Aguas Andinas S.A. (AGUASA) Earnings Call Transcript & Summary

Good morning, and welcome you all. I am Andrew McCarthy, and on behalf of CrediCorp Capital, I would like to thank you for your attendance and your participation in this webinar with Aguas Andinas. Today, we will have Marta Colet, CEO; Didac Borras, CFO; Daniel Tugues, Operations Director; Camilo Larraín, Legal Affairs Director; Alejandro Riquelme, Finance Manager; and Denisse Labarca, Head of Investor Relations, to talk about the results of the fourth quarter 2021 and their vision for 2022 and some other subjects within this situation. The format of the webinar will include, first of all, presentation on behalf of the Aguas Andinas team. The CEO, Marta Colet, will give out initial remarks, and then we will break it out into 3 sections. First of all, the financial results; second, the challenge of climate change; and third, some regulatory issues. During the presentation, we invite you all to participate with your questions and concerns, and at the end of each of the sections, I will present them to the team. If we have enough time, we'll also have some space at the end for additional Q&A. [Operator Instructions] [Foreign Language]

Thank you very much, Andrew, and good morning to you all. Welcome to this meeting, where we will be reviewing the management of our company in 2021. Let me start by thanking you all to be with us today. It's always an honor for all of us to have this space to be able to talk to you in order to clarify any doubts and talk about the different projects that we've been doing during 2021 and also about future plans, as we've been saying at the very beginning. So the 2021 fiscal year happened in the very intense scenario with very relevant landmarks, several electro process in the country, the beginning of the constitutional convention, the pandemic of COVID-19 that's still present, and a new year for the most extreme and intense drought that we've heard of that has impacted with low level of rainfall and snowfall, with low flow of rivers supply in Santiago that are in the historical minimum. Our commitment as a company is to the development and progress of Santiago and the inhabitant, that's why in 2021 was a year where we've made a huge investment effort worth many, many pesos, which is 20% higher than the previous year. In terms of projects focused on adaptation in fight against climate change and the impact of them, all of them are really essential so that citizens can have a robust supply that is safe and reliable even under this very adverse climate conditions that we are experiencing as I've mentioned before and as we'll see further on. Let me now highlight the significant progress made on the works of the Cerro Negro well. This infrastructure will allow us to reinforce the supply in the southern area, and also the modernization of a new plant of drinking water that will enter into operations very soon. The new matrix of drinking water also in Providencia that started last December, also the important progress that we are expecting with significant results in everything that has to do with the hydraulic efficiency plan to look for any leaks. Also, the greatest autonomy of the Aguas Cordillera area, thanks to the new dams of San Antonio and San Enrique. All of those relevant works for the city because they allow us to adapt ourselves to this new reality with innovative constructions and concrete constructions. An important point last year that I would also like to highlight is the collaborative work. I need to mention the historical collaboration agreement that we signed together with the different associations. The first of the river Maipo, that is looking to optimize the water management in the basin. Also, we made important transfers of water between the different users of the river, and we've also been able to keep the dam with a volume of 158 cubic meters now a little bit higher and 13% higher to the end of 2020. Additionally, to this agreement, we've also been working in collaboration and intense way with the different municipalities of Greater Santiago to make the irrigation of public spaces more intense and also promote a responsible consumption in the city. The current situation demands us to continue to strive for this, and we'll continue to do that in order to supply the city with an essential resource as its water. Likewise, we need to have new sources, new redundancy in our infrastructure and also strengthen the security of the system. There is no doubt that this is our commitment to the city of Santiago and its inhabitants, and we count on all of you, as we've always had. Thank you very much for joining us, and now we'll check in detail the 2021 fiscal year. Have an excellent day.

Thank you very much, Marta. And now we will hear about the financial performance of the company, so Didac Borras, the CFO of the company, has the floor.

