Companhia Energética de Minas Gerais

Good morning and welcome to CIMIG's conference call. We're going to see the results of the first quarter of 2022. This conference call is being recorded and will be made available at the company's RI website, where the presentation is also available. Note that if you need simultaneous translation, this tool is available at the globe icon where it reads interpretation located at the center bottom of the screen. By selecting it, you can choose the language of your choice, Portuguese or English. For those listening to the conference call in English, you have the option of silencing the original Portuguese audio by clicking on Mute Original Audio. At this time, I'd like to turn the floor to Carolina Sena, Superintendent of Investor Relations. Carolina, please, you may go ahead. Good morning. My name is Carolina Sena, Superintendent of Investor Relations at CEMIG. We begin the release of the financial results of the first quarter of 2022 with the presence of Reinaldo Passanesi Filho, CEO, Dimas Costa, Commercialization Director, Eduardo Soares, Regulatory and Legal Director, Leonardo Jorge de Magalhães, Chief Financial and Investor Relations Officer, Marco da Camina Ancona Soligo, Participation Director, Marnay Tadeu Antunes, Distribution Director, Tadeu Carneiro da Silva, Generation and Transmission Director. For the opening remarks, we turn the floor to our CEO, Mr. Reynaldo Passanesi Filho. Good morning. Good morning, everyone. It is a great pleasure to bring here the quarterly results. They have been actually excellent. In a month where CEMIG is celebrating 70 years of a company that has actually grown. It is one of the main landmarks of the national electricity industry. It started with President Juscelino Kubitschek 70 years ago, 71, but CEMIG was created 70 years ago and it is a very significant part of the electricity segment in Brazil, building landmark industries and the power plants. We have distribution, transmission, engineering in all corners of the country. CEMIC employees who are at CEMIC today or have retired at CEMIC that are a great role model. So the first thing is to thank and congratulate each one of those who have been responsible for such an important history, CEMIC's history, and we're very proud to be able to be part of this and to continue onwards. And to move forward, presenting results such as the ones we're showing you now for the first quarter of 2022. For me, it's important to say, and this results more than the numbers themselves, it's the consistency and the adherence to the strategic plan that we have approved at the board in January 21. It's a strategic plan focused on a very clear purpose, that with our energy we transform lives, the lives of people from Minas, and we'll focus our investments in Minas Gerais and we'll succeed. And for that, we must be, first of all, extremely efficient in the technical aspect and efficient in the economic aspect. That's what we've been able to bring, and I believe you are all witnesses of how the efficiency results have improved. I would say that since 2018, there's been a major turnaround in terms of efficiency, in terms of operating expenses, general administrative expenses, and technical efficiency in services provided, tech and fax indexes, and the losses within regulatory parameters, so the financial adjustments that we've had combined to the compliance to the regulatory OPACs and being compliant to the losses within regulatory parameters exceed one billion reais per year. From 2009 until 2018, CEMIG had never been below regulatory expenses. On average, we've been 700 million reais above regulatory expenses over the last ten or nine years, from 2009 to 2018. We've been making a lot of effort to contain expenses, and we're very proud to say today that we've reached the limits within the regulatory parameters for expenses. That's a 700 million adjustment at least to reach the regulatory limits. And sometimes we're better than the regulatory limits, but let's just say the number of the limits. Same thing in terms of losses. Our adjustment is higher than 1%. in the index from 12.5 to 11.5, which is a very significant adjustment worth hundreds of millions of reais, amounting to at least a one billion real adjustment in meeting the target of regulatory parameter for losses and expenses. So, overall, that places us within the limits of the regulatory EBITDA of the institution for the first time in the company's history. So, it's a turnaround adjustment, very significant compared to what we saw in the past 10 years from 2009 to 2018. That's a huge point of focus and that's precisely this additional cash generation that allows us to face a very ambitious investment plan in Minas, Minas Gerais. I mean, more in terms of distribution, but also operating expenses in transmission. And we've also been achieving results in terms of technical performance improvement, increasing wind power generation in the areas where we can go beyond generating additional revenue. and an operational use of our hydropower plants and our wind power plants, specifically those that allow us to generate greater revenue levels. So there is great effort here in the turnaround, either to recover revenue and to reduce expenses, and that's what I said. It's an adjustment above one billion reais per year. You can do the math at present value, what it represents, with upsides, with topics that are being negotiated in the public, and we always talk about them in terms of the post-retirement or post-employment aspects, which are important to the company. and to the position that we have for long-term sustainability, that's pillar one, to be efficient. Pillar two, to invest in the core business in Minas Gerais, There's also a big change here compared to the previous strategy