GUACOLDA ENERGÍA FIRST QUARTER 2020 RESULTS€¦ · Guacolda Energía S.p.A. is located in Huasco, in the Northern part of Central Chile, and sells electricity on the National Electrical

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GUACOLDA ENERGÍA FIRST QUARTER 2020 RESULTS

• Guacolda Energía S.p.A. (Guacolda, or the Company) reported a Gross Profit of US$34 million in the first quarter of 2020, up 102% compared to the US$17 million in the first quarter of 2019 due to higher dispatch and consequently higher net spot sales volumes, lower maintenance costs, lower depreciation and lower coal costs. These positive effects were partly offset by lower unregulated and regulated customers demand.

• The Company achieved an EBITDA of US$43 million in the first quarter of 2020, 47% above the EBITDA in the first quarter of 2019, driven by the increase in growth profit.

• Guacolda posted a US$13 million Net Income for the first quarter of 2020, up from the Net Income of US$6 million in the same period of 2019. Higher gross profit as well as lower income tax expenses in the first quarter of 2020 compared to the same period in 2019, was partly offset by a negative effect on foreign exchange differences.

REVIEW OF FIRST QUARTER 2020 RESULTS

Income Statement (ThS$) 1Q2020 2019 Var (%)

Operating Revenue 115,367 120,174 (4) %Cost of Sales (81,473) (103,396) (21) %

Gross profit 33,894 16,778 102 %

Administrative Expenses (3,930) (3,436) 14 %Other gains / (losses) — — ---Financial Income 170 129 32 %Financial Expense (6,943) (7,845) (11) %Foreign currency exchange differences (9,944) 2,484 ---

Income (loss), before tax 13,247 8,110 63 %Income tax expenses (63) (2,183) (97) %

Net Income (Loss) 13,184 5,927 122 %

EBITDA 42,978 29,155 47 %

Numbers presented in the text of this report are rounded to millions; therefore, differences may arise with the financial statements.

Earnings Report - 1Q 2020

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Gross Profit

In the first quarter of 2020, Guacolda’s gross profit increased 102%, compared to the same quarter in 2019, reaching US$34 million.

Gross Profit (ThUS$) 1Q

2020 2019 Var (%)Regulated customer sales 11,458 14,397 (20) %Unregulated customer sales 91,804 96,788 (5) %Spot sales 3698 1227 201 %Transmission revenue 6,598 6,715 (2) %Other operating revenues 1,809 1,047 73 %Operating Revenues 115,367 120,174 (4) %

Fuel Consumption (30,352) (41,347) (27) %Energy and Capacity Purchases (9,195) (9,728) (5) %Transmission Tolls (7,656) (10,095) (24) %Other Cost of Sales (21,256) (26,413) (20) %Depreciation (13,014) (15,813) (18) %Total Costs of Sales (81,473) (103,396) (21) %

Gross profit 33,894 16,778 78 102 %

Net Generation (GWh) 1Q

2020 2019 Var (%)Coal 1,113 1,010 10 %Total Generation 1113 1010 10 %

Energy Purchases (GWh) 1Q2020 2019 Var (%)

Spot — 93 (100) %Other generators 1 2 (50) %Total Purchases 1 95 (99) %

Physical Sales (GWh) 1Q2020 2019 Var (%)

Regulated Customers 127 129 (2) %Unregulated customers 931 975 (5) %Spot 56 — ---Total Sales 1,114 1,104 1 %


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In the first quarter of 2020, Operating Revenues fell US$5 million, compared to the same period in 2019. Lower contract sales, unregulated and regulated, were the main drivers for the decrease in revenue. These negative drivers were partially offset by higher spot revenue due to an increase in generation.

Contract sales revenues decreased 7% to US$103 million, explained mainly by a decrease in regulated and unregulated contract prices linked to lower coal prices, and to a lesser extent lower demand on existing regulated and unregulated PPAs.

Spot sales revenues in the first quarter of 2020 increased US$2 million while Energy and capacity purchase expenses remained relatively stable at US$9 million.

