Engie Energia Chile S A : Press Release EECL 1H23 Inglés

April 26, 2023

ENGIE ENERGÍA CHILE REPORTED EBITDA OF US$189 MILLION AND NET PROFITS OF US$25 MILLION IN THE FIRST HALF OF 2023.

EBITDA REACHED US$189 MILLION IN THE FIRST HALF OF 2023, A 212% INCREASE COMPARED TO THE FIRST HALF OF 2022. THE ELECTRICITY MARGIN RECOVERED DESPITE HIGH GENERATION AND SYSTEM MARGINAL COSTS, WHICH ARE AFFECTED BY THE DELAY WITH WHICH THE DECLINE IN FUEL MARKET PRICES IS REFLECTED.

• Operating revenues amounted to US$616.2 million in the second quarter of 2023, a 28% increase compared to the second quarter of 2022, due to an increase in physical sales to regulated clients, and the increase in average realized energy prices explained by inflation and fuel-price indices.
• EBITDA amounted to US$87.1 million in the second quarter, a US$95.1 million increase compared to the negative US$8 million registered in the second quarter of 2022, due to the increase in operating revenues, which offset the increase in generation costs and energy purchase costs.

• Net income reached US$7.1 million in the second quarter of 2023, which of US$44.2 million reported in the second quarter of 2022, mainly due margin.

favorably compares with net loss to the increase in the electricity

Financial Highlights (in US$ millions)
	2Q22	2Q23	Var %	6M22	6M23	Var%
Total operating revenues	481.4	616.2	28%	899.2	1,204.0	34%
Operating income	(53.0)	40.6	n.a	(29.9)	97.9	n.a
EBITDA	(8.0)	87.1	n.a	60.5	189.0	212%
EBITDA margin	-1.7%	14.1%	(15.8pp)	6.7%	15.7%	(9.0pp)
Total non-operating results	(8.3)	(43.7)	n.a	(28.0)	(74.0)	164%
Net income after tax	(44.2)	7.1	n.a	(40.4)	26.8	n.a
Net income attributed to controlling shareholders	(44.2)	7.1	n.a	(40.4)	26.8	n.a
Earnings per share (US$/share)	(0.042)	0.007		(0.038)	0.025
Total energy sales (GWh)	3,043	3,005	-1%	6,007	5,943	-1%
Total net generation (GWh)	1,615	1,641	2%	3,008	3,196	6%
Energy purchases on the spot market (GWh)	1,114	697	-37%	2,113	1,249	-41%
Energy purchases - back up (GWh)	430	724	69%	990	1,523	54%

ENGIE ENERGÍA CHILE S.A. ("ECL") is engaged in the generation, transmission and supply of electricity and the transportation of natural gas in Chile. ECL is the fourth largest electricity generation company in Chile and one of the largest electricity generation companies in the northern segment of the SEN national grid (formerly known as SING). As of June 30, 2023, ECL accounted for 8% of the SEN's installed capacity. ECL primarily supplies electricity to large mining and industrial customers, and it also supplies electricity to distribution companies throughout Chile. ECL is currently 59.99% indirectly owned by the French company, ENGIE LATAM. The remaining 40.01% of ECL's shares are publicly traded on the Santiago stock exchange. For more information, please refer to www.engie-energia.cl.

