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

Good morning, everybody. My name is Paul Lev, Sales Trading Manager in Chile Investments. And in the name of Chile Investments, we'd like to say all that are online today, we currently are reviewing the results alongside with Aguas Andinas. And presentation for the panelists, we have Mr. Didac Borras Martinez, he's CFO. Degree in Economic and Business Studies in the University of Barcelona and MBA IESE Business School. Has more than 16 years of experience for the Manager position in financial services companies in the integral cycle in Spain, France and Mexico. As well, we have Daniel Tugues Andres, Director of Operations and Circular Economy. Civil Engineer, Highways and Ports from Polytechnic University of Catalonia with an MBA in the IESE Business School. Has 15 years of experience in the Environmental Infrastructure sector, both in water and sanitation and recycling and waste recovery. And finally, we also have Mr. Camilo Larraín Sánchez, Legal Affairs Director. Lawyer from the University of Diego Portales and Masters in Business Law from University of Los Andes. In Aguas Andinas since 2000, Secretary of Board of Director, Secretary of ANDESS A.G., and subsidiary ESSAL until 2020, also Director of Sociedad Canal del Maipo and Eléctrica Puntilla S.A. As I've said today, we'll review the results from Aguas Andinas. Finally, we'll answer questions. I hope we could do them through the chat. We'll read them in the presentation and mention that there will be a survey that the company left in the group chat and for the evaluation of this presentation. So, we'll leave you with Mr. Didac.

