Enel Américas S.A.
Q4 2015 Earnings Call Transcript

Published: 3 Mar 2016

[Operator:]

Good day ladies and gentlemen, and welcome to Enersis America’s Full Year 2015 Results Conference Call. My name is Carmen and I will be your operator for today. At this time, all participants are in a listen-only mode to prevent background noise. [Operator Instructions] And as a reminder, ladies and gentlemen, this conference is being recorded. During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements could include statements regarding the intent, belief, or current expectations of Enersis and its management with respect to, among other things, Enersis’ business plans, Enegrsis’ cost reduction plans, trends affecting Enersis’ 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 Enersis and its affiliates. Such forward-looking statements reflect only our current expectations are not guarantees of future performance, and involve risk and uncertainties. Actual results may differ materially from those anticipated in the forward-looking statements as a result of various factors. These factors include a decline in the equity capital markets of the United States or Chile, 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 Enersis’ Annual Report on Form 20-F, including under Risk Factors. You may access our 20-F on the SEC’s website www.sec.gov. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of their dates. Enersis undertakes no obligation to update these forward-looking statements or to disclose any development as a result of which these forward-looking statements become inaccurate. Now I would like to turn the presentation over to Mr. Luca D'Agnese, Enersis America’s CEO. Please proceed.

[Luca D'Agnese:]

Good afternoon to everybody and welcome to our full year 2015 conference call results presentation. I am Luca D'Agnese, CEO of the Company and with me today is Javier Galan, the CFO, which will explain in detail our financial results. Please let me remind you that the presentation will follow the slides that are being already uploaded to our website. As always, we will have the usual question and answer session at the end of the presentation. Also let me anticipate to you that this presentation will show results for the entire Enersis. Let me offer that the split of Chilean activities from America is been effective starting February 2016, for that reason, we will also present some of the key figures separated between Enersis Chile and Enersis Americas without Chile. Now, on Slide number two, I will start by explaining the main updates for the period. During the fourth quarter of 2015, Enersis generated $900 million of EBITDA. Full year EBITDA result, there was $3.5 billion in line with the result of 2014. That result however was achieved despite an overall negative exchange rate impact in Brazil and Colombia for $384 million and the general slowdown of the economies in the continent. Excluding those impacts, operation EBITDA showed an increase of 10.5%. Net earnings of the company decreased 8.5% reaching on a per share basis 13.5 Chilean pesos, exceeding a total [Indiscernible] mainly thanks to better financial results. On a total, our Colombia generation subsidiary Endesa announced the initial generation test of over 400 megawatt of new hydropower plant El Quimbo. The plant entered into commercial operations in mid-November. The energy new generation of this power plant on a yearly basis should be approximately 2.2 terawatt hour with a load factor between 65% and 70%. In terms of clients connected to our networks we continue to grow organically at a good pace adding approximately 450,000 clients per year as we did in the last 12 months, - reaching a total of 15.2 million. And finally, let me remind you that regarding the reorganization process, the splits of the Chilean and American – was approved in the Extraordinary Shareholder Meeting held on December 18 2015. Following this decision since February 1st we have in Enersis Americas all the Latin American assets except Chilean ones. In Enersis Chile, only the Chilean assets. As you can see the result is slide number three in which we have the splits of the key figures of Enersis total in key figures of Enersis Chile and Enersis Americas. Here we show that the EBITDA level, Enersis Americas showed a decline in US dollars by 9%, which however is mainly due to the negative exchange rate effect. Without that effect, the EBITDA would have showed an increase of 5% in homogenous exchange rates. Enersis America currently represents about 70% of EBITDA and 62% of the net income of the total Enersis. While Enersis Chile which represents the other part, as you can see has shown a substantial growth in all earnings figures from EBITDA to EBIT to net income. Let me now give you some updates of the key drivers that under been this performance. From the macro scenario point of view, we operating countries that on average has shown a GDP growth with a significant slowdown in 2015 reaching an overall average growth in the five countries we operate of about 1%. This has been significantly affected by the negative performance of Brazil and by the lower growth in Argentina. However, the total energy demand on our network has been growing at a higher pace exceeding 2% as an average with specific very positive performance in Peru, significant growth in Argentina and Colombia as well. From the point of view of generation, in 2015, we have been able to hedge a significant proportion of our generation. We can see from the chart that the total of energy contracts that we have at the end of 2015 reached 81% of the total energy we have produced but exceed 90% Edesur Argentina in which generation is substantially regulated. Generation markets continue to show significant differences in terms of prices with Colombia particularly high because of the drought effect and Peru and Argentina significantly lower. Local currencies have been showing significant depreciation with respect to Chilean pesos, which has affected our results as we have seen especially, Brazil and Colombia with devaluations approaching 20%. Let’s now take a look to our main operational highlights under this scenario on Slide number 5. We can see that the installed capacity that we have in our generation has been increasing by about 400 megawatts because of the impact of El Quimbo which has added 400 plus a small increase in Peru due to the repowering of the Malacca’s power plant which added another 34 megawatts. Net production of the year has been more or less constant because of El Quimbo entering at the very end of the year and electricity sold to our customer has been showing a 1.6% increase and largely with the growth of demand in our network. While the number of customers has been growing at a higher rate of 3% underpinning the long-term potential for growth in electricity demand of the region. Now let me hand over the presentation to Mr. Javier Galán who will analyze the main financial highlights for the periods starting from Slide number six.

