CELSIA S.A. E.S.P. (CELSIA) Earnings Call Transcript & Summary

[Operator Instructions] We would like to thank everyone joining us today. So now I'm going to give the floor to Ricardo, Celsia's Leader. So welcome to Space, to the Zoom, to the webinar, to all these channels that we have to communicate with the people that are interested in Celsia.

Good morning, Gonzalo. Thank you all. Thank you to everyone joining us today who will be listening to the financial results of the team to close the 2022, which was a great year for us. We had great results, and it will allow us to jump into 2023 on the right foot. So we will be talking about the challenges regarding the regulations, but also in the business. And we hope that everything will work out. And with that capacity to adapt that the company has shown, we will be at the forefront of the market. We start this webinar celebrating, if you can name it that way, because we're celebrating the culmination or the end of the blackout of '93, which was a trauma for a big generation, it motivated a big change in the electric sector. Here in Celsia, we were asking many of our younger employees, collaborators, team members. And most of the people didn't know what the blackouts between '92 and '93 were. And this was really traumatic, because it was 11 months of around only 9 hours of power, of blackout in the country. And you can picture this today. It would be something catastrophic. And from this situation under the constitution of 1991, the country started to raise structure and reformulating the electric sector with 2 very important laws, which were 142 and 143 bills that created this solid institutionality that for 30 years has allowed incredible development of the electric sector, of the Colombian electric sector, which we can say that nowadays in terms of quality and price is the best in Latin America. And we will be talking about that in a bit. This is a system that after 30 years has been extremely reliable. Additionally, it has a solidarity scheme of subsidies between high and low income. Let's remember that the higher income levels provide subsidies for the lower income. The level that doesn't have the subsidy and contribution is the fourth level. And there's an additional scheme, which is the distribution areas between the cities and the rural areas. And it allows that the distribution of the DRGs can be supported for many clients. And it's a type of subsidy so that the cities can subsidize energy in the rural areas, which I think something extremely important. Additionally, after that crisis in 1991 -- '92, sorry, the sector started an economic recuperation, economic recovery. So 30 years ago, this sector was 100% public and managed by the public institutions under political criteria, and it had no notions of development. And nowadays, this sector is adding more than 700 -- sorry, COP 7 trillion to the country and it's a public private model with alliances that has allowed to provide and generate an electric matrix and energetic matrix that it's a role model around the world. Most people don't know that the Colombian matrix is the fifth cleanest energetic matrix in the world. So when we're talking about energetic transformation, we should stop talking about that here because we are already there. We also have important challenges. The Decree CO2 27 in which the president of the republic takes the general hold of the CREG, which is the regulation commission and they expanded the Administrative Act, the [ DAID ]. We don't have the regulatory disposition that develop or modified the current regulation on the matter. And on this point, we would like to call -- to make a call, which is let's strengthen the institutionality, because this institutionality was created 3 years ago and it's been evolving really well. It has allowed us to overcome 5 critical drought and rain spells of El Nino without any blackouts. We have also overcome a black part of the history of the country in which the guerrilla groups were bringing down power towers, and there was no one single blackout. All that institutionality has allowed us to increase the coverage, and today we've reached -- to go from 74% to 98% in 30 years. And the quality index are better every day, even when you look at the graphs in which we analyze the price in USD of the low -- of the medium income levels compared to the rest of America. And you compare it to the quality of the system, the countries that have a lower tariff or a lower rate than Colombia, they have a completely deficient matrix or grid, so Venezuela, so are completely deficient. This is really interesting. And when you look at the rate, the minimum wage 30 years ago would buy 20% less kilowatts of what the minimum wage can purchase today. This means that nowadays with the minimum wage, you can buy a lot or we're buying a lot more kilowatts. So we will see how this moves out through the different guilds, the different sectors we're participating and we'll be really aware on how -- what implications this will bring to the sector, especially to our company. Now let's jump to talk about 2 other topics that I'm pretty -- quite sure that you're really interested on, which is the Board of Directors announcement. We're announcing the retribution (sic) [ distribution ] to investors -- the return to investors. So yesterday we published the utility distribution proposal. We will be bringing them to the stakeholders meeting. And it's important to mention that in previous years, the company was providing an ordinary and an extraordinary dividend. This yield we were giving it with the reflection of non-recurring transactions. In this project of utility distribution, we're going to propose to the assembly of COP 283. This is an increment of 11.9% compared to last year, and we will be paying in for quotes -- in 4 parts this year. We're providing 110% of the controltility of 2022. And for these we will be taking from the reserves. And we were doing this out of consideration that our stakeholders or shareholders, we know that the support that they've provided has been really important and that have always motivated to continue in this transformation progress. We want to give them this, this recognition that is relevant. In 2017, the consolidated EBITDA was about COP 1.12 billion, and today we're closing 2022 with an EBITDA of COP 1.8 billion. Additionally, we have COP 200 million through platforms that is not consolidated. This means that the practical -- that the operation has practically doubled. And at the same time, we've been able to hold the index -- the leverage index stable at around 3x the EBITDA. This means that our triple A rating is still there, and we've been able to increase the EBITDA volume. Additionally, the results are providing good dividends with the shareholders. Now regarding the lack of cash flow in the market that we're seeing, that we're experiencing, that has been hitting the prices of our shares. We wanted to mention that we have the reacquisition of shares program that we want it to be proposed in the next meeting, the shareholder meetings in March. This is -- the goal is to reacquire COP 3 billion. That will be done throughout the next 3 years. If we're going to take 3 years to use the COP 3 billion, the idea is to quickly deploy the resources that are needed to give floor to this or to give support to this in the market. The reacquisition of companies in -- and the market share is really important. The first mechanism is through the transactional procedures in the market so we can reacquire a maximum of 25% of the daily average volume of the last 90 sessions. The price of buying must be same or lower than the same or the demand for the system transaction, which is the norm. And the maximum amount of shares of the program that we can reacquire through this mechanism is up to 10% of the shares that are circulating. So this takes us -- that the amount of COP 3 billion is the one that was used to considering this situation. This transactional system is a very good alternative. But we are also aware, and a lot of