Engie Energia Chile S.A. (ECL) Earnings Call Transcript & Summary

Good afternoon, everyone, and welcome to Engie Energia Chile's Second Quarter 2020 Results Conference Call. If you need a copy of the press release issued yesterday, it is available on the company's website at www.engie-energia.cl. Before we begin, I would like to remind you that this call is being recorded and that information discussed today may include forward-looking statements regarding the company's financial and operating performance. All projections are subject to risks and uncertainties and actual results may differ materially. Please refer to the detailed notes in the company's press release regarding forward-looking statements. We would like to advise participants that this call is dedicated to investors and market analysts, not for the press. We ask all journalists to contact Engie Energia Chile's PR department for details. I will now turn the call over to Mr. Eduardo Milligan. Please go ahead, sir.

Thank you. Good afternoon, and thank you for attending this call. I hope you and your families are safe and doing well. So today, again, from home office, Bernardita Infante, Head of Corporate Finance; and Marcela Munoz, Head of Investor Relations, and I are very pleased to be once again with you to present this time our first half results. On today's call, we will focus on the following main relevant developments. First, how we are managing the current context and the actions carried out by the company in relation to the COVID pandemic. Second, the transformation of our portfolio of PPAs. As we explained last quarter, we agreed a new PPA structure with our client Antofagasta Minerals, AMSA. Considering this agreement, we have already renegotiated more than 75% of our unregulated portfolio of free client PPAs. But in addition, we also signed this year new PPAs that we will certainly allow ECL to keep a 12-year contracted portfolio, and hopefully, more to come. Third, we will discuss our first half results, the impact of COVID on contracted demand and, of course, our guidance for 2020, together with some sensitivities on demand evolution during the second half. Fourth, we will discuss the progress of our investment plan. We recently acquired Eólica Monte Redondo with wind and hydro capacity of 82 megawatts. We continued with the construction of 2 renewable projects, wind Calama and PV Capricornio. While we just started the construction of a third project, PV Tamaya. And last but not the least, we will present the status of transmission projects under construction or recently awarded. Let's go through the presentation to discuss these topics in more detail. So please, let's move directly to Page #10. So last year, we announced the execution of an ambitious asset rotation plan, which involved the construction of approximately 1,000 megawatts of renewables between solar and wind generation units. The plan will require an investment of approximately $1 billion. We already launched the execution of half of this plan. Back in 2019, ECL acquired 2 PV plants with combined 55 megawatts. At the beginning of July, we also completed the acquisition of Eólica Monte Redondo, or EMR, including a 44-megawatt wind farm and a 34-megawatt hydropower plant. We will explain in detail the transaction in a few minutes, and we also started the construction of our first 3 renewable projects with combined capacity of 362 megawatts. Hence, we are covering almost half of the 1 gigawatt already announced. At the same time, we continue preparing additional projects to complete this first phase and be prepared to even launch the construction of more projects. This means we already committed a total investment of approx $389 million, and we will discuss the status of these projects in a couple of minutes. On Page 11, as we mentioned last quarter, we summarized 2 recent important events on the financing side. First, last January, we replaced the existing $400 million bonds with original maturity in 2021 with a new issuance and larger amount. ECL issued $500 million with new maturity in 2030. Now this transaction improved our liquidity as we extended the average maturity of our debt to almost 8 years and will lower the average cost of our debt to around 3.8%. Because of the make-whole, we reported an approx $13 million one-shot loss affecting our first half financial statements. We consider this nonrecurring, so it should not affect our dividend payment decisions in the future. At the same time, we will report $5.5 million per year in interest expense savings. Now in second place, we -- as we mentioned in previous quarter, during the COP 25, we signed a letter of intent with IBD Invest to structure an innovative type of financing to promote the construction of renewable projects. This financing is for an indicative amount of around $125 million. The due diligence process has been completed, and we are finalizing the documentation to close the transaction in the upcoming weeks. Now please move to Slide 12. And then we will discuss where we are in relation to the price stabilization mechanism. We have already explained in detail