Good morning, everybody. Welcome to this first presentation of results of the year from Aguas Andinas. Before we begin, I'd first like to welcome all of the investors and analysts that have gathered here in this presentation. Hopefully, you and your families are well in the context that there's the COVID still present. And because of this reason, we still do this presentation of results virtually. But hopefully, at some time, we could retake these meetings presentially, and we could hopefully gather in a meeting altogether. Before we begin, if you'll allow me, I'd like to begin explaining a series of changes that have happened in the financial direction of Aguas Andinas that impact the area of investments and investors with information available. First of all, I'd like to thank Alejandro Riquelme for many years, he's been the responsible from this area. He takes a lot of functions in the company, driving strategic projects within Aguas Andinas but stop having functions in the financial area. A long-term degree in this environment, so I'd like to thank. Always a great job from Alejandro. As well, I'd like to present Antonela Laino, who is the person who joined Aguas Andinas taking Alejandro's functions. Antonela has an experience in all those type of areas, so we'd like to welcome her. Strengthening the team, we'd like to include additional analysts. The investments team, Erika Sandoval, who's with us and the team. And Denisse Labarca and team, who still has the Investor Relations role. So without further ado, we could begin this presentation of results. There will be composed of 3 parts since we've done in the last presentations. We select topics that we consider are relevant for the company and our interest for the investors and analysts of the company, so will present in 3 blocks. First, we'll begin with the block speaking about results and finances. The second block that we will focus in the management of water scarcity that's impacting the metropolitan region. And in regards to regulation, we'll try resolve issues about legal stuff or from the constitutional assembly. To begin, we'll do a brief summary of what this first quarter has been, ensuring that the company is focused on 2 big topics. On one hand, as you might know, we have water scarcity that's impacting the metropolitan region for many years. But in the last 3, we could see its impact a bit more, so the company has focused much of its efforts in managing and mitigating these effects and making sure that rational continuity for all the clients and habitants for the metropolitan region, it's still given with full normality as it's been through this first quarter this summer, this Chilean summer. It's been hard to manage, but with the effort at a management level and with the investments' held, we could overcome restrictions. A second block that's relevant and has impact in the results that we'll see at the company, this is a macro economical context that we face. The context that it's having increased inflation that's increasing the cost of the company. So we need to concentrate a lot of efforts in management and launching or intensifying our efficiency plans as to mitigating these effects and having margins and profitability as it's been historically throughout the company. If we concentrate at the 4 main milestones that are interesting to mention in this kick off of this first quarter, I would highlight a good trajectory, a positive trajectory with sales and revenues of the company in this page. EBITDA driven by increase of tariffs by operations of new investments, that they have an increase of more than 10% of revenues in this quarter. This increase in revenues is also has intensified. It's mean that our EBITDA generation from the previous trimester of 2021 with more than 10%. As I said, thanks to this increase, our revenues have been compensated partially by our operational costs that we will mention throughout the presentation. Additionally, as I mentioned, we've continued mitigating. We've been managing the impacts of climate change, a climate change that's translated into a period of drought and orders for our city. That's very important in the region. And that, to me, for these years in since the final plan of investments, we find that it's strategic and that we find that this first quarter, we've invested more than CLP 26 million and improvements of infrastructure and resilience and water resources. Additionally, thanks to the agreement that we did in the year 2021 in August, we've been able to manage more efficiently the Rio Maipo water transfers, and this has allowed us to maintain in safety levels for this 2020 year without adding restrictions in the metropolitan region. As well, I'd like to mention, thanks to this climate change, water consumption of the company has been decreasing. In regards to the first quarter of 2021, a reduction of consumption that we believe is produced by many factors between them, a decrease of average temperatures in summer, we're speaking about a grade and a half into the historical data. This inspects consumption significantly. Additionally, as you might know, we've held campaigns that are internal from municipalities in order to try to harvest the consumption of water. This has had an impact in the behaviors of our clients versus water consumption. That's been reflected here in this mitigation for consumption in the population. And we believe as well that throughout this summer 2022, mobility inside the region has increased regards to the periods because of -- because there's such confinements. So there is less consumption. With more detail, we realize this reduction, but taking into account that the company, in regards to the first quarter of year 2021, has had a decrease in regards to residential consumption. Additionally, what we've mentioned, it's the pressure that the company is receiving, especially in inflation topics about the operational costs. This increase of costs portrayed in different areas of the company has implied at the company intensifies the efficiency plans for the idea, mitigating partially this increased cost. As we see as well in the presentation, the impact of the first trimester or quarter are reflected, and have a significant impact. Fourth point that we believe it's interesting to mention, the generation of operational cash flow that the company has had an significant increase linked especially to the increase of collection and payment of taxes that has had an increase of almost 3x the generation of cash flow in regards to the previous period. Let's remember as well that inflation has had a significant impact in our cost. It's accounting impact, not our cash flow, so we will see an increase in financial costs. But in the cash flow, it doesn't have a direct impact. If we go to analyze what the figures are in the main magnitude of Aguas Andinas this first quarter, what we could see is an increase in sales. More than 20% -- more than 10%, sorry, because of tariffs linked by operations of new operations that has taken into arising sales of more than 10%. Increase of revenues that has also translated into an EBITDA increase, more than 4% -- almost 4% compensated by the increase of operational costs, mainly in 3 paths. It has a base of costs linked to inflation or increase of inflation. We'll see operational costs increasing as well, we've had costs linked to drought-like purchase of water, purchase of water that's been maintained in elevated levels as in recent periods, but with the impact on the price as with the rise. Historically, it's -- we see that it's traded in 5%. There is a little bit of increase. It's been like this in this first quarter. We hope that in the following quarter, we have reduced or stabilized. But if we compare with the previous period, we see that there's increase in delinquency. In a one-off effect that's non-recurring in regards to delinquency associated to a certain make -- may make -- again delinquency extremely low in the first quarter. If we would compare the perimeters in non-recurring of effects would be 3.5% versus 2.2%. With a small increase, but it's not so significant. Net results decreased 12% linked to the financial costs associated to the U.S., and positive cash increase with more than 3x of increase so there's other generation of cash flow in the company. If we concentrate in the revenues very linked to the indexation polynomial going into the operation of new investments as well as the polynomial compensated partially because of the reduction of consumption. As we mentioned, this reduction is of 2.3% in regards to the first quarter of 2021 and very linked to residential consumption that is reduced in 1.7% and a 3.9% in regards to the previous period. This increase of revenues has also translated into an increase of EBITDA. If we can see, that's very similar impacted by operational costs. The first block linked to the inflation, everything that is salary, is a matter on track that we have linked to inflation have increased in the cost, so we have a significant impact. All those blocks of costs linked to the drought specialty water purchase. As we've mentioned, we maintain a water purchase and elevated levels with the idea of maintaining elevated. That's there with a significant impact. And costs, all those costs related to networks and anticipation of water efficiency, that's also taking into arise our operational costs. And as we've mentioned, the probability has an impact of almost CLP 300,000 in the first quarter. Generation of cash flow is very positive, increasing. And we see 2 effects here that needs to be mentioned. First of all, an increase of net debt correction to the U.S., so it has a positive effect. Just remember that in the first quarter, we did the dividend payment, so it has an impact on the cash flow in the company that increases the net financial area. And these 2 increase of debt are compensated with the cash flow generation, debt and operational cash flow we've had in this first quarter of 2021. As we said, it's very important in our CapEx plan, and we need to strengthen this plan. 22% of these investments are destined to bring forward some operational security and increasing the water supply of the company. 23% to maintaining our networks of water supply and 30% of increasing our water supply. Finally, I'd like to go over the main ratios of the company that reflects this solidity for this first year. An increase of value EBITDA of 7%. The EBITDA ratio, it's very attractive. Our ROIC over the 10%, almost in 11%, leverage controlled and 1.68 of ratio that have showed us the decision of the cash flow, and our net ratio of EBITDA stabilized in 3.8x. Let's remember that this first quarter, it was in April, the fixed rating right by the AA perspective of the company, so this reflects the trust that they have in the strength of Aguas Andinas. Without further ado, I leave Daniel -- I give the floor to Daniel, so he explains about water challenges and climate change.