Thank you, Andrew. Welcome you all to this fourth conference on the outcome of Aguas Andinas corresponding to 2021. I would like to start my presentation by talking about the main financial aspects to highlight in 2021. On the one hand, the positive journey compared to 2020 that we've had in 2021 with a 5.8% income and an EBITDA that increases at 11.7% against the previous year. Of course, this is mainly due to 2 aspects. On the one hand, higher average tariffs that have a positive impact of over CLP 18 billion associated to polynomial indexing as well as a start-up of new investment with associated tariff, and additionally, also to cost efficiencies and lower bad debts that we've also captured during 2021 that have allowed us to offset some other elements that we've also had. Second, we continue to manage and mitigate the effects of climate change as our priority. In that sense, we continue to execute our investment plan in order to reinforce security of supply and in order to increase our operational resilience. In line with that, we're investing during 2021, as Marta said, over CLP 154 million. Additionally, it's important to highlight the success in signing the collaborative management agreement with Maipo panelist that allowed us to maintain the safety level of El Yeso reservoir around 170 cubic hectometers. As a third point to highlight, we continue to experience and fight the direct and indirect impacts of the pandemic. In this sense, the company has always followed a preventive strategy to ensure our operations and service quality. If we compare pre-pandemic year against 2021, we might quantify the global impact of the pandemic in our results this year in over CLP 30 billion due to direct and indirect effects compared to 2019, mainly lower consumption and higher bad debts. And last, the global context, the global economic context has also been a challenge for us during 2021. Inflation, as you know, has been quite high during 2021. In that sense, our operational costs and financial costs have boomed. And also in line with that, we've had to apply efficiency plans that have allowed us to absorb and compensate all of these increases. If we analyze the fourth quarter, we might see that revenues have boomed, a 5.5% against the fourth quarter 2020, mainly boosted by the tariff indexations. It's important to highlight that the volume recovery has been slow. Also that in 2020, the last quarter has been high-volume quarter, even higher than those in 2019, so we are comparing high volumes in 2020 against some other volumes of 3.7 cubic hectometers in the other year. And also sanitation income associated to the activity EBITDA also booming with 35.6% against the previous year, mainly associated to bad debt reduction. Also, let us remember that during 2020 and in the fourth quarter, it reached its peak of bad debts, reaching 4.5% levels during 2021, we've been able to stabilize, since April till the end of the year, our bad debts in around 3%. Let me also remind you that the last quarter of 2020, we incorporated the SERNAC agreement provision of [ CLP 11 billion ]. This is something that we have not had in 2021, and this cost increases are partially offset with operational cost increases mainly associated to maintaining costs. Also, we see a reduction in net income of 8.5%, mainly impacted by the increase of financial costs associated to the variation of CLF 2.97% in 2021 versus 1.26% in 2020. Also, in the last quarter of 2021 has been one with very high inflation. Also, let me remind you that in 2020, we had the [ Yeso ] transfer in the last quarter. Comparing the same period of 1 year and the next, it represented a negative impact in this regard. If we analyze results and make a summary of the result in 2021 compared to 2020, we can also observe a positive evolution in practically all of lines. In terms of revenues, booming ones around 5.8%, mainly boosted, as I said before, by the tariff indexation's effect, both polynomial as a start-up of new investments. Also, we see a positive trend in consumption. Even though it's light, we can observe a certain recovery against 2020 with 1.9 cubic hectometers in drinking water, both in residential and non-residential areas and higher non-sanitation income, almost CLP 7 billion by an increase and recovery of an activity against a year that has been quite impacted by the pandemic. In terms of EBITDA, also booming, 11.7% against 2020. Even though there are some effects, we should highlight as a higher operational cost. In this sense, we should highlight the maintenance of networks that has increased significantly as we will see further on, as well as the purchase of water that has also been relevant in order to maintain our security levels in the El Yeso reservoir stable. In that regard, this higher operational costs have been offset by a lower provision of bad debts. As we've said before, 2020 reached levels above 4%, 2021, we've been able to stabilize that bad debt, so this has a positive impact. Additionally, as I said before, there are several one-offs that make our EBITDA boomed, and it's also important to highlight the operational efficiencies and cost efficiencies that we've captured in 2021 that allowed us to compensate the increase in costs associated to inflation. In terms of net income, also booming in 2%, exceeding CLP 100 million in 2021, an increase mainly coming from EBITDA offset by higher financial costs, as we said before, associated to the CLF variation. In terms of CapEx, an increase of 23.2% against 2020 CapEx. That is strategic and very important for us in order to guarantee resilience and operational continuity of the company in a climate change scenario. Also NFD, also booming in 10%. Here, we should highlight that part of this increase is associated to the CLF variation and variation that goes to 6.6% in 2021 and has an impact of around CLP 57,000. Let me highlight that our leverage has been in line with the target set at the beginning of the year, around 1.65% and the EBITDA to net debt ratio is still stable, below 4x. We focus on the