Comp En De Mn Cemig ADS American Depositary Shares

We inform that this video conference is being recorded and will be available at the company's ARA website, where you'll find the company's presentation. Should you need simultaneous interpreting, the feature is available by clicking on the globe icon located on the bottom of the screen, choosing Interpretation and then the language of your choice, Portuguese or English. Should you choose to follow the call in English, you can also select Mute Original Audio. I would like to turn the floor over to Carolina Senna, Investor Relations Superintendent. Please, Ms. Senna, you may proceed. CAROLINA SENNA Thank you. Good afternoon, everyone. I'm Carolina Senna. I'm CEMIG's Investor Relations Superintendent. We now start CEMIG's second quarter 2023 earnings call and webcast with the following executives. Reinaldo Passanese Filho, CEO, Leonardo Giorgio de Magalhães, CFO and IR Officer, Marco da Camino Antônia Lopes Soligo, Chief Participation Officer, Marnay Padeu Antunes, Chief Distribution Officer, and Padeu Carneiro da Silva, Chief Generation and Transmission Officer. For the initial remarks, I turn the floor over to our CEO, Reinaldo Passanese Filho. Good afternoon, everyone. Once again, it is a pleasure to be here, bringing to you the results of another quarter. And these keep being sound and consistent results, as you can see in this first slide. I can say that this is our main message. the company is effectively in a sound and consistent growth route. This is thanks to a very clear strategy that we called to focus in Minas Gerais and to win. As you see in the last bullet, we have been very successful in executing the largest investment program in CEMIG's history. And this program is focused on the businesses that we know and the territories and the areas and the clients that we know. Here you have 42 billion investments for the next five years focused in distribution, transmission and generation of energy in Minas Gerais and also in the trading area all over the country. in addition to investments in distributed generation and natural gas. But these are territories that we know well and also in situations in which we fully control the decisions. That also means the divestment of the assets that are minority shareholding, in areas that are outside the state of Minas Gerais. This strategy has proven to be sound and consistent. And that is what allows us to be bringing to you, once again, a robust cash generation and also robust net profit. We are talking about an adjusted EBITDA, already recurring one of 2 billion reals in the quarter, annualized. almost 8 billion reals, and a net profit, once again, a growth of almost 7% vis-a-vis the prior quarter, already adjusted. This is a net profit of 1.2 billion reals. These are the consistent results, the recurrent results that prove the soundness of this company. And now I go to the first bullet, bringing to you also how sound our internal controls are. We did have the surveillance oxalate certification of a balance sheet with no problems in its internal controls, an unqualified approval, after six years. So we are very sound in terms of our internal controls and governance. And that comes in a great moment because we are celebrating 10 years of the La Clean Company. Also, sound results, consistent cash generation, net profit consistent as well, $1.2 billion cash generation. also very robust. And also, we aim to continue generating value to society, to shareholders and stakeholders by the means of the largest investment program in history. And in order to complete this strategy, we have another topic, which is capital allocation, just like I mentioned. in the 42 million, the largest investment plan in the company's history. And you will see in the presentation that in one semester, we have invested in distribution almost double of what we invested in 2018. Just to give you an idea, In the first half, we invested in the double amount that we invested in 2018. And this is the topic that we are talking about in terms of capital allocation. And another dear topic for the company and the company's strategy is our operating efficiency. we move forward and these consistent results of cash generation are there because we are meeting all the regulatory objects, regulatory losses, so we are within the parameters there. This is our strategies for is to have a robust cash generation because we are efficient in this operation and We are under the regulatory optics. We are lower than the regulatory losses allowed. And we have a strategy to allocate capital, which is record in the businesses that we know. And we are divesting from assets in which we have a minority shareholding. And as you know, we have already divested in a large number of these assets. The presentation will also go over another great effort of this company in the digitization area, almost 1 million reals in digitization, automation, modernization, new systems to operate and control our businesses, record investments and modernization. And we also have future perspectives in this capital allocation. in terms of investments and return and not only return on distribution investments, but also a company's investments and generation after a number of years, we are now building almost 180 megawatts of photovoltaic plants. We have a bold plan in distributed generation, whether solar photovoltaic generation, whether it is flowing, we are talking about 540 megawatts already growing in land plants to ensure the market leadership in addition to our objective to renewal our generation concessions. So this is the broader overview. And I also would like to talk about our leadership in energy trading. We have a very comfortable situation for the next three years, as far as the needs that we have are concerned, because we have a situation where we can seize this opportunity of lower prices in the short term for electric energy. So I would say that here, once again, we are in a very consistent and sound position in terms of our results. These are my initial remarks. The slide is up. I can comment