[Javier Galan:]

Thank you, Luca. Before commencing the key drivers of year 2015, let me update you on the most recent advance affecting also the accounting representation of this full year results. As you can see in the right-hand side of this slide, Enersis reclassified all its revenues and expenses from Chilean activities on the discontinued operations following the spin-off between Chilean and non-Chilean assets approved in the Shareholders Meeting held on December 18 of 2015 and formally executed on February the 1st. As a result of this, EBITDA reported excludes all Chilean activities. Taking this into account and in order to have a better general comprehension of full year results, we show in the left-hand side of this slide, the pro forma results of Enersis which with no split as if nothing has happened. The following slides will take into account this pro forma representation. The next release of results related with the first quarter of this year will be separated in accordance into Enersis Chile and Enersis Americas results. Now let’s move to Slide number 7 in which we analyze some important key drivers during year 2015. Revenues increased by 6% in 2015, thanks to the combination of higher energy sales compared to 2014 which increased 4% and higher prices of energy sold which increased at about 7%. Operating EBITDA excluding the translation exchange rate effect increased by 10.5% in 2015. Reported EBITDA including these exchange rate differences was flat compared to 2014. This is mainly explained by the good performance of the generation business which increased its EBITDA by 6.2%, thanks to Chilean operations mainly compensated by the distribution business which showed a decrease of 5.9%, mainly due to our Brazilian activities. Let me remind you that the overall Group EBITDA during the fourth quarter was almost $1.0 billion. Net income attributable to Enersis shareholders increased by 8.4% recording $1 billion in the year 2015. This was the result of the already mentioned good performance in generation and better financial results, which improved $361 million during the period. I will explain this concept more in detail later on. Net debt increased by 5.5% or $173 million, mainly due to exchange rate differences effect on total local debt, decrease -the debt decreased. As you can see, the Group has been able to maintain the overall EBITDA similar to the one of 2014 despite the negative impact of the exchange rate differences in Brazil and Colombia for $384 million. This has been portable, thanks to the good operational results in the generation segment in Chile and to a lesser extent, Colombia and Peru together with higher physical sales in our distribution business that increased by 1.6% versus last year, thanks to the continuous growth of our total client base. On the following slides, I will describe the EBITDA evolution on a country-by-country basis. In Chile, full year EBITDA increased by about 29% surpassing $1 billion in 2015. This was possible, thanks to the improvement of the generation activities mostly due to higher physical sales which increased by 2.4 terawatts hours compared to last year and a better average energy price - sales energy prices, better hydrology compared to 2014 Bocamina II generation and Gas Atacama full consolidation. This unit was acquired in April 22 of 2014 and during 2015, improved its results in $15 million versus last year. All of this made possible a result increase of 45% reaching an EBITDA of $790 million on the generation business. This positive effect together with a more stable distribution business more than compensate the premature effect of non-core activities sold last year, in particular El Melón, Ananya, for an amount of $63 million. Let me now focus your attention in the next slide in Brazil. In Brazil, EBITDA decreased by $358 million or 39.4% amounting to $552 million