analysts and investors have mentioned this, that the problem in the market is the lack of cash flow. And that 25% is relatively low. This is only 70 million approximately daily. However, we think that it will support, it would give enough cash flow. And we hope that it will consolidate at least a price that is going to be reasonable for those shareholders that have the need of selling for any reason. But let's look at another mechanism. The other mechanism is the independent one. This implies that the reacquisition would be done through the share market, but it would be different from the usual business round procedures. In this case, we will follow the rules of the programs of reacquisition approved by the society without having inherent limit to the transactional system. In this case, we will do a public bidding to reacquire X shares and we would establish an amount and a price. Operationally, this mechanism works as an OPA, but with very different timeframe as OPA and there is no freeze in the prices. It has very substantial difference. So it's a very fast mechanism. And it's more or less 5 days after you release the hold. And we think it's really quick. And we believe that by combining the 2 mechanisms, we will be addressing this -- or we will be phasing -- we will be seeing an exit to the situation or overcoming this situation. And it will provide a solution to those shareholders who need to sell. Obviously, you're asking us the fundamental value that we're seeing. And what we're doing here is we're simply creating a support mechanism for the cash flow for those processes that I was mentioning. So in the ruling that we will be proposing, we will have the 2 mechanisms. So the Board of Directors and all the management team are working in operations that will allow to reveal and capture the value of the businesses that the organization has. However, we understand that the need for this cash flow in the short term for some of the shareholders is limiting, and we're trying to offer a mechanism that will allow us to overcome this limitation that the market experiences. Now jumping to other subjects. During the Q&A, we will be able to go deeper into that. We have Esteban Piedrahita and Santiago Arango and we will be able to answer any questions that you might have. Regarding the behavior of the rate -- of the energy rate, I would like to tell you that we stick to the guidelines of the national government and we also participated with other companies of the sector in that bidding to build solutions and a framework for this rate. So Celsia clients in Cauca and Tolima experienced a reduction in the rates, in the tariff in the month of November and December 2022. With the accumulated reduction in this moment, the rate dropped from between 2.5% and 8%. And as generated, Celsia did reduction average to 9% compared to the business partners that have energy contracts, energy sales [ contracts ]. So we complied with every -- with all the regulations that were given. And this gives a lot of stability to the indicators that were having an abnormal behavior due to the commodities and supply chain issues, that were generating a lot of pressure. On the other hand, the company also did other -- took all the necessary actions to incorporate Tolima area in the ADD. And we will -- we were able to bridge this gap because it was the only department in the country that didn't have or didn't participate in this scheme. And second, we were able to reduce the cost of distribution. So we have to remember that the institutionality and the clear rules for the game are the ones that have allowed us to do investments that continue strengthening the system. Nowadays, we bring energy or we provide power to more than 1.2 million clients between homes and companies. We invested around COP 5 billion between new grids, new substation, new circuits in the system to improve reliability. In Tolima, it was COP 143 billion and in Valle del Cauca were COP 357 billion. All of this to increase the quality of our service. In the SAIDI indicator, which measures the quality of the service, registered in Celsia 10.29 hours in Valle del Cauca and 40.79 hours in Tolima, improving substantially what we will providing before. And the SAIFI that measures the frequency shows us that the interruptions were 6.6 times in [ Boyaca ] and 19.9 times in Tolima. This is really important in terms of quality. When we look at it at the main cities level, the 5 main cities in Tolima, the improvement is very relevant. Another important indicator in which we're working on to bridge the gap between the 2 departments is in energy loss. In [ Boyaca ], it was 9.4%, a little bit above technical losses, and in Tolima it was 12.9%. And we were -- previously, it was around 27%. So we've improved a lot. Sorry, 20%. So we've improved almost 7%. We conducted maintenance and service plans that include coordination with the control center. We're seeking to minimize displacement time, availability of material and we're incorporating the use of drones to ensure the integrity of the operation. There are a lot of many other investment to achieve more coverage and to increase in the transition -- in the energetic transition. One thing you might know is we created a startup that's called enerBit. It's a technology company focused on the client and whose main product is trading energy. It's completely innovative. The strategic aim is to digitalize electricity and power to give the power of decision to our clients. We're obsessed with reducing the cost of service for each client, to provide new payment methods, new methods. We've developed hardware, software. We have a -- it's a completely independent company from Celsia, but it has all the support. And it's been led by experts that we've brought from all around to increase the value proposal of enerBit. So you will be hearing a lot about enerBit in this year. We started operation with this company as a market agent in 2022 in April, and we close with 1,157 clients. We're already in 4 markets, in Cartagena, Palmira, Medellin and Pereira. And this client base makes enerBit as the fifth trade -- pure trader in the country with the -- and is the second in terms of digital traders. There is another important front in electric vehicles. We closed with over 1,500 charging stations between private, public, residential in several departments and cities in the country. This electric vehicle topic is strengthening every day. We're generating partnerships and we see a potential line for growth seeing what's happening all around the world. Now in internet in home. In internet services, we've been developing for over 3 years. We have over 46,000 clients in Valle del Cauca, Tolima. And I think by now, by today, we're over 50,000 clients with our optic fiber system, an availability of 99.99%. This means it's a really, really good service. Basically, the availability is just -- the design is really good. The experience index is around 83.7%, and this is incredible. In telecommunications, the experience index it's really bad. And we have an experience index that is extraordinary, because it's a company that was designed from 0, 100% digital and provides the best quality internet service in the country. We're in rural areas. We're in the cities. And there's something really beautiful thing here happening. Whatever it is that we pass the optic fiber and we run into a school, we automatically connect the school. And we have 124 schools that have connectivity, and it's almost 80,000 students. For each public school that we go through in Tolima and Valle del Cauca are going to have really good internet service so that they can be connected. So as you can see in this company, we wanted to mention or include this new topic so that you can see the capacity of Celsia to find new horizon, develop new ideas. There are new ideas that we are assessing, that we're considering that in the future we will be talking about that. But we're always willing to adapt and to generate new things. Now with that, we will be talking more about the financial results.