Spot sales volumes increased as a result of higher output at Guacolda’s units after the start of operations of the Cardones-Polpaico line in June 2019, which led to higher dispatch of Guacolda and a reduction in node price decoupling. The increase in plant availability led to a 103GWh increase in generation, up 10% compared to the first quarter of 2019. The start of operations of Cardones-Polpaico also led to a reduction in the need for energy purchases on the spot market to meet contracted demand volume. It's worthy to note that spot energy sales volumes are reported net of spot purchases.

Fuel consumption expenses fell US$11 million equivalent to a 27% decline, compared to the first quarter of 2019 as a result of lower coal prices, offset in part by the increase in generation.

Transmission revenues remained relatively stable at US$7 million comparing the first quarters of 2020 and 2019. Transmission costs in the first quarter of 2020 totaled US$8 million, a 24% decrease compared to the same quarter in 2019 due to regulatory changes as for the calculation of equivalent charges.

Other Cost of Sales decreased by 20% or US$5 million due primarily to a reliquidation adjustment in intercompany purchases during the first quarter of 2019, in addition to lower maintenance costs.

Depreciation and amortization expenses were US$3 million lower driven by the impairment of the book value of Guacolda’s PP&E, registered in December 2019.

EBITDA

EBITDA (ThUS$) 1Q2020 2019 Var (%)

Gross Profit 33,894 16,778 102 %Depreciation and Amortization (-) 13,014 15,813 (18) %Administrative Expenses (3,930) (3,436) 14 %EBITDA 42,978 29,155 47 %

The Company reported EBITDA of US$43 million in the first quarter of 2020, a 47% increase compared to the US$29 million recorded in the first quarter of 2019. While Gross Profit grew by US$17 million, Depreciation and Amortization expenses decreased US$3 million driven by the impairment of the value of Guacolda’s assets registered at the end of 2019. Administrative expenses increased by 14% driven by higher insurance premiums.


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Non-Operating Results

Financial Results (ThUS$) 1Q

2020 2019 Var (%)Financial Income 170 129 32 %Financial Expense (6,943) (7,845) (11) %Other gains / (losses) — — ---Foreign Currency Exchange Differences (9,944) 2,484 ---Total Financial Results (16,717)

17 (5,232) 220 %

During the first quarter of 2020, Financial Results totaled US$-17 million, compared to US$-5 million in the same quarter of 2019. The increase in losses was the result of a US$12 million negative variation in foreign exchange differences, going from a US$2 million gain in the first quarter of 2019 to a US$10 million loss in the first quarter of 2020.

The Chilean peso depreciated by 13.8% in the first quarter of 2020 while it depreciated by 2.3% in the first quarter of 2019. The negative impact of the higher depreciation of local currency on accounts receivables denominated in CLP, was the primary driver in the negative variation in foreign exchange differences.

Financial Expenses decreased US$1 million in the first quarter of 2020, explained by lower interest expense, as a result of the scheduled amortization of the company’s debt.

March 31, 2020

December 31, 2019

Sep. 30, 2019

Jun. 30, 2019

Chilean Peso EOP (CLP/US$) 852 749 728 679

March 31, 2019

December 31, 2018

Sep. 30, 2018

Jun. 30, 2018

Chilean Peso EOP (CLP/US$) 679 695 660 651

Average Exchange Rate for the Period 1Q2020 2019 Var (%)

Chilean Peso (CLP/US$) 803 667 20 %

Income Tax

Guacolda registered an income tax expense of ThUS$63 in the first quarter of 2020, compared to a US$2 million income tax expense in the first quarter of 2020. The primary driver of this variation was the absence of deferred taxes impact on results in 2020, due to a non-recoverable provision for the value of deferred tax assets recognized on October 1, 2019.