in 2015 compared with $910 million in 2014. This result already takes into account an FX conversion effect between the Brazilian real and the Chilean peso of $174 million. Excluding this effect, operating EBITDA decreased by 20.2%. The negative operational impact of $185 million was mainly related to plant. Our distribution company based in Rio de Janeiro mainly due to the following reasons, a reduction of energy sales which decreased energy sales by 131 gigawatt hour reaching 11.5 terawatt hours in 2015. This result is mainly attributable to the slowdown of the Brazilian economy and the tariff adjustments approved by the country’s electricity regulator agency ANEEL in March 2015 including the tariffs flag system which came into force in January 2016 on the extraordinary tariff revision. The increase in the energy losses of up to 20.9% from 20.1% in 2014 and the new regulatory cycle applicable to one plant which offers a relative lower allowed return compared with – that have entered already in the fourth regulatory cycle. Our generation activities were impacted by lower energy sales in Cachoeira Dourada for 688 gigawatt hours and lower prices on energy sales in Central Fortaleza. Meanwhile, the transmission line CIEN was mainly impacted by the FX conversion rate. Let me now move to Colombia in the next slide. In Colombia, current EBITDA decreased by 14.8%. This figure includes a negative foreign exchange conversion effect of $2010 million and the impact $210 million and the impact of the so-called wealth tax of $21 million US recorded in the first quarter of 2015. Excluding the negative FX effect, EBITDA would have increased by 1.7%. This increment is the result of the following. One, a better performance in the distribution business, which increased by 4.9% in spite of the work tax in Codensa for $8 million, thanks to a national demand growth of 4.1% and a higher number of clients which increased by about 93,000 reaching 2.9 million clients. Energy losses remained stable versus last year at around 7.3%. Secondly, on the other hand, the generation business in local currency repeated the same good results of last year and in an environment of very low hydro consolidation related with a linear phenomenon which in the case of Colombia causes lower precipitations. This phenomenon began in 2014 and has intensified its effect during the last quarter of 2015 and it is expected to continue until the end of the first half of 2016. Under these circumstances, our generation company Emgesa increased its energy sales by 1.1 terawatt hour at higher prices which were indexed to higher producer price index. This was the main factor of explaining higher revenues of about 24% in local currency. Next slide in Peru, Peruvian EBITDA increased by 8% reaching $537 million. The business continued to grow at a solid rate mainly thanks to the increase of the electricity energy demand by 4.2 % in our concession area, the number of clients acquired during the period close to 43,000 new clients, on the improvement of the energy mix where hydro production increased by about 5% versus last year. A result of this, generation EBITDA increased by 2.6% due to the better average sale prices index to US dollars in spite of lower physical sales of 0.7 terawatt hour and in distribution EBITDA, which increased by 16%, thanks to higher physical sales which increased 0.3 terawatt hour reaching 7.3 terawatt hour as of December 2015. Finally, let’s move to Argentina in Slide number 13. EBITDA in Argentina increased by $277 million reaching $314 million in 2015. Distribution business increased by $240 million. This was possible, thanks to the temporary resolution number 52 implemented on March 11, 2015 dedicated to pay operating costs and investments associated to the distribution service. This temporary increase over the, revenues was enacted in February the 1st 2015 