that was a strategy to diversify for investments and minority shares outside of Minas Gerais in the most part without CEMIC's control. But today, CEMIC's investments are in our core business of distribution, generation, and transmission in Minas Gerais. entirely under CEMIC's control. So it's 22.5 billion reais over the next five years from 2021 to 2025. This is a process that's ongoing. We see a higher volume of hires and we renegotiated many contracts with our suppliers. In terms of investment, We have more than double the historical investment from 2009 to 2018, which was investment below, much below depreciation even, with plans to continue to grow. And we have our main challenges, which is more energy to grow 50% in the number of substations, the conversion of 30 kilometers of grid into a three-phase grid, minus less, that's to bring public lighting to the municipalities, that's creating miles to digitalize customer service, bringing more quality to the services provided, which is an investment of 1.5 giga in generation and a strategy of first buying energy from outsourced providers, but now we have the position as market leader, an example of new business that brings great results to the company. And we want to make the most of the capacity that they have to access customers to have our own production. So these are the programs that are the most important ones, enabling 1.5 gig and generation to start growing again and The bees and the minas. strengthening the improvements in this ambitious program of 2.5 billion reais in distribution that goes well beyond and above depreciation to actually be able to provide the best service to our clients. All 100% CEMIG within our core business, including 1 billion of investment at GASMIG, 1 billion of investment in CEMIG 5.0. So that's the second pillar. And we'll also see during the presentation the recovery of investments and our ambition and the attraction that we're being able to gain despite the challenges especially seen in the supply chain, but we will certainly succeed. And this year, 2022, is the final year pre-tariff review, which is, of course, very important, and there's this acceleration. So, efficiency, investment in our core business in Minas Gerais, divestment in non-strategic assets, especially Those that are outside of the state of Minas Gerais. We completed the sale of light last year. Now, we closed the sale of Pranova. It's been, what, 10 days, which also eliminated a big risk that the company had. The risk of the potential non-conclusion of Pranova and the potential failure of this judicial recovery. We effectively concluded the sale for a value of 60 billion with worn out and pre-tax. So these are positive figures that reinforce cash along with the increase in efficiency for us to be able to meet the objectives of such an ambitious investment program. So these are the three main pillars, efficiency, investment in Minas, divestment in non-strategic assets, we'll continue to do that, we'll continue this divestment process in non-strategic assets, especially those outside Minas, and a vision of the future of sustainability and innovation, and sustainability Our indices of decarbonization are very positive over the last few years. We closed the thermal plant in Zaraté. We are the Dow Jones Sustainability Index since the beginning. I won't remember exactly, but I think it's been more than 15 years that we've been in this index. We have recently approved with our board of directors the net zero commitment by 2040. So, the 70th anniversary is to bring modernity and a commitment to the major trends for modernization, for a cleaner world. All of our energy is renewable, 100% of our portfolio, everything we do is within renewable energy. And in the viewpoints of innovation, we've been discussing with the regulators, ONS, and we understand it will help us modernize the systems such as hybridization association. And we have just formed a partnership with the University of Tajuba to study storage, hydrogen laboratory. These are all topics that I see very positively for the Brazilian electricity industry, and CEMIG needs to be a leading player and proactive for us to be able to develop, for example, hydrogen to become an exporter of energy to the world. And finally, in this world of the future, we're very prepared for this market opening moment, considering our very strong historical presence in energy commercialization. So I'd like to go over very quickly what the 70 years of CEMIG are and congratulate everyone who is or has been part of this history, saying that we're committed to be able to continue generating more results as you've been seeing, record EBITDA, record net income, quality of services also at the highest historical levels, historic results. in terms of being the first time where we made the regulatory losses, expenses within regulatory parameters, seriousness and the vision of the business of what we do. fulfilling the mission of not participating in non-strategic assets, delivering what is included in our strategic plan, and this makes us very proud and able to make this company more solid and make everyone proud, everyone who's here and has CEMIG as their employers or contractors. So we're available here. I'm talking more in broader terms and financial... A summary I'll leave to Leo and Carol. But, of course, the numbers, in my view, reflect the consistency with our strategic plan. Our strategic plan is focused in Minas, has its ambitions in Minas, and a wide capacity to meet the goal. That, for me, may be the central aspect. Now, here we're within our core capabilities. This is what we know how to do, and you can count on us to deliver. Thank you. Thank you, Reinaldo. Good morning, everyone. Thank you all for participating at our conference call. In the earnings of