Aguas Andinas S A : Consolidated Earnings Release for Aguas Andinas as of March 31 2023

Aguas Andinas Earning Realease

First Quarter 2023

1. Summary of the first quarter

Aguas Andinas continues to strengthen its resilience, management and investment plans to face the effects of climate change, such as profound water scarcity

The Company continues to face the challenge of climate change. The deep drought and water shortage situation in the country, which has been going on for more than 14 years, continues.

In this context, water scarcity has continued to be managed by prioritizing water transfer agreements with the different stakeholders in the Maipo River basin, which has allowed covering one third of the demand of Santiago and maintaining an adequate level of security reserves in the El Yeso reservoir, which as of March 2023 reached a historic level of 192 hm3, in line with the Company's objective.

In addition, we have continued to invest in new sanitation infrastructure to expand and diversify the availability of supply sources, which at the end of the first quarter of 2023 amounted to $27,836 million. In this sense, it should be noted that this is the first summer that we have had the works of the new Lo Mena - Cerro Negro wells system, which provide a flow of 1,500 l/s to supply 400,000 customers in the southern area of Santiago, as well as the expansion and modernization of the Padre Hurtado Potable Water Treatment Plant, which adds 1,000 liters per second of water production, ensuring the supply of potable water during peak demand periods in the municipalities of La Reina, Ñuñoa, Providencia, Las Condes, Vitacura and Lo Barnechea.

It is also important to point out that during the past summer several episodes of turbidity were experienced in the Maipo and Mapocho flows, generated by convective rains and high temperatures, altering the normal operation of the potable water production plants. However, the supply in the city operated without major impacts, thanks to the activation of the operational continuity plan and the use of the operational backup infrastructure deployed as part of its resilience plan. These include the Pirque mega-ponds for the Maipo area and the San Antonio and San Enrique mega-ponds for the sector supplied by the Mapocho.

Aguas Andinas' consolidated results at the end of the first quarter of 2023 are in line with the Company's forecasts, confirming the consolidation of the trend that began in 2022.

Aguas Andinas maintains a sustained growth in EBITDA, reaching $100,417 million as of March 31, 2023, which represents an increase of 18.9% compared to the same period of the previous year. Likewise, it continues with a solid cash flow generation in the period, which has allowed keeping indebtedness aligned with the Company's objectives.

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The moderation in inflation growth in the first quarter of 2023 has positively impacted the Company's financial results

The accumulated inflation in Chile as of March 31, 2023 was 1.8% versus 3.4% as of the same date in 2022, which has a positive impact on the readjustment of the financial debt in Unidad de Fomento (UF), resulting in a lower expense of $7,810 million.

The Company has continued to drive its efficiency program based on the Transformation plan and, additionally, commercial actions to improve uncollectibility and debt recovery have yielded positive results

The Company is implementing a Transformation plan, with a vision of a new sustainable business model focused on mitigating risks, capturing efficiencies, prioritizing investments and incorporating technology, supported by a new organizational culture. In line with the above, initiatives have been developed to improve processes and digital transformation that have generated Efficiencies of $1,239 million at the end of the first quarter of 2023.

In addition, commercial actions to recover debt have allowed to reduce bad debt expense from a ratio of 3.4% of revenues in 2021 to 1.7% at the end of the first quarter of 2023.

EBITDA as of March 31, 2023 amounted to $100,417 million, an increase of 18.9% compared to the same period of the previous year. The main variations are shown in the following chart:

1. Higher sanitation revenues of $25,104 million, mainly associated with higher average tariffs of $23,371 million due to the latest tariff indexations by polynomial and the entry into operation of new investment projects as Trebal-Mapocho Nitrogens Biofactory and Cerro Negro - Lo Mena Wells. Also, higher sales volumes were recorded for $1,184 million (+1.4%), mainly explained by higher consumption of non-Residential customers by +2.9%, which is partially offset by lower sales to Residential customers by -0.5%.

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1. Finally, there was an increase in other income of $4,240 million, mainly associated with increased activity in home services to customers, modifications to sanitation infrastructure, sale of materials and non-sanitation subsidiaries.

1. The Company's costs have been increased by the inflation effect, mainly due to higher labor costs, construction materials, service contracts in UF and compensation adjustments. As of March 2023, the index accumulated an increase of 11.1% in twelve moving months. Additionally, operating costs for the entry into operation of new facilities and assets are considered, as well as the cost of sales associated with the growth of non-sanitation revenues.

1. Increase in energy costs of $1,707 million, mainly associated with the increase in the average price of the regulated tariff and the higher consumption associated with the company's new infrastructure.

1. Higher raw water transfer costs of $830 million necessary to continue facing the extreme drought situation that the region has been experiencing for the last 14 years and which in this first quarter has manifested itself with particularly low river flows compared to previous years.

The volume stored in the El Yeso reservoir was 192.0 hm3 as of March 2023 vs. 154.1 hm3 as of March 2022.

1. During the first quarter of 2023, there were 2 extraordinary operating contingencies (siltation of the independent intake, breakage of the Recoleta matrix), whose corrective costs amounted to $1,638 million.

It should be considered that the event in the independent intake is due to an external cause associated with the weather conditions, which during the summer season 2023, it manifested with an unusual combination of high amount of sediments and low flow of the Maipo River, a situation that has prevented the normal evacuation of sediments.

1. Within the framework of the Transformation plan that the Company is implementing, initiatives have been developed to improve processes and digital transformation that have allowed us to generate Efficiencies for $1,239 million as of March 31, 2023.
   In this regard, initiatives aimed at improving metering management, detecting leaks in networks, purchasing efficiencies, and commercial actions for debt recovery have been deployed, which have allowed to reduce bad debt expenses, from a ratio of 3.4% of revenues as of March 2022 to 1.7% at the end of the first quarter of 2023.

Net income as of March 31, 2023 amounted to $48,912 million. The main variations are presented in the following chart:

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At the non-operating level, there is a higher financial result of $8,713 million regarding the same quarter of the previous year, mainly associated with a lower revaluation of the financial debt due to the variation of the Unidad de Fomento (1.3% in 2023 versus 2.4% in 2022). It should be noted that the price-level restatement of the UF is an accounting impact with no significant effect on the Company's cash flow.

As of March 31, 2023, income tax was higher than the previous year of $7,863 million, mainly due to a higher result in income before taxes added to the inflationary effect of deductible permanent differences, the main difference being the price-level restatement of tax equity.

Cash Generation and Position. At the end of the first quarter of 2023, the balance of cash and cash equivalents was $193,150 million, increasing by $13,815 million regarding the end of 2022. The increase in this item is mainly explained by the higher operating cash flow for the period, which is partially offset by the payment of investments and debt repayments.

The company continues to maintain a robust cash position at the end of the first quarter of 2023, which will allow to ensure the development of the investment plan foreseen for this fiscal year.

Investments

To face the effects of the prolonged drought, which has lasted more than 14 years, the Company is developing a robust investment plan to ensure the security of supply standards committed for Santiago under climate change conditions.

As of March 31, 2023, investments of $27,836 million were executed, according to the following composition:

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