Business context and reporting period
Enel Chile S.A.’s Form 20-F is an annual report for the fiscal year ended December 31, 2023, not a standalone fourth-quarter report. The company generates and distributes electricity in Chile. Its consolidated financial statements are prepared under IFRS as issued by the IASB, with Chilean pesos (Ch$) as the presentation currency. Enel S.p.A. owned 64.93% of Enel Chile at year-end.
Financial and operating performance
| Metric | 2023 | 2022 |
|---|---|---|
| Revenue | Ch$4.263 trillion | Ch$4.379 trillion |
| Revenue and other operating income | Ch$4.380 trillion | Ch$4.956 trillion |
| Operating income | Ch$767.8 billion | Ch$912.4 billion |
| Operating margin | 17.5% | 18.4% |
| Net income | Ch$680.0 billion | Ch$1.309 trillion |
| Net income attributable to Enel Chile shareholders | Ch$633.5 billion | Ch$1.252 trillion |
| Basic and diluted EPS | Ch$9.16 | Ch$18.10 |
| Operating cash flow | Ch$705.7 billion | Ch$744.8 billion |
| Investing cash flow | Ch$(86.2) billion | Ch$455.6 billion |
| Financing cash flow | Ch$(934.2) billion | Ch$(628.7) billion |
| Cash and cash equivalents at year-end | Ch$563.3 billion | Ch$875.2 billion |
| Total assets | Ch$11.834 trillion | Ch$11.866 trillion |
Current assets were Ch$2.371 trillion and current liabilities Ch$2.794 trillion, a working-capital deficit of about Ch$423 billion. Financial liabilities were Ch$2.520 trillion and related-party payables Ch$1.497 trillion; management’s disclosed net consolidated financial debt was Ch$3.3 trillion, after cash and hedge derivatives.
Operating data: net installed capacity was 8,478 MW, 77% renewable and battery storage; electricity generation was 24,122 GWh, up 8.6%, and sales were 32,847 GWh, up 2.3%. Hydroelectric output rose 25.0% to 12,208 GWh, while thermal generation fell 24.5% to 6,198 GWh. Distribution served about 2.13 million customers; electricity distributed was 14,356 GWh, down 18.1%.
Material changes versus the prior comparable year
- Total revenue and other operating income fell 11.6%; generation revenue declined 15.5%, while distribution revenue increased 3.9%.
- Operating income declined 15.8% and net income 48.1%. The year-on-year net income comparison was materially affected by 2022’s Ch$981.9 billion gain on the sale of Enel Transmisión Chile and Ch$460.7 billion of income from a Shell gas-contract amendment. In 2023, Enel Chile recorded a Ch$215.6 billion gain on the sale of Arcadia.
- Generation costs eased with lower energy purchases, fuel use and gas commercialization costs, alongside improved hydrology. Cash from operations decreased 5.4%; cash fell by Ch$311.9 billion during 2023.
- The company sold Arcadia, which held 416 MW of solar capacity, in October 2023. The 2022 sale of Enel Transmisión Chile also affects period-to-period comparability.
- Year-end cash dividends paid during 2023 were Ch$5.43 per share, compared with Ch$0.37 in 2022; these are dividends paid during each calendar year, not necessarily attributable to that year’s earnings.
Outlook, commentary, risks and unusual items
Management expects Ch$2.0 trillion (about US$2.3 billion) of capital expenditure in 2024–2026. Separately, it expects about 1.3 GW of additional net renewable capacity by 2026, taking renewables to 79% of installed capacity, with US$1.9 billion of renewable-project investment planned over that period. Los Cóndores, a 150 MW hydro project, was expected to finish in 2024. The filing does not provide a clear consolidated earnings or revenue forecast.
Management identifies hydrology and climate as important earnings drivers: drought can reduce hydro generation and require more expensive thermal output or spot-market purchases. El Niño brought severe flooding in 2023, delaying Los Cóndores, while management cited the prospect of hotter, drier conditions in the first half of 2024. Other material exposures include Chilean tariff regulation and delayed recovery of regulated-price stabilization balances, peso-dollar movements, fuel and power prices, transmission constraints, customer tariff switching, project execution, environmental rules, and cybersecurity. The company relies on subsidiary distributions to meet its own obligations.
Tariff stabilization laws have created substantial receivables and delayed cash recovery. The filing reports Ch$750.6 billion of non-current trade receivables associated with the mechanisms and Ch$595.1 billion of related non-current energy-supplier payables. Enel Chile also sells certain receivables, incurring financing costs.
The company targets zero direct (Scope 1) emissions and fully renewable generation by 2040. Its 2023 Scope 1 emissions were 3.13 million tonnes of CO2 equivalent, down from 4.85 million in 2022. However, in March 2024 the company reported an emissions intensity of 128 gCO2e/kWh, above its 2023 target of less than 100; this may increase interest by 5 basis points on sustainability-linked financing contracts totaling US$350 million as of March 31, 2024.
Other notable items: the board approved a final 2023 dividend of Ch$4.57921 per share, described as a 50% payout, in addition to the Ch$0.59781 interim dividend paid in January 2024. CEO Fabrizio Barderi resigned effective March 1, 2024; Giuseppe Turchiarelli was appointed permanent CEO effective May 1, 2024. KPMG gave unqualified audit opinions on the financial statements and internal controls. The auditor identified unbilled energy revenue of about Ch$1.053 trillion as a critical audit matter.
Most important facts for investors to verify
- Reconcile the reported Ch$3.3 trillion net consolidated financial debt with the balance-sheet debt, related-party payables, cash and derivative positions; review maturities, covenants and refinancing needs.
- Track the collection, financing cost and regulatory treatment of tariff-stabilization receivables, and the status of Chilean tariff-setting processes.
- Assess whether earnings comparisons normalize for the 2022 transmission-sale gain and Shell payment, and the 2023 Arcadia-sale gain.
- Monitor hydrology, spot-market exposure, renewable project timing, transmission availability and the planned completion of Los Cóndores.
- Verify the emissions-linked financing consequences, the 2040 transition investment requirements, and the assumptions behind management’s capacity and capital-expenditure plans.
- Review the Ch$1.053 trillion unbilled-revenue estimate, customer receivables and provisions. The filing reports Ch$236.8 billion of total provisions and discloses pending litigation and regulatory matters; outcomes and potential losses may differ from current estimates.