revenue of companies compared to 2020. As we've said before booming revenues boosted by our 3 lines mainly. The consumption effect, slight increase against 2020, a slow and gradual recovery against pre-pandemic year, but that allowed us to recover 1.9 cubic hectometers that represents 0.3% versus 2020. We've mentioned also the tariff review that's linked to a planned infrastructure in 2021. The Pirque dams have increased the operations, also nitrate treatment in La Farfana and the autonomy 12 hours that was Cordillera project is -- also has an impact on our tariffs, which is positive. Additionally, let me remind you that during 2021, we've also had 3 polynomial indexations linked to inflation. [ 2.6 in March 2021, 3.5 in August 2021 and 3.9 ] in November 2021. Additionally, the non-sanitation activity has also experienced a recovery of the activity mainly in domicile services and non-sanitation affiliates that have allowed us to increase our revenues in over CLP 7 billion. If we analyze the evolution of EBITDA, also booming, as we said before, 11.7% boosted by the growth in our revenue, but also with some effects that it's important to highlight. On the one hand, an increase in costs linked to inflation. Let me remind you that the cost base line linked to inflation in the company goes in CLP 151 billion, so in an elevated inflation, we have an impact on cost and relevant point in the maintenance -- in the network maintenance and equipment maintenance, there's been a 19% increase against 2020. Let me remind you that there's also a drag effect due to the lower activity in this effect in 2020. In 2021 that activity has partially been recovered, so there are some increases that have been booming. Also, we've experienced an increase on raw material and labor costs that have impacted also. Some other impacts related to drought, as we've said before, the purchase of water. They continue to be significant during 2021. Against 2020, they've increased in CLP 2.23 billion associated to price effect mainly due to the update in prices that we've observed. On the other hand, also highlight the efficiencies the year that have allowed us to absorb the increase of cost in [ FC ]. On the other hand, the lower bad debt in 3.1% against 4.2% in 2020. This has allowed us to have a lower provision compared to the previous year, and the SERNAC effect also that has benefited us or that has had a positive impact into comparable periods. We think it is interesting to know that the company, since 2021, has been affected by the pandemic. These effects are quantified in CLP 30,740 million, including the loss of volume. Remember that, as we said before, from 2019 to 2021, in comparative periods, we have almost CLP 16 million in consumption reduction, so this accounts for the 3.1% of bad debt increase and the COVID expenses. These COVID impacts have been partially offset by the organic growth of the company associated with increase in income due to higher tariffs and the cost control and optimization. And if we analyze the bad debt stabilized at around 3%, as we said before, in 2020, it reached 4.2%, and in historical terms, it was around 1%. We've been able to reduce our provision in CLP 4.477 million in 2021. We've maintained our historical level. This has been audited and also, through our consultants, it has been compared to other methods, and we consider this method to be robust and also reasonable for the type of method of business that the company has. There has been an increase in our gross debt with an increase of CLP 18 billion compared to the past levels, and there has been an increase and an effort with our clients in order to normalize the debt, and we see the efforts in the agreement of payments. The net income is plus 2%, mainly associated to the increase in EBITDA and a lower tax cost also related to the inflation rate. But this is offset particularly by the increase in the financial costs associated to the UF. You can see 6.6% in 2021 and 2.7% in 2020, and then other effects. The ESSAL effect in 2020, we had the effects from the disposal. But in 2021, we have these offset. The expiration process of the Osorno concession with earnings in the levels of CLP 7.8 billion after taxes. And this is also related to the increase in the investment plan, over CLP 2 billion. Our financial debt, NFD is high. In late 2021, it was around CLP 92 billion versus the almost CLP 60 billion the previous year. There are some impacts. There are some effects, and we have had to finance our CapEx. This is why we've had these levels, but it's been reasonable. And as you saw in the previous ratios and rates, well, this has been very reasonable. Our EBITDA level, we have [ CLP 20.7 million ] in bonds and loans and AFRs, and the debt by rate shows that we have a fixed debt at 88.5% and variable at 11.5%. As I said before, the company has continued with its investment plan, which is strategic in order to secure the company's resilience, and operations and also guarantee the water resource for Santiago and other areas. The company invested over CLP 154,000 million, 21% was invest into security of supply, highlighting projects like nitrate treatment plant, the biofactory asset replacement or the expansion of the Padre Hurtado drinking water treatment plant, and the expansion of the arsenic treatment plant. 25% of the CapEx related to maintenance, 24% related to water resources plants. So we have some projects here. As you can see, the hydraulic efficiency plant, the purchase of water rights, and 30% invest into other projects, mainly territorial expansion, and some other projects as well. And finally, allow me to emphasize the company shows a very robust balance sheet in order to confront the challenges that we have ahead. We still are members of the Dow Jones sustainability index. We've been awarded the ALAS prize, and we have recognized activities. We have ROIC over 10%, our ROA over 4.6%, a control leverage in 1.65, a net debt EBITDA in [ CLP 3.78 million ] and liquidity ratios that allow us to confront the challenges in a calm manner.