how this law and mechanism works. The main 2 variables that will determine the size, the recovery pace of the fund is the demand and the peso-dollar exchange rate. Since the underlying exchange rate of the price is approximately CLP 640 per dollar, while the FX rate is currently close to CLP 770 per dollar. As of June 2020, the size of this account receivable in our books was $112 million. As of March, it was $94 million. This represents an around $6 million monthly increase. As we explained before, to improve our cash flow position, we are evaluating different alternatives to monetize these receivables. But of course, this will depend on the available facilities and the potential costs. An important question you may have is when we expect the fund will be fully consumed. Well, this will depend on the demand and FX evolution, but it will maintain the current FX rate ranges. It could happen between mid-next year and 2022. An appreciation of the Chilean peso will benefit the duration of the fund and vice versa. Now an update about the COVID pandemic. Let's go to Page 13. As we explained during our last call, the COVID pandemic has created several challenges to adapt our processes and operations and to respond very fast, ensuring the safety of our teams, ensuring the operational continuity, and finally, the way we do business and work together with our stakeholders. We continue running our business through the crisis committee and have implemented contingency plans, adopting several sanitary measures in our sites to comply also with the authorities instruction. Similarly, we have monitored the situation and actions taken by our suppliers and contractors asking them to comply with the same standards that we apply to our staff. At present, approx 70% of our staff continue working from home, while employees and contractors are working in shifts in 10 different sites. Our operations are functioning normally. And in this line, I want to recognize the strong efforts from our operational teams to keep running all our assets across the country. We have experienced some mix of delay in the construction of our renewable transmission projects, but we are working to recover these weeks. We will discuss in some minutes the current status of each project under construction. Now let's turn to Page 14. As we explained last quarter, we signed a new agreement with Antofagasta Minerals for the 186-megawatt contract. Following a similar approach to previous solutions, we are doing this to modify the current coal-linked PPA and transform this contract into a green corporate PPA, with a larger duration providing our clients a solution for their needs and also including an important reduction in CO2 emissions. The agreement also involves that ECL take control of Inversiones Hornitos -- of 100%, in fact, of Inversiones Hornitos. And this means full control of CTH unit, which was previously 40% owned by Antofagasta Minerals. Then as a result, we are no longer reporting minority interest in our financial statements starting March 2020. These new contract and price will allow us to continue our reconversion to renewables. We consider now this PPA transformation into a green corporate PPA, a very significant achievement as we have already restructured more than 75% of our free client portfolio. So we are now ready to focus our efforts on providing, again, a win-win solution to Codelco 150-megawatt contract, which is still linked to coal and to CTA unit. Now let's please move to Page 15. We are also showing additional green corporate PPAs that were recently awarded to ECL. Therefore, we have signed more than 700 gigawatts hour per year. PPAs with CAP and Parque Arauco are amongst the most important. In addition, we were awarded and secured 2,400 hectares in the northern region with a purpose to develop 320 megawatts of additional renewable projects, mainly wind. The message behind this new slide is that despite one of our main objectives was to transform what we already had in relation to PPAs and assets, an additional objective, of course, is to grow, capturing additional demand and clients. Now ECL's structure and processes have evolved over the last 3 years for this new phase. As just mentioned, there is only 1 PPA in our free client portfolio that is still linked to coal. This means the transformation process we started 3 years ago to transform all PPAs into green corporate PPAs is almost in the final part. Half of the renewals linked to this process already are under construction and that we can move forward towards a new phase of additional growth, leveraging on ECL's new structure and business culture. The entire organization and our new Commercial VP, Luis Meersohn, who recently joined ECL will be fully focused on this important objective. So on this line, on Page 16, we present the recent acquisition of Eólica Monte Redondo. I think this slide includes all the main elements of the due diligence and the decision process. But what are the main assumptions behind this acquisition? While this company has regulated PPAs until 2021 and 2023, which means, afterwards, will become uncontracted, and