Contents
HIGHLIGHTS:	3
RECENT EVENTS	3
SECOND QUARTER 2023	3
FIRST QUARTER 2023	4
INDUSTRY OVERVIEW	5
Marginal Costs	5
Fuel prices	6
Generation	7
Management's Discussion and Analysis of Financial Results	8
2Q 2023 compared to 1Q 2023 and 2Q 2022	8
Operating Revenues	8
Operating Costs	9
Electricity Margin	10
Operating Results	11
Financial Results	11
1H2023 compared to 1H2022	12
Operating Revenues	12
Operating Costs	13
Operating results	14
Financial Results	15
Liquidity and Capital Resources	16
Cash Flow from Operating Activities	16
Cash Flow Used in Investing Activities	16
Cash Flow from Financing Activities	17
Contractual Obligations	18
Dividend Policy	19
Risk management policy	20
Hedging Policy	21
Business Risk and Commodity Hedging	21
Foreign Currency Hedging	22
Interest Rate Hedging	23
Credit Risk	24
OWNERSHIP STRUCTURE AS OF JUNE 30, 2023	25
Number of shareholders: 1,763	25
APPENDIX 1	26
PHYSICAL DATA AND SUMMARIZED QUARTERLY FINANCIAL STATEMENTS	26
Physical Sales	26
Quarterly Income Statement	27
Quarterly Balance Sheet	28
Main Balance Sheet Variations	28
APPENDIX 2	31
Financial information	31
Financial Ratios	31
CONFERENCE CALL 2Q23	33

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HIGHLIGHTS:

RECENT EVENTS

SECOND QUARTER 2023

• IFC and DEG financing for US$400 million: The International Finance Corporation (IFC), a member of the World Bank Group, announced the signing of a "Super Green" loan - green and sustainability linked - for ENGIE Energía Chile S.A. (ENGIE Chile). This financing, together with the parallel financing supplied by the German Bank DEG, who belongs to the development banking group KfW, is for a total amount of US$400 million with a 10-year tenor. The purpose of this loan is to provide financing for CAPEX in renewable projects, which is aligned with the Company's energy transformation plan, aiming at transiting from a fossil fuel energy generation matrix to one based in renewable generation assets, as well as the installation of Battery Energy Storage Systems - BESS. This financing includes US$200 million provided by IFC, US$114.5 million by investors in the Managed Co-financing Program - MCPP by IFC, US$35.5 million by an investor who's concentrated in the ODS - ILX Fund, within the B Loan framework by IFC, as well as the DEG Loan for US$50 million.
• Puerto Andino. To give continuity and to enhance the profitability of our Puerto Andino port operations in Mejillones, in 2019 the company signed a strategic alliance with PASA, an experienced port operator controlled by the Sigdo Koppers group. On April 3 this alliance signed its first unloading contract through Puerto Andino with SQM. This contract will allow to receive, load, unload, transfer and store third-party cargoes. In this way, the port will be able to continue operating responsibly together with the communities, giving new uses to the company's assets, extending their life, and becoming a development opportunity for the Bay of Mejillones. Puerto Andino, in operation since 2017, has the capacity to receive more than 6 million tons of solid and liquid bulk. The terminal has a maximum allowable draft of 17.9 meters, a maximum displacement of 198,500 tons, and a design that allows the operation of capesize carriers.
• Financing activity: On April 10, 2023, the company took a US$75 million short-term loan from its parent company, Engie Austral, to finance investments in fixed assets and LNG purchases. The amount may be increased to US$150 million. On April 20, in an effort to extend the average tenor of its debt, the Company renewed two loans with Scotiabank for a total of US$100 million, with original maturity in April and May 2023, and extended their maturity date to October 21, 2024, and on May 22, the Company renewed a US$50 million loan with BCI, extending its maturity until November 12, 2024.
• Publication of Node Price Decree, a fundamental condition for the implementation of the PEC and MPC laws: On April 12, 2023, the July 2022 Average Node Price Decree issued by the National Energy Commission was published in the Official Gazette. With the publication of this decree, together with the publication of the Exempt Resolution of the CNE that established the guidelines for the application of Law No. 21,472 (MPC or Consumer Protection Mechanism), the requirements for the monetization of payment certificates to be issued by the Chilean Treasury on account of the receivables to be collected from distribution companies were met. This program has been structured by IDB Invest with the collaboration of Goldman Sachs and JP Morgan and Itaú, who will support the process of selling these certificates in the international financial market. This program will allow the company to sell part of the accounts receivable originated by the energy price stabilization mechanisms, which as of June 30, 2023 reached a total of US$451 million. The monetization of this amount should be realized through the sale of payment certificates as well as the re-liquidationin installments included in the bills of regulated customers as soon as all the regulatory conditions needed for this mechanism are in place. The expectation is that this could occur as from August 2023.
• Last sale of "PEC-1"accounts receivable: On May 12, 2023, the Company was able to sell a nominal amount of US$51 million corresponding to accounts receivable under the program known as PEC-1, recovering US$38 million after a financial discount of US$12.6 million. This sale marked the end of the sales of accounts receivable from regulated customers to Chile Electricity PEC framed within the PEC-1