Yes. Thank you, Ricardo. And I would like to greet everyone joining us. As always do it, in the website -- in the shareholders website, you can find the details of the report that we published yesterday, and additional information that you can also see in the site the same -- as they're linked. And now I'm going to do something a little bit different from what I normally do. We want to focus on the certain important events that happened during the semester before we jump into figures. First, I would like to tell you that we did the second sale of that to the [ BID ] as a way to accelerate the collection of that debt that is really important that it was COP 183 billion. This made us to do an assessment of that operation and has a net effect of COP 21 billion. However, that value of COP 21 billion is represented in 4 different accounts. First, we have financial income for COP 31 million linked to the assessment of the interest of that tariff rate under the regulation framework. Second, we have a financial expense of COP 64 billion. Third, we have a fiscal shield, where we saw a difference of COP 22 billion. And finally, we have a deferred tax for COP 11 billion. This operation represents the sale of debt for a rate of around 12% when the financial options, the most competitive in the short term, were giving interest of only 18%. This is due to the IDB support when we started the program, but it also reflects the regulatory stability that allows for these entities to provide these options. Second, we had an asset sales -- the sale of assets in [ Caoba and Lowdel ], given that we're the managers and developers of those platforms for a total of COP 380 billion, that generated utilities after tax of COP 46 billion. However, given that [ Caoba and Lowdel ] are related to the fact that the company has 50% share of those vehicles, the accounting regulation allows us to reflect COP 36 billion of that as a lower value of the investment and only COP 15 billion in the ERI. Finally, as an extraordinary event, and it's normal that in the final quarter of the year, we do all the provisions that we must have. And this year, we registered COP 52 billion that are basically -- that basically come from 2 assets. First, Porvenir II asset, where we registered a detriment of COP 31 billion, but we also had a detriment in the liquidation in the trust fund of the BLM for COP 21 billion. The nonrecurring transactions of the quarter, I'm not including the asset sale, particularly when we talked about the sale of [ Lasanda ] and the provision that we conducted, the net consolidated income were COP 13.2 billion. And additionally, we had a loss due to the controller of COP 19 billion. When depreciating the nonrecurring transactions, the net consolidated earnings in the fourth quarter would be of almost COP 73.7 billion and it would not no longer be a loss, but income of COP 135 billion. In 2021, we also had really important operations when we depreciated them. That's almost COP 100 billion and the comparable debt would be for the COP 74 billion that I told you. And in the control, the result would be COP 113 billion after depreciating the 2021 operations. With the COP 43 billion that I just mentioned. These exceptional movements have an effect on the -- on the quarter and does not set a trend on the operation of the company. Additionally, it's important to remember that in this last quarter, in the Central America operations, we have -- where we were out of operation for the whole quarter due to exceptional events that happened [indiscernible] in Panama generated a lack of power for 3 months. And that's around COP 10 million or so less of income in Central America. In the fourth quarter, the consolidated income added to COP 1.76 trillion. So it's a 46% growth compared to the previous year. In Colombia, the income were boosted by more generation, commercialization, both in contracts and on the spot as well as use and grid connections or network connection, given that there's new infrastructure in operation, in Central America, there were decreasing 13.9% due to the decrease in generation due to the events of SE that I mentioned. The sales cost were COP 1.3 trillion. That's an increment of 60.3% compared to year. The variable costs were COP 1.1 trillion, and they increased 82.5% related to the increase of purchases of assets. The fixed cost added to COP 291 billion, with an increase of 12%, an increase due to operation and maintenance, tax and rent in 2022. The cost of sales reached COP 3.87 trillion, registering a growth of 36.9%. The administrative cost COP 108 billion. It was an increase of 20%, mainly to the debt provision of COP 24 billion. If we exclude the effect of this, the quarter, the administrative cost for the quarter will be COP 83.4 billion with a decrease of 7.4% due to the policy of conscious saving that was implemented in the last quarter. The EBITDA in the quarter was of COP 444 billion with an increase of 10.3% due to our contribution margin that was positive in other segments, including the investment platforms and a more quality of infrastructure that became available to our clients. In 2022, the consolidated EBITDA reached COP 1.78 trillion with an increase of 30.1% and an EBITDA margin of 32%. Now the financial costs that were really important in the quarter were around COP 257 billion, again, registering 166 -- a reduction compared to the same year previously, which were mainly supported by the IBD operation and the support that I was talking early. There was an increase of the indicators in the last year so it's important that you're aware that the effective rate of the last quarter or last quarter in '21 was around 8%, and the debt index and interest of the last [indiscernible] due to this effect of the indicators was around 16%. The [indiscernible] tax were around COP 81 million. This was an increase of 105% due to the increase in the nominal rate of taxes. And it's a growth of around 65.5% compared to previous year. In the net consolidated earnings added to COP 442 billion, and the net attributable to propriety -- to owners of the controller were COP 276 billion. Now jumping to the -- we have an indicator of leverage of 3x of the EBITDA, the average life span of the company is 5.67 years. And at the beginning of this year, we set some really important transactions to reprofile the entrance that we have for this year. We were able to resettle COP 820 billion, and these were divided in terms between 2 and 5 years, including the ordinary bonds for the second market of around COP 242 billion for January. [indiscernible] company with a consolidated [ profit ] of COP [ 24 ] billion. I would like to highlight additionally that in terms of debt, we achieved one of the most important goals that we had, which was basically that our global debt between the third and the fourth quarter would be exactly the same. [indiscernible] debt at the beginning of the year, but the global debt of the organization didn't move between the close of the third quarter and the fourth quarter, and that continues to be our goal. I would like to point out before I finish this portion of the webinar, the deployment or the importance of the platforms out of which we are co-investors and we continue -- we provided the operation and maintenance and the execution of projects. [Caoba] closed with incomes of around COP 224 billion with a growth of 23.7% and EBITDA that is close to COP 195 billion, which was a growth of 25%. On the other side, the large-scale solar energy, which is CO2 energy platform we closed with incomes of COP 26 billion and an EBITDA of COP 20 billion. [Lowdel], which is our solo platform at a lower scale -- a smaller scale, closed with COP 3.3 billion and an EBITDA of COP 1.06 billion. And finally -- and we've talked about this a lot, [indiscernible]. We had income since its start of operation of around COP 39 billion and an EBITDA of COP 31 billion. And with this, Richard, we close the analysis of financial figures, which was a lot, but because it was a closing quarter, it was really good -- it reflects a really good performance of the organization.