therefore, a good match for ECL long PPA portfolio. The contracted demand is around 275-gigawatt hour per year, but the expected demand is closer to 180-gigawatts hour or a 65% consumption factor. How much we expect these assets will contribute to ECL generation portfolio were close to its current demand, around 180 gigawatts hour per year. We are, of course, evaluating some alternatives to optimize both of them. What then will be the contribution of this acquisition to ECL in terms of EBITDA? Well, I can say around $7 million to $20 million for half of the year, around $15 million in 2021, $10 million in '22 and '23. And afterwards, will depend on the marginal costs. But in my view, it doesn't matter because afterwards, it becomes an uncontracted asset that contributes its energy yield to ECL's longer PPA position since we are already contracted. This means we didn't assume during the due diligence process any PPA renewal or any similar process, but just valued the energy yield produced by both assets. So a very fair approach considering this was a related part of the transaction. Finally, the acquisition of EMR is important and good news because these assets were the last generation assets, 100% owned by Engie in Chile. So as you know, last year, we also acquired the PV plants, Los Loros and Andacollo, which were also owned 100% by Engie. So this transaction is important because it also helps to confirm the role of ECL in Chile and avoids any future potential competition between ECL and other Engie vehicles in the generation business in Chile. Now on Page 17. We want to highlight the recent developments in our PPA portfolio, the progress of our renewables plan and also the recent upgrade in ECL's rating by Fitch from BBB to BBB+, something not very common, I can say, during these days. The upgrade of ECL's rating, I think, is a result of the strategy and action plans which started back in 2016, 2017. Then on the dividend side, I want to be cautious. We mentioned during our previous call that we will closely follow ECL's cash flow position and evolution during 2020 before we propose a promissory dividend or move to a next phase of higher dividends. We need to consider that between 2020 and 2022. We will add an important amount of long-term receivables related to the tariff stabilization fund that will certainly reduce our cash flow generation. While during the same period, we have a heavy CapEx plan. In summary, we will come back with the proposal once we secure our funding needs for future investments. Now let's move to next section and go through the first half results and also discuss where we are with our projects under construction. Let's go directly to Page 21. Total revenues reached $657 million in the first half, down 14% from the first half of last year despite the 7% increase in physical sales. This was because average prices decreased, in turn, due to the decrease in fuel prices, but costs also decreased. Our own generation increased mainly due to the commissioning of IEM in May 2019. The increase in generation led to an increase in fuel costs despite a drop in fuel prices. However, our spot energy purchases decreased significantly from 3 terawatt hour to less than 2 terawatt hour. All in all, EBITDA is 29% lower compared to the previous year. Despite there is a COVID impact embedded in this result, the relevant decrease in comparison to 2019 is mainly explained by the 75 million LDs registered back in '19, paid by IEM contractor due to the delay on starting. Excluding this impact in 2020, EBITDA is slightly below the EBITDA of previous year. But what is important, in my view, is the expected EBITDA for 2020. So where are we? Well, in a couple of minutes, we will discuss our guidance and some sensitivities. In the same line, the recurring net income was $76 million, half of 2019 results, mainly explained by 2 effects, the LDs received from IEM contractor and higher interest expenses because interest expense seems to be capitalized upon the completion of the IEM project back in May '19. In summary, physical energy sales had a relatively positive performance considering the current context. EBITDA fell in line with average lower energy sales prices as a result of the indexation to fuel prices, which was partially offset by lower cost of energy and fuel prices. On Page 22, we present ECL's supply curve, which as every quarter, is very useful to understand our results. As you can see, IEM, CTA and CTH continue to operate as baseload units, while they reported some limitations in production. Our 2 combined cycle units running with natural gas, plus generation by Gas Atacama using our gas, represented close to 20% of our energy supply, while the rest of ECL's coal units were less dispatched, as you can see in the table on top of this slide. Just a reminder, we already announced the closure of Units 14 and 15 in Tocopilla by the end of next year and for CTM1 and CTM2 around 2024 or even sooner if conditions are appropriate. This is something that we will continue analyzing over the next quarters. Finally, ECL bought almost 35% of its contracted demand between