and did not implied a tariff increase to find new clients. On the generation side, the improvement of $36 million is related to higher energy sales in our hydro plant El Chocón, due to general better hydro conditions during 2015 on a better average, sales price in connection with the resolution number 482, which updated the existing cost plus regulation conditions coming from resolution and 5th of March 2015 and resolution 529 of Mary 2014. Let’s now have a look to the main factors determining the net attributable income on the next slide. EBITDA and EBIT were in line with 2014 results and attributable net income increased by 8.4%. This is explained mainly by an important decrease of $361 million in financial results which decreased by 90% compared to last year. This was mainly due to the following factors,, one, a positive impact of IFRIC 12 restatement in Brazilian distribution companies of non-amortized assets at the end of the concession of $162 million, two, a positive exchange rate effects on the debt denominated in local currencies, difference to Chilean peso, that compensates a slight increase of higher costs of financial debt in Colombia and Brazil. And the one-off impact of lower expenses from exchange rate differences mainly explained by the dealer polarization of – stable related to Argentina assets of $2016 million. Finally, the effective tax rate during the period was 35.6% compared to the 32.5% registered in 2014 mainly due to higher results in Chile combined with a higher tax rate of 22.5% compared with 21% in 2014, the rise from the tax reform and the taxable income in Chocon due to higher income of Bossa effect. Now focus your attention on the capital expenditures structure on Slide number 15. Investment were $2.1 billion for the period. This figure takes into account an FX conversion effect against US dollar. Excluding this effect, investments denominated in Chilean pesos increased by 25% or $420 million mainly in Colombia due to the El Quimbo finalization in Brazil due to the distribution regulated activities and in Chile due to – and Bocamina II. Growth CapEx which represented top of the total investments increased by 34% and maintenance CapEx increased by 3.8%. With all these elements, the cash flow and the net debt evolution during 2015 in the following slides. During 2015, funds from operations amounted to $2.8 billion after tax payments and financial expenses. This amount covered both maintenance and growth CapEx for $2.1 billion. The cash flow after dividend paid for $955 million was a slightly negative and equal to $260 million. Taking into account this free cash flow evolution, let me explain the net debt evolution on the next slide. During the year, net debt increased by 173, during this year the net debt decreased by $173 million or 5.5% from $3.1 billion to $2.9 billion, mainly due to the positive FX impact of our debt denominated in local currency. Finally, let me give you an overview of the gross debt and maturity profile in the next slide. As of December 2015, gross debt amounted to $4.9 billion, 20% lower if compared to December 2014, mainly as a result of the exchange rate effect and some loans repayments with cash amounting to $166 million. The average cost of debt increased from 8.3% to 8.7% due to higher interest rates and inflation in Brazil and higher interest rates in Colombia, partially compensated with a lower cost of debt in Chile. Total liquidity amounted for $3.2 billion, allowing us to easily service our outstanding debt through 2017. This liquidity position includes committed and uncommitted credit lines of $1.2 billion and cash and cash equivalents of $2 billion of which, 1.2 are related to the capital increase. Our short-term maturities are $0.9 billion for 2016 and $0.6 billion for 2017. Let me now hand over to Mr. Luca D'Agnese for the final closing remarks in the next slide.