Thank you. So yes, these were really outstanding and numbers figures. Even when we're talking to the last part of those platforms, we can see that one of those platforms started from zero and nowadays, you have EBITDA of COP 31 billion. So the solar is gaining a lot of traction. So it's really interesting to see how these -- all these sectors are evolving and how is it that we are growing in all of the sites. However, none of -- all that are leasing is not -- doesn't understand the challenges that we're facing, not only from the regulation side because that's an important challenge. But that macro economy subjects and topics so it's really hard those interest rates that you are starting to feel. All of these starts to wear or start to hit and because we have a CapEx and we're trying to import and the exchange rates are really hitting really hard. With all that combination, we're starting simplification programs, automatization programs last year. We were internally calling them conscious saving, and we were able to reduce and increase the efficiency of our operation to reduce costs and improve efficiency. We were calling the topics, which is the recurring CapEx and other indicators was growing around 6%, 7%. So in reality, we were decreasing really important figures. Additionally, the CapEx for expansion investment, we took really strong measures. So due to all of these exchange rates and all this, obviously, the rules to jump into an expansion CapEx is to change it to make adjustments. So we -- our partners, for instance, the platforms, the risk in the country have increased that's normal that something natural in face of the global instability of mistrust in investment, we are all waiting for that. And we must have new requirements, new conditions, but also to have a financial closure that with all this combination allows us to present to the clients' expansion projects to our Board to see to assess if they're available because this new situation that we're facing is revenue, but our CapEx is really having an impact. And the recurring CapEx, it's important to continue really important development to be able to comply with the regulations, the minimum regulations in data. So with that combination, we're dealing with that for a -- for a year. Now in terms of profitability in the company, and we're going to close with this. By the end of 2022 or the end of 2022 showed us that we still have a positive differential of 131 PD compared to the WACC and the profitability that we have. Today, we have a profitability of 14.33% and at WACC, it's in 13.02%. So it's a difference of 8% compared to the previous year. This means that the increase in capital costs our interest cost is big, but it's not just for us, it's for any company in Colombia. And we also saw an impact from the situation in Central America. Clearly, if we were to take this out, we would have difference of 200 basis points between WACC and ROCE. This allows us to say that we are healthy, that we're good, that we have a company that has been able to overcome all these adverse situations. But to close -- to put the cherry top now in terms of actions for taxes. For instance, in terms of infrastructure, we were approved of COP 70 billion for national projects, 3 in terms of road, 7 for education and one environment. We had an impact on 16 municipalities over 5 departments that were highly vulnerable in Colombia. And we've executed since 2017, more than COP 100 billion. This means that we are reaching more than 110,000 people in 27 different municipalities and country. And we were able to have approval of COP 43 billion for projects in Ibague and [indiscernible]. And we're really happy with this because now, talking to people, there are people who are going to ask us if we're going to approve the donation to the foundation and we will take this proposition to our shareholders. And I think this holds this will hold, but we are providing over COP 220 billion. And we are executing our projects for our communities and around the year, we have COP 7 billion that we donated to the population. So the impact of this program for us is huge. And I think we can close here and we're ready to answer any questions that we have for the shareholders and the investors.