the spot market and our supply agreement with another generation company. This means that we buy from the spot market at a lower cost than we can produce with our less-efficient coal units, which still act as a physical hedge to limit the production costs at a certain level. On Pages 23, 24 and 25, we present the evolution of our contracted portfolio and how each quarter we enlarge the green area shown on Page 25, while the gray area has considerably reduced over the last 8 quarters. Now let's see where we are with the projects under construction. On Page 26, we can see the full picture of the current plan, the 2 acquisitions, the 3 projects under construction and the projects under development. The good news is that we just started the construction of PV Tamaya before the date we were expecting. If you recall, last quarter, I said at the beginning of the third quarter. This means we expect the 3 first renewal projects to reach COD during 2021. Let's go through each of them. I am on Page 27 now. You can see the progress of the Calama wind farm. This 151-megawatt wind farm considers 36 mills, each with 4.2 megawatts. As of the end of June, construction showed 59% of advance, while the overall progress rate was 30%, twice the progress we reported 3 months ago, even during this complex period. The concrete foundations for 29 out of the 36 mills have been completed, while the substation is showing a 35% progress. We maintain the same COD announced last quarter, and budget is under control. This means we expect COD during the third quarter of 2021. On Page 28, you can see the progress of our 94-megawatt Capricornio PV plant, which, as of the end of June, presented a global state of advance of 75%, while 3 months ago was slightly above 50%. We maintain the same COD announced last quarter, which considered some weeks of delay due to COVID, but without the changes in budget. This means we expect COD during the second quarter of 2021. If our construction team can recover some weeks, maybe the project could be ready during the first quarter of next year. Now on Page 29, we show for the first time the details of PV Tamaya, a 114-megawatt PV plant located in the northern region close to our mining clients, with $68 million investment and expected COD also during the second quarter of 2021. The mobilization started 1 month ago. The main contractors are Tozzi, Trina and Sungrow. And this means between Capricornio and Tamaya next year, we will add more than 200 megawatts of solar PV capacity to our portfolio. On Pages 30 and 31, we show an update on transmission projects under construction or recently awarded. First, in transmission, we continue with the construction of 4 national solar projects awarded back in 2018, with a total investment of approx $43 million. As you can see in the picture, the construction of these projects is also making progress. Two of them will reach COD during 2020 and the other 2 next year. Second, on Page 31, you can see an overview of the national transmission projects corresponding to the auction awarded during this year, representing an overall investment of approximately $28 million. Both are in pre-construction phase. And once the decree is issued, we will finalize the procurement process and will start also construction. On Page 29, we show that in 2019, we completed the construction of IEM project. Even considering our asset rotation plan, with a significant investing activity in renewals, CapEx levels are lower than those of 2016 and 2017, while our cash flow generation capacity has increased. For 2020, we have updated our CapEx forecast, and we expect $340 million, mainly focused on our renewable and transmission projects as well as some maintenance. As you know, we plan to finance these capital expenditures with a mix of internal cash generation and also bank finances. In this line, our net debt-to-EBITDA ratio should increase during 2020, following the additional debt we will raise to finance a portion of our CapEx needs. We intend to keep our leverage ratios not exceeding 2.5x on a structural and regular basis. Then we need to consider, however, that in 2020, we will have most of the negative impact related to the regulated tariff stabilization mechanism, which will need to be financed by ECL until this long-term receivables are collected in the future or until a monetization structure is put in place. Let's talk now about our guidance for 2020. And please turn to Page 30 (sic) [ Page 33 ]. So we decided to keep this page unchanged, but adding a message. This guidance is under revision, which I'm sure makes sense to everyone. But even considering a certain degree of uncertainty, I think we can provide some elements on where we could end this year. For 2020, we were expecting a higher contracted demand compared to 2019, but a lower operational and recurrent EBITDA during the year, mainly explained by the termination of the Zaldivar PPA in the second half of the year. And we were also considering a more conservative average spot price for the guidance we provided for this year. We do know that COVID will affect our results in ways that, as we