Hi, good morning. As Didac mentioned, the main challenge we're facing is droughts. If we could see in this graph, historic graph for 70 years, where we could see we've been at very low levels, strictly speaking. And what's relevant here in the past 4 years are extremely dry conditions that we're giving in the last years, but not with this consistency. It's really hard to recover. We go to the next slide. Additional spend in summer. The main topic here, we have 2 slides, and the Aguas del Maipo is the main one. Aguas Andinas and Mapocho, that has its particularities. In the waters of Maipo since last year, 2021, and curve is the average year. We started with that administrate issue because getting the service, and they were very low in January, sanitation and watershed that are very low. And even worse, in the last few years, at the bottom, we have the 2 watersheds. The green would be the historical average. Red, what was the worst year, up until that year 2020. And in blue, it's -- with that, see the last 3 months. More demand, more heat. How do we manage this? Because of the other users of the accounts, the analysts who has allowed us to sustain this position. In regards to the regulations and the demand, around 2% of the water wasn't available with the user. So with the agreement of redistribution, we have this -- how we could get supply to the city without mentioning. You could use its peak in summer with a level, for what we've been working on is maintaining adequate levels. Thanks to the analysts, regarding the mid-summer. If we go to the next. In the Mapocho, maybe you've seen it in the media, mentioning that effectively, it was this way Las Condes and Vitacura communities, they have no basins. So here, impacted very strongly. In August, we saw -- we had some -- the visits predicted for summer, and we have plans for restraint or containment. No massive call for the residential or was a communicational focus of these. Those communities worked with the clients to be able to great consumers. As well, the lack of resolutions in terms of water on the left, this allowed us to support the Mapocho sector with the Maipo water. And last, because of rationing, we cannot apply it, facilitating, having it ready, needed, thanks to the other management, haven't been able to apply it. We go to the following slide. Managing in the year, what we are doing in the medium term in order to have more robust action plans. Other actions in particular, all the accounts have been incorporated. Underground Lo Mena, Antonio Varas are tracking of areas that we have underground, where we're having an underground efficiency plans for the wells in order to extract water, reduction of losses in the network and efficiency in the distribution in the plants and the agreements in collaborative projects. We have this issue of the drought that we cannot have it because of the operations of Aguas Andinas. We have to go and find solutions and/or basin or watershed as well as other actions. And we're seeing reverse or we are also seeing this -- the other users. So this plan, when we go to the following one, increase actions, both the Negro pit and that we're doing the collaborations from April. We have 2,000 cubic meters per second, so with concrete actions like this, recovering for the following years, the balance supply and demand, supply and demand is more balanced. Further climate change in droughts that we're facing structurally. Without further ado, I will give the floor to Camilo.