Thank you, Didac. Thank you very much. And as I said before, we are opening the Q&A session. [Operator Instructions] Didac, may I ask you about the capital assignment in 2022? As you showed on the slides, we are seeing a recovery in the operating cash flow. However, there are some requirements on the side of investments. So my question is, how do you see this discussion between assigning capital, distributing capital in dividends leveraging the company, so on and so forth? Could you share with us what's your opinion about the dividends in the first half of 2022?

Thank you, Andrew. In line with your first question, it is true that the company is making a very important investment effort, and 2022 will continue to be a year where the company -- when the company will keep on investing. As we discussed in many meetings before, we want to preserve the operation of the company, the resilience of the company and the supply of water to Santiago. So as we start recovering and gaining a little bit more, nobody knows what the future holds in climate aspects in 2022. However, if the recovery path remains, we will be more operational. We will keep on investing high in 2022, and the dividend distribution policy of the company will remain the same. So in more detail in this aspect, this is a decision taken at the shareholders' meeting, and this decision will be made based on the climate and pandemic context around the company. So in that sense, the company's strategy is to secure the operations and not risk operations.

Thanks you, Didac, perfect. In honor of time, I would like to move on to the next session, Climate Challenges with Daniel, Director of Operations, Daniel Tugues.

Thank you. Thank you very much. The technical challenges that we face include climate change, of course, and droughts as the major challenges. If you take a look at the figures, there is a steep decline in all rivers. Well, Maipo River, from historical water flows, has been a decrease by 55%. And the Yeso River -- the Yeso system has a very significant drop of 42%. And the most impressive aspect is the speed at which this has occurred, so we have these historical record of rainfalls in Santiago with a clear downward trend in the past decade, in particular. You can see this is very worrying, very concerning, with a very steep decline in the rainfall average, almost half the historical value. But above all, the good years are over. We see that there are not any years for recovery anymore, so we see a very tough decade. And this decade seems to be worse than the previous decade, unfortunately. So the main challenge for us is how can we adapt ourselves to an accelerated challenge in climate change. This is the evolution of the Yeso reservoir. In the past years we see that the drought of 2019 left us with 60 hm, and this is very low, indeed. So the main point was how could we recover to a stable situation to guarantee supply and to be prepared to implement our mid- to long-term solutions? So these recovery that we see in 2020, 2022, 2021 has been thanks to a collaborative effort with the Maipo River partners. One of the main landmarks of the year has been this agreement that we celebrated with the 7 associations of canal operators. And I would like to elaborate on this for a couple of minutes. This has been very important for us. For the past 10 years, when we started having a very important drought periods, the drought started to stress out water resources. So in 2011, we decided to request water supply from other users. We started thinking that, that would be a temporary requirement in very short periods of time. I'm thinking that it would be just a one-off situation. However, after some years, we realized that, that was a structural problem, not temporary anymore. And the gaps that we had were increasingly higher, forcing us to request higher volumes of water, causing more stress to agricultural farmers. So in the drought of 2019, we reached a point of no return. It was impossible to keep on operating in this situation, and so this situation emerged. We organized a round table in 2020. And this year, in -- actually, in August last year, we finally signed an agreement with the Canal Operators Associations in order to confront the near future and overcome the scarcity programs. So this agreement normalizes any historical discrepancies that we may have. Second, guarantee minimum reservoir levels, the levels that we consider that are safe to supply the city of Santiago. And also, agree on the main lines of action at the water system level, at the basin level. So a series of modernization projects were approved, also, the preparation of a master plan in order