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Cash Flow

Cash Flow Statement Summary (AR$ Million) 1Q2020 2019 Var (%)

Net cash from operating activities 71,168 14,083 405 %

Net cash from investing activities (3,012) (1,020) 195 %

Net cash from financing activities (3,065) (11,593) ---Total Net Cash Flow for the Period 65,091 1,470 4,328 %Net Foreign Currency Exchange Differences (2,499) (25) ---

Net Cash and Cash Equivalents Increase 62,592 1,445 4,232 %Cash and Cash Equivalents at the Beginning of Period 27,948 34,755 (20) %Total Cash at the End of the Period 90,540 36,200 150 %

Total cash flow during the first three months of 2020 recorded a net inflow of US$63 million (including foreign exchange variations), compared to the US$1 million inflow recorded in the first quarter of 2019. The increase in total cash inflows is attributable to the increase in inflows from Operating Activities, as well as from Financing Activities, partly offset by higher outflows from Investing Activities.

Total cash as of March 31, 2020, reached US$91 million, up 150% from the cash as of the same date in 2019.

Net cash from operating activities registered a positive variation of US$57 million as of March 31, 2020, compared to the same date in 2019. This variation is attributable to a decrease of US$37 million in Payments to Suppliers for Goods and Services due to lower coal payments associated to lower coal prices and pending payments for coal purchases as for March 31, 2020 and a US$19 million increase in Receipts from Customers.

Net cash used in investing activities grew to US$2 million, due to higher purchases of property plant and equipment compared to the first quarter of 2019 primarily as a result of increased maintenance costs.

Net cash used in financing activities decreased from a net outflow of US$12 million in the first quarter of 2019 to a net outflow of US$3 million in the three-month ended March 31, 2020 primarily related to the proceedings of a committed credit line withdrawn to fortify the cash position of Guacolda amid the Covd-19 pandemic and a US$10 million decrease in dividends associated to a single payment in March 2019 compared to no payments in the first quarter of 2020. A US$40 million prepayment during the first quarter of 2020 of the US$100 million syndicated loan due in April 2020 partly offset the positive variance.

Financial Debt

Total debt principal outstanding as of March 31, 2020, reached US$598 million, comprised of US$500 million in senior bonds due in 2025, US$60 million from the US$100 million in a Syndicated Term Loan Facility and US$38 million from a committed credit facility withdrawn to fortify the Guacolda’s cash position amid Covid-19 pandemic. As of March 31, 2020, approximately 90% of Guacolda’s financial debt is at a fixed rate.

The following chart details Guacolda’s total debt amortization schedule for the outstanding debt as of March 31, 2020:


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Debt Amortization

Total Outstanding Average Interest Rate

Schedule of Maturities as of(US$ Million) March 31, 2020

2020 2021 2022 2023 2024 2025Senior Notes due 2025 500 4.56% — — — — — 500

Committed Credit Line 38 4.53% — — 38 — — —

Syndicated Loan 60 Libor + Spread 60 — — — — —Total 598 4.40% 60 — 38 — — 500

In April 2020 the company paid an additional US$25 million from the US$100 million Syndicated loan, with only US$35 million pending as of today, to be paid before the end of the year. In March 2020, Guacolda disbursed a committed credit facility of UF1.105.000 (equivalent to US$38 million) from Banco Estado to fortify the Guacolda’s cash position amid Covid-19 pandemic. The credit facility matures in April 2022, however the company plans to repay this debt during 2020.

MARKET INFORMATION

Chile’s National Electric System or SEN, supplies a wide range of customer types, including Chile’s main population centers, in the central part of the country and mining operations in the north, with a diverse generation matrix including thermal, hydro and renewables. The SEN runs from the northern part of Region I to Region X.

During the first quarter of 2020, hydro generation on the grid decreased by 8% compared to the same period in 2019 in line with the 16% decline in hydrological inflows in Chile. Average spot prices in the first quarter in Chile were lower than in the first quarter of 2019 due to a combination of lower fuel prices for coal baseload plants, the start of operations of the Cardones-Polpaico line, fully interconnecting Chile’s former SIC and SING systems and higher availability of CCGT’s operating with cheap Argentine natural gas.

Total energy demand increased 2.9% compared to the same period of 2019, for an average monthly demand of 6,588 GWh per month in the first quarter of 2020.

These factors led to a 4% decrease in the average marginal costs in the north and a 21% decrease in the central part of the system compared to the same period of 2019.

