Aguas Andinas S A : Consolidated Earnings Release for Aguas Andinas as of March 31 2022

Aguas Andinas Reasoned Analysis

First Quarter 2022

1. Summary of the exercise

Aguas Andinas is focused on the management and mitigation of climate change impacts.

The Company continues to face the challenge of climate change. The profound situation of drought and water scarcity in the country, which has been going on for more than 13 years and has deepened in the last 3 years, continues to strongly affect the availability of river flows that supply the city, the Maipo and Mapocho Rivers, which in the current summer 2022 have seen their flows reduced by 70% to 80% regarding averages of the last 10 years. Both rivers maintain the condition of Shortage Decree granted by the regulatory authority.

The above situation raises the need to consider that we are in the presence of a structural change in the condition of the water sources, which is beginning to be irreversible. In this context, the Company has continued to make a significant operational, financial, technical and human effort to maintain the city's water supply.

In recent years, a major action plan has been deployed to address water scarcity and the effects of climate change:

1. Signing of a historic collaboration agreement with the Irrigation Associations of the First Section of the Maipo River that establishes a series of measures to lay the foundations for a solution that reinforces the supply of water to the population and, at the same time, the use necessary to sustain the agri-food industry, improving the water efficiency of the basin.

1. New Lo Mena - Cerro Negro well system, which will provide a flow of 1,500 l/s to supply 400,000 customers, which is currently more than 95% complete.

1. Modernization and expansion of the Padre Hurtado Potable Water Plant, which supplies more than one million people.

1. Expansion of the Quilicura Potable Water Plant to increase water availability in the northern sector of the capital.

1. Modernization of the Vizcachitas plant, generating greater efficiency in water consumption due to the implementation of new filters.

1. New ponds in San Antonio, San Enrique, Talagante and Parque Bicentenario.

1. Water efficiency plan, with deployment of all available technologies for water recovery.

Likewise, actions have been carried out to raise awareness and sensitize the public on the importance of caring for water, such as the "Every drop count" communication campaign, with a call to modify behavior in favor of the environment and responsible consumption, which has led to a decrease in residential and municipal consumption in the first quarter of the year.

In this context, the Company has continued to manage water scarcity by prioritizing water transfer agreements with other users, which has allowed it to ensure supply during the summer of 2022 and maintain the security level of the El Yeso reservoir at 154.1 hm3, in line with the Company's objective.

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In order to face this emergency, the Company has maintained its investment efforts, executing an investment plan that reached $26,214 million during the first quarter of 2022.

Basic Services Law:

On February 11, 2022, Law 21,423 was published in the Official Gazette, which partially solves the debt incurred during the Covid-19 pandemic by sanitation service customers in a more vulnerable situation and who have an average consumption of no more than 15 cubic meters of potable water per month. The debt and subsidy will be prorated in 48 monthly and successive installments. Each installment may not exceed 15% of the average monthly consumption. The portion of the debt not covered by the subsidy will be extinguished, which will be recognized as a tax accepted expense.

Global context and operational costs:

In the current context of extreme drought, generalized increase in the costs of raw materials, labor and transportation, the Company has experienced higher operating costs at the end of the first quarter of 2022, mainly associated with the purchase of water due to the effects of the drought, and maintenance of networks as a result of the significant increase in customer requirements and workload, together with higher prices due to the increase in labor costs, construction materials, service contracts in UF and compensation adjustments.

In addition, the significant increase in the CPI of 3.4% had a negative impact on our financial costs associated with the readjustment of the UF debt.

EBITDA as of March 31 2022 amounted to $84,426 million, an increase of 3.4% compared to the previous year. The main variations are shown in the following chart:

EBITDA Evolution (Million of $)

+3.4%

81,656

Sanitation income	Cost increases due to CPI and new assets	Impacts drought	Network maintenance and repair	Uncollectible	Efficiencies	Others

84,426

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1. Higher sanitation revenues of $13,174 million, mainly associated with higher average tariffs of $15,814 million due to the latest tariff indexations by polynomial and the entry into operation of new investment projects (La Farfana Nitrates and Aguas Cordillera safety ponds). However, lower sales volumes were recorded for $2,819 million, mainly explained by a decrease in sales to residential customers by -3.9%, which is partially offset by higher sales to non-residential customers by +1.7%.

1. The Company's costs have been increased by the CPI, mainly due to higher labor costs, construction materials, service contracts in UF and compensation adjustments. As of March 2022, the index accumulated an increase of 3.4% in the first quarter and 9.4% in 12 months. Additionally, operating costs for the entry into operation of new facilities and assets are considered.

1. Higher raw water and electric power purchase costs of $1,961 million necessary to continue facing the extreme drought situation that the region has been experiencing for the last 13 years.
   It is important to note that the volume stored in the El Yeso Reservoir as of March 2022 was 154.1 hm3 vs. 173.8 hm3 as of March 2021. Also, in August 2021 a historic collaboration agreement was signed with the Irrigation Associations of the First Section of the Maipo River, which includes commitments to develop a Master Plan for the Management of the Maipo River Basin, and will allow promoting new investments to provide additional resources to the system, such as the reuse of treated water from the Biofactories for exchange with raw water.

The collaboration agreement with the Irrigation Associations is in operation, and thus, the Board of Directors of the Junta de Vigilancia de la Primera Sección del Río Maipo (Maipo River First Section Oversight Board) has coordinated water transfers during the summer period, ensuring sufficient reserves in the El Yeso Reservoir to face the winter of 2022.

The agreement has also established an update in the price of transfers, making it consistent with the value of raw water from the Maipo River used in the tariff processes. In addition, it includes thresholds that define high and low demand prices based on the river's water scarcity.

1. Higher network maintenance costs of $1,925 million were generated due to a significant increase in customer requirements and workload.

1. At the end of the first quarter of 2022, an allowance for doubtful accounts of $5,080 million was recorded, generating a higher bad debt expense of $1,698 million regarding 2021, resulting a % of bad debt on revenues of 3.4% vs. 2.5% of the previous year (it is important to note that in the first quarter of 2021, the compensation associated with the settlement through SERNAC was deducted from customer accounts, which had a positive impact on the bad debt ratio for that period).

1. In addition, it should be noted that historically this indicator has increased in the first quarter due to seasonal factors; however, it is projected to decrease as the year progresses, in line with the Company's objective.

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1. 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 allowed us to generate Efficiencies for $833 million at the end of the first quarter of 2022.

Net income as of March 31 2022 amounted to $33,749 million, compared to the previous year. The main variations are presented in

representing a decrease of 12.0% the following chart:

Variation Net Income (Million of $)

38,341

33,749

EBITDA

Depreciation & amortization

Financial result

Income tax and other

At the non-operating level, there is a lower financial result of $11,178 million compared to the previous year, mainly associated with a higher revaluation of the financial debt due to the variation of the Unidad de Fomento (2.4% in 2022 versus 1.1% in 2021).

Income tax and other presented an improvement of $4,609 million, mainly explained by lower income before taxes, together with the effect of the price-level restatement of the Tax Equity.

Cash Generation and Position. During the first quarter of 2022, the balance of cash and cash equivalents was $129,884 million, decreasing by $33,629 million compared to the end of December 2021. The decrease in this item is mainly explained by the payment of investments for $39,640 million together with the payment of dividends made as of March 2022 for $40,767 million, which was partially offset by the higher operating cash flow for the period. The Company's current cash stock, which continues to be higher than the minimum cash requirements to meet short-term obligations, is maintained at these levels in order to face possible liquidity shocks in the current volatile context.

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