FORM 6-K 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of February, 2019

Commission File Number: 001-37723

Enel Chile S.A. 
(Translation of Registrant’s Name into English)

Santa Rosa 76
Santiago, Chile 
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  [X]   Form 40-F  [   ]

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes    [  ]      No    [X]

Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes    [  ]      No    [X]

Indicate by check mark whether by furnishing the information
ontained in this Form, the Registrant is also thereby furnishing the
information to the Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes    [  ]      No    [X]

If °;Yes” is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): N/A

 

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ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

obtained to pay for the Enel Generación PTO within the context of the Elqui Project.

 

 

SUMMARY BY BUSINESS

 

Generation

 

·         Net electricity generation increased 17% when compared to December 2017 (+2,973 GWh) reaching 20,046 GWh mainly due to the addition of EGP Chile power plants since April 2 (+2,673 GWh) and also an increase in Enel Generación Chile generation (+300 GWh) due to greater hydroelectric dispatch (+1,322 GWh) as a consequence of better hydrology, which was partially offset by lower thermal dispatch (-1,024 GWh).

 

·         Operating revenues amounted to Ch$ 1,580,653 million as of December 2018, equivalent to a 3.3% reduction, mainly as a consequence of a shift in the Company’s customer mix in terms of regulated and unregulated customers, and a lower average sale price when expressed in Chilean pesos due to a lower average exchange rate.

 

·         Procurement and services costs decreased significantly to Ch$ 709,506 million, 21.5% less than the amount at December 2017. These cost savings mainly responded to a more efficient generation mix, which led to lower fuel costs, lower energy purchases and other variable procurement and services costs.

 

·         As a result of the abovementioned, EBITDA of the generation business reached a total Ch$ 713,628 million, equivalent to a 23% increase when compared to the figure of last year. Also, operating income of the business increased 15% to Ch$ 533,620 million. The increase in both figures mainly responds to the addition of the results of EGP Chile since April 2018.

 

 

 

Physical Data                                                   As of December 31, 2018

Total Sales (GWh)                                                                   24,369

Total Generation (GWh)                                                          20,046

 

 

Distribution

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

 

§  Physical sales reached 16,782 GWh as of December 2018, representing a 2% increase when compared to last year, explained by higher toll revenues.

 

§  The total number of customers increased 2% to 1,924,984 when compared to December 2017, mainly residential and commercial customers. Annual energy losses declined from 5.1% to 5.0%.

 

·         EBITDA of the distribution business increased 13% to Ch$ 200,614 million as of December 2018, and operating income rose by 20% reaching Ch$ 159,259 million.

 

Physical Data                                                  As of December 31, 2018

Total Sales (GWh)                                                                   16,782

Customers                                                                             1,924,984

 

 

FINANCIAL SUMMARY

 

§  Gross debt of the company increased by US$ 2,362 million to US$ 3,634 million when compared to December 2017. This variation is mainly explained by the consolidation of EGP Chile´s debt into the Enel Chile Group, and also the debt committed to by Enel Chile in March 2018 to finance the Elqui Project and its partial repayment with the issuance of a Yankee Bond for US$ 1,000 million in June 2018.

 

§  Liquidity available to Enel Chile is composed of the following:

·         Cash and cash equivalents                     US$ 353 million.

·         Undisbursed committed credit lines (*) US$ 713 million. 

 

(*) includes Enel Chile´s US$ 400 million committed credit line with related party Enel Finance International.

 

§  The average cost of Enel Chile’s debt as of December 2018 was 5.1%.

 

§  Hedging and protection:

 

To mitigate the risks associated with exchange rate and interest rate variations, Enel Chile has established policies and procedures to protect its financial statements against the volatility of these variables.

 

Enel Chile’s exchange rate hedging policy states that there should be a balance between the currencies of each company’s operations and the currency of its debt. Therefore, the Company has cross currency swap and forward contracts that amount to US$ 769 million and US$ 1,202 million, respectively.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

To reduce financial statement volatility caused by interest rate variations, the Enel Chile Group maintains an adequate debt structure balance. Therefore, the Company has interest rate swaps for US$ 400 million.