to address some structural problems in order to ensure the sustainability of the basin. So we decided to work on the reuse project in order to work out all these problems. So all these actions and activities were approved in relation to the effective deployment and implementation of the actions that was deemed as badly needed and finally could work around. This agreement has borne its fruits. It has allowed us to effectively offer the Maipo area a good level of sustainability and also to start with a series of projects which are key for the mid- and long-term for climate change. And as I said before, this collaboration allows us to provide -- to supply the area that we had intended to supply. This year, we had to manage the obtention of 251 hm cubic meters, which represents 31% of the raw water necessary for the company. So 31%, as I said, of the raw water that we need in order to ensure and guarantee the supply to the city. So this is the menu of solutions, as we say, this is a map of solutions that would be very good for us in order to reverse the situation. We need to supply and offset the hm3 that we need, the cubic hectometers. $330 million in investments in climate change works, including a variety of wells, the reused purified water project, we intend to increase the cubic meters by second -- per second Also the hydraulic efficiency plan, we are on the right track. And in the past years, the indicator has stabilized, and this is very important for us. So we decided to implement and accelerate this plan in 2022 to double the pace of deployment and improve the indicator. We are also made the modernization and efficiency plan. An optimization plan, underground water plan. We have 10% of underground water, reaching 20%, reaching 30%. We are doing our best in order to optimize these levels. And we have a technology plan in place to optimize the exploration of our wells. This is supplemented by the projects that I mentioned before, and very importantly, the reinforcement of the Mapocho River area, so this is very important for us. Las Condes, Vitacura have a heavy reliance of the Mapocho River. So this is very important for us to provide support to this area. The river doesn't have a basin, so this year, we've been able to identify and implement a series of emergency works in order to support the Mapocho sector of the Maipo. So we are very well prepared in that situation, which is vulnerable, of course, but we don't see any problems in the short term. We should wait until March to see the increase in the demand after the holiday season, but in case there is an issue in that regard, we will address it accordingly.

Thank you very much, Daniel. Very interesting this section on the initiatives that you are having in order to face climate change. My question, with all of these initiatives and everything that has to do with the reserve -- reservoir in El Yeso, so can you see what the effects in terms of revenue and cost could be during 2022? I mean, should these initiatives try to somehow help the revenues and cost drivers?

Yes, Andrew. As Didac was saying, we don't have a crystal ball. And the key point for 2022 is what will happen during June, July, and August when rainfalls are concentrated in Santiago and where we make our stock that should allow us to go beyond the other summer of '22, '23. Right now, in the first half of the year, we already know about that. We are in our worst year. We are talking about 2021, and we are planning figures. But I think that we know that flows for 2022 are even worse than those in 2019, 2020. I mean, the drought that was considered the worst one that we've had. So we are even worse than our worst year. So this will be really on the first half of the year. From now to June, this is what we are expecting, the transfer levels will be around the same levels of last year. Even though last year was a bit better, we were coming from a very bad year, we had to pick up. So we hope the conditions are similar to that, and they will remain stable in the future because we have this agreement that already provide some stability and facing the second half of the year, we'll have to wait for the winter to see what happens with rainfalls. In general, it should not be worse than the past year because it's really been very bad in terms of rainfalls. We had 200 millimeters. But of those 100 millimeters were within the atmospheric rivers, so these are the rainfalls that are in historical minimum records. So it's true with [indiscernible] where, every time we see that this is a minimum level, we always have one that's even worse. But in principle, I mean, we should not expect something worse than that.