mentioned before, are difficult to predict. However, I can say that after 3 months, we can share some facts. So first, so far, our unregulated demand increased in the first half compared to previous year. Mining and other new clients' demand was higher and close to 0.4 terawatt hour compared to the same half of previous year. But on the other hand, we can say that regulated demand remained almost flat compared to previous year, but we need to consider that COVID only impacted the second quarter. We need to recall that we were having a nice start this year with a higher-than-expected demand during the first 2 months of 2020. So this means we have been experiencing over the last 2 months an average decrease of around 6% in regulated demand compared to the same months of 2019. So now we can say that COVID is impacting the regulated demand compared to 2019. Now these are facts compared to 2019, but our guidance is not based on the previous year. Our guidance considers our own set of projections. And as you can imagine, we were expecting higher demand in 2020 compared to 2019. Because some regulated PPAs signed with other generation companies matured back in 2019. This is the case for unregulated clients. We can say that demand is in line with what we forecasted for -- before COVID, but this is not the case for the regulated demand. We are between 5% and 10% lower than what we were expecting. And this is why on next page, 34, we present an estimated COVID impact during the first half of 2020 of minus $10 million, which already materialized in our P&L. So then the question would be what could be the impact of the lower regulated demand during the second half? We present in this page 2 simple scenarios, 5% and 10%, affecting only regulated or both regulated and unregulated demand. We don't know what is going to happen. But I hope this sensitivity will provide some guidance over the previous guidance. If we assume a moderate case, by February, of course, of minus 5%, then we will be close to minus $20 million over the initial guidance, considering real first half results and projected second half impacts. So if my math is correct, this puts our average EBITDA guidance around $20 million lower due to COVID. But bear in mind, it could be a bit higher following the reference of last 2 months. So we can conclude something in between $20 million and $30 million. The lower demand could, of course, be compensated by lower energy purchases costs given the fuel prices and hydro conditions. Some of them are already considered in this exercise. But this positive impact may not be sufficient to fully compensate the lower regulated demand we could expect during the second half of this year. Then in 2021, ECL should be able to see a recovery in EBITDA once the 3 renewable projects I just mentioned are in operation since ECL will be able to replace spot purchases at spot market prices by producing at almost 0 cost. So now we will move to next section. Hopefully, Bernardita was able to connect. She will give us more details on our financial results.

Well, thank you, Eduardo. I hope you can hear me well.

Yes.

Okay. So hello, everyone. I'm on Slide 36. Our EBITDA decreased 29% to $202 million in the first half of this year. So we can blame COVID for part of the decline, but it was mostly due to other factors. As you may remember, last year, we received $75 million in liquidity damages paid by the main contractor for the IEM power plant to compensate us for the delayed start-up of the project. So this corresponds to operating income because it replaced revenue we would have received had the project been running. But we recognized this amount in 1 shot in 2019, while we should have recognized roughly half of this amount in the second half of 2018 and the other half in 2019. Another reason for the EBITDA decrease is the drop in our electricity margins, which had an impact -- estimated impact of roughly $11 million if we consider its different components. So one of them is prices, which affected our electricity revenues. Prices fell because the indices to which our tariffs are linked, that is coal prices, Henry Hub and CPI, trailed significantly. In addition, we had PPA renegotiations, the most important being the contract with Minera Centinela controlled by Antofagasta Minerals. This renegotiation not only involved the commercial terms of the PPA, but also the transfer of control of Inversiones Hornitos. Under the agreement signed at the end of March, the PPA priced discount is bigger in 2020. And through this bigger discount, every month, Engie is acquiring a 40% stake in Inversiones Hornitos. So the tariff decrease affected our electricity margin, but it was countered by the income related to the acquisition, which amounted to $15 million in the first half of 2020. Therefore, the effect of this agreement on EBITDA was almost neutral. We reported higher fuel costs despite the drop in fuel prices, and this was because our generation increased mainly to the start-up of IEM in May 2019. And also because we had higher gas generation as we had more gas supply this year. Then if we look at the bars