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

INFORMATION RELEVANT TO THE ANALYSIS OF THESE FINANCIAL STATEMENTS

 

Change in Scope of Consolidation:

 

Corporate Reorganization Project

 

On August 25, 2017, Enel Chile proposed a corporate reorganization (hereafter “the Renewable Assets Reorganization”)  to Enel S.p.A that involved integrating the Enel Green Power Latin America Ltda. (EGPL”) renewable energy assets in Chile into Enel Chile, which controls the conventional electricity generation assets owned by Enel Generacion Chile S.A. (“Enel Generación Chile”) and the electricity distribution assets owned by Enel Distribución Chile S.A.

 

The proposed Reorganization involved the following stages: (i) Public Tender Offer for Shares (“PTO”), (ii) Capital Increase, and (iii) Merger, each stage conditioned to the implementation of the others.

 

On December 20, 2017, the Extraordinary Shareholders’ Meeting of Enel Chile approved the Reorganization subject to complying with the conditions established for the PTO, Capital Increase, and Merger. The Shareholders’ Meeting also approved the Ch$ 1,891,727,278,668 capital increase of Enel Chile through the issuance of 23,069,844,862 new common shares, all of one same series and without par value, for a price and other terms approved by the Shareholders’ Meeting.

 

Finally, on March 25, 2018, the amendments to the articles of incorporation of Enel Chile to include the agreements related to the Merger, Capital Increase and changes to the corporate purpose of Enel Chile, among other provisions, were approved. The PTO took place between February 16 and March 22 of 2018, the subscription of preferred shares related to the capital increase took place between February 15 and March 16 of 2018 and the Reorganization (including the Merger) concluded and became effective on April 2, 2018 and led to the increase in Enel Chile’s shareholding in Enel Generacion Chile from 59.98% to 93.55%. The merger of Enel Chile and EGPL from that date on increased Enel S.p.A total shareholding in Enel Chile to 61.93%.

 

As a consequence of the aforementioned, the results of the Enel Chile Group include the results of the EGP Chile Group since April 2, 2018 and the ownership share of Enel Generación Chile increased from that same date on. For additional information see Note N^o 6 to the Interim Consolidated Financial Statements of Enel Chile as of December 31, 2018.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

MARKETS IN WHICH ENEL CHILE S.A. OPERATES

 

Generation business

 

We own and operate 130 generation units in Chile through our subsidiaries Enel Generación Chile, Pehuenche, Gas Atacama, and EGP Chile, which combined, have a total 7,463 MW installed capacity as of December 31, 2018. Of this total, 40 are hydroelectric units with 3,548 MW installed capacity, 22 are thermal units that operate using gas, coal or fuel oil and together total 2,740 MW installed capacity, 59 are wind generation units with 642 MW installed capacity, 8 are solar generation units with 492 MW installed capacity and 1 generation unit is geothermal with 41 MW installed capacity. There are variations in the capacities respect to 2017, because during 2018 these were updated considering the results maximum capacity tests of the Tarapacá TG, Atacama, Taltal y San Isidro 2 power plants, among others, in accordance with the technical norm and the requirements from the National Electric System operator.

 

The following chart summarizes the physical information of our generation business segment for the period ended December 31, 2018 compared to the same period of 2017:

 

 

 

Distribution business

 

Our distribution business is carried out by our subsidiary Enel Distribución Chile S.A.

 

Enel Distribución Chile is one of the largest electricity distribution companies in Chile, in terms of the number of regulated customers, distribution assets, and electricity sales. It operates in a 2,105 square kilometer concession area, framed under an indefinite concession granted by the Chilean Government, to transmit and distribute electricity to 33 districts of the Metropolitan Region, including the concession areas of our subsidiaries Eléctrica de Colina Ltda., Luz Andes Ltda. and Empresa de Transmisión Chena S.A., for an unlimited period of time. Its service area, from the Chilean tariff regulation perspective, is considered to be primarily a densely populated area.

 

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

The following chart summarizes the physical information of our distribution business segment for the period ended December 31, 2018 compared to the same period of 2017:

 

 

The following chart shows the electricity sales revenue per business segment and customer type:

 

 

 

CONSOLIDATED FINANCIAL STATEMENT ANALYSIS

 

1.    Statement of Comprehensive Income Analysis

 

Net income attributable to the controlling shareholders of Enel Chile as of December 31, 2018, reached Ch$ 361,710 million, which represents an increase of 3.5% in profit when compared to the same period of last year in which the figure amounted to a Ch$ 349,383 million.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

The following chart compares the figure of each item of the income statement as of December 31, 2018 and 2017:

 

 

EBITDA:

 

The consolidated EBITDA of Enel Chile amounted to Ch$ 891,355 million as of December 31, 2018, which represents a 20.6% increase when compared to the Ch$ 739,252 million booked the previous year. This increase is primarily explained by lower operating expenses in both the generation and distribution business segments.