the first quarter of 2022, we'll talk a little bit about The execution of our investment program, it's an ambitious program for the year, close to 300 million reais. In the first quarter, we were slightly below expectation, close to 500 million, and we highlight our distribution with investments close to 3 billion in the year 2022 in our budget. Investment in the first quarter was 423 million. As we mentioned, slightly below our expectation, But we're mobilized and involved with many internal initiatives with our entire team engaged to be able to accelerate this program. There's many substations and works that are ongoing, expected to be concluded over the next few quarters. And the program will accelerate over the next quarters and we will be able to get as close as possible to our expectation in the budget. We're very optimistic with the investments that we're making this year. Reynaldo already mentioned these investments will be part of the 2023 base, and there's very few for us. We're optimistic considering the investments we're making. Last year, we were able to invest 1.6 billion. That was already much higher than our historic average. And this year, we have an ambitious program. And these investments coming in the remuneration base for 2023, combined with the adjustment of our market, considering all the losses that we had on GT in the tariff cycle close to 5%, that Carolina will show you in a while, will also be reformed in the tariff review. Thank you. combined to our operational efficiency measures, make us very optimistic concerning the future results of our distribution grant. These are the quality indicators. We remain with very positive quality indicators. It's important to show the historic series to see the considerable progress CERIC made since 2019. where we were at above the regulatory parameters and from then on the company has been able to turn around significantly and this quarter we've been able once again to achieve a constant improvement scale increasing the quality of service to our clients with the best deck of the company closing at 9.26 very close to the limit of nine hours compared to the regulatory indicator that's closer to 10 hours. So, the company has been able to constantly achieve in distribution not only better financial results, but also better operating quality that can also be seen in the next slide. We talked a little bit about the default. We remain at collection indexes that are very favorable at almost 100%, our alpha. definitely one of the best indicators compared to other distributors in the Brazilian electricity and that's a result of many actions that the company has implemented over the past few years to be able to reach this goal. On the slide here, we see some of these initiatives that involve daily monitoring new collection instruments. The number of these collections is smaller as well. That's also decreased default and the expansion of our collection channels. Another important indicator we'd like to share is the percentage of collection through digital channels, where we came from close to 35% in 2020, the total collection through digital channels, and now we get to 54%, 53.97% in the first quarter of 2022. This collection indicators through digital channels indicate a reduction of delinquency as well as a reduction of costs of collection of energy bills. So, they're completely convergent with our operating efficiency pillar that has already been mentioned by our CEO Reinaldo at his opening remarks. And within our operational efficiency measurements, We've implemented a voluntary retirement program in the second quarter, but it's already released in the information of the first quarter. This will be between May 2 and 20, where we offer separate pay for the payments who wish to retire from the company. And we understand this program is very important to reduce our costs. and for us to be able to maintain our costs at the distributors and transmitters within the regulatory parameters. We understand that this is important for cost reduction and allows the company to, with this process, is able to bring new workers to the company who will help in our cultural program with new employees, with new ideas that are also important in this cultural transformation process at our company. Moving on, as Reinaldo mentioned, the sale of Renova occurred in the second quarter and will have a positive effect in the second quarter, close to 400 million reais. 372 million, to be more specific, in the second quarter. So, in addition to the cash entry of 60 million, there is the fiscal credit that's also helped in having an effect in the results of the second quarter. With this sale, the company is also able to achieve another important effect, which is to focus its strategic plan in the investments inside the state of Minas Gerais. compared to what we did in the past. We had a lot of participation and the company divided its focus between investments in Minas, but also in the management of these stakes. Moving on, sustainability is a very important topic for the company. As I mentioned, it's in our DNA. We're a company with 100% generation of renewable energy. And here we have some of the highlights of this quarter. We expect that over the next few days, We'll get other important achievements in the ESG agenda that we understand to be very important for the company and completely in line with our strategic plan. We released our annual sustainability report according to the best international standards. in consultancy from independent parties, we acquired a lot of energy, all our energies, pretty much most of it is acquired from renewable sources. And remember the bid that the company made a while ago to acquire 1.2 gigs of renewable energy and we sell, we have this rack, this renewable energy certificates