All right. So yes. So we have 202 people attending via Zoom. And we're also broadcasting the event through live Space in Twitter, and we have around 100 people connected there. It's a format that is not specifically designed for Twitter, but we thought it that would be very valid for everyone to be able to connect through that channel. So thank you for joining -- for attending to this invitation. We have a lot of questions to Ricardo, Esteban and Santiago. [ Juan Pullgarin ] has a couple of comments. A lot of people were asking how important is to do this, to mention the blackouts of -- that happened 30 years ago and all the transformation, because most of the times, we just focus -- we don't see the whole picture, the landscape of where we started, how we see that we change it. [ Juan Pullgarin ] is asking, in 2021, the CPI was 5.62% and dividends was 200 in 2022, the CPI was 13.2% and the dividend was 300. Do you think that the dividend that was announced for 2023 will affect the drop of the shares? I don't know what -- and also the impact in the sales and buying of shares. Yes, we were doing the total we can of the dividend, and it's important to consider something that's very important. In 2020, we started a process of an extraordinary dividend. We presented to the assembly as a process of sharing a very important transaction that occurred in 2019. It was the [ Termoflodis ] asset, if you remember, in 2015, 2016. It took a lot of effort -- it was the first time that we proposed a dividend, and we had a lot of, let's say, monitoring from our shareholders. Then after the sales of Flores, we also had an extraordinary dividend that the idea was to make it something a onetime event, and we conducted an extraordinary event or process, if you will. And we started reducing it. And this year, that process comes to an end. The ordinary dividend that nowadays represent the total of the distribution of utilities of earnings that is being proposed to the assembly corresponds to an incremental 15% in the dividend ordinary production that is being distributed to the shareholders. So we jumped from COP 252 per share, and now we are in COP 283 per share ordinary. On the contrary, what we think that the ordinary is complementary to the process of what we announced with a very important part to reimburse our shareholders with the support that -- just for the support that they've had. So more than seeing it in a negative light is understanding that the extraordinary is over, but the ordinary has increased a lot -- and to elaborate on that, 2 things. The first is that the [ leap ] is really we're setting an increase for any first time shareholder. Anyone who is jumping in jumping on board. And we consider that this is really interesting. We think that we are living -- we're going through a very complex situation. We have 17,000 shareholders. Most of them are small shareholders with less than COP 20 million of investment per share. So with these programs that we are presenting, we will be able to help a lot to the liquidity that a lot of people need. It's something that we've seen in the last 3 months. So thank you, Gonzalo, and thank you, Juan Fernando, for the question. There's another question from Juan Fernando that comes via Zoom. To all of those that are attending through Twitter, that's an alternate channel. So if you have any questions, we're doing -- we are answering any questions from Zoom. Juan Fernando also asking the new shares from Ecopetrol -- sorry, Ecopetrol strategies in terms of generating what are the risks in the management and outcomes of Celsia? Ecopetrol, let's say, it's been giving the possibility to develop within the national development plan and they have the option to jump into the generation market, and they're giving up -- they've been giving a priority in terms of solar and wind power. Here, it's -- in Colombia, vertical integration is not allowed. Only 3 companies have the option to do this because we were integrated way before this law come into effect. And yes, if you allow me to jump there. Within the national development plan, Ecopetrol can jump in and start participating in the 4 sectors. If the generation comes from renewable nonconventional sources, only if that happens. They can integrate as long as the sources are from those, are like those. The vertical integration would only be allowed for those companies that were consolidated before the law of interaction. And a lot of people are asking, how can we low the rate. We can lower the rate by having more competition by expanding the market. Ecopetrol has the option, can do it, yes, it's more than welcome. As long as they don't start doing dumping and just doing projects with really, let's say, strange maneuvers because it's a public entity. But we believe that more competition, more competitiveness, bringing more investors in the [ all kind ] -- the wind power and solar power, if we bring more -- there are a lot of investors coming from different -- from around the world, from very important markets that want to invest there. So the -- this is going to benefit all of the clients and consumers in the country. That's basically it. Another question from [indiscernible] 50:14. enerBit that was mentioned during this presentation. Is it -- what happens with the enerBit?