 

Revenues, operating costs, personnel and other expenses that determine our EBITDA, broken down by business segment for the periods ended December 31, 2018 and 2017, are presented below:

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

 

 

 

GENERATION BUSINESS EBITDA

 

The EBITDA of our Generation Business Segment reached Ch$ 713,628 million as of December 31, 2018, which represents a Ch$ 132,486 million increase when compared to the same period of the previous year. The main variables that explain this result are described below:

 

Operating revenues amounted to Ch$ 1,580,653 million as of December 31, 2018, a Ch$ 54,284 million reduction, or 3.3%, when compared to the same period of the year before, mainly due to the following:

 

·         A Ch$ 31,730 million reduction in energy sales due to a lower average sales price in Chilean pesos, partially compensated by higher physical sales (+1,012 GWh) to non-regulated customers (+1,963 GWh) and spot sales (+433 GWh) that were offset by lower sales to regulated customers (-1,384 GWh). This variation includes the revenue from energy sales of EGP Chile that amounted to Ch$ 49,671 million for the nine-month period ended December 31, 2018.

 

·         A Ch$ 36,278 million decrease in other services revenue, primarily due to Ch$ 35,428 million less toll revenues.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

·         A Ch$ 9,328 million increase in other sales, mainly due to a Ch$ 12,065 million increase in gas sales offset by Ch$ 2,790 million lower coal sales.

 

·         A Ch$ 4,396 million increase in other operating revenues, mainly due to insurance claims related to an incident at Central Tarapacá that represented Ch$ 20,710 million in revenue, partially offset by the Ch$ 2,245 million reversal of fine provisions related to returning the concessions of the Tames and Totoralillo projects in 2017, lower revenue from commodity hedging derivatives for Ch$ 10,509 million and lower revenue related to the reversal of provisions of non-use of water rights amounting to Ch$ 4,984 million. This variation includes Ch$ 801 million other operating revenue of EGP Chile for the nine-month period ended December 31, 2018.

 

Operating costs reached Ch$ 717,816 million as of December 31, 2018, a Ch$ 186,162 million reduction, equivalent to 20.6%, due to the following:

 

·         A Ch$ 133,840 million reduction in energy purchases primarily explained by lower physical energy purchases (-1,960 GWh), mainly contracted energy purchases (-2,733 GWh) that were partially compensated by higher spot market purchases (+773 GWh). This lower cost includes the positive effect of adding EGP Chile to Enel Chile, which led to a net Ch$ 115,346 million reduction in Enel Chile’s cost of energy purchases as a consequence of the elimination of related party transactions (sales of EGP Chile to Enel Generación Chile).

 

·         A Ch$ 49,711 million decrease in fuel costs, primarily Ch$ 30,481 million lower gas, Ch$ 9,174 million lower coal, and Ch$ 9,906 million lower fuel oil costs, primarily responding to the lower level of thermal dispatch.

 

·         Other variable procurement and services costs declined Ch$ 12,095 million mainly due to Ch$ 8,345 million lower costs related to the agreement with AES Gener that allows the Nueva Renca combined cycle to use the LNG available to Enel Generación Chile, lower thermal emissions tax costs for Ch$ 3,654 million, lower water consumption costs for Ch$ 1,119 million, lower commodity derivative costs for Ch$ 1,770 million, partially offset by higher commercialization costs of gas sales amounting to Ch$ 4,816 million.

 

·         Transportation costs decreased Ch$ 1,174 million, mainly due to the Ch$ 12,493 million effect of adding EGP Chile Group to Enel Chile, higher transportation and regasification costs for Ch$ 630 million, offset by lower tolls in Enel Generación Chile for Ch$ 11,949 million.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

Personnel expenses amounted to Ch$ 53,328 million as of December 31, 2018, a Ch$ 6,332 million increase when compared to 2017, mainly due to the Ch$ 6,976 million increase in salaries and wages as a consequence of including EGP Chile in Enel Chile´s scope of consolidation.