The Cardones-Polpaico line’s operation had a positive impact on Guacolda starting in June 2019 by reducing the transmission constraints that had previously affected the plant's operation. Dispatch increased and the decoupling between the injection node and withdraw node prices diminished.


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Guacolda produced 6.3% of the energy generated on the SEN during the first quarter of 2020. The table below shows the main SEN variables as of March 31, 2020, and 2019:

1Q2020 2019

Demand growth (%) 2.9 % 0.2 %

Average monthly consumption (GWh) 6,134 6,400

Average spot price Northern Chile US$/MWh 48.67 50.61

Average spot price Central Chile US$/MWh 50.18 63.51

RISK ANALYSIS

MARKET AND FINANCIAL RISK

Market and financial risks refer to the risk that the fair value of future cash flows of a financial instrument will fluctuate due to a change in market prices. Market risks include the following three categories: foreign currency risk, interest rate risk and commodity price risk. Financial risk relates to the potential occurrence of events which could have a negative financial impact on the Company and includes credit risk and liquidity risk.

Foreign Currency Risk

The Company’s functional currency is the US Dollar given that its revenue, expenses, investments in equipment and debt are mainly denominated in or linked to the US Dollar. Exchange rate risk is associated with any revenue, expenses, investments, and debt denominated in any currency other than US Dollars. As of March 31, 2020, Guacolda maintained several currency forwards with banks to mitigate its exposure to foreign exchange variations associated with collection of energy sales, given that even though most of the Company’s energy supply agreements have prices denominated in US Dollars, payments are made in Chilean pesos at an exchange rate that is fixed for a specific period of time.

Interest Rate Risk

Guacolda manages its interest rate risk by having the majority of its debt at a fixed rate. It should be noted that the impact of a variation of 10% in variable interest rates would have had a US$50,902 impact on Guacolda’s net income given that approximately 83.6% of its total debt is at a fixed interest rate.

Commodity Price Risk

The fuel used by the Company is primarily coal, which is a commodity with international prices set by market factors outside of the Company’s control. Since the units of Guacolda are coal-fired generation facilities, coal costs represent an important part of operating costs. Additionally, the price of fuel is a key factor in plant dispatch and spot prices in Chile.


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Currently, most of the Company’s power purchase agreements include indexation mechanisms that adjust prices based on the increase and decrease in the price of coal in accordance with the indices and adjustment periods specified in each contract, to mitigate major variations in the fuel cost. Moreover, sales to the spot market allow variations in fuel prices to be transferred to the sale price.

Credit Risk

Credit risk is related to the credit rating of Guacolda’s counterparties. The Company is exposed to credit risk primarily from its operating activities related to trade receivables and from its financing activities including deposits with banks and financial institutions and other financial instruments.

Regarding trade receivables, Guacolda has an ample customer base, with counterparties including distribution and mining companies with high solvency. In the case that the Company has an excess of energy; it is sold in the spot market. Per Chilean regulations; the Company’s spot sales are required to be with other generators in the SEN grid that have energy deficits according to the economic dispatch performed by the Coordinador Eléctrico Nacional (ISO).Financial investments by Guacolda such as time deposits and derivatives are executed with local and foreign financial institutions that have national and/or international credit ratings greater than or equal to “A” under the S&P and Fitch scale and “A2” under the Moody’s scale. Similarly, derivatives for financial debt are executed with first-class international entities. Cash, investment and treasury policies direct the management of the Company's cash portfolio and minimize credit risk.

Liquidity Risk

Liquidity risk relates to the need for funds to meet payment obligations. The Company’s objective is to maintain a balance between fund continuity and financial flexibility through normal operating cash flows, bank loans, public bonds, short-term investments and committed and uncommitted credit lines.

As of March 31 2020, Guacolda had US$90 million in available cash and cash equivalents, compared to US$36 million as of March 31, 2019.

As of March 31, 2020, Guacolda withdrew a UF1.105 million committed line of credit, equivalent to approximately US$38 million to fortify the cash position of the company.

OPERATIONAL RISKS

Operational risks relate to the possibility of future outages or deficiencies that can negatively affect the Company’s strategic operational and/or financial objectives.