Thank you very much Daniel. [Operator Instructions] And we go to the last section to talk about the last regulatory events in the [ industry ], so Camilo Larraín, Legal Affairs Director, has the floor.

Andrew, good morning, everyone. The first thing that I'll talk about are the reforms of the water code that were recently approved in Congress, and it's about to be enacted by the President of the Republic. We should highlight, in this case, that this is a country agreement in terms of the way to treat water resources. This took 11 years to materialize. We went from very extreme positions of different standpoints to reform where the essential part of water right is being preserved. But the state is consolidated in the chance to have certain management on water resources to favor human consumption and also ecosystems and environment. So in principle, the water rights enforced are indefinite unless they are not used for a given time, so in that case, they would be expiring. So the new water rights have 30 years deadline, and it can be automatically renewable under certain circumstances. As I was saying, one of the most important things is that we give the power to the authority to safeguard human consumption and also the ecosystem. So these are powers -- and also preserve aquifers. These are new powers of the Water Association. Also, the exercise of rights can be limited if the source is being affected or waters can be redistributed within one same source. If we go to the next slide, we can see that droughts are being regulated in a very accurate way. The powers of the general water divisions are being expanded in order to conduct certain actions in case of drought with a 1-year term. And in this case, there is an explicit declaration of preference for human consumption, and we also contemplate agreements with the Canal Operators Associations or something similar, or the one Aguas Andinas has reached, and that was previously mentioned. And as limitation. In terms of limitation to the water rights in favor of sustainability, we cannot constitute rights in glaciers. On the other hand, our strategic plan for water resources by basin is established and it should be developed. And the purpose of it is to try to obtain new sources of water in concepts as the reuse of water, also reuse of wastewater, the artificial refilling aquifer among others. Apart from that, in terms of human right to water, this is a concept that we can go on to the next slide. This is something included in the United Nations. There is an accurate connotation to this. This is explicitly contemplated within this water code reform, so water rights have to do with human right to water that has been developed by the UN. In terms of prioritization of water use, these are for human consumption. Subsistence, in the sense that it's the use of water, people who use land in a domestic manner, then waters can also be reserved for human consumption and move on to sanitation, and other -- it's easier for the director to do that. Even though there are no available rights, so to speak, they can be granted under certain circumstances and in a fast and expedited manner. This is in terms of the water code reform that we consider as an important progress made by the country after quite a long period of discussion. Last, in terms of regulatory aspects, I'm going to talk about the basic services law. This law, maybe if we could move on to the next slide. This basic services law regulated the debt produced by users during the pandemic during March 2020 and December 2021. The most important thing is that, that law set forth the possibility to have -- to automatically be prorated into 48 monthly payments. This was possible for a great amount of users. And on the other hand, it also established the prohibition of cut in the service. And in terms of the extension, this means a prohibition to be able to cut the service. This is over, so this is now a tool associated to sanitation, which is quite relevant. But apart from that, very recently, this [ Law 21,423 ] was published. And basically, it deals with the situation of bad debtors or users with lowest resources, and it set it in an average consumption lower than or equal to 15 cubic meters per month. In that sense, state subsidy was automatically established in order to pay those debts. Those debts from those groups or clusters was prorated into 48 monthly payments and ultimately cannot exceed 15% of the average consumption against the previous period. So this means that, ultimately, those users will have benefit with those monthly payments with the subsidy and also, during this -- during 48 months, of course. And the additional debt, of course, there is a commitment on the part of utilities to extinguish that. So for the rest of users, there are some agreements that have already been signed according to the company's commercial policies that follows those criteria. And last, and to conclude, let me briefly talk about the constitutional convention. As you probably know, it continues with its work in different commissions, and here, what we are showing is a calendar. And you can see that at January 30 -- by January 31, the deadline for proposals has already finished or also in terms of citizens. So those proposals have been seen by the respective commissions, and after that, once reviewed by those commissions and generally approved and specifically approved, they will be reviewed by the convention, and 2/3 are needed in order to make it a rule after this general and specific approval, of course. This is what we can say in terms of regulatory aspects.