 

Other expenses reached Ch$ 104,191 million as of December 31, 2018, a Ch$ 1,370 million increase when compared to 2017, mainly due to the Ch$ 22,323 million effect of including EGP Chile in the scope of consolidation and higher technical and management services for Ch$ 8,303 million. This was offset by the reduction of Ch$ 25,106 million related to the write-offs of the Neltume and Choshuenco projects booked in 2017 for not being economically viable projects.

 

 

DISTRIBUTION AND SUBSIDIARIES SEGMENT:

 

The EBITDA of our Distribution Business Segment reached Ch$ 200,614 million as of December 31, 2018, which represents a Ch$ 23,425 million increase, or 13.2%, when compared to the previous year. The main variables that explain this outcome are described below:

 

Operating revenues amounted to Ch$ 1,263,224 million, a Ch$ 63,435 million reduction, equivalent to 4.8%, basically due to (i) a Ch$ 60,851 million reduction in other services revenues, namely lower revenue from transmission tolls, and (ii) lower energy sales revenues for Ch$ 10,297 million mainly as a consequence of a lower average sales price, which was offset by higher physical sales (+345 GWh). These lower revenues were compensated by higher products and services sales for Ch$ 4,044 million.

 

Operating costs reached Ch$ 972,500 million, a Ch$ 83,208 million reduction when compared to the same period of 2017, mainly due to: (i) lower transportation costs for Ch$ 53,193 million, (ii) lower energy purchases for Ch$ 11,682 million mainly resulting from a lower average energy purchase price offset by greater physical purchases required to satisfy demand and (iii) lower variable procurement and services costs for Ch$ 18,333 million, primarily meter rentals and street lighting services.

 

Personnel expenses amounted to Ch$ 25,931 million, a Ch$ 5,889 million reduction compared to expenses accrued by December 31, 2017, mainly due the lower extraordinary non-recurrent employee bonuses given to employees during 2017.

 

Other expenses reached Ch$ 64,179 million as of December 31, 2018, a Ch$ 2,237 million increase when compared to the same period of the previous year, mainly due to higher operating and maintenance expenses related to a tree trimming plan that began in 2017 and higher repair and conservation costs.

 

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

The following table summarizes the Enel Chile Group EBITDA, depreciation, amortization and impairment expenses and EBIT broken down by segment as of December 31, 2018 compared to December 31, 2017.

 

 

 

 

Depreciation, Amortization and Impairment

 

Depreciation, amortization and impairment costs amounted to Ch$ 220,750 million, a Ch$ 60,129 million increase when compared to the previous year.  This variation is mainly explained by the depreciation of EGP Chile that amounted to Ch$ 62,142 million for the nine-month period ended December 31, 2018.

 

The following chart presents consolidated non-operating income as of December 31, 2018, and 2017.

 

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

 

 

 

 

 

• 13 •

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

Financial Result

 

The consolidated net financial income of Enel Chile as of December 31, 2018, reached a Ch$ 110,875 million expense, which represents a Ch$ 88,460 million increase in expenses when compared to 2017. This negative outcome is primarily explained by the following:

 

Financial income decreased Ch$ 1,729 million due to lower income related to customer refinancing for Ch$ 2,442 million, compensated by greater income from short-term fixed income investments for Ch$ 713 million.

 

Financial expenses increased Ch$ 68,673 million, mainly due to higher interest on bank loans and bonds amounting to Ch$ 36,999 million mainly related to the new debt of Enel Chile to finance the Elqui Project, plus  higher interest expenses related to the addition of EGP Chile Group for Ch$ 31,674 million.

 

Income related to indexation decreased Ch$ 1,734 million primarily due to greater indexation of financial liabilities recorded in U.F for Ch$ 3,840 million and the negative impact of IAS 29 “Financial Reporting in Hyperinflationary Economies” on the branch of the Gas Atacama Group located in Argentina that amounted to a Ch$ 3,786 million loss. The aforementioned was compensated by the positive effect of recoverable taxes for Ch$ 2,717 million, and greater income on hedging derivative contracts for Ch$ 3,175 million.