that are sold in the market, so they have the power that SEMIG contracts from sustainable sources has valued. And I prioritize the Recupera Binas program. We know the first quarter of 21 was a lot of rain in the state with the fact in the society of the state and the company participated in this process. assisting Minas Gerais families in negotiations with the clients who have been affected by storms, with the donation of refrigerators, which is in line with all the actions that CEMIG implemented during the pandemic, sponsoring more than 400 municipalities in the state of Minas Gerais, contributing with the state society within our ESG agenda. We understand that the company's social responsibility on the society where we operate. Moving on, we'll talk a little bit about the results analysis of this quarter. Turning over the floor to Carolina, so she can talk a little bit about the highlights of the company's consistent results since 2020. At each quarter, we highlight this. The company has been presenting consistent growing results always above expectations of the market and this was another quarter where we saw very positive results so i'll turn the port to carolina to talk about these results in more detail good morning everyone thank you leonardo so we'll present the results of the first quarter of 2022 and we'd like to highlight once again the results in the commercialization activity CEMIG is the largest commercialization company in the country, has once again brought robust results for this activity. Part of this activity has already migrated to CEMIG-H, so consolidated what remains at CEMIG-GT and H, forget you when they did that, was $262 million in the first quarter. It's already been mentioned by Leonardo, the importance of the GDP in 2022, generating greater operating efficiency and cost reduction, bringing new employees to the company through and highlighting the equity. with a growth of 55.9%, a gain of 184 million. When we look at Sydney D, similarly as in the first quarter, the intense rainfall that happened, especially in Minas Gerais, decreased the volume of energy distributed. That's also happened in the first quarter since it rained until February, but that's when we see in the captive markets the drop was higher. The rainfall brought a reduction, especially in the rural areas, category in irrigation and We remained in transport for clients in line with 0.3%. SemicGT, in addition to the strong commercialization activity, we also have the FX effect. The foreign exchange in the first quarter was below closure from December, so there's a positive effect in the financial results of 255 million, and we're comparing with the first quarter of 21. It was the opposite effect. We had a negative effect of 619 million. Now, looking at the evolution and the growth of EBITDA and profit, we can see that CEMIC presented recurring growth of about 16%. We had some effects that impacted EBITDA in the first quarter of 2021, the sale of light in January of 100 million and the tax review. effects but excluding them we see important growth of close to 16 on the net profit side we see growth of almost 50 so in addition to the effects mentioned we also had the effect of fx exposure as i mentioned before in 2022 this was a positive effect since the fx was below the closing value of december As for CEMIG GT, you'll see the results. As we mentioned, the commercialization activities that took opportunities from the market and brought an increase of 26% on EBITDA, achieving 944 million. And then the income effect, when we removed that FX exposure effect, we see growth of 82%. And at GT, there's already part of the EBITDA that migrated to CEMIC-H. So even with the beginning of this transfer of activity to CEMIC-H, CEMIC-GT still had a highlight position in the group. As for SEMIC-D, as we mentioned, rainfall has affected consumption and the demand of the captive market. So, excluding the non-recurring effect of the tax provision we talked about, the EBITDA had a very small reduction of 1.7%. And excluding this effect, despite the rainfall, Being an intense, the company presented an increase of 10.6% in its recurring net profit, achieving 376 million in the first quarter 2022. Now, breaking down the market, as we talked about, in the captive market, we had a reduction of 6.6%, especially due to the rainfall on rural customers because of irrigation. There's also been some customers that have been reclassified in this category for not meeting NAL's regulation. And as Dr. Reynaldo already said, it's important to note the increase in the energy injected, achieving 5.3% of the energy consumed at CEMIG-D. Next year is an important year, as we said, because of tariff reviews, and our market will be adjusted, and these effects will be mitigated since that 14300 bill addresses this point, that affects not only CEMIG, but all distributors in the country. Here, as Dr. Reynaldo already mentioned, we are within or below the regulatory OPEX and above the regulatory EBITDA, and this accomplishment of the EBITDA was in the fourth quarter of 2021. So we see that looking at OPEX since 2020, we've been able to remain underneath the regulatory parameters for OPEX. The main impacts we have and realize is the post-employment program that we're working to mitigate the effects of the post-employment costs and to make balance sheets. We addressed it in the fourth quarter with life insurance. We still have health plans and pension funds. that are ongoing. And when we look at EBITDA, as I mentioned, at the end of 2021, we were able to exceed the regulatory parameter for EBITDA, achieving in the first quarter of 2022, 655 million reais. As for operational costs and expenses, CEMIC has been working strongly to maintain its costs below, especially the regulatory parameters. PMSO