at the left of the slide, we can see the positive impact. The increase in our own generation meant a decrease in electricity purchases on the spot market. This, together with lower spot prices, which averaged about $45 per megawatt hour in the first half of the year, had a $65 million positive impact on EBITDA. Now despite COVID, our physical sales increased. Here, we need to give a closer look to each of the 3 clients on the regulated segments, which behave differently. The demand from our 3 clients recovered from low demand observed last year, mainly because last year, mining operations were affected by a hard Altiplanic Winter, temporary stoppages for the upgrade of emission reduction systems and a 14-day strike at Chuquicamata. So this year, demand for mining clients returned to normal and increased by 12%. Now the behavior of our sales to distribution companies was different. When comparing the first half of 2020 and 2019, we see virtually no change in physical sales. But only after looking at each quarter, we can see the effects of COVID. In the first quarter, physical sales to distribution companies increased compared to the first quarter of last year because starting 2020, Engie reported an increased share of the PPAs with distribution companies in the south center segment of the CEN as older PPAs from other generation companies came due. So the physical sales increase in the first quarter reflected ECL's increased pro rata of all regulated contracts, while the COVID effect did not begin until the very end of the quarter. It was the second quarter, the one reflecting the COVID impact. In the second quarter, physical sales to distribution companies decreased by 5% when compared to the same quarter of 2019 and by 13% when compared to the first quarter of 2020, which already included the pro rata increase. So therefore, overall, for the first half of the year, we can say that the COVID effect was completely offset by the increased pro rata of the pool of contracts with distribution companies. To have an idea of how much of the EBITDA decrease is explained by the operating margin of the electricity business, we must add the effects on prices, volume, sales, fuel costs and energy and capacity purchases. This is how we get to the $11 million reduction that I mentioned earlier. And the main reasons behind all of this were the decrease in Henry Hub, the decrease in regulated demand in the second quarter and plant failures that led to a higher-than-expected marginal cost in March 2020. The remainder of the EBITDA reduction was primarily explained by the liquidated damages reported in 2019. So now please turn to Slide 37. At the center of the slide, we can see each of the after-tax variations in net recurring income, which decreased from $144 million in the first half of 2019 to $76 million in the first half of this year. As mentioned earlier, the drop is primarily explained by the decrease in EBITDA, in turn, caused by the liquidated damages of 2019. Increased depreciation costs as a result of the start-up of IEM and higher financial expenses explain the difference. As you know, in January, we completed the liability management transaction in which we issued a new bond to repay an old one. Our average interest rate decreased in such a way that even though we increased bond debt by $100 million, we will report $5.5 million per year in interest expense savings. So the increase in interest expense in the first half is only explained by a lower amount of capitalized interest in the projects under construction. In the first half of 2020, only $1.4 million of interest expense was capitalized. Finally, we can see that minority interest disappeared as according to IFRS rules, ECL took full control of CTH upon the execution of the agreement with AMSA at the end of March. If you look to the right of the slide, we will see a nonrecurring impact in the first quarter of 2020 related to the $13.6 million premium paid on the early redemption of the $400 million 144A bond. This had an after-tax impact of almost $10 million on the first half net income in 2020. On the left side of the slide, we can observe what happened last year. The big nonrecurring loss reported in the first half of 2019, explained by the impairment of the coal plants units 14 and 15 in Tocopilla, which will be closed by year-end 2021. Now going to Slide 38. There, we can observe an increase in net debt as a result of the following cash flows in the first half of the year. So in terms of uses of cash, capital expenditures amounted to $84 million, mainly in the renewable and transmission projects. In the next bar, we show the payment of $14 million in premiums to bondholders. The next 2 bars correspond to factors that had a direct effect on debt balances but lower effect on cash. The first bar includes accrued interest on mark-to-market variations. And the second one includes land and vehicle leases that were classified as financial leases as a result of the implementation of IFRS 16. Finally, we paid $58 million in income and stamp taxes. Now our cash sources included in the orange bars was negative numbers as they