Thank you very much, Camilo, for this. And I would like to start with something that has come up in all of this constitutional debate, everything that has to do with the potential nationalizations of water rights. And I have 2 questions here. Of course, several steps are still needed in this process as Camilo also mentioned in order to approve the articles of new constitution. But when do you think is the right time to make a prohibition for the value of water rights? And what could be the impact in dividends payments? Of course, your provision that could be quite important on that -- on the one hand. And in the case of nationalization of water rights, how should we think about the impact this could have on rates, considering that water rights are part of the investment cost of [ model ] company? And how do you expect to obtain raw water in the absence of water rights? And how would this be included in the rights? This is more of a long-term question, but it's interesting to get an answer.

Well, in terms of the debate of the constitutional assembly on water rights, there are several things that are considered as relevant. As, for instance, the greater power of the state in order to manage water resources in order to favor human consumption specifically. This is what has been mostly mentioned, and also in order to favor the environment or ecosystems. Those are the main aspects that are being discussed in terms of water resources in the constitutional assembly. But on the one hand, we've seen that the current code reform picks up on that, so that means that the constitutional convention -- this does not mean that the constitutional convention will not have its own rules. Of course, this is something quite known that they will be regulating everything that has to do with water resources. So we're sure we believe that there will be a regulation towards greater state powers to favor human consumption, also subsystems and the management of the environment. Now, we only have a proposal that has been approved in the Environment Commission. It still needs to be approved specifically, and then it should go to the plenary session where it needs to have a general approval and then also a specific approval. What it's not yet clear is -- well, in that sense, it's quite early to know what is going to happen with water rights. The proposal we have is quite radical in terms of water code, but I believe that's -- it's also important to mention that there are still many steps to go through. And evidently, if we aims at reaching expectation, we need to have it very clear at a country level because this has -- or bears a very high cost. So I think there's a lot still to be discussed both at the commission level as well as the plenary session or convention in terms of water rights. So questions in terms of impact or future impact, I personally don't think it's serious to talk about that specifically because this is something that is still to be discussed. What we might add is that such a company cannot be left without water, that's apparent. I mean, this water -- sorry, this company will guarantee water. It's a different thing to talk about the title of water. Currently is an administrative right, and it might become water from state properties that grants used license. But nobody is thinking, in fact, of prohibiting the use of water to such a company. It's all having to do with the legal aspect. I mean, it's not reasonable to leave a company that supplies all of Santiago without water, so that can be assured. But the rest of it is still guesswork, so that's why I believe we still need to wait. That's why we show the calendar, the convention, we still need to wait to see how it develops.

Thank you, Camilo, for these comments and thinking about this debt, actually, a question says, what are you waiting for to introduce the [ moral city ] plan and the approval of the law that grants a subsidy to the customers and clients to pay their debts? Do you think there will be some debt plan? How would it be like? Would you make some revision about it?

Well, we have a wide variety of specialties here, maybe the financial director could give an answer to this part.

We have a positive approval of the law. We think this law will stabilize the current situation that we are at in terms of debt. So we have a positive opinion about the law. Remember that our provision in criterion has been quite conservative. For the pandemic years, we have had high debt provisions, and today, the robustness is high, too. So we estimate a relatively limited impact from this law in our financial results, in financial statements in 2022. Of course, we'll still need to wait to see how the law will be like. But in principle, we think this will be a positive piece of legislation for the company.

Thank you, Didac. Well, unfortunately, we are reaching the end of this webinar. We have not been able to answer each and every question in the audience, but probably, the team is going to follow up your opinions and your comments. On behalf of CrediCorp Capital, thank you, Marta, Didac, Daniel, Camilo, Alejandro, and Denisse. Thanks to the assistants, to the participants for your participation, and it would be very good if you could answer a survey that we have for you. Thank you very much. Have a great weekend, and I will give the floor to the Aguas Andinas team in case they want to make a closing remark.

Andrew, if I may, I would like to thank the organizers very much and the participants. We know that not all the questions have been answered during this session. However, you should know that we are going to give you answers. We are already preparing the answers so that all of you can have these replies to your inquiries and the questions that you've raised. Thank you.

Thank you.

Thanks, everybody.