the Distribution business and to have it -- balance it and also an attractive business for investments in Brazil in this area. The Distribution business needs investment, infrastructure needs investment. So its important and the government correctly adjusted their proposal. So we're confident that we're moving in the right way.
You mentioned Enel Rio and, of course, it's aligned with other distribution, which is light in Rio. We have a different situation in Rio regarding the losses in the city. Well, the good thing is that Enel and also the Minister of Energy -- well, there is an alignment that we have a different problem in Rio and all the technical analysis is moving in the correct way of analyzing this as a specific concession area, which is something that we do not have a closed proposal yet. You know that the order to move this is to have this total, let's say, this total for other concessions. The model very well framed and in parallel, establish a special model or special adjustments for the case of the concessions in Rio.
We're -- we still -- we reinforced our interest in the concession of Rio. We're -- and we're confident that we'll reach a good solution of this specific model for the concession of Enel Rio, especially in terms of areas of high complexity, let's say, or that we have lack of safety, especially where we have higher losses and the company cannot operate in these areas. That's the key issue. We know how to operate. We know how to reduce the losses. The problem is that there are areas in the state of Rio that we cannot operate. So we're confident that from the regulatory aspect, this issue will be addressed in the next period. So the government and also with the companies and with strongly technical and independent field will address this situation.
Well, second question was about the stewardship?
Sorry. Stewardship, we're advancing on this solution. We have a very good thing. We have a pipeline -- in our pipeline, 26 -- 25, 26 gigawatts of mature pipeline, which means that there are excellent projects that are good projects and we're executing 1.4 gigawatts. We enter into operation, 400 [ gigas ]. I mean, the figures -- they are sound figures. They are strong figures. And it makes sense to get -- to find a partner to do this alliance with us and to move forward with our projects. Why is it? This because we can do more, we can execute more of these good projects.
We're in a process of -- we have -- we're finding interest on these projects. Of course, it's notorious that the cost of capital is not in a very good moment, but it's cyclical. It's something that will improve in the coming months. So we're confident that -- again, here is something that we use the same thing that we spoke in the last conference -- in this conference. We will only sell the asset at the right price. Stewardship is nothing, but selling projects, selling assets at the end of the day. So of course, we're looking for a partner that pay the right price for our assets. If not, we'll take more time to get the better partnership that we want. We want a win-win approach. We are working for a win-win approach. What we can offer, all our proven track records in terms of executing projects, always been operating good projects, right? And last but not least....
The final one is about the pending asset sales, how much will you actually get in cash after considering tax payments in Peru?
Well, we already mentioned these figures, it doesn't change too much. But the tax -- the sale for the assets represents -- sorry, just 1 second. This is not -- the question is the total of distribution generation or....
Distribution?
Distribution. It's USD 2.9 billion, right, the total.
Okay. But he is asking about the tax rate -- the tax rate of the local Peruvian corporate asset?
29.5%, 30% more or less. Yes. Exactly. Yes. This is more or less -- this 30% over the USD 2.9 billion or USD 3 billion is USD 600 million. The tax for the distribution part and the generation part, we're still analyzing. But it's not different from what -- so different from what we announced since the beginning. Both assets we're talking about USD 5 billion, right?
Okay. Well, as there are no more questions. Thank you, Aurelio and we conclude the results conference call. Let me remind you that the Investor Relations team as usual is available for any doubt as you may have. Thank you for you attention. Thank you, Gigi, for you support in this call, and have a good day.
Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.