led to a reduction in net debt, included $75 million cash payment from TEN and $101 million in operating cash flow. So let's go to Slide 39 for details of our liquidity and debt structure. The main changes are the following. The net debt-to-EBITDA rate increased to a still comfortable 1.7x. EBITDA for the last 12-month period ending June 2020 was $452 million, while the net debt reached $772 million. Our gross debt increased by $83 million to $1 billion, basically due to the new $500 million bond, which was issued to repay a $400 million bond, and the $22 million increase in IFRS 16 leases, primarily explained by new land concessions, or concesión onerosa in Spanish, for the development of our renewable projects. A $30 million net reduction in our short-term debt partially offset the gross debt increase. As Eduardo already mentioned, we are very happy to inform that Fitch ratings upgraded our long-term debt financial rating to BBB+ and our local rating to AA. On Slide 40, we can see our share price evolution, clearly marked at the beginning of the second quarter by the COVID-19-driven recession. We note, however, that our stock performed better than the market in the last 12 months. While the ECL stock price fell 12% over the last 12 months, the IPSA index fell 22%. This and the rating upgrade are demonstrations of the resilience of our business in the context of this very tough pandemic. Well, this is all on my side, and I'll leave you with Eduardo for the final remarks.

Thank you, Bernardita. As always, and to conclude this presentation, we would like to end with some final messages we want to share with you. So first, today, we presented our first half results and some sensitivities on demand and potential impact on EBITDA for the second half of the year. Despite, we could expect a negative impact on our 2020 guidance, we believe the company is well prepared to absorb this temporary impact. And hopefully, we may find some additional creative ideas to offset part of them. Second, today, we also mentioned additional green corporate PPAs that were recently signed. After 3 years, preparing the company for a different future, restructuring PPAs with very important clients and developing renewals, we are ready to add a new improved solar business. And in addition to the company's transformation, look for additional opportunities to grow in the market. And third, I'm glad to say that we have reached almost 50% of the renewables plan we announced last year. We will continue developing an important portfolio of renewable projects to bring them to a ready-to-build stage. And hopefully, in some months, we will be able to announce the construction of additional renewable projects. So, well, with these final messages, we are concluding our first half results presentation. And we hope this presentation was helpful and wish you the best in these difficult times. Thank you, and we are ready for any questions that you may have.

[Operator Instructions] The first question will come from Andrew McCarthy of CrediCorp Capital.

My first question was just on the issue of collection. I was just wondering if you could comment if you had any issues with collection from either regulated or free segment clients. And then my second question was to get your sense on how you're seeing the dividend outlook as we go through the next sort of 12 months. You mentioned, obviously, the -- perhaps the slightly lower EBITDA than you'd originally been anticipating. You're advancing well with all the CapEx deployment, very good use on the Tamaya project. And obviously, we have the issue of the stabilization mechanism and perhaps not having necessarily in the very short term sort of the financing solution there. So just trying to get a sense how you see that dividend, the likelihood of dividends and the amounts and -- going forward, where you see that.

Andrew, thank you. Thank you for your both questions. So in terms of collections, I think we are having -- how can I say this? We are -- we have been proposing to some of our regulated and unregulated clients some payment, flexible conditions in order to help them go through this complex period. But most of them are, let's say, small accounts, nothing material. So we are still looking at different options to help part of our clients. But so far, we haven't been impacted by the current context in terms of increasing budget debt or having bad receivables in our balance sheet. And in terms of the dividend outlook, what I can say is that it will depend, of course, on how the situation evolves over the next 12 months. As I mentioned before, we have a heavy CapEx plan in front of us. We also want to grow more and capture additional demand. So we are still keeping the minimum of 30% in our radar. And if conditions allow us to increase the 30%, it's something that we will discuss at a certain moment with the Board and make a proposal. But so far, we are not ready to make any announcement in relation to dividends or any change in our policy. I think this is something that will be analyzed in further detail in the future depending on how the whole situation evolves.