also on that. We have 1.7 million. billion in investments here and here we have a capital allocation right that i was talking about just so it's 1 billion and 700 million in the first half of the year if you all remember uh how it was in 2018 for the whole year it was 950 so almost all that amount in a single semester so in fact now we have a large part of our investment program already contracted so we have a everything that we need to be able to execute our investment plan especially in the regulated sectors where we have greater perspective to generate value we do have a challenge the brazilian electric sector has a challenge in centralized generation because of um a large amount of supply. And you're still picking up in terms of demand for energy consumption. And the country also consistent results in gas and distributed generation. Once again, record in terms of investments. We are building a pipeline here from the metro region of Belo Horizonte up to Divinopolis. And also in the distributed generation area, our objective is to maintain our leadership. and the state of Minas Gerais. These were my initial remarks, and we are available to once again show you and hear your contributions about another quarter of sound results in this company. Thank you very much, Dr. Reynaldo Passanesi Filho. Now I will turn the floor to our CFO, Leonardo Jorge de Magalhães. Leonardo, thank you, Carol. As Reynaldo mentioned, we did have important investments already. This year, we have a bold investment program, a little bit over $5 billion. We are very optimistic about our investments in distribution. We understand that we'll be able to complete these 3.2 billion in the year, and we believe that has a number of positive consequences. We have some precious numbers that will be considered in the next tariff review. And also, these figures help the company to have more energy available in the market, which is important for society in order to ensure the society's growth. the society that is catered by this company, some investments in distributed generation. And here the performance, the execution in this first half of the year was shy. considering the total that we have forecasted for the year because we believe that most of these investments will happen in the second half of the year. So in the second half of the year, we expect more investments in the other business in the company other than distribution as well. So we are very optimistic. We believe we are going to get close to this 5.4 billion that we have forecasted for 2023. And as Reynaldo mentioned in the next slide, we have some of the challenges of the trading area. And we understand this is a great opportunity for CEMIG as it was when we had the free market becoming open a few years ago, and Semig saw a new opportunity then, and now it generates a lot of results, great results, and Semig's EBITDA of our trading company in the first half of the year was higher than 600 million reals, a very relevant result, and that is a material fact, material proof that the the trading area of CEMIG is correctly reading the market. This is a relationship that adds value both for the clients as well as for the company in its operations. With the opening of the retail market and new markets, CEMIG is already prepared to cater to this client by our website, energialeve.cemig, and this is constantly being developed so that every day we can have a friendlier platform so that we can reach consumers, not only in the state of Minas Gerais, because we understand that thanks to the company's reputation, the top of mind of our brand here in Minas Gerais, this... allows us some competitive advantage, and we have to seize this competitive advantage to have a large share of this market, but also to allow us to cater to this retail consumer and client out of Minas Gerais. So we understand that we can have And we do have that ambition in terms of a stake in this retailer's marketplace. This is a new market where the company adds value, considering especially this moment where energy has low prices in the free market. And that's an important market for us. We want to cater to this market in a way that we can create value to the company and our shareholders. Moving on, Reynaldo talked about these important investments that we'll be doing in the next few years. It's within our strategic planning, and there are some special topics here. So investment in security and safety, We see cyber attacks happening frequently. SEMEG has resilience and it's a security information. We are prepared to face threats in this environment and also platform development in terms of quality of service to clients and that reflects in the better productivity in our teams, avoiding frustrated teams being displaced because they do not have the best algorithm or the best optimized intelligence to be used in their daily operations. So we understand that this platform modernization allows us to have greater security and sustainability in our operations, digital channels, and also operating efficiency. important investments and we understand that the company cannot let go updating itself in this digital environment. These are important investments we'll be making in the next few years and I think this is going to generate value. Moving on, our ESG actions. This is a very dear topic to us. This is in our DNA. Semig has always been within the sustainability indexes, the national ones and international ones. Semig is part of these indexes. And we play a significant role there. And in this quarter, we... launched our program, that diversity program for our employees. So we have also training in diversity. This is important for us. In the second quarter, we had the largest issuance of sustainable bonds in Brazil, $2 billion in emissions. Our bonds were placed in the market and that shows how much the market trusts on us and they are attached to important investments that we are making in social areas, three-phase minas, mais energia and efficiency programs that bring more energy and have energy available to clients. So we change lives of people that are