Yes, we have this digital trailer for several years, and we were able to jump into market or to launch last year. This has a very special configuration because it can offer products that are really different from the ones that the traditional traders can offer. So additionally, we develop a hardware with some start-ups from Cali and with our innovation R&D team from enerBit that allows us not only to, let's say, use of smart measuring device, but have another device that allows us to have an interrelationship with the client that is really interesting is really key. So it's a trade that has traded that has its partner, it has its differential. And we hope that will go beyond energy and more into interaction with clients and customers. And we hope that in the future, you will become customers for enerBit if you're in one of the cities that we mentioned because we're going to expand in this year, we hope that you do.

There's a comment from Elena. She's really happy about this news of the optic fiber connection in school. She's really happy with that. No. In the repurchase, do you have the times, the estimated times?

No, we will jump to the assembly, we have the shareholders meeting. We will hope for approval, and we will be working diligently. We are already developing a plan so that we can do it in a short time as possible and operating with either of the mechanisms that we mentioned. We have the COP 300 billion. If we require that for this year, then we will use it this year. But it's according to what our shareholders request from us. So we're being very active in the execution of that mandate of that asset.

Now due to the tax shield and given the new regulations, would Celsia be reducing the investment?

Yes. Unfortunately, yes. I'm going to tell you, and I'm going to ask Esteban to provide the scenario.

How is it the law that 1715?

Almost give us an incentive of around 300 basis points. Now with this new tax reform and this new development, they practically eliminated. So Esteban, if you can tell us a little bit about that.

Yes, as Juan was mentioning in his question, with the tax reform the minimum [ tributation ] rate that was done we had a big impact in the renewables and everything regarding the transition -- energetic transition such as wind, hydrogen that was affected there and a lot of different things. So now we cannot reach those 0% rates that were the law the 15 that law was proposing or doing, but now we're subject to that minimum rate of 15%. In our estimate that represents of around half of what the 17.15 almost was [indiscernible] to be between 1 to 6 -- sorry, the [indiscernible] for solar and wind power projects, there was a contribution for around 1% of net sales to [indiscernible]. It was COP 287 billion that sales Colombia provided as a payment for taxes, which is a little more than a 60% increase compared to the average tax that we paid this year, we're going to pay COP 287 billion. So it's a tax machinery that was really important there. So it's an explanation to the 300 megawatts that this year we had. So we're sending a message to the government that, look, you have to take care of this company because we're really important. Because it's a lot of money that we're providing in taxes.

Another that's really important in shares repurchase, how is that going to be financed, that repurchase of shares?

It's a very good question. And at this moment, we're conducting all the exercise, what I'm telling you is that in our main plant, we're not going to be using the debt. So within our main plant using debt or we're doing an assessment of our cash flow for the year of the different resources that we have in Colombia, the operations in Central America, so that we can basically do variation [indiscernible] repurchases with the… Almost 200 in some. So is there anything from [indiscernible]? Figure money in the project. This doesn't mean that the asset is completely 0. It means that the asset and debts are the same. The trust fund on the day, we have a really important cash flow [indiscernible] what we had was a detriment decent due to cautionary accounting due to the vulnerability and the change in prices for the metals and all that, with the trust fund, we wanted to recover that. But we still have a value and we have had an expectation of recovering cash flow with those assets. And now we're going to give the floor to the people that are raising their hand in Zoom. So please Roberto Paniagua. -- you can open your mic now and do your question.

Can you hear me?

Yes, Roberto, we can hear you. No. We also have Katherine Ortiz, Katherine, go ahead.

I know that at the beginning, Ricardo did a very comprehensive introduction regarding everything on the rate, tariff, the [indiscernible], the blackout, but I would like to know and on being aware that we still don't have clarity on the, what the President of the Republic wants to do by having the role of the [indiscernible] view of being able to analyze the legal aspect of that decision and the scope of it. And how far can he come? And if there is any limit to the changes that he might do because the big worry is how much -- what's the impact on the finances of the companies that nowadays are, [indiscernible] superintendent of public you do have [indiscernible]. So in this sense, the President to quote of the function that could allow to have a final word policies -- so what are we seeing today? The article of the constitution provides to the comment of the legislators so that they can fix through law, specifically 143, all the capabilities in terms of rates. So today, we think that the President can perfectly have the general competence or the general rule but in terms of specific [indiscernible] regime, then there is where we think that cannot be done because it was a lot of legislative through the 140 law that delegated those [indiscernible], which is what you can see from what you've heard from different assets, specifically professors from the academy that have talked about it. So we're waiting to see the decree and see and waiting to assess. But so far, nothing has been defined. And a final question related to all of this. Does this change the expectation of future investment in Celsia? Have you had any revisions of the investment plans [indiscernible]?

Well, thank you to all of you. And there were a lot of questions with the CapEx regarding CapEx. There's a question from [indiscernible]. She saying, I don’t really understand the dividends. Are you going to do a proposal of distribution of ordinary dividend for COP 283 per share and that extraordinary dividend will be used for repurchase of shares?

No, it's not that. The extraordinary dividend that we had in the last 2 years tops [indiscernible]. Yes, it was conceived and the finish.

Let's see if you can. Yes. I have 3 questions. The first is can you give us any information on CapEx guideline -- we're having audio difficulties. We'll come back once the audio is re-established.