had an increase of 4.5%, but when we look at the effect of inflation on costs, that was 11.3%, it remained below. Noting the reduction of expenses with personnel, The collective bargaining at CEMIC, the base date is November, so that was the inflation repos in the personnel costs, but there was also a reduction of 8.2%. There's a highlight of the increase of outsourced services to maintenance of electrical equipment and IT expenses, which are important investments to bring quality and efficiency to the services provided, and the post-retirement with the actuarial assumptions for the rates, which were very high in 2021, and they had an effect in the costs. But as for the other costs, there has been an increase, but those costs that are transferred to consumers, that are the energy purchase costs and gas purchase prices, these effects are evened out with the tariff adjustment. As for GASMIG, COSMIC is having a more and more important role in the SEMIC group. We see in 2021, due to the thermal dispatch, the volume sold was above the previous year's in the first quarter. Despite this thermal dispatch being reduced, there was an important EBITDA growth of about 11%, and in net profit, about 20%, achieving 2.9 million of cubic meters negotiated per day, especially with industrial customer. The ASMEG, it should be noted, was in the tariff review process ongoing that was concluded now in April 2022, with some very important effects for the company. So, despite the average reduction of 10.05 in the tariffs, we need to highlight the WACC. There was a reduction to maintain it in line with other players, other companies that also distribute natural gas. So, we maintained it similar. The WACC is very important, 8.71%. Regulatory EBITDA for 2022 is 620 million with the steric review. GASMIC renewed ahead of time its concession contract for another 30 years. It will go to 2053. And there was a payment of a grant bonus that was integrated into this remuneration base. So the net remuneration base at GASMIC after the review is 3.4 million. And all the MSO costs were recognized in full by the regulator. That's a very important item for the company. and it will bring greater returns, noting, as was mentioned, GASNIC has a huge potential for growth in the state of Minas Gerais, since the state still lacks a lot of gas supply, especially in the interior of the state. Now I'll turn over to Leonardo, and he'll talk about the consolidated debt profile. The company... presents very comfortable leverage levels, close to one time the EBITDA. And we see that in this quarter, the cost of debt had a increase, a result of the increase of interest rates and inflation as well. This is a scenario issue that Brazilian companies will go through 2022, maybe 2023, with this increase before it starts to go down. But this is something that we understand should be a scenario related to the economic scenario, the macroeconomic scenario that Brazilian companies in general are experiencing. But the companies that profile is very comfortable today. In 2024, we have the maturities of our Euro bonds at 1 billion reais. And as we mentioned, the company is very mindful of the possibility of reducing This wall in 2024 with the use of some instruments, either repurchase of bonds or US dollar block that allows the company to have no FX exposure risk in 2024. The company now had the best moment understanding how to generate more value to the shareholders and work towards the reduction of these maturities concentrated in 2024. Now, our cash flow is very robust in the quarter, close to 3 billion. It was efficient. We had higher costs with the purchase of energy, so we had about 1 billion reais on the cost of energy purchase in the CVA that was not in our tariff and will be integrated in the upcoming tariff adjustments. This cash generated was sufficient for the company to meet this higher cost of energy purchase, as well as the payment of loans and fundings at 130 million this quarter, as well as the company's activities in investments closing the quarter with a comfortable cash level of 2.5 billion. Basically, these are the information of the quarter. We always like to close with this slide. showing the commitments made by CEMIG with the market and with our shareholders, and these results that the company has been showing as we complete them quarter over quarter with consistent results, and they're a result of these different actions that the company has been implementing, related not only to positive financial results, but the improvement of operational quality for this group as a whole. So the objectives that have been matched, we have many that are related to quality and service to our customers, operational efficiency, liability management of our bonds, the divestment, aspect at Renova and Light that we did in 21, as well as the strengthening of some of these investment programs, partially achieved because they're still ongoing as the divestment of non-strategic assets, restructuring of the retirement benefit plans. At this time, we are discussing with the trade entities with employees to discuss this aspect that generates value to the company, and we have the possibility to achieve a convergence in understanding. And our digital transformation process, where the company has been investing heavily in 2022, our digital transformation process has already started to present positive results, as we already mentioned. Even the percentage of collection through digital channels exceeded 50% in 2022, compared to slightly more than 32% in 2020. That's also a result of the investments that companies are making. In progress, renewal of confessions, investment in renewable generation sources, and grow retail electricity sales. The company is paying attention to this very closely. in 23 and 24 will