Hello. Good morning. I will speak up on these parts about the evolution of the Constitutional Convention. The current news in regards to water resources and what impacts us directly as a sanitary services with the public company, utility company. When it's in its final stage, the convention and other meetings with investors at the beginning -- the very beginning, came to the conclusion that this convention will have a special worry about the water resource issue, water and reverse. In the sense that a big majority of the people are anticipating in the convention should worry. But it's not relevant or majority, because the water -- for the water and sewage resource people, and that's how we've been seeing it. Now, the work commissions is over in the 6 and 7 different commissions that were organized to do specific jobs, part of the different matters that will the subject of the constitutional conventional draft. The water supply resource and sanitary businesses aligns mainly in the environment convention and the fundamental rights commission, and the other one that's from the body of the states. Having finished this, there are different conclusions or issues that could be taken out. In the first place, the convention matters of water resources, obviously. There's proposed a very relevant change that's organic, and in regards to all the water issues related by national organization or regulations. Well as well, it's proposed that there's a preference from human consumption. This is very relevant and aligned with modifications to a water code that now it's a law after 11 years, modifications laws from 2006 through 2022. We also have the human rights to access of water in the same terms from the United Nations. We've always had the conviction that this obligation to satisfy the human rights to access our water, and it's an obligation that the state is guaranteed and that in other countries. We always had the convention of the sanitary sector, especially our business, and we comply fully the presets of the United Nations so that in a place, we permanently have the human right to access of water for people. Another perspective that were approved from our section in regards to with -- has to do with the water ratio we see in the frontline slide. But before, I'd like to say that there were some proposals, and the commissions are trying to -- that the draft of the constitution would say that the businesses of public sanitary would -- should be part of ownership of the states. That was from the plane, but this story provision that it's still being -- it's still under discussion, but this is a mistake. This is a norm that does not forecast on -- with regards to our permanent nor that was seen at the Environment Commission and it was rejected, and it doesn't have the support of the members. The conventions of the majority, at least, in regards to this idea. So it should be rejected, and the processing that's -- that we're waiting for the provisions. And in the following slide, I will mention that there was an attempt to impact the right of ownership in regards to concessionaires or concessionaires or public services or HBTs, and this was rejected from the assembly. At the moment, we have a constitutional proposal for human right to water, preference for water consumption and in matters of water resources. We could go to the following slide. There's an issue that's very delicate, and it was approved and want to explain it accordingly. Water use rights, which are seen by the water code? It was approved by the plenary that they go to be an -- administrative authorizations that have a lower range of legal access. They offer less rights, less guarantees for protection of less entity. And the other hand, being said that they're uncommerciable. A public utility center company like ours in general, it's not so relevant, the title in itself. What matters the most, to be able to have the availability of these waters, and this, obviously, it's not risking at any moment that a company like ours stops having these waters. But the incommerciable feature could have some complications, not because our company starts to commercialize these waters, but the total range of our objectives for we have waters in order to transform them in drinking water and send it to our clients. Being incommerciable, these waters, the issue is that they're very aspect of the company in order to face climate change and the drought that has been explained by Daniel and Didac. We have contracts with the right owners of rental supply or general agreements that are marketable for character, and this would be seen as impacted, so this could be impacted. All of this is being seen in the Transitory Provisions Commission. This commission is analyzing the way in that this provision, that will be part of the permanent provisions. And after approving this draft, they will go to publish it. And waters at a tidal level, they will be authorization at non-marketable factor. All this is being seen as how this plays or is combined with the current reality that there are water rights that are established in the code. Some complications, as I said, this is a topic that will happen with the waters that's -- the water acquires normally. And this is the study, if we reach this after, is the adequate transitory provision that could have an impact in accounting, but they all dependent from the transitory provisions. If there's for future rising for the human rights or if they are on their execution in later years, so we still have the current situations. It will not have an effect. It will have effect if this water could be transformed into drinking water. It probably could have an impact in tariffs, but they -- the recovery of tariffs of the conflict of water resource and thinking what is the term around the basis of what the commercial value of it is. So evidently, there should be an adaptation of the law. Finally, mentioning that this convention is in its final stage of harmonization and the transitory provisions, what is being discussed today concretely and tomorrow and the following week as well, and will be defined this transition in regards to the water issue. That's it. Thank you very much.