I'm going to answer one of your questions because, so regarding the indexes, the strategy of the organization is to always have a debt that reflects the index that reflects the income. That's why it's tied to the CPI. If you measure the impact of the investment on the cost and income, there's no need to continue with the correlation of it to index, the CPI in depth because there's a better way to correlate with what's been with the income of the company. We didn't have estimated guidance to share, we already shared some insight on the CapEx. But now regarding the EBITDA, we're not seeing extreme growth in EBITDA. But it is still very important to remind you all that we're still under the project of the [indiscernible] internet to all of our business lines. So just to answer a little bit. And the other one is the geographic diversification. Yes, we have a low geographical diversification but [indiscernible]. So that we can provide that diversification in Colombia. But it's clearly more difficult to diversify outside of Colombia. So that might be a little bit beyond what we're capable of.

So we have some questions from repurchase. So I think it's important to unify them. One is saying that if you're not worried that after the purchase, the liquidity is going to be lower. Why is it that you're not launching an OPA [indiscernible] what share -- what percentage of shares is the company planning to repurchase? Also, if you were planning a reacquisition?

Yes, I think that we were -- we did a lot of emphasis. And we have the goal to provide action to those minority shareholders that are not finding liquidity that are relatively small. So that's the main goal. The COP 300 billion, basically, you're going to closed, but it might vary. The other questions, let's say, I don't know if Esteban wants to complement. But yes, that's basically the goal is to provide liquidity for those small shareholders.

Question is what are we going to do with the shares that we acquired repurchased?

Perhaps regulating for a bit and they will not be part of the deciding forum or for the profits allocation. So basically we will do what's been what's under the regulation of the code so yes, so far, we will just, yes, we're just in the phase of reacquiring. [indiscernible].

But for nothing that has been percentage to the Congress. Okay. Now I'm going to talk a little bit about El Nino phenomenon. So El Nino has this forecast. The last 2 weeks, the probability jumped from 45%, 50% to 60% by the end -- by the second half of the year. So the temperature of the Pacific it's -- or the -- where, yes the Pacific has just that [indiscernible] has just passed. So the temperature in the Pacific has gone back, it's standard and we're reaching the limit of time where there should be a strong drop, and this has led us to think that we're going to have by the end of the year, a dry spell and if El Nino doesn't happen this year, in 2024, we will see El Nino. So yes, it's a really complicated situation. That's why there is a lot of noise with the stock market prices. We're looking at this signals, we'll start to save water for that situation and we want to do save water, basically the systems just takes to turn on the thermal generators. So due to the changes of prices on the market, when 3 years ago the gas powered and the coal power plants had a cost of COP 200 per watt, now we will be seeing COP 400. So saving water is more expensive now than a couple of years ago. So people in the stock market don’t really consider this. So they only focus on commodity prices. And also with the policies and the announcement of the government of stopping the gas exploration because the natural gas portfolio is just dropping in the country. We are coming to the spring where forecast are not so precise but between May and June we will have a clear stance on what the perspective is or the forecast is. I'll try to address your question in part. And yes, we didn't comply with guideline, effectively we are above the debt on that we're still on the metric of leverage that where we wanted which is 3x the EBITDA, we're not outside of that, because it's the leverage that we want to have as a business. Second, there is something that is while it's not in our normal standard, the operations we do which is by the end of the year is COP 200 billion in change of debt that we had to term translating the financial report but nothing regarding in debt. For the rest we have several project regarding the platforms and the rate option we have the IDB we already had a lot of cash from there and we have several projects that we're thinking on bringing more into this project [indiscernible] so that we can relative those platforms. So the idea is we are in transit period. If we can close the year above what we are expecting then we will jump into executing part. So yes, there was a delay on the resources but that doesn't mean that they are not going to arrive. And it's not structural, it's due to outside factors. Second, where is the debt and who is going to do the reacquisition? The BCA, it's a company that doesn’t have debt fundamentally. It's backed by an operation on account payable of the assets that was done in 2017. And from all the flows are in LA Colombia company. So let's say that we pay a debt if we want it of the source, if we want it, it would be in LA Colombia and it will not be a good decision especially who is repaying most of that is LA Colombia. And we will be seeing a tax shield that would be enormous. In the assay where we have a little bit more flexibility. So let's say that. In matter of speaking we understand that the 16% is debt, is there but it's a conjuncture and we should go back to normal levels and if you were to make that decision today we would be executing a really high cost of acquisition of value of LA Colombia which has been the big part of our debt. So we don’t -- it doesn't mean that our horizons or we don’t have the interest of reducing the debt of the company the global debt but as we were mentioning 3 months ago a very important part of our plan in face of the macroeconomics risk more than regulatory risk that we have talked a lot in this session, the macroeconomic risks are of difficult time of no liquidity, what we can have is a debt that has a really long profile so that we can manage and have flexibility that's why the plan has been more on that hand rather than prepaying the debt. So [indiscernible] do you have any other questions? We have another question. [indiscernible].

[indiscernible].

So we're going to continue with Ricardo.

So Ricardo Sandoval from Bancolombia. Thank you for the session. I have 2 questions. The first is regarding El Nino that Ricardo just mentioned that today, the marginal scarcity cost, this is COP 200 and the price on stocks in COP 442. Now in the front of a drought scenario or opportunity cost for saving water that is high I would like to know if we would be able in the regulation fee or the user [indiscernible] the cost for -- this means, whenever there is scarcity is it possible that even the rate that you want to reduce will be impacted by that? That's the first question. Maybe you can answer that, and then I'll ask the second question.