have important years for this process of market opening. And just as the company has a history of success in service, when the market started to open for the service to free customers, we understand that this is also a time for the company to take an opportunity and we're prepared to also serve this market. So that's basically what we had to say. I thank you all for your participation. and we will be available to answer any questions that you may have. We will now open the questions and answers session. We kindly ask you that you ask all your questions at once and wait for the company's answer. Please note to ask questions You can submit your question on the Q&A icon at the bottom of the screen. Your names will be announced for you to be able to ask your questions live. At this time, there will be a request to activate your microphone on your screen. If you do not wish to open your microphone, please write no microphone at the end of your written question so that we can read your question. Our first question from Natalia, suicide analyst. We're opening your audio for you to ask your question. Please go ahead. Good morning. First, congratulations on your results. I'm here to ask if you can give us more detail about the energy allocation strategy in CEMIC-GT that led to an improvement of margins in the border. Also, if you can, Please tell us more about the benefits of this contract allocation at the holding. Natalia, thank you for your question. This is Dimas, Commercialization Director. About your question, the quarter results I'll try to answer both questions in one, and then if it's okay, you'll let me know. But the first question is that with transfer, and we're in the process of transferring energy from DT to the holding... especially or only the energies acquired from third parties. Third outsourced energy respond for three-thirds of our portfolio. Due to that history of the loss of the plants, for us to maintain our market, we chose to acquire energy from third parties, first in the short and medium terms, and now more in the long term. So, we are in this transfer process. which brings a gain in the tax aspect. The fact that these energies are directed to the holding, we have this tax benefit. And in combination with that, comparing 22 to 21, we had an increase of sales at around 20% in the amount traded. And this is occurring at the same time. When we started the auctions in 2018, The beginning of delivery was more affordable energy when we bought, and the beginning of delivery started now in 2022. So, we had a sales increase at a good market price at the same time as the beginning of the entry of these energies that we acquired in the bids. Also, in December, we made a sale of around 300 megawatts and 200 reais. When the market was believing that the power would be expensive and we believe it would go down, there's a structure. there in the hydrometeorology analysis that indicated a good year, as it was in terms of rainfall. So we made a sale of around 300 mega at around 200 reais versus the PMD at around the minimum for the quarter, which also brought significant gains. And in combination with all that, with the turn of the year, And most of our contracts change in the anniversary adjustments at the end of December. So we still have a percentage of around 18% of our contracts corrected according to the IGPM index. That's also higher than the IPCA index. So these 18% have also contributed greatly to this improvement in results. I don't know if I've been able to answer everything you asked. Yes, you did. Thank you. Next question. Francisco, self-site analyst, VDI. Francisco, we will open your microphone for you to ask your question. Please go ahead. Good morning. Can you hear me? Yes, Francisco, go ahead. I have a few questions, but I'd like to elaborate more on our colleague's previous question. The impression that we have, at least looking at the numbers, is that GT in this first quarter sold around 3,300 megawatts of energy combining GT and the holding, the commercialization business at the holding. When we look at this total volume, it represents about 75% of the guidance for the year of energy sales. It's 4,370 in the last guidance. So my question is, if... Everything remains constant. We should imagine that the sales volume in the second, third and fourth quarters should not be much higher than the guidance of 4,300. Of course, to make up for the fact that the first quarter was lower and the guidance is an average for the year. So that's the question that is related somewhat to our previous question from our colleague. And if it is so, Would that be related to the ramp up of sales of an incentivized energy that in the guidance says 1,515 mega and we're not certain if all this is being delivered to CEMIG and if they're selling all this volume or if it's to be gradual throughout the year. So that would be my first question. Francisco, thank you for your question. It's almost a continuation to Natalia's question. We, as every year, we sought to allocate energy as best as possible. So our seasonality contemplates that. You've looked at it with a lot of knowledge there, but there was seasonality aligned with where we concentrated our consumption, our energy more in the second half of the year and a little bit more in the first half than the second. There is a ramp up because we also have, as I said, There's been an increase of sales of 20%, and these energies will come in. Throughout 2022, we had almost the amount already guaranteed. There's already a 20% sales increase, but we're in a sales process where we will meet the guidance of reaching that target. that is proposed at the guidance. But it was basically, as you said, it's a seasonality movement and a ramp-up for sales increase. Did I answer? Yes. I just wanted to add a follow-up