[Luca D'Agnese:]

Thank you, Javier. As a plus point, let me underline again the resilient performance that our company has shown in 2015 in a challenging economic environment in the region. This performance makes us confident in pursuing our plan, to deliver the efficiency and improvements in line with targets that we already made public for 2016. We are going now to follow very closely some of the important evolutions we see in the region, especially, the important regulatory changes that are expected and partially have already occurred in Argentina as we are going to continue our scouting activity in the region and especially in Brazil. We are going to maintain our investment plan focusing hydropower plant in Chilean generation and the network’s quality improvement across the region especially in countries outside Chile. In the first part of the reorganization process, we have already approved the splits of the two companies on December 18 and from February 1; the split was actually made effective by creating Enersis Chile from Enersis America. Finally, on the corporate governance side, the new Board of Directors that were designated on the General Assembly of December 18 have started to operate and called a next General Assembly for the two companies on April 28. Now I thank you very much and with this, we finalize the description of the 2015 full year results. Operator, we can now proceed with the question and answer session.

[Operator:]

Thank you. [Operator Instructions] And our first question is from the line of Enrico Bartoli from MainFirst. Your line is open.

[Enrico Bartoli:]

Hi, good afternoon everybody. A few questions on my side. First of all, regarding Brazil. If I write – also the unit margins in Reais in the fourth quarter were significantly down compared to last year. Could you please elaborate a bit on this dynamic? And regarding Ampla, you mentioned the tariff revision that you return, but could you remind us please what is the new return and if in Reais terms if the 2015 level on margins can be considered sustainable or at least they can be taken as a reference also for 2016? Then I have a question regarding Argentina, could you please quantify the impact on revenues from the resolution 32 on Edesur and what are you – what is your view about the impact in 2015 from the discussion, the possible revision of the tariff? And finally, could you give some sensitivity on your sales – committed sales in the power generation business, particularly in Chile, Colombia and Peru, the sensitivity to US dollar. So which portion of the volumes have some kind of link to the US dollar and what could be the sensitivity there on prices? Thank you.

[Luca D'Agnese:]

Okay, let me start with some of the answers to your question and then, we will completed the answers with the help of Javier. First, your questions about margin in Reais being significantly lower in the last quarter of 2015 versus 2014, we have to highlight that the last quarter of 2014, so a one-off effect from the recognition in the margin what’s called the regulatory aspect which is basically tariff deficit which the authority will recognize to operate and its recovered in the following years from the cash flow point of view with the system of tariff flex. This effect was accounted in the fourth quarter of 2014 and of course it’s not repeated in the last quarter as we see it. From the point of view of how we see the returns in Brazil, as we pointed out, Ampla is operating from being at the first year of the regulatory cycle combined with a negative evolution of the economic environment, a slowdown in demand, and therefore all the effects have been quite negative. We expect the regulatory situation to slightly improve in 2016 while the economic situation to remain quite challenging. Therefore, we expect the 2016 for Ampla to somehow consolidate that for four months that we have seen in 2015 in a while we expect significant growth in the following years. From the point of view of Argentina, the effect of resolution 32 explains basically the entire growth of EBITDA from 2014 to 2015. This resolution – the impact of this resolution has been more or less confirmed by the new definition of tariff that the government has made for 2016. Therefore, we expect the EBITDA of distribution to be more or less in line with the one we had in 2015 while waiting for the new definition of the tariff we had in the so-called the integral tariff review that the government has announced for the end of the year. From the point of view of the connection of generation revenue to the exchange rate in Chile, we have the generation revenue are 100% connected to US dollars. In Peru there is substantial connection to US dollar as well, while in Colombia generation revenues are in local CapEx. I don’t know whether we have some specific elements that we need to like the return on – but we have that you were asking a specific comment.

[Enrico Bartoli:]

Yes, please.

[Javier Galan:]

In terms of the Ampla, Ampla is on the third cycle on the remuneration real interest after taxes 7.5% compared with the fourth cycle remuneration which is 8.1%, which the remuneration that that’s equal.

[Enrico Bartoli:]

Thank you. And sorry, just the very last, on the power generation prices, any link to the oil price in addition to the currencies?

[Javier Galan:]

We do have a small proportion of our Chilean prices linked to commodities. We have a basket of commodities that are included in that – including gas price, score price and oil price, but they represent as that as more proportion of the total revenues, the largest proportion is indexed to the US inflation.

[Enrico Bartoli:]

Thank you very much.

[Operator:]

And our next question is from the line of Ezequiel Fernandez from Scotiabank. Please go ahead.

[Ezequiel Fernandez:]

Hello, everybody and thank you for taking my questions. First, I would like to ask about Chilectra. I connected a little bit later in the call, I don’t know if you made a comment on this or not. Is it related to the regulatory changes that the Chile Congress is bloating I wanted to know if the new law will apply to this guidance review the upcoming one for Chilectra or to the next one in 2020 to get a sense of when the C&E in Chile could start the revision. If you give us an idea of the calendar and what is your expectation for the new regulatory walk or regulated returns for Chilectra and then, if you wouldn’t mind, I will follow-up with another question on Brazil.