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program. This way a total nominal amount of US$272.9 million was sold with a total of US$193.8 million of net resources received between February 2021 and May 2023. The total financial cost attributed to this transaction during this period amounted to US$79.1 million.

• Annual Ordinary Shareholders' Meeting: On April 25, 2023, the Company's shareholders agreed the following:
• • Dividend Policy: No final dividends will be paid on account of 2022's net results given the losses reported in the period.
  • Auditors: To appoint EY Servicios Profesionales de Auditoría y Asesorías SpA as the Company's external auditors.

FIRST QUARTER 2023

• Tamaya solar PV plant: This 114MWac plant located in the Antofagasta region achieved its commercial operation date on January 14, 2022, as confirmed by the national grid coordinator ("CEN"). This new asset forms part of our ambitious transformation plan, which considers the addition of 2GW of renewable generation and is in line with our zero carbon goals. The Tamaya plant has been injecting power to the system since November 2021.
• Coya solar plant COD: This 181.25 MWac solar PV plant achieved its commercial operation date (COD) on March 24, 2023, as confirmed by the National Electric Coordinator. The PV plant -located in the commune of María Elena, Antofagasta region- became the company's largest renewable operation currently connected to the SEN power grid. With its 369,432 photovoltaic panels, it allows to supply renewable energy to the equivalent of 73 thousand homes, which means a reduction of 311,293 tons of CO2 per year. The solar energy generated by the PV plant will be stored thanks to a Battery Energy Storage System (BESS), which will have a capacity of 638 MWh. The initiative called "BESS Coya", which is currently under construction, will deliver greater efficiency and flexibility to the SEN.
• LNG supply: During the first quarter of 2023, the company was able to secure the purchase of liquefied natural gas for a total volume of 14 TBtu to replace the 4 cargoes for a total volume of 13.2 TBtu that its liquefied natural gas ("LNG") supplier, Total Energies Gas & Power Limited ("Total"), did not confirm, as reported by the company in the Material Fact notice issued on December 23, 2022. Through this supply of LNG, acquired at current market prices, the company has been able to reduce its exposure to the spot market and to ensure the continuous supply of energy to its customers.
• IEM plant outage: On January 24, the Infraestructura Energética Mejillones (IEM) power plant presented a failure in one of its auxiliary transformers, which caused malfunctioning of its electrical system. In accordance with ENGIE's protocols, the unit's operation was immediately halted. The initial scheduled return date was early July 2023; however, the company took all the necessary measures to anticipate the operational return of the plant to mid-May 2023. The unit's scheduled annual maintenance was anticipated to shorten the total operation stoppage period in 2023.
• Financing activity: During the first quarter, the company renewed US$80 million of debt maturing in February 2023, obtained a new US$50 million one-year loan and drew US$93 million from the 5-year loan granted by Banco Santander at the end of 2022 for the purchase of renewable assets in Chiloé. The company used the proceeds from the last disbursement of the Banco Santander loan to prepay the existing project financing of one of these assets a total of US$80 million.
• S&P rating outlook: On March 31, 2023, S&P Global Ratings placed the company's 'BBB' rating on CreditWatch negative. In S&P's opinion, the liquidity position of Engie Energia Chile S.A. (Engie Chile) has worsened due to higher working capital requirements in 2022, and S&P believes that this situation will persist until the company is able to refinance or pay off part of its short-term debt, which reached US$360

