Enel Americas S A : Américas Financial Statements Analysis 9M 2020

PRESS RELEASE

FINANCIAL STATEMENTS ANALYSIS

AS OF SEPTEMBER 30, 2020

PRESS RELEASE

CONSOLIDATED FINANCIAL STATEMENTS OF ENEL AMÉRICAS GROUP

AS OF SEPTEMBER 2020

(numbers expressed in millions of US dollars)

• Cumulative revenues as of September decreased by 19.4% as compared to the same period of last year reaching US$ 8,521 million explained mainly by lower revenues in the four countries where we operate. In quarterly terms, comparing the 3rd quarter of 2020 and the 3rd quarter of 2019, we can see a fall of 15.8 % to US$2,820 million.
  In cumulative terms, the fall is mainly explained by lower revenues in Brazil and Argentina due to the extraordinary recognition of US$ 248 million last year because of the agreement signed between Edesur and the Argentine State for outstanding claims. Added to this is the impact of currency devaluation of US$ 495 million in the 4 countries and a reduction in demand due to COVID-19. In quarterly terms, the lower revenues are mainly explained by Brazil, mainly affected by the devaluation of the Brazilian Real.
• In cumulative terms EBITDA decreased by 26.1 % reaching US$ 2,196 million, explained mainly by the above-mentioned 2019 extraordinary effect in Argentina, a lower EBITDA in Brazil and the negative impact of currency devaluations. Without the extraordinary 2019 effect and isolating the exchange rate effect, EBITDA would have decreased by 1.1%.
• In quarterly terms, we can see a 19.5 % drop reaching a US$ 725 million EBITDA, mainly explained by the fall in Brazil mostly from the exchange rate effect and to a lesser extent in Colombia and Peru. Without these effects, EBITDA would have fallen by 2% during the quarter.

			EBITDA (million US$)
	Country	Accumulated figures		Quarterly figures
		9M 2020	9M 2019	%	3Q 2020	3Q 2019	%
	Argentina	138	431	(67.9%)	40	29	36.7%
	Brazil	829	1,193	(30.5%)	291	428	(32.0%)
	Colombia	892	959	(7.0%)	291	323	(9.8%)
	Peru	357	411	(13.1%)	112	130	(14.4%)
	Enel Américas (*)	2,196	2,971	(26.1%)	725	901	(19.5%)

(*) Includes Holding and Adjustments

• Cumulative Operating Income (EBIT) decreased by 36.0 % as of September and 30.7% during the quarter, reaching US$ 1,383 million and US$ 481 million respectively, mainly explained by the fall of EBITDA.
• Cumulative Net Income attributable to the parent company reached US$ 487 million, 40.8% less than in the same period of 2019. At a quarterly level, the fall was 31.6%. In both cases it is explained by lower operating performance, partially offset by better financial results and lower tax payments.

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PRESS RELEASE

FINANCIAL STATEMENTS ANALYSIS

AS OF SEPTEMBER 30, 2020

• Net financial debt reached US$ 4,244 million, 1.0% less than at the end of 2019, mainly explained by decreases in Enel Sao Paulo, Emgesa and Enel Río, offset in part by an increase in Enel Américas holding. The decrease is mainly explained by the devaluation of currencies, reaching an impact of US$ 1,188 million at the level of gross debt.
• CAPEX for the first the nine months reached US$ 981 million, 8.9% less than in the same period of the previous year, explained mainly by the effect of currency devaluations. Apart from said effect, CAPEX increased by US$ 93 million, largely explained by investment increases in distribution companies in Brazil and Codensa.
• CAPEX for the quarter reached US$ 381 million, 2.4% more than in the 3rd quarter of 2019. If we put aside the exchange rate effect, CAPEX increased by 25% or US$ 93 million mainly due to increases in distribution companies in Brazil, especially Enel Goiás.
• As for the current situation arising from COVID -19, in the third quarter we saw a recovery in terms of demand and collectability in relation to the previous quarter. The impact from COVID-19 during the quarter was US$ 195 million at EBITDA level, considering both the Distribution and Generation businesses. Our Company continues to do its best to maintain its operations, protect its workers and assist the community with various solidarity measures.