 

Income from positive exchange differences decreased Ch$ 16,324 million mainly due to the greater negative exchange differences on cash and cash equivalents for Ch$ 3,347 million, a greater negative exchange difference on forward contracts for Ch$ 5,386 million and a lower negative exchange difference on supplier accounts for Ch$ 4,227 million.

 

 

Other Non-operating Income

 

The income from companies accounted for using the equity method amounted to a Ch$ 3,190 million profit as of December 31, 2018, which represents a Ch$ 5,887 million increase when compared to last year, mainly explained by better results from Centrales Hidroelectricas de Aysén for Ch$ 5,914 million until its liquidation.

 

Income from other investments decreased Ch$ 105,076 million, mainly explained by the sale of Electrogas S.A. in February 2017, for Ch$ 105,312 million.

 

Corporate Taxes 

 

Corporate income tax reached Ch$ 153,482 million as of December 31, 2018, a Ch$ 10,140 million increase when compared to the previous year, basically explained by (i) greater expenses due to the increase in the income tax rate from 25.5% in 2017 to 27% in 2018 amounting to Ch$ 8,527 million, (ii) less income related to the liquidation process of Centrales Hidroelectricas de Aysén for Ch$ 29,594 million and

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

(iii) lower expenses related to the sale of the Electrogas S.A. in February 2017 for Ch$ 27,675 million.

 

 

 

BALANCE SHEET ANALYSIS

 

 

Total assets of the Company as of December 31, 2018, increased Ch$ 1,793,248 million when compared to total assets as of December 31, 2017, mainly due to the following:

 

·         Current Assets decreased Ch$ 58,189 million as of December 31, 2018. The variations in the main categories are presented below:

 

·         Cash and cash equivalents decreased Ch$ 174,284 million, explained by cash disbursements related to (i) the payment of the Enel Generación PTO for Ch$ 1,624,327 million, (ii) dividend payments for Ch$ 231,394 million, (iii) purchase of property, plant and equipment for Ch$ 305,089 million, (iv) income tax payments for Ch$ 135,928 million, (v) employee related payments for Ch$ 121,091 million, (vi) interest payments on loans for Ch$ 115,603 million, (vii) loan repayments for Ch$ 819,526 million, and (viii) other cash disbursements for Ch$ 56,103 million. All these effects were offset by (i) the issuance of a Yankee Bond for Ch$ 625,368 million, (ii) a Bridge loan to finance the Enel Generación PTO for Ch$ 940,414 million, (iii) a capital increase, net of the purchase of own shares, for Ch$ 593,451 million, (iv) payments received from related parties for Ch$ 64,095 million (v) cash inflows from forward contract payments for Ch$ 1,122 million, (vi) interest payments received for Ch$ 6,676 million, (vii) dividends received for Ch$ 1,527 million, and (viii) other operational cash inflows for Ch$ 1,002,124 million, mainly customer collections net of payments to suppliers.

 

 

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

·         Other current financial assets increase Ch$ 19,676 million due to the Ch$ 18,131 million increase in the hedging derivative related assets of Enel Generacion Chile.

 

·         Trade accounts receivables and other current accounts receivables increase Ch$ 71,201 million, mainly due to (i) a Ch$ 40,211 million increase in services accounts receivables, (ii) a Ch$ 15,572 million increase in the distribution segment sales accounts receivables, (iii) a Ch$ 1,459 million increase in trade accounts receivables from Enel X Chile, and (iv) the addition of EGP Chile´s trade accounts receivables amounting to Ch$ 14,959 million.

 

·         Current related party accounts receivables decrease Ch$ 17,685 million, mainly explained by (i) lower Enel Global Trading SPA receivables for Ch$ 19,963 million related to gas and commodities purchases, (ii) lower GNL Chile advance payment receivables for Ch$ 3,338 million related to gas purchases, and (iii) lower Enel Brasil S.A. accounts receivables for Ch$ 1,779 million.  The aforementioned is partially offset by an increase in Enel Americas S.A. accounts receivables for Ch$ 2,762 million related to the addition of EGP Chile that involved adding the accounts receivables of Enel Green Power SPA for Ch$ 2,406 million and the accounts receivables of Enel Green Power Perú for Ch$ 1,782 million.