So it's a wonderful question. And what I recommend is everyone in Twitter, just recommend following how stock market there is this great channel that explains the Colombian market. So I'm going to give you a really wonderful answer to the clients of [indiscernible]. We have a 95% high. If normally you can reach and it will shoot the rates up and our customers are not going to see any difference. But now let's look at the country. SO the country as it is it's high 80% at long-term contracts. Those long terms contracts are around between COP 270 and COP 300. So 80% are not going to be -- going to have an impact. What happened with the rest of 20%. Let's do that calculation. Let's say it reaches COP 1,000. So it's a differential of COP 700 for the 20%. So you have COP 140 that have more pricing in terms of [indiscernible] let's say, the worst-case scenario of El Nino. But it's also important to point out that in that calculation it's going to have an increase of COP 140, but we're not going to have restrictions due to restriction is going to go down to 0 and restrictions of around COP 30 to COP 40. So the net effect is COP 100. So COP 100 the whole country. But in [indiscernible] and Tolima, there would be no impact. So yes, the COP 300 system in the most critical scenario, there will be just an effect of COP 100 for the duration of the phenomenon. So it's something that's really wonderful that the system has today and the protection that we have with the design of the Colombian electric system. And I want to do a comment that is really important, which is we are needing energy, there was a bid before the decree of the President. There was a bid that's looking for energy for December 2026. And the [indiscernible] is giving an alert because we need the trust of the investors, need to gain and earn the trust of the investors because we might be running into issues there. Sorry, I ran out of battery in my phone. So we're going to be having this -- we will be needing more kilowatts for the Colombian system. So that's something important, so I hope that answers your question, Ricardo.

Ricardo do you have another question? Yes.

Second question is can you give me the number of the article of the National Development Plan that affects the tributary benefits [indiscernible] sources that you mentioned, do you have the number? And I understand that when you look at the whole system the increment is small, but it will be possibly concentrated in areas that are more affected and that are more exposed to market prices rather than the contract prices. So from the political point of view it might be a little bit dangerous. But thank you for your answer.

Ricardo, it's article 146 of the National Development Plan that modifies article 54 of law 143 of 94. And an important, something regarding the political aspect, is yes, just like those 5 and 30, there are other expectations. but politically, it's not -- historically was so we've seen that on the coast, there was a high contraction is not the same as -- so it's not the same position to market as it used -- as it was. And sorry, Ricardo. And what's most important, you're allowing us to talk about a myth, a big myth that was there. So if the reservoir is full then the tariff has to drop. No, it's not like that. It depends on the forecast. And the thing is that saving water and keeping that reservoir full, it's expensive, but that depend forecast. But look what happens because the figure and the data kills the gossip. So once we have that forecast of [indiscernible], the 75% of the price from stock was under the contract. So you can picture this. The stock market was always below and now 2 years after, where I think is down. How long were we in COP 0 in stock, almost 30%. Yes, that happens when we have rain spells. And we are in this transition phase that I've told you, it generates a differential prices. Thank you again, Ricardo.

We have a specific question on the terms of this year. The participant is 0004328. Now regarding the terms of 2023, do you have any expectation?

Yes. As a matter of fact, we refinanced and that figure corresponds to the financial state or to the picture by the end of 2022. As we were mentioning in January this year, we generated the bonds in markets for COP 240 billion. But out of those COP 400 billion, COP 240 million were already refinanced in January and what we're leaving, which is COP 260 billion are the normal things that we always expect to have, that we were not -- yes, I really wanted to reduce the exposition there. I'm going to go back if you can Look how important it is to save water? Close the year at 100% capacity as a water reservoir and 50 days of the year between -- like it hasn’t really rained a lot and [indiscernible] is already at 82%. So yes, the level goes down and it goes down quick.

Okay. stay on, I'm just summarizing because there are some that -- what we're trying to do is we can summarize and answer the question. There is no one raising their hand. We already answered the questions from Twitter space except the opening glitch, one that they have a 2-for-1 promotion, other than that, everything was really wonderful. This was an experiment that we wanted to conduct of using a platform such as Twitter to do a retransmission of our financial report. I think that it was really interesting that more than 100 people were logging for this almost 2 hours. So it's a different way of presenting, but it's a way of communicating and sharing all of our report Ricardo, if you will, the closing words.

Yes. Thank you, everyone, for being with us. There is a thing of a customer that is now receiving invoicing so yes, we will address that with the team and I would like to thank all of you and give you a message that Esteban mentions let's make it possible that in the face of all this regulatory uncertainty that we will be able to be resilient, we will be able to adapt, that we can keep a trajectory of stability, of solidity and we are, that's what we are doing we are at a stage that is different where we have to be really prudent, we have to really control the cost, we have to be really productive and we have to be really prudent with the new investment additionally we need to continue exploring this new avenues for growth. And possibility to develop and reach and improve the quality of life of our customers and thank you very much and hopefully we will meet in the shareholders meeting which is going to be in May, May-June, and hopefully will be there or you can join us through the internet, so thank you very much, thank you everyone.