Enel Chile S.A. — FY2022 Form 20-F
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter filing; the supplied filing does not provide a clear set of Q4-only financial results. Financial statements are presented in Chilean pesos (Ch$) and prepared under IFRS as issued by the IASB. KPMG issued an unqualified audit opinion.
Business context and financial performance
Enel Chile generates and distributes electricity in Chile. At year-end it reported 8,408 MW of net installed generation capacity, approximately 2.1 million distribution customers, and 76% renewable installed capacity. Enel S.p.A. controlled 64.93% of the company.
| Metric | FY2022 | FY2021 | Change / context |
|---|---|---|---|
| Revenue and other operating income | Ch$4,956bn | Ch$2,855bn | Up 73.6% |
| Operating income | Ch$912bn | Ch$260bn | Operating margin 18.4%, versus 9.1% |
| Net income | Ch$1,309bn | Ch$101bn | Parent-attributable income: Ch$1,252bn |
| Financial results | Loss of Ch$119bn | Loss of Ch$157bn | Improved by Ch$38bn |
| Operating cash flow | Ch$745bn | Ch$413bn | Up 80.4% |
| Investing cash flow | Inflow of Ch$456bn | Outflow of Ch$737bn | Includes proceeds from asset sales |
| Financing cash flow | Outflow of Ch$629bn | Inflow of Ch$293bn | Included debt and interest payments |
| Cash and cash equivalents | Ch$875bn | Ch$310bn | Year-end balance |
| Total assets | Ch$11,866bn | Ch$9,500bn | Year-end balance |
Raw materials and consumables rose 69% to Ch$3,400bn, reflecting higher energy purchases and prices, fuel costs, and gas sales costs. The reported operating margin is affected by unusual 2022 gains and should not be treated as a purely recurring margin.
Debt, liquidity, and capital returns
Year-end gross consolidated interest-bearing debt was approximately Ch$4.0tn, including related-party borrowing. The company described net consolidated debt of approximately Ch$3.1tn, calculated using financial liabilities, related-party payables, cash and equivalents, and hedge derivatives; these figures use different debt measures. Interest-bearing debt maturities were concentrated after 2027 (Ch$2.293tn), with Ch$426bn due in 2023. The filing reports 84% of debt at fixed rates and 16% at variable rates.
Cash was Ch$875bn, and unconditionally available long-term credit lines were Ch$334bn. Current liabilities of Ch$3,168bn exceeded current assets of Ch$3,064bn, indicating negative working capital of about Ch$104bn. Management said it did not anticipate liquidity shortfalls and expected to refinance debt as it falls due. Contractual obligations totaled Ch$24.375tn, of which Ch$19.167tn was purchase obligations, mainly electricity, fuel, operations, and maintenance.
The board proposed a FY2022 final dividend of Ch$5.43073 per share, equivalent to a 30% payout, after a Ch$0.32409 interim dividend paid in January 2023. Shareholders approved the final dividend in April 2023.
Material changes and unusual items
- FY2022 net income and operating results benefited substantially from the December 2022 sale of 99.09% of Enel Transmisión: the company recognized a gain of Ch$982bn. Cash proceeds from the sale were reported at approximately Ch$1.229tn.
- Enel Generación amended its Shell LNG supply contract. Shell paid US$520m; the company recognized Ch$461bn as other operating income. The amendment reduced contracted gas volumes.
- Generation revenue nearly doubled, reflecting higher sales volumes and prices, gas sales, and the Shell agreement. Generation raw-material costs also rose sharply, including from higher spot purchases, fuel prices, and thermal dispatch.
- Operating cash flow improved, but investing cash flow turned positive principally because of divestiture proceeds; it does not represent recurring operating cash generation.
- The company completed its coal exit when Bocamina II closed in September 2022, following earlier closures of Tarapacá and Bocamina I. It also wrote off approximately Ch$53bn of abandoned thermal, hydroelectric, and geothermal project assets.
- Electricity sales were 32,120 GWh, up 13.8%; generation was 22,215 GWh, up 16.7%. Hydroelectric generation rose 26.1%, attributed mainly to better hydrological conditions. Generation-related purchases and spot prices nevertheless remained costly.
- Revenue from energy supplied but not yet billed was estimated at Ch$812bn at year-end and was identified by the auditor as a critical audit matter.
Outlook, risks, and contingencies
- Investment and transition: Planned 2023–2025 capital expenditure is approximately Ch$1.455tn. A renewable investment plan of US$1.1bn is included for that period; management expects about 1 GW of additional renewable capacity by 2025 and a 79% renewable share of net installed capacity. The company targets zero direct emissions and fully renewable generation by 2040.
- Market outlook: Management expects lower prices in 2024 as lower-priced generation contracts from earlier auctions take effect. A 2017 auction contract awarded to Enel Generation covers about 1.18 TWh annually at an average US$34.7/MWh. Enel Chile won no supply blocks in the 2021 or 2022 tenders.
- Price-stabilization and customer debt: Chilean price-stabilization laws defer recovery of generation receivables. The earlier US$1.35bn mechanism reached its cap in January 2022; a subsequent mechanism provides for up to US$1.8bn. Implementation delays and timing of repayment remain important, and receivables increased materially. COVID-era customer debt rules also require extended installment arrangements and may leave part of unpaid debt with distributors.
- Core operating risks: Prolonged drought can reduce hydro output, raise thermal dispatch and spot purchases, and expose the company to losses on supply contracts. Commodity prices, fuel availability, exchange rates, transmission constraints, and regulated tariffs also affect results.
- Other risks and contingencies: The filing identifies climate and extreme-weather exposure, regulatory change, political and constitutional uncertainty in Chile, project delays and cost overruns, cyberattacks, and litigation or regulatory sanctions. Enel Chile disclosed ongoing proceedings and fines, including disputes involving distribution service quality; management considers recorded provisions adequate. The report does not identify a single total quantified exposure for all proceedings.
- Governance and controls: Management and the auditor concluded internal control over financial reporting was effective at December 31, 2022. A material weakness identified in 2020 was reported as remediated.
Most important facts for investors to verify
- How much of 2022 earnings and cash generation is repeatable after excluding the transmission-sale gain and Shell contract amendment.
- The collectability, timing, and financing cost of tariff-stabilization receivables, including the implementation of the newer mechanism.
- Net debt and related-party borrowing definitions, upcoming maturities, covenant headroom, and continued access to committed credit.
- Whether planned renewable projects meet their budgets and schedules, and whether new capacity and transmission access support contracted sales.
- Hydrology, spot electricity prices, commodity exposure, and the effect of regulated tariff decisions on generation and distribution margins.
- The status and potential financial impact of material litigation, regulatory fines, and customer arrears.