Perfect, Camilo. Thank you very much as well to Didac and Daniel for the script presentation. Currently, I will invite all of the audience so they could seek questions through the chat, so that we could read it. And the first question we have, it's -- we have a more general one. It could be for Didac, if you could see a change of the ratings of the company in regards to the payment of debt in capacity?

Thanks, Paul. As I've mentioned in the initial part of the presentation, which is just right up our rating, analyzing forecast and doing it to forecast for the future. So we don't consider that there should be a change in our rating in the short term. It's true that the company will place a lot of focus in the control of the debt, so for us, it will be an objective that the ratio of EBITDA net ratio should be in stable figures. And if this is produced, we will not be a change in the rating. We'll have to place a lot of focus in the depth of the company in this context.

Perfect. Thank you, Didac. We also have a question here. It says, the appropriation of the current rights is -- are established, how does the camp impact the balance of rights, and there are any provisions for this?

Okay. This -- as I've mentioned, it's part of the discussion of the transitory provisions. This is undergoing evolution. There are different opinions or ways of facing topics, and this is since solved it yet. Of course, that our possibility could be a transit of rights towards authorization. It's a system of appropriation. Another possibility could be the new rights other solutions. This is undergoing analysis by the institutionalists. There's a thesis that also suggests that the water rights turn directly into authorizations which, okay, it all worries us, because there will be unmarketable for patients, and they would turn into non-marketable. So the impact of financing and accounting, I could comment it, but it's a topic that needs to be analyzed once we have a definite draft of such constitution.

Thank you, Camilo. We have another question. Could you give us an update of the impact for the company of the new law that resolved the nontransferable issue approved last January. Didac, maybe?

Yes. Thank you, Paul. As you've mentioned, it's a new law that it's in force and considers in January and the period for COVID, we have 2 months monitoring and seeing evolution, so possibly soon to see the effects. But we could say that the impact or the follow-up that clients are doing about this new law, it's practically low. Follow up, it's being in an order of 30%, I would say.

Okay. Perfect, Didac. Another question here we have. What implies that the authorization of water are non-transferable from the legal, economical and financial perspective?

As I've said, we have water rights for -- to make it drinkable. It's not within our expectations, marketing water rights. Nonetheless, we always need more water rights. More water rights that are acquired by others that do not use them to say something for different reasons of law's interest or accelerating contracts, in order to ask for more this increasing demand and this extreme drought moment for the culture specific demand. This could without the transitory vision could have a complication to acquire new water sources. We need to have at present the convention where they have a preference for human consumption, so we'll see provisions how they are played in the future. But because preference for human consumption will have an impact, of course, in securing water sources to satisfy human consumption.

Yes. Thank you, Camilo. Here, Andrew McCarthy is asking, what intent for raw water comes from purchases or renting of water out, including agreements signed with the channel lists.