in qualitative terms. If you were to make an educated guess of how you see GT's result for the rest of the year, GT plus the trading at the holding, all together, assuming that Filileo is at the current levels, GT's EBITDA plus the trading, in your opinion, should it be in line with the first quarter of 2022? Should it be higher or lower? I would guess higher, but I'd like to hear qualitatively your opinion about this. Qualitative, you mean in terms of sales volume? No, in terms of EBITDA. Looking at the first quarter, it should be higher. It's higher. It will be higher. We have here an internal challenge to reach more than $1 billion in EBITDA for 2022. It is doable. It's not a dream. We've had results from the fourth quarter that guide us to an EBITDA in commercialization and trading at around 1B in EBITDA. Okay. Thank you for the opportunity to ask my questions. Thank you. Thank you, Francisco. Thank you, Francisco. Continuing our next question, André Sampaio. André will open your microphone for you to ask your question. Please go ahead. Good morning. I have two questions. If I could start with Santo Antonio, if you can tell us a little bit how it's progressing in the capital increase negotiation, if you have any information about the other partners, and also about Santo Antonio, if you can comment whether there's any other lawsuit or arbitration that we can expect for the coming months or years. And a second question would be if you could tell us about the evolution of works to reduce the post-retirement liabilities. Thank you. Hello, Andrea. This is Marco, the company's participation director. About Santo Antonio, we already released that we are not interested in capital allocation. Speaking of CEMIG, we will not allocate or invest any money in Santo Antonio. As for the other partners, we have nothing to comment. As for the arbitration, as far as to the best of my knowledge, there's no new arbitration coming in in the next few years. Just to locate it, this is my 11th day in the company, so I haven't heard anything about other arbitration processes aside from San Antonio. And post-employment, post-retirement, Leonardo will answer. Thank you. Excellent. So about the post-retirement, André, thank you for your question. We know how complex these processes are. They involve restructuring our pension plan, our health plan. We've been talking to the market since 2020 that we are in this negotiation process. We hired consulting services that could help us develop the restructuring proposals. And as for the pension plan, We're discussing at the for-lose level our proposal to create a financial plan that removes the mixed actuarial risk and that is also more flexible for the participants in the management of their resources. We understand it would be interesting for both parties to be involved in this restructuring process. We are optimistic. And for the health plan, the restructuring of this plan includes a discussion process with the FLAGS trade entities to change the health plan that we offer today, both for the retired and active participants and the means of contribution. Since they're complex, they take longer, but we've been able to, with our negotiations, to bring down the obligations for life insurance, that's one of three post-employment obligations. So we've been able to bring that down from our balance at the end of 21. We're optimistic for the other two processes as well. We know that the issues that involve pension plans and approvals, of course, the process has already started and will be concluded by 23. We believe the process is moving along. And health plan, we hope that we expect that this year, 2022, we may be able to receive favorable news in terms of results that can reduce both the obligation in the balance sheet as well as the expenses that we register every year in our financial statements. So, they're complex processes, but they are following along. They're being discussed with the class entities, regulatory entities, and like the pension plans with Prefic and we expect to have positive news to provide in the short term in conference call as we had in the fourth quarter, so when we had news about life insurance. Excellent, thank you. Moving on, next question, Daniel Banco Safra. Daniel, we'll open your microphone. Please go ahead. Good morning. I'd like to ask you to please talk about the announcement of the suspension of the CAPEX guidance. I'd also like to understand the perspective for tariff review next year. If the suspension of this guidance will affect in any way the perspective of asset base for next year's tariff review. And my second question, if I may, if you could talk about the divestment process of your stake at Taesa, how this is moving along what your mindset is. Thank you. Daniel, thank you for your question. As for the guidance, there's no connection to the tariff review. As I mentioned, we are very optimistic with our tariff review. We believe it's a process where It's going to be important for CINIC-D in terms of cash generation and profitability in 2022. We understand that we have a lot of investments to make this year. and these investments will be considered within a next year's remuneration base, along with the market adjustment. So, we're optimistic with CEMIC-D's results. The guidance aspect, what we released in the last guidance last year in May, there's been a whole year we should tell something to the market, regulations require us to do that. So, we shall have a CEMIC day in the third quarter, to be able to discuss more about the company's strategy as for investments and our expectations for future results. So we understand that in the third quarter, we will have the valuable opportunity to discuss the future of the company. But as for the tariff review, we're very optimistic with