serviced by us and we also generate value to our shareholders because these investments are also recognized in the remuneration base. And also, we have disclosures in our TCFD report, and these are events related to climate change. And here we were able to remove a large amount of CO2, 10,156 tons of CO2. This is a relevant figure. It is equivalent to 100,000 fuel tanks. And also, we have a certification of renewable energy certificates. This is the energy that we delivered to our clients, and it has the seal proving that energy comes from renewable sources. That's another value that we create for our clients when we have this special seal. Now we are going to dive into the results analysis. I will comment on the overview and then Carol will continue the presentation. As Reynaldo mentioned, another quarter of consistent results and EBITDA close to 1.9 billion. And the half of the year, close to $4 billion. And net profit close to $1.2 billion. And in the half of the year, almost $2.5 billion. So we can get very optimistic in terms of our results for the end of the year. Our buy loss defines a payout of 50%. of a dividends payment. So it is a very attractive payout. And I would say one of the best dividend paying companies, I would say that Semigi is. And the results that we bring to you at every quarter allows investors to feel secure in terms and confident regarding their trust that they have on us. So as I mentioned, over 40% growth vis-a-vis the prior year in these six months, over 600 million in EBITDA, And dividends, we have had interest on equity already, almost 900 million of interest on equity, showing that the company is really interested to work with investors as well. We did have a positive tariff review. We understand that the results of this review will be better seen in the second half of the year. And this was in May 28, this tariff review. So just one month after this tariff review that has affected the company's results for the second quarter of 2023. For now, by the end of the year, we will have the whole semester with the results of the tariff review, which were positive. It was fair regarding our operations. regulatory losses, PMS, so within the regulatory limits. And CEMEX GT, with financial discipline, consistent results, we bid at NL Transmission Auction in January of 2023. You understand that we were competitive because we are in Minas Gerais. We understand that our proposals were competitive we are not awarded the auction but we also understand that we have a commitment with our shareholders of you know investing on assets that will generate positive present value so we were not awarded this bid but we have a a number of other investments for the next a few years that will generate a value for our shareholders so that's fine It's part of the game. We bid. We were not awarded the concession, but that shows also that we have a financial discipline in our capital allocation. And also here, we have the sale of Baguari and Retiro Baixo HPPs that... These are almost concluded. We are just waiting for the final approvals to conclude the operations and then to have the funds coming into our cash. So now I will turn the floor to Carolina, and she's going to go into the details on the results. Thank you, Leonardo. Now moving on, on this slide, we have Samig's. Consolidated to Q23 results. Here we have had no non-recurring effects. In 2022, we had a number of effects that affected results. I will go over them very briefly. We sold Renova, as we said, that is within our plan of... sale of assets, of non-performing assets. And we also had the write-off of financial assets. These are assets that we have, but we had other assets that we need to be reimbursed. So those were written off. We also have the provision for credits, for tax credits, and that was provisioned in 2022. Also, the use of the distribution infrastructure, this was a non-recurring revenue also in 2022. reversal of San Antonio provision, and the FX exposure And this affects the quarter. And remember that we still have an euro bond share or parcel that is due in 2024. When we remove all these effects, we report another quarter with sound results. We grew 3.8% in our EBITDA, 6.6% in our net profit, showing our commitment and the company's commitment in adding value to its shareholders. About operating costs and expenses, there was an increase of 9% in the PMSO affected by outsourced services. That increase is because of companies' management change because of preventive measures. Since the 4Q22, we mentioned that we were going to change that in our management because this is going to bring better services provided to our clients. Also, on our resolution 1000, here we have financial compensations for consumers. On the other hand, on the positive note, we did have our a voluntary redundancy program, and that was a cost of 9%. But the highest increase here, the outsourced services, this is an expense that is going to bring us a long-term reduction in future costs and better services provided to our consumers. On the next slide, we see the company's cash flow, the strong generation of operating cash. In six months, we generated $4 billion. So the cash in December was $3.3 billion. We are returning the tax credits and the tariffs. We paid dividends to We raised the 2 million in CEMIG-D, as we mentioned, with sustainable bonds. We paid debts with another factor here of 1 billion, 388 million. We paid Santo Antonio. We are investing in the largest investment program, as Reynaldo said, and we ended with a cash of 3.8 billion in six months. And it tends to be used over the second half of the year. because of our robust investment program, which we already discussed. About the debt profile and the consolidated debt profile, I already talked about the Eurobond. We already bought back parcels of this Eurobond. And it is due in 2024 and 2023. We'll do another buyback. So for December, we do not have a premium anymore for the buyback. So we are going to improve our structure. The cost of debt is down because of the IPCA and the dollar and our leverage. Although