I don't know if it will be this way, but you see the balance of the quarter. What was the season of spring-summer, up until March, the deficit that we had out of 43%. So part of this with the dam because of the channel lists and with other payment for these independent contractors and most of it came from the agreement -- collective agreements from the dam.

Thank you, Daniel. We also have a question from Maria, it says, it has to do with the channel lists. With the agreements that includes that the transfers of water will be in singulary prices instead of tariff prices. Will this reduce raw water purchase?

The payments, the public, it could be downloaded. Here, we have different levels of prices in order to reflect the water. It does not have the same period of price in different periods throughout the year. That's how it have their annual sites. What they do is to define price when we will consider slow demand, relatively low impact offset for water. It's of a similar price to the one known in tariff because of right holders. Going to look for this slow demand doesn't have the same prices from low demand and high demand. We have to mention something when there's a bit on the river. We have a lot of demand from agriculture sector to another price, and the mark that was taken over the cost. Once again, to cost, that's a very evident example to what we have in the several measures are very deep dam post-extraction, the last cubic meters are always more expensive. And the human rights that ask for water and the water and it's on high demand or they need to price marginal price, which is very like the merchant price that we're analyzing.

Well, if you allow me, I think there was a question at the beginning. Comes from Cerro Negro, the impact of the tariffs.

If you'll allow me to answer that. The term impact of Cerro Negro, 0.6% on the tariff. In order to reach this, we could determine the work, 29%. But the work needs to be 100% complete, which will happen in the following months of June. So redundance in full review. This part is done, will be approved. We hope that it's this way and the tariffs would be placing around June.

Thank you, Daniel. Effectively here, with a question from Rodrigo Morales. We also have another question from Maria. What impact in costs you estimate the internalization of biofactory?

Do you want to answer, Daniel, or should I answer? Or you like?

I could say from the operational effective and integration practically to the equality of conditions, it has been an effect of equivalents of ratio conditions. It impacts our payments. Same time with our water adjustments to the costs and the evaluation that we have, previously, it's a bit more balanced have a significant impact. Having said this, Brazil, in the sanitation stage, we got to make progress in the program to see how we capture post integration.

Thank you, Daniel. We also have a question here. Thanks for their comments, all set for the biggest tariff for the biggest staff because of the increase of inflation?

As we could see, a higher inflationary has an impact in the financial costs significantly. But thanks for the following, now we have natural coverage in tariffs that allows us to compensate for these -- for 2 years. So this increase of costs of -- for inflation have an effect in the short term and an increase of financial costs that we, through the tariffs, we recover approximately in 2 years.

Okay. Perfect. Thank you very much, Didac. Here, just another question, Andres. As color on the impact of raw water costs and the purchase sale of 2022 rainfall levels are similar to 2021?

Yes, they're similar to what it was from last year. But last year, it was very bad. It's very hard to think that this year could be worse. If it's just as bad, they might be similar. The contractors in waters will impact the transfer costs.

Excellent. There's a question that we skipped, it was one of the first ones. It's what percentage of the project may now will add to the tariffs? When do you think this should happen?

I think I already answered that, 0.6%. The work is done in June. We thought that tariffs could be in June.

Perfect. I don't know if there are some more questions, we'll wait. There's another one from Fernan Gonzalez. What could we wait from the capitalization of financial cost for the rest of the year, similar to the ones in the first quarter?

Yes, the answer is yes, similar. We have capitalization criteria that's held by the auditors. We'll maintain this criteria as we've done historically. There's no accounting change in the sense, so we should wait approximately the same values.

Fine. Here, a question from Mr. Manuel Vath. The financial costs due to inflation increase are noncash, but they could still reduce the profit for the year. Will these effects be considered for distributable income or since they're non-cash, could they be cleaned?