[Javier Galan:]

Okay, so about Chilectra, we done expect significant changes aside from the periodic revision of the distribution value assets. We expect this to maintain the typical stable trend for our EBITDA in Chilectra. I have to underline that in Chile, the regulation is not based on the regulatory return on a regulated asset base, - of the so-called model enterprise in which there is a range of allowed return of – actually the return is basically coming from the ability of the company to beat the target of a model cost by the regulator. Typically, the return for enterprises like Chilectra are in the range between 10% and 15% on actual asset.

[Ezequiel Fernandez:]

Okay, perfect. Thank you. And when do you think that the Chilectra revision could start the upcoming one, is it on this year or maybe is getting another bit delayed?

[Luca D'Agnese:]

The typical review we have in the year actually was there will be a revision that we expect in 2016 although we do not have feasibility on the date. The general review you are talking about the one which is going through the Congress there are interim proposal by we don’t have a visibility on when this is going to be implemented.

[Ezequiel Fernandez:]

Okay, great. Thank you and my question about Brazil, is you mentioned that we will probably see – we still see EBITDA kind of soft in 2016 during this year, is this related to continued problems with the pass-on to customer at the higher energy cost or is it for some other specific reasons?

[Luca D'Agnese:]

No, the high energy cost will impact, they all be marginally our EBITDA in a sense that ANEEL has made clear that they day one to eliminate orat least compensate throughout the year and they got extended it. This is recognized that being probably end of 2014 as I say it’s already in EBITDA, so the energy cost is affecting our income only and on an indirect basis in the fact that customers pay more are actually typically paying less on time and so we are suffering from the point of view of that asset and somehow also related to energy losses. This is an indirect effect. The direct effect is more the reduction in demand, when it maybe associated that also the prices but more generally to economic prices which has been heavily impacting the industrial segment.

[Ezequiel Fernandez:]

Okay, thank you very much.

[Operator:]

Thank you and our next question is from the line of Charles Fishman from Morningstar Research. Please proceed.

[Charles Fishman:]

Thank you. I just wanted to confirm the income tax rate. As I look at the consolidated financials for this year, it looks like the book taxes were around 40% but I believe you said the effective tax rate for Chile after the tax reform was going to be – was 22.5%. Did I understand that correctly?

[Javier Galan:]

See, the only thing – tax rate is 22%, that was – the increase on the tax reform of last year. You take into account that we are consolidating results for sample in Colombia we have a higher tax rate close to even above 35%.

[Charles Fishman:]

Okay, so going forward now, after we – the complete separation of the companies and you are just reporting on Nurses Americas as an analyst, should we be thickening in terms of an effective tax rate for modeling purposes of the 22.5% going forward.?

[Javier Galan:]

I mean, as we have a 25% in total when we separate businesses, Chile would have shown tax which will be more related to the 22% and the rest will have higher tax.

[Charles Fishman:]

Okay, okay, thank you.

[Operator:]

Thank you and our next question is from the line of from [Indiscernible]. Please go ahead.

[Unidentified Analyst:]

Hi, thank you for the presentation. I have just one question about the debt and specifically the bond, the USD bond that matures at the end of the year. I would like to know what’s the plan for that and actually, also what’s the plan for the US bonds in Chile?

[Javier Galan:]

We have at Enersis, in this case will be at Enersis, maybe we have a debt maturing on November and we have not yet made an internal proposal, but initial thought is that we will renew this debt on the market when it comes at the time.

[Unidentified Analyst:]

Okay, okay, and for the US bonds in the local debt market in Chile?

[Javier Galan:]

We don’t have maturities this year. We don’t have maturities this year. Depending on the cash flows of the business itself, we will pursue a very similar policy that we have been looking- doing in the last years. If we need to go through and maintain the bonds on the – we will think the appropriate moment to distribute in the market.

[Unidentified Analyst:]

Okay, thank you very much.

[Operator:]

And our next question is from the line of Rodrigo Mora from Moneda. Please go ahead.