Operational Failures and Maintenance

Mechanical failures, accidents or planned and unplanned maintenance affecting the availability of the Company’s efficient capacity could have a material adverse effect on results.Although the Company performs regular maintenance and operational enhancements to guarantee the commercial availability of its units and operational insurance policies remain in effect, mechanical failures or accidents could result in periods of commercial unavailability. Significant periods of unavailability of Guacolda units, because of mechanical failure or maintenance (planned or unplanned), would require the Company to meet its contractual obligations by purchasing energy on the spot market, which could result in higher costs that would adversely affect operating results.

Decoupling Risk


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Given certain transmission restrictions in Chile due to the concentration of renewable energy plants, there can be a decoupling between injection and withdrawal prices. The effect of the difference in price is assumed by the generation companies and can, in turn, affect their operating margins. Currently, there are contracts in which this risk cannot be passed through; however, clauses to mitigate this risk are being negotiated in new contracts with unregulated customers.

It should be noted that the Cardones-Polpaico transmission line came online at the end of May 2019, allowing for the full interconnection between the Chilean former northern and central grids. This link has contributed significantly to reduce energy prices differentials between both regions while reducing transmission constraints that generated significant variations in prices between different nodes of the system. All this contributes to a significant reduction in the decoupling risk.

Contract Demand

Most of the Company’s contracts are with creditworthy customers that require our electricity to produce their products. In the case the demand for energy-related to the variable portion of our contracts decreases, our customers do not comply with their committed obligations or we are unable to renew or replace these contracts, our financial performance could be negatively impacted.

Regulatory Risks

Guacolda is subject to several different aspects of Chilean regulation and modifications to existing legislation could potentially have an adverse effect on the Company’s financial results. The Company cannot guarantee that the laws or regulations in Chile will not be modified or interpreted in a manner that could adversely affect the Company or that governmental authorities will effectively grant any approval requested. Guacolda, through AES Gener, actively participates in the development of the regulatory framework, submitting comments and proposals to the proposed regulations presented by authorities.

On March 18, 2020, the Government of Chile declared a constitutional state of emergency amid the COVID-19 pandemic. In this context, various legislative bills were presented in Congress, to suspend the cut-off of basic utilities - electricity, water and telecommunications - during the health crisis, and defer payments of accounts of certain vulnerable groups of people. To date, two bills are in the second constitutional process in Congress, one in the Chamber of Deputies, and the the other one in the Senate, both with similar intentions, varying in some aspects such as the universe of beneficiaries, duration of the benefit and potential financing options for such measures. Companies affected in the case of the Electric Industry should be distribution companies. Notwithstanding the above mentioned, potential effects on the chain of payments are being analyzed by the Company.

Regulatory Framework

As an electric generation company, Guacolda is subject to regulation in diverse aspects of its business. The current regulatory framework which governs all electricity supply companies has been in effect in Chile since 1982.In November 2019, Chilean Law 21,185 was enacted creating an energy price stabilization mechanism affecting regulated contracts with reference in the first half 2019 energy prices. Through this mechanism, future increase in prices will be temporarily borne by generation companies supplying these regulated contracts, financing up to US$1,350 million. Energy prices are expected to decrease from 2021 onwards, so the difference between fixed tariff and contract price evolution will be used to repay pending payments to suppliers. Also, in November 2019, the Chilean Ministry of Energy presented its Flexibility Strategy by which will review, among other matters, the improvement of the market for the development of a flexible system, review of the regulatory framework for storage systems and measures associated with the system’s flexible operation. This process will run until May 2022 and it’s expected that the current market compensation mechanism will be reviewed, potentially affecting Guacolda’s capacity revenues.


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On December 21, 2019, the Ministry of Energy enacted Short Distribution Law 21.194, which lowered distribution companies’ return rates to 6% after tax. The Ministry is currently discussing the Long Distribution Bill, which would address the creation of a commercialization player and a lower limit to migrate the migration to the free customer segment of the system, an issue that must be addressed considering the regulated contracts already awarded in the last long-term bids supplying energy until 2040.