Yes. The distribution of dividends, it's a subject that approached in the stakeholders Board. It will be approached in this environment. We always try to make sure the operation continuity, so every milestone in regards to results, we value the context, we value the risk -- the commercial risks and ideas to preserve this operational continuity to the mark. Every time, we'll evaluate the cash flow and contract situation. And in accordance with this, we will give the distribution of dividends. Historically, the company has been distributing 100% of the recurring utilities, and the policy is still the same. We always evaluate at the moment of distribution. The context, the cash and balance edition in this sense, we move forward.

Okay. Here's another question. Sorry, Daniel or anyone, if could you give us an update on the investment plans for this year? I think this is for Didac.

Yes. I could answer at the financial level, if you want, Daniel answer at a project level. But mainly, CapEx plan maintains an investment level similar to 2021. So we'll invest less than CLP 155 million with the idea of making sure of operational continuity, increasing resiliency in the infrastructure of the company and increasing the water resource. And there's something important in the maintaining of networks or CapEx, we increased digitalization and operational improvements of the company. But an objective for CapEx, because this expects similar investments to 2021.

There's a question here that we skipped. I would like to mention that the nitrate treatment plant is operational. Does this mean a change in tariffs? And I also like to know how -- when the -- Cerro Negro will be tariffed?

The platform nitrate treatment, it was tariffed. We received the okay, to be able to tariffed, so we have seen the degradation stages and what's been approved for the work, and then incorporating the task. But yes, it's being tariffed.

Okay. Another question here, is it possible with the new constitution, you guys shouldn't pay for the water -- for -- because of the priority, we need to get provision and consumption?

Okay. So the issue of the constitution, it's under development. We still need the termination of the transitory provisions. Preference for human consumption, it's a norm that's established, but this provision needs to bring a benefit for the sanitary sector, their moment of trials or other situations. This is something we need to be seen in the context with the definite draft of the constitution in regards to all topics of water resources and the change of the provisions. I need to do -- have to do with the future because one thing the constitution. But another thing are the great amount of laws that have to do with water rates. For example, the National Agency of Water the national situation for our users, so we need to see the scenario of a signatory company in the future. For now, this company has done simply privilege, all of the agreements with the members of the quarter for something else, and will be privileged the organization on water supply, and -- of watershed. And Aguas Andinas in the first place, we've been reducing. It will always allow us to have the best relationship with members of the watershed.

Thank you, Camilo. Here, we have one question, asking about that what impact will it have in tariffs? I don't know who will answer this, with regards to water, what impact does it have on the tariff?

Sorry, Paul. If you'd like, this question, what we'll do is work it internally, and we'll give it internally.

Excellent. I think we're on time. We'll ask the last question, from Maria, and we'll wrap up. It's unexpected, a better performance of the margins maintained by hydrology but including new water efficiency infrastructure. But what other internal external factors could impact negatively during 2022?

Yes, I mentioned, well, we expect for this year, there's an inflation impact of our operational cost affected by this, so a lot of focus in this aspect. Purchase water, as Daniel mentioned, they are in high levels so we'll always have a price effect that will drive the increase of cost. This will be the second great leverage of price increase in operational costs. And the third lever will have to do with networks and notifications or water efficiency. These 3 parts are where we're trying to improve and manage as best as possible with the ideas to having our margins aligned.

Perfect, Didac. I'd like to take advantage and thank Aguas Andinas for the trust and thank all the clients and investors of you, and potential investors that gathered here in the name of Chile, of course. And Daniel, Didac, Camilo, the whole team, Denisse, Antonela and Erika, for this presentation. And I'd like to leave you the last where you could say goodbye to the investors.

Thank you, Paul. That's it. I'd like to thank -- together -- or, to participate on those first results from this company. I'd like to wish you well. And I'm available for the investors, contact me if you have any questions. Or, as a priority, we've heard the company to reach to the investors is very much a priority, that's why we prioritize it. So don't question to contact us, and we hope that you have a great day, and thank you for being online.

Thank you, Daniel, and thank you all. Remember that this survey there, it would be very helpful if you could answer it. I'd like to say goodbye and mention that there will be a replay available soon after this event, so you could review it if you need it. Thank you very much.