 

·         Inventories increase Ch$ 17,274 million mainly due to (i) a Ch$ 11,930 million increase in the inventory of coal, (ii) a Ch$ 5,212 million increase in the level of inventories of Enel X Chile related to the electric mobility project, and (iii) the addition of the inventories of EGP Chile for Ch$ 4,551 million. The aforementioned is offset by the use of electric materials for Ch$ 4,896 million.

 

·         Current tax assets increase Ch$ 22,008 million mainly due to the payment of taxes for fiscal year 2017.

 

 

Non-Current Assets increase Ch$ 1,851,436 million as of December 31, 2018. The variations in the main categories are presented below:

 

·         Trade accounts receivables and other non-current accounts receivables increase Ch$ 24,345 million, mainly related to (i) booking higher leasing receivables for Ch$ 24,273 million including the Ch$ 16,539 million Enel X Chile receivables, and (ii) the addition of Ch$ 409 million of EGP Chile receivables.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

·         Intangible assets other than goodwill increase Ch$ 60,201 million, due to (i) new investments, mainly software, for Ch$ 13,029 million, (ii) the intangible assets of Enel X Chile for Ch$ 242 million, and (iii) the consolidation of EGP Chile, adding Ch$ 44,865 million by the end of the fourth quarter.

 

·         Goodwill increases Ch$ 27,787 million due to the consolidation of EGP Chile that at year end 2018 had Ch$ 20,147 million in goodwill of Empresa Eléctrica Panguipulli S.A, Ch$ 7,564 million in goodwill of Parque Eólico Talinay Oriente and Ch$ 76 million in goodwill of Geotérmica del Norte.

 

·         Property, plant and equipment increases by Ch$ 1,722,960 million, mainly due to (i) an increase in new investments for Ch$ 199,185 million, and (ii) the consolidation of EGP Chile that adds Ch$ 1,523,775 million in property, plants and equipment as of December 31, 2018.

 

·         Deferred tax assets increase Ch$ 16,333 million, mainly due to higher deferred taxes related to tax losses, which includes the Ch$ 18,055 million from the consolidation of EGP Chile at year end 2018.

 

 

Total liabilities of the Company, including Equity, increased Ch$ 1,793,247 million as of December 31, 2018, when compared to total assets as of December 31, 2017, mainly due to the following:

 

Current liabilities increase Ch$ 400,648 million. The variations in the main categories are presented below:

 

·         Other current financial liabilities increase Ch$ 391,850 million, mainly (i) the increase in bank loans for Ch$ 940,414 million related to the funds obtained by Enel Chile to guarantee the timely payment of commitments originated as part of the Enel Generacion Chile PTO (ii) the Ch$ 70,791 million in bank loans of EGP Chile as of December 31, 2018 as a consequence of the consolidation of EGP Chile, (iii) bond M and H obligations being transferred to the short-term for Ch$ 30,529 million, (iv) an increase in hedging derivative liabilities for Ch$ 79,844 million, and (v) exchange differences on USD loans for Ch$ 21,818 million. All the above were offset by

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

(i) debt principal amortization payments made on bank loans for Ch$ 748,473 million.

 

·         Trade accounts payable and other current accounts payable decrease Ch$ 1,692 million, mainly (i) lower dividends payable to third parties for Ch$ 43,486 million; (ii)  lower accounts payable to suppliers of goods, services and fixed assets  for Ch$ 13,686 million, and (iii) lower accounts payable to energy suppliers for Ch$ 4,178 million. The abovementioned was partially offset by greater trade accounts and other accounts payable: (i) of Enel X Chile for Ch$ 20,744 million related to the mobility project, and (ii) the addition of EGP Chile for Ch$ 42,006 million.