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PRESS RELEASE

FINANCIAL STATEMENTS ANALYSIS

AS OF SEPTEMBER 30, 2020

SUMMARY BY BUSINESS SEGMENT

Generation

The generation business segment registered a 16.0% decrease in EBITDA as compared to the same period of the previous year, reaching US$ 994 million. This is explained by lower results in the 4 countries especially in Brazil due to lower energy sales. Added to this is the US$ 164 million effect of currency devaluations with a negative impact. Isolating this effect, EBITDA would have fallen by 3.4% in relation to the previous year.

In quarterly terms, EBITDA in the 3rd quarter reached US$ 332 million, 11.3% less than in the same period of 2019, due to lower results in Argentina in addition to the exchange rate impact. Isolating the latter effect, EBITDA would have fallen by 5.4%.

Physical Data

			9M 2019	9M 2020	Var %	3Q 2019	3Q 2020	Var %
		Total Sales (GWh)	54,396	49,378	(9.2%)	19,548	17,583	(10.1%)
		Total Generation (GWh)	31,418	30,219	(3.8%)	12,140	11,050	(9.0%)

Distribution

EBITDA in the distribution segment was 31.7 % lower than in the same period of 2019, reaching US$ 1,268 million; explained mainly by the extraordinary regulatory agreement of US$ 248 million signed by Edesur and the Argentine National State for pending claims.

Furthermore, the exchange rate effect had a US$ 341 million negative impact and lower sales were also recorded in the 4 countries. Isolating the one-off event and the exchange rate effect, EBITDA would have maintained flat.

In quarterly terms, EBITDA in the 3rd quarter reached US$ 415 million, 24.8% less than in the 3rd quarter of 2019. Isolating the exchange rate effect EBITDA would have fallen by

0.6%.

The consolidated number of customers showed a 1.8% increase while physical sales fell by 5.7% during the semester and 4.5% during the quarter.

Physical Data

			9M 2019	9M 2020	Var %	3Q 2019	3Q 2020	Var %
		Total Sales (GWh)	90,093	84,932	(5.7%)	30,230	28,883	(4.5%)
		Number of Clients	25,149,761	25,594,703	1.8%	25,149,761	25,594,703	1.8%

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PRESS RELEASE

FINANCIAL STATEMENTS ANALYSIS

AS OF SEPTEMBER 30, 2020

FINANCIAL SUMMARY

The Company's available liquidity has remained strong, as shown below:

• Cash and cash equivalents	US$ 1,605 million
• Cash and cash equiv. + cash investments over 90 days	US$ 1,687 million
• Available committed lines of credit *	US$ 817 million

1. Includes two lines of committed credits between related parties. One of them for US$ 142 million of Enel Brasil with EFI and fully available and another for US$ 150 million of Enel Américas with EFI and fully used.

The average nominal interest rate in September 2020 decreased to 4.8% from 7.3% during the same period of the previous year, primarily affected by lower debt costs in Brazil as a result of the payment linked with the purchase of Enel Distribución Sao Paulo, better rate conditions in debt refinancing in Brazil, Colombia, Peru and the Holding and a reduction in rates associated with variable debt rates in Brazil.

Hedging and protection:

To mitigate the financial risks associated with foreign exchange rate and interest rate fluctuations, Enel Américas S.A. has established policies and procedures aimed at protecting its financial statements against the volatility of these variables.

• Enel Américas S.A. (consolidated) foreign exchange rate risk hedging policy establishes that there must be a balance between the index currency of the flows generated by each company and the currency in which they assume any type of debt. Therefore, the Enel Américas Group has entered into cross currency swaps of US$ 590 million and forwards of US$ 326 million.
• To reduce the volatility of the financial statements stemming from interest rate changes, Enel Américas Group keeps an adequate debt structure balance. To achieve the above, we have entered into interest rate swaps totaling US$ 142 million.

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