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million in December 2022. A downgrade could occur if the company fails to remedy current liquidity pressures through a refinancing strategy over the next three months. Engie Chile's debt maturity profile could improve either through the monetization of its accounts receivable originated by the tariff stabilization laws for regulated customers, a liability management program, or explicit support from its parent, Engie S.A. S&P also revised downwards the independent credit profile (SACP) of Engie Chile to 'BB' from 'BB+'. However, S&P continues to view the company as a strategically important subsidiary of Engie S.A. (Engie; BBB+/Stable/A-2), and this group support provides an up to three-notch increase to Engie Chile's SACP rating.

• Albemarle project: On March 24 and 25, the transmission business unit project team reached an important milestone, performing all scheduled tasks for the energization of the new Albemarle Project facility. The project scope included the expansion of the existing Tap-Off 220/23kV Substation (owned by AES Andes), the construction of the Salar Substation within the Albemarle plant and the construction of a 35-kilometer 23 kV line to connect both substations to transmit energy to the plant for 20 years. This project involved a total of 600,000 human hours without accidents, with a peak of 180 workers in the field during the construction process.

INDUSTRY OVERVIEW

The SING and SIC power grids operated independently until November 24, 2017, when the interconnection of both grids was perfected through EECL's 50%-owned TEN project, giving birth to the SEN ("Sistema Eléctrico Nacional"). Currently, the company's generation assets are predominantly located in the northern segment of the SEN, in the area that used to be covered by the so-called SING Grid ("Sistema Interconectado del Norte Grande"), which serves a major portion of the country's mining industry. Given local conditions, the northern segment of the SEN is predominantly a thermoelectric system, with generation based on coal and LNG, with growing penetration of renewable sources, including wind, solar, and geothermal. In 2018, EECL began its geographical diversification with the acquisition of renewable generation assets in other regions of the country and with the start of supply under PPAs awarded with distribution companies in the center-south region. The interconnection of the grids and the entry into operations of the Cardones-Polpaico Interconnection Project of InterChile, on May 30, 2019, allowed for the coupling of transmission bars in the different substations of the system, reducing the curtailment of renewable energy supply due to the insufficiency of the transmission infrastructure. However, the accelerated installation of renewable energy projects in recent years has exceeded the capacity of the transmission infrastructure, making it necessary to expand it to prevent renewable energy losses.

Marginal Costs

2022		Real (Monthly Average per Node)
Month	Crucero 220	Polpaico 220	Charrúa 220	Pto. Montt 220	Temuco 220
Ene	69	69	75	213	77
Feb	68	68	69	290	72
Mar	95	102	114	210	117
Abr	108	118	126	230	127
May	96	102	100	187	101
Jun	190	200	196	224	192
Jul	116	154	148	241	144
Ago	101	112	100	199	90
Sep	84	87	82	198	70
Oct	83	69	61	77	54
Nov	112	95	86	100	72
Dec	96	91	89	83	61
YTD	101	105	104	188	98

2023 Mes

Ene

Feb

Mar

Abr

May

Jun

Jul

Ago

Sep

Oct

Nov

Dec

YTD

Real (Monthly Average per Node)

Crucero 220	Polpaico 220	Charrúa 220 Pto. Montt 220 Temuco 220
96	94	91	197	89
114	114	110	215	107
106	133	132	207	128
109	133	132	160	130
106	123	123	138	118
93	104	102	90	88

104

117

115

168

110

Source: Coordinador Eléctrico Nacional

In January 2023, marginal costs averaged US$96/MWh in the north and US$92/MWh in the center, while in the south they stood at US$197/MWh due to high temperature, transmission restrictions and higher demand.

In the first half of February 2023, there was a significant increase in marginal costs in the system (+30 US$/MWh in the north and center), due to transmission works, failures of own and third-party units, and lower hydroelectric contribution given the end of the thaw period.

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