 

·         Related party accounts payable increase Ch$ 38,323 million, mainly due to (i) greater accounts payable to Enel Green Power SpA for Ch$ 30,353 million (ii) greater accounts payable to Enel Green Power SpA GLO for Ch$ 7,772 million, (iii) greater accounts payable to Enel Global Trading for Ch$ 6,998 million, (iv) greater accounts payable to Hydromac Energy SRL for Ch$ 5,906 million, (v) greater accounts payable to Enel Italia Srl for Ch$ 5,506 million, (vi) greater accounts payable to Enel Global Thermal Generation SRL for Ch$ 2,200 million, (vii) greater accounts payable to Enel SpA for Ch$ 1,953 million mainly related to services. The aforementioned was offset by (i) a reduction in accounts payable to Enel Green Power del Sur SpA for Ch$ 10,324 million (ii) a reduction in accounts payable to Empresa Eléctrica de Panguipulli S.A. related to the purchase of energy and tolls for Ch$ 3,247 million,(iii) a reduction in accounts payable to Enel Produzione for Ch$ 3,019 million, (iv) a reduction in accounts payable Enel Distribuzione for Ch$ 2,851 million, (v) a reduction in accounts payable to Parque Eolico TalTal S.A for Ch$ 2,105 million due to lower energy purchases and (vi) lower accounts payable to GNL Chile S.A. for gas purchases amounting to Ch$ 2,152 milion.

 

·         Current tax liabilities decrease Ch$ 49,350 million, mainly due to the payment of income tax for fiscal year 2018.

 

Non-Current Liabilities increase Ch$ 1,505,397 million as of December 31, 2018, which is explained by the following:

 

·         Other non-current financial liabilities increase Ch$ 923,855 million, mainly due to (i) the debt issued by Enel Chile for Ch$ 615,040 million, the US$ 1.0 billion Yankee Bond, net of arrangement expenses for Ch$ 17,770 million to guarantee the timely payment of debt arising from the Enel Generación PTO, and (ii) the consolidation of EGP Chile, which as of the end of the period had bank loans for Ch$ 229,020 million, and (iii) exchange differences on the USD bonds for Ch$ 128,387 million. The aforementioned is

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

compensated by (i) the transfer of Enel Generación Chile’s M and H bonds installments to the short-term for Ch$ 30,529 million and (ii) a reduction in hedging derivative liabilities for Ch$ 18,256 million.

 

·         Non-current accounts payable to related parties increase Ch$ 446,875 million mainly explained by the debt that Enel Green Power de Sur, subsidiary of EGP Chile, owes Enel Financial International NV for Ch$ 447,194 million.

 

·         Deferred tax liabilities increase Ch$ 105,856 million mainly due to the Ch$ 77,463 million deferred tax liability of EGP Chile.

 

 

 

 

Total Equity amounted to Ch$ 3,674,164 million as of December 31, 2018

 

Equity attributable to shareholders of Enel Chile amounted to Ch$ 3,421,229 million, comprised of the following: Issued capital for Ch$ 3,954,491 million, Retained earnings for Ch$ 1,914,797 million, Other negative reserves for Ch$ 2,335,616 million and share repurchases for Ch$ 72,388 million.

 

During the year, Issued capital increased Ch$ 1,725,383 million as a consequence of the merger of Enel Chile and EGPL.

 

Retained earmings presented a Ch$ 163,172 million variation during the period, explained by (i) the net income of the period for Ch$ 361,710 million, minus dividends for Ch$ 195,859 million and (ii) a Ch$ 2,659 million reduction resulting from applying the new model to determine the provisions for the impairment of financial assets for the first time (NIIF 9), as of January 1, 2018.

 

Also, other reserves presented a negative variation that amounted to Ch$ 1,378,342 million, mainly comprised of: (i) lower reserves for Ch$ 1,313,999 million related to reorganizations under common control, (ii) lower cash flow hedging reserves for Ch$ 159,021 million, and (iii) greater translation differences for Ch$ 94,678 million.

 

Equity attributable to non-controlling shareholdings amounted to Ch$ 252,935 million, which includes the initial Ch$ 803,577 million balance, plus the transactions booked throughout the year up to December 31, 2018, related to net income of the period for Ch$ 51,137 million and other comprehensive results for Ch$ 10,563 million. The aforementioned was offset by lower reserves for Ch$ 592,695 million related to reorganizations under common control, dividends for Ch$ 19,603 million and Ch$ 45 million from applying the new model to determine the provisions for the impairment of financial assets for the first time (NIIF 9).

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

 

 

The performance of main financial ratios is the following:

 

 

The current ratio as of December 31, 2018, reached 0.82 times, which represents a 36.4% decrease compared to December 2017.  This reduction is explained by the increase in other current financial liabilities due to the remaining balance of the bridge loan obtained to finance the Enel Generacion PTO.