the distribution service in the coming years. And as we mentioned, with the market adjustments and the new remuneration base for 2023. Now, for divestment, I'll turn over to Marcos so he can tell you. Hello, Daniel. Good morning. Thank you for your question. So, Daniel, we maintain our interest in the sale. We're studying intensively with the contracted banks to format the sale because it must be something good for all partners. And considering we're in May, we would really like to conclude this process or at least sign the contracts this year if we succeed in the process. What I can tell you is that we're very dedicated to and we want to do it, make it happen. Thank you. Great, thank you. Next question, Luisa. It's a BBA. We'll open your mic, Luisa. You may go ahead, please. Good morning. Can you hear me? It's a follow-up to Daniel's question. Part of the question was already answered, but I'd like to understand if the suspension of the guidance for the coming years if this is more related to the restrictions in the global supply chain that would impact the development of renewable projects that you already have signed. I'd like to understand if that was the main motivation. Luisa, thank you for your question. I'd just like to make it clear that the guidance suspension is not related to any sort of reduction in the company's expectation of future results as i said this is basically related to the fact that it's been one year from the last guidance and our next semi-day will occur in the third quarter we understand that that's when we're we need to give information to the market and it's best to suspend that guidance since it's been more one year but there's no we understand that the company is on track. We're very optimistic with the company's results and its many businesses. So there's no relationship with that and the frustration of future reductions or future results or reduction of expectations. Okay, thank you. Next question from Eduardo Souza, investor. Congratulations on your results. What's the expectation to the proceeds distribution in 2022 in terms of percentage figures? Thank you for your question. As for dividends, we have a dividend policy that's the payment of, it's a payout of 50% of our profit. In 2021, the dividend was very attractive. It was above 8%. And considering our result expectations for 2022, which will be positive, we consider that the dividends will follow the same policy and will provide a very attractive yield to our investors. Of course, we need to wait for the year to develop, but our expectation is that it will be a year with positive results and, consequently, attractive dividend to our investors. Next question, Daniel Francisco, investor. Opening your mic. Go ahead, please. Daniel, please go ahead. Good morning. Can you hear me? Yes, we can. Please go ahead. Good morning. Congratulations on your results. Actually, I have two questions, basically. I saw the report, and I congratulate you, and I have two questions to ask you. The company has an investment, CapEx, from what I calculated here, from what I saw, is at least 5 billion. I would like to ask my first question. Does the company intend to focus on wind power, renewable energy, and so on? How does the company expect that the holdings to develop in the medium to long term if the company no longer buys energy. I apologize for my language, but the energy from other companies and being self-sufficient.

Thank you for your question.

So, we purchased energy in the past. For cognitive reasons, we were prevented to invest and the option for us to maintain our market was to make these purchases in the long term so as to fill our portfolio. But once we already have the investment capacity, our trend now is to start to reduce the purchase of outsourced energy. As it may be clear, we're going to run an auction in June where we're buying pipelines. energy pipelines for solar and wind power generation combined to a percentage of energy that we may or may not acquire from third parties so the idea now is to move on to our own generation we're already investing And we're also acquiring pipelines, as you can see, and the auction will hold in June. So that's the trend, considering that now we have investment capacity. Did I answer your question? Yes, if I may. If I may add another question. Yes, please go ahead. I apologize for intruding, but... If the company went down to the 25% minimum, I would not see anything wrong. But since the company intends to participate in this auction and invest in other areas in the state of Minas, as was already mentioned, in different municipalities and so on, Does the company intend to participate in public bids, for example, for energy transmission? And in this case, the cash disbursement, wouldn't it be, you're the ones who know the amounts should be paid, but wouldn't it be better to get a cash reduction to give stamina for the company and in that case reduce the dividends so that the company has more Thank you for your question. We understand that maintaining the policy of 50% of dividends is sustainable and gives the company the possibility to continue to invest, maintain its leverage at low levels, giving attractive returns to our investors in terms of remuneration for their investments in the company. I take this opportunity to thank you all for participating at our results, our earnings conference call. We have very robust results and we have reason to remain optimistic as for the company's future and the results of coming quarters. And we conclude our results conference call for this quarter. The conference call of the earnings results of CEMIC's first quarter of 2022 is closed. The Investors Relations Department remains available to answer any questions and doubts. Thank you very much for participating. Have a great day.