[Rodrigo Mora:]

Hey, thank you for taking my question. I have a question related to financial situation in Ampla seeing the financial statement, Ampla received an inter-company loan from ANEEL Brazil around 870 million reais. I would like to know what kind of action the management – Ampla’s management is taking to resolve this situation.

[Javier Galan:]

Of course, we are following very closely the situation in Ampla, which combines an important cash deficit coming from the economic environment in which we operate. At the same time, we then need – of important growth in investments to recovery quality, that’s why we are supporting this program that is essential to restore profitability and bring EBITDA, actual EBITDA closer to the regulator EBITDA that the company will be allowed in which the difference is heavily impacted by penalties and customer claims for bad quality. Therefore we are supporting the quality increases throughout this investment program that will take its peak throughout the year 2016 and 2017 and we expect at the end of those two years, the performance of the company to be improved in a very significant way. At the same time, we are taking actions to reduce cost, personnel in the company is going to be reduced already towards the end of 2014, - 2015, sorry, and we have a plan to do a similar reduction in 2015, 2016, sorry concentrated in the support functions and overhead, at the same time, we are monitoring very closely the situation of customer that specially governments in which of course, the late payments from government entities has been impacting the cash flow of the company. The situation has been somehow of – customer collection has been somehow stabilizing in the month of February. So we can see effects of these recovery programs in both our cost side and our cash flow side. We however consider that Ampla will continue to undergo a phase of negative overall cash flow for the impact of these investment programs for the following months at least at the end of – at least throughout the end of the year.

[Rodrigo Mora:]

Do you expect that this inter-company loan will be – Ampla will be able to paid for the next years, pay back to ANEEL Brazil or do you expect that this inter-company loan probably would be capitalized in Ampla?

[Javier Galan:]

No, we do not expect so. We expect the situation as we said to return with the company starting to pay this back from the end of 2017, as we said.

[Rodrigo Mora:]

Okay and thank you. I have another question related to the situation in Argentina. If I see the – this year Argentina in these two regions, what do you expect in terms of tariffs for this year, maintain the situation last year or maybe it will change at the middle of this year or at the end of this year?

[Luca D'Agnese:]

Well, first, the new tariff level that’s been starting from February as it’s decided by the government, as I say, there was more or less in line with the overall revenue that we had in 2015. However, with a significant difference being the fact that I was speaking about of course in, say, constant inflation-adjusted level. Of course, the level of revenues however being the same, the composition that will be total entirely different because while in 2015, most of the revenues was coming from government grants, now most of the revenue will come from actually customer paying to this, which we consider a much healthier situation for a distribution company. What we are expecting for the end of the year is, review of the tariff which however, we do not see having a significant impact in 2016, most of that impact being in 2017 seems, we expect these to take place all in the last month of this year.

[Rodrigo Mora:]

Meanwhile, the CapEx investment interest will maintain the same amount in Argentinean Pesos?

[Luca D'Agnese:]

I think the amount in Argentinean pesos is probably going to be higher. I think, we will maintain between constant and slight decrease in our currency, the investment we see for 2016.

[Rodrigo Mora:]

Okay, thank you. One question please. Is – regarding the both shares, Enersis Chilean and Enersis America, when do you expect both shares are starting to list at the stock market?

[Luca D'Agnese:]

Well, our target is to have the shares listed by the end of March. We hope we will be able to keep with this target. However, we cannot confirm this for positive. This is the program we are working on at the moment.

[Rodrigo Mora:]

Okay, thank you very much, Mr. D'Agnese. End of Q&A

[Operator:]

And ladies and gentlemen, this concludes our Q&A for today. I would like to turn it back to Mr. D'Agnese for fhinal remarks.

[Luca D'Agnese:]

Well, let me just thank you all very much for your attention and for your questions. Remember that our Investor Relations team will be glad to assist you in any further questions you may have.

[Operator:]

Ladies and gentlemen thank you for participating in today’s conference. This concludes the program and you may all disconnect. Have a wonderful day everyone.