 

Acid test or quick ratio, as of December 31, 2018, was 0.77 times, which represents a 37.9% reduction when compared to December 31, 2017, also as a consequence of the increase in financial liabilities.

 

Working capital, as of December 31, 2018, amounted to minus Ch$ 220,516 million, which represents a Ch$ 458,836 million negative variation when compared to December 31, 2017, explained by the increase in other current liabilities.

 

 

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

The debt ratio was 1.04 times, which means that the level of commitment of Enel Chile equity was 1.04 times at the end of 2018.

 

The financial expenses coverage ratio for the period ended December 31, 2018, was 6.81 times, which represents the ability to cover all financial expenses with the EBITDA obtained during the period ended December 31, 2018.

 

The profitability index, calculated by dividing operating income by operating revenues, increased 19.2% when compared to the same period of the previous year, reaching 27.3% as of December 31, 2018, due to higher operating income obtained this period when compared to last year.

 

Return on equity of the owners of the controlling shareholder (dominant) was 14.5% for the twelve-month period ended December 31, 2018.

 

Return on assets was 8.8% for the twelve-month period ended December 31, 2018.

 

 

MAIN CASH FLOWS

 

The net cash flow of Enel Chile Group reached a negative Ch$ 179,457 million as of December 31, 2018, which represents a Ch$ 351,009 million reduction when compared to the previous year. The main factors that explain this cash flow, classified as either operating, investing, or financing activities, compared to December 2017, are presented below:

 

 

Net cash flow from operating activities amounted to a Ch$ 735,526 million for the twelve-month period ended December 31, 2018, which represents a 15.7% increase when compared to December 2017. These cash flows come primarily from sales and other revenue amounting to Ch$ 3,037,830 million, cash inflows from insurance policy premiums and services, annuities and other insurance benefits for Ch$ 9,201 million and other cash from operations for Ch$ 23,354 million, which were partially offset by cash outflows related to (i) supplier payments for Ch$ 1,921,810 million; (ii) employee payments for Ch$ 119,944 million; (iii) income tax payments for Ch$ 134,513 million; (iv) other payments related to operational activities for Ch$ 137,352 million, and (v) insurance premium payments and other payments related to insurance policies for Ch$ 15,704 million and (vi) other cash outflows for Ch$ 5,536 million.

 

 

ENEL CHILE FINANCIAL STATEMENTS ANALYSIS AS OF DECEMBER 31, 2018

 

Net cash flow used in investing activities amounted to Ch$ 1,881,560 million for the twelve-month period ended December 31, 2018, which represents a Ch$ 1,735,094 million increase in cash outflows when compared to December 2017. These cash flows are mainly comprised of (i) Ch$ 1,624,327 million to pay the Enel Generación PTO, (ii) Ch$ 300,539 million to purchase property, plant and equipment, (iii) payments of futures, options and swaps for Ch$ 1,476 million, (iv) loans to related companies for Ch$ 37,940 million, and (v) other cash outflows for Ch$ 6,754 million. These cash outflows were partially compensated by (i) cash inflows from related parties for Ch$ 76,307 million, (ii) cash inflows originating from futures, options and swaps for Ch$ 353 million, (iii) dividends received for Ch$ 1,521 million, (iv) income from the sale of assets for Ch$ 4,641 million, and (v) interest received for Ch$ 6,654 million.

 

Net cash flow from financing activities amounted to Ch$ 966,577 million for the twelve-month period ended December 31, 2018, which represents a Ch$ 1,284,173 million variation when compared to December 2017. These cash flows are comprised of (i) funds from long-term bonds issued for Ch$ 665,829 million (Yankee Bonds), (ii) funds from a Bridge loan to finance the Enel Generación PTO for Ch$ 940,414 million, and (iii) funds from shares issued for Ch$ 665,839 million. The aforementioned were offset by (i) payments to repurchase shares for Ch$ 72,388 million, (ii) dividend payments for Ch$ 231,393 million, (iii) interest payments for Ch$ 116,541 million, (iv) Bridge loan payment for Ch$ 819,526 million, (v) financial leasing liability payments for Ch$ 1,889 million and (vi) other cash outflows for Ch$ 23,298 million.

 

 

The following table presents the cash disbursements related to additional property, plant and equipment and its depreciation for the twelve-month period ended December 31, 2018 and 2017.