On June 4, 2019, generation companies signed a voluntary bilateral agreement with Chile’s Ministry of Energy of Chile for the Disconnection and Cease of Operations of certain coal-fired units. The agreement establishes that the plants disconnected from the system may enter into an operating "Strategic Operating Reserve State" (ERE), whose objective is to provide security guarantees to the National Electric System. The agreement will materialize the disconnection of approximately 1,000 MW of coal-fired power plants between 2019-2024, subject to the regulatory changes described in said agreements take full effect. In the first quarter of 2020, the Ministry of Energy closed the regulation’s Public Consultation process including these regulatory modifications, and it is expected that this regulation will be submitted to the Comptroller General of the Republic at the end of the second quarter for final approval. To date, Guacolda’s units are not affected by this agreement.

Environmental Regulation

Guacolda is subject to environmental regulations, which, among other requirements, require environmental impact studies and environmental permits before developing future projects. The Company cannot guarantee that governmental authorities will effectively grant any environmental approval requested. New environmental regulations are constantly under development, which could modify current operations and/or require additional investments to comply with the new laws.

On August 30, 2017, Decree 38/2017 was enacted, which established a new Atmospheric Pollution Prevention Action Plan for Huasco and the surrounding zone (the “Prevention Plan”). The Prevention Plan for Huasco establishes additional requirements for particulate matter (“PM”) emission control for Guacolda, being the main ones:

i. Keep stack PM emissions below 30 mg/m3N for each stack, and below 730 ton/year on aggregate of all stack emissions ii. Reduce PM emissions on coal transfer points and coal conveyors iii. Pave the ash deposit access road iv. Sweep and vacuum the PM that falls during material transportation, wind action, or vehicle movement.

To comply with these requirements a “Integral Control Plan” was submitted to the authorities in February 2018. The Regional environmental authority approved the Control Plan on February 26, 2019.On October 14, 2019, the Superintendency of the Environment (the "SMA") notified AES Gener about certain breaches with its environmental license at the Guacolda plant, initiating through a sanctioning process through Exempt Resolution N ° 1 / ROL D-146-2019.

In total, 4 charges were filed by the SMA. In summary, these charges include:a. Failure to comply with all measures to mitigate atmospheric emissions (for example, vehicle traffic on unpaved roads, failure to install filter in the limestone storage, failure to fully encapsulate conveyor fuel belts, not installing waterproof cloth around the coal yard, inadequate washing of ash transporting trucks from the central dump to ash disposal), b. Failure to comply with mitigation measures to avoid discharges of solid fuel into the seac. Failure one day of temperature monitoring of water intake and discharge in Unit 3d. Exceeding the seawater discharge limits for one day.

On November 13, 2019, the company submitted the first proposal for the Compliance Program to the SMA, which is under review by the environmental authority, without any comments being made. On April 27 of this year, the SMA made observations to the PdC presented by Guacolda, granting 8 business days to present a consolidated Compliance Program incorporating the observations made. The SMA resolution is pending notification to Guacolda.


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Tax Regulation

The Company is subject to existing tax legislation in Chile. Amendments to laws or modifications in tax rates have a direct effect on earnings.

On September 29, 2014, the Official Gazette published the Tax Reform, which replaces the income tax system and modifies substantially the Income Tax Law and Chilean Tax Code. The 2014 tax reform law incorporated a new tax on air emissions from stationary sources with boilers or turbines that have a thermal capacity equal to or greater than 50 MWt starting in January 2017. In the case of CO2, the tax is US$5 per ton of CO2 emitted.

A bill for a “tax modernization” was submitted to the Chilean Congress in August 2018. After substantial modifications in Congress, it was enacted and published in February 24, 2020 under Law 21.210. This law, simplifies tax records that taxpayers must keep, modernizes the definition of accepted expenditures, to incorporate disbursements during the ordinary course of business that are part of its operation, but not directly associated to the productive activity. Additionally, an amendment to the emissions tax regulation was issued, expanding the taxation base to all establishments whose emitting sources, individually or in aggregate, produce 100 tons or more of particulate matter per year, or 25,000 tons or more of CO2, not only limiting them to boilers or any particular emission sources as in the previous regulation. Another relevant modification is the opportunity to implement compensation programs, from 2023 onwards, thereby reducing the calculation of emissions on which the tax payment will apply, however the requirements of such programs are pending of publication by the authorities. In addition to these modifications, the law incorporated a surcharge on real estate contributions, for those taxpayers whose aggregated properties exceed an appraisal of 670 UTA, as of December 31 of the previous year, according to the following tranches: i) 670 UTA -1,175 UTA: 0.075%; ii) 1,175-1,510: 0.15%; iii) 1,510 UTA or more: 0.275%. Another change incorporated by the new law is a tax for the benefit of a regional fund, equivalent to 1% of the cost for investment projects exceeding US$10 million, which must be subject to environmental impact studies. It is applied to the amount that exceeds the US$10 million and will be accrued in the first year with operating income, payable over a period of 5 years, for the benefit of the region in which the project will be built. This tax is applicable to projects with environmental assessment processes initiated as of February 24, 2020.

During 2019, Guacolda accrued emission taxes net of pass-through agreements of US$14 million.

During the first quarter of 2019, the Company accrued emission taxes net of pass-through agreements of US$2 million.


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GUACOLDA ENERGÍA S.p.A. BALANCE SHEET

Balance Sheet as of March 31, 2020, and December 31, 2019

International Financial Reporting Standards (IFRS).

Assets (ThUS$) March 31, December 31,2020 2019

CURRENT ASSETSCash and cash equivalents 90,540 27,948 Other financial assets 84 23 Other non-financial assets 7,511 30 Trade and other accounts receivable 127,350 132,843 Accounts receivable from related parties 17,282 23,035 Inventory 31,385 32,166 Current tax assets 188 132

Total Current Assets 274,340 216,177

NON-CURRENT ASSETSTrade and other accounts receivable, non-current 5,165 4,863 Intangible assets other than goodwill 975 1,080 Property, plant and equipment 953,869 964,875 Deferred tax assets 76 90

Total Non-Current Assets 960,085 970,908 TOTAL ASSETS 1,234,425 1,187,085


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GUACOLDA ENERGÍA S.p.A. BALANCE SHEET

Balance Sheet as of March 31, 2020, and December 31, 2019

International Financial Reporting Standards (IFRS).

Liabilities and Equity (ThUS$) March 31, December 31,2020 2019

CURRENT LIABILITIESOther financial liabilities 109,684 106,083 Trade and other accounts payable 56,229 56,770 Accounts payable to related parties 42,149 10,179 Provisions for employee benefits 1,333 3,253 Other non-financial liabilities 791 594

Total Current liabilities 210,186 176,879

NON-CURRENT LIABILITIESOther financial liabilities 496,572 496,435 Other provisions 112,572 111,657 Non-current provisions for employee benefits 198 218

Total Non-Current Liabilities 609,342 608,310 TOTAL LIABILITIES 819,528 785,189

SHAREHOLDERS’ EQUITYIssued capital 343,170 343,170 Retained earnings (loss) (72,889) (86,073) Other reserves (5,034) (4,851) Other equity interest 149,650 149,650

Shareholders' Equity attributable to Parent Company's owners 414,897 401,896 Non-Controlling Interest — — Total Shareholders’ Equity 414,897 401,896

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 1,234,425 1,187,085


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GUACOLDA ENERGÍA S.p.A. INCOME STATEMENT

For the three-month periods ended March 31, 2020, and March 31, 2019

International Financial Reporting Standards (IFRS)

Income Statement (ThUS$) March 31, March 31,2020 2019

Regulated customer sales 11,458 14,397Unregulated customer sales 91,804 96,788Spot sales 3,698 1,227Transmission revenue 6,598 6,715Other operating revenues 1,809 1,047Operating Revenues 115,367 120,174Fuel Consumption (30,352) (41,347) Energy and Capacity Purchases (9,195) (9,728) Transmission Tolls (7,656) (10,095) Other Cost of Sales (21,256) (26,413) Depreciation (13,014) (15,813) Total Costs of Sales (81,473) (103,396)

Gross Profit 33,894 16,778

Administrative Expenses (3,930) (3,436) Other gains / (losses)Financial Income 170 129 Financial Expense (6,943) (7,845) Foreign Currency Exchange Differences (9,944) 2,484 Income (Loss) Before Tax 13,247 8,110 Income tax income (expense) (63) (2,183) Net Income (Loss) Before Tax 13,184 5,927

Income Attributable to Shareholders of Parent 13,184 5,927

Income Attributable to Non-controlling interest — — Net Income (Loss) 13,184 5,927


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GUACOLDA ENERGÍA S.p.A. CASH FLOW STATEMENT

For the three-month periods ended March 31, 2020, and March 31, 2019 (cumulative results)

International Financial Reporting Standards (IFRS)

March 31, March 31, 2020 2019

Cash flows from (used in) operating activitiesClasses of collections from operating activitiesCollections from sale of goods and provision of services 131,510 112,717

Classes of paymentPayments to suppliers for the supply of goods and services (58,340) (95,249) Payments to and by employees (2,910) (3,468) Other payments for operating activities — —

Interest received 114 132 Other cash inflows (outflows) 794 (49)

Net cash flows from (used in) operating activities 71,168 14,083

Cash flows from (used in) investing activitiesPurchase of property, plant and equipment (3,012) (1,020)

Net cash flows from (used in) investment activities (3,012) (1,020)

Net cash flows from (used in) financing activitiesLoans received 37,773 — Payment of loans (40,000) — Interest payment (838) (1,593) Dividends paid — (10,000)

Net cash flows from (used in) financing activities (3,065) (11,593) Net increase (Decrease) in cash and cash equivalents, before effects ofexchange differences 65,091 1,470 Effect of exchange differences on cash and cash equivalents (2,499) (25) Net increase (decrease) in cash and cash equivalents 62,592 1,445

Cash and cash equivalents at the beginning of the period 27,948 34,755 Cash and cash equivalents at the end of the period 90,540 36,200


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ABOUT GUACOLDA

Guacolda Energía S.p.A. is located in Huasco, in the Northern part of Central Chile, and sells electricity on the National Electrical Grid of Chile (SEN). The company owns and operates a coal-fired a thermoelectric generation facility, with a gross installed capacity of 764 MW. Unit 1 and Unit 2 have been fully operational since 1995 and 1996, respectively. Unit 3 and Unit 4 came online in 2009 and 2010, respectively. Additionally, the Company completed Unit 5 which started operations at the end of 2015. AES Gener owns 50% plus one share of Guacolda, while Global Infrastructure Partners (GIP), through its subsidiary El Aguila Energy SpA, owns 50% less one share of the Company.

ABOUT AES GENER

AES Gener generates and sells electricity in Chile, Colombia, and Argentina with the mission of improving lives by accelerating a more secure and sustainable energy future. The Company operates a total installed capacity of 5,304MW in the region along with an extensive portfolio of renewable energy projects under development. The Company is the second-largest generator in Chile, with a diversified portfolio including hydro, wind, solar, energy storage, biomass, gas and coal-fired power plants.

In Chile, AES Gener owns 3,620MW, comprised of 3,074MW of thermoelectric, 271MW of hydroelectric, 110MW of wind, 90MW of solar photovoltaic and 13MW of biomass capacity, in addition to 62MW of battery energy storage systems, seawater desalination plants, transmission lines and gas pipelines in Chile. AES Gener also owns hydroelectric and solar plants in Colombia with a total capacity of 1,041 MW and a natural gas combined cycle plant in Argentina with an installed capacity of 643 MW. AES Gener is 66.7% owned by The AES Corporation.

To learn more about AES Gener, please visit www.aesgener.cl/investors


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GUACOLDA ENERGÍA FIRST QUARTER 2020 RESULTS€¦ · Guacolda Energía S.p.A. is located in Huasco, in the Northern part of Central Chile, and sells electricity on the National Electrical