we had the funding for CIMIC-D of $2 billion, it's still low. But like I said, naturally, because of the robust investment program, this leverage is going to increase, and it should reach $27 at two times in the consolidated results. So in spite of being a low leverage, it will naturally increase. increase because of the investment program. Now, going into CEMIG-D results, we have the non-recurring here, the provision for the COFINS credits, and also the use of distribution infrastructure. If we remove those, we have an EBITDA of 14.3%, a net profit of 10.9%. And again, we have just concluded the fifth tariff review for the company, and we have now an average increase of 13.3%. So here in this quarter, we had just one month of effect of this adjustment for this tariff review. And our regulatory remuneration base here increased from 8.9 billion to 15.2 billion. And the electricity market for CEMIG-D here, if we add consumer and transported energy, we have a 0.7% growth. It might seem small, but if we look at the whole market, the DG market is affecting the whole company. Compared on market quarter to quarter, we had a 56% increase. And this energy, when it migrates to the g it is growing and the state of minas gerais is bringing in opportunities for growth and development and we see this and transported energy because you see that it grew 3.3 percent and the captive and despite of the drop of 1.7 percent we draw your attention to the residential growth here 6.4 percent the number of residential consumers Increase in the average consumption also increased. And this is important information showing that the strategy of investing and distribution has a strategy that does bring return to the company in addition to better services provided to clients in our concession. About regulatory limits, we are committed to meet the regulatory limits The losses are important. We were able to be under the regulatory limits in 2021 and we ended the quarter at 10.78 and the limit is 11.16. So we are very well positioned. So our limits for the end of the year is going to be 10.8 and we will be within the regulatory limits, thanks to the initiatives that we have already carried out in the past six months, and we'll continue working on them. We have already made 210,000 inspections. We replaced 312,000 obsolete meters. Also, we replaced meters, bi-smart meters, and the energy illegal program is already working with low-income families to have their legal energy connections. Now, in semi-D, this proves how our digital channels are improving our collection. It's very important to have the new system, the PIX, which is the instant payment system that already represents 14.03% of all collections, and that our customers ARFA, which measures the Receivables Collection Index in 2022, we were very close to 100%. And in this half of year, we went over 100%. That is because we were able to collect a debt of a city hall in Minas Gerais, and we brought 12 million reals to the company in that action. Another important metric here is that we are committed and we are still delivering and will continue to deliver our Regulatory OPEX that we have in Ontario, so the OPEX for six months, we have 2 billion as the regulatory OPEX, and our performance realized was 1.9. And the regulatory EBITDA, we are above that, so we are committed to meeting the regulatory limits with efficiency, and that's what we are doing. And we see greater opportunities to improve even more with the post-retirement, as we have shared with you. And now turning to CIMIC's GT results, this slide's a little bit different. We also had non-recurring effects, and I talked about them, which was the disposal of assets, also the write-off of financial assets, the reversal of San Antonio provision, and the effects exposure affecting our profits. But when I remove these effects, and also important information here, we are transferring the trading activity from CEMIG-GT to the holding company. This process has not been concluded. And when I go back to the EBITDA that has already been migrated that is under CEMIG-H, if I bring back that effect, we had a small drop of 2.2% affected by inflation, which also affects the... Transfer of rights bonus. But if I bring back the fact of the profit regarding trading activity, I had an increase of 14.3, influenced by the dollar. This is the effect on CEMEX GT financial results. Important highlights for CEMEX GT that we have already shared, and it's important to stress. Our permitted transmission revenue did not affect the results in this quarter, but we did have an increase of 23.5% for the next cycle, affected by the inflation. And the period also is strengthening and improvement of the network with the additional permitted transmission revenue and also the reprofile. of the CEMEX-GT national grid contribution. And the amount that we'll be receiving is higher than the prior years. And I would like also to highlight something else. We have already shared that. But this is just a hint on the development of these projects here. We have already invested here 360 million. The works are ongoing. All the suppliers are contracted. And as Dr. Rinaldo mentioned, we have already requested the renewal concessions for Sacra Vale, Emburcação and Nova Ponte. For GASMIG, we also consolidated these results. GASMIG is important for our consolidated results. So every quarter, we bring GASMIG results. We can see that we had an EBITDA growth of 55.4% affected by the repositioning of the tariff review and a higher consumption, especially Consumption from industrial and thermal clients increasing 36.5%. GASMIG has shown growth opportunities, and because of that, it launched a centralized project that will bring The gas pipeline up to Divinopolis, this is a capex of $780 million. Up to June, we have already invested $73 million. And by the end of the year, we will have invested $367 million. We are concluding the bidding process and environmental licensing. And in the second half of the year, we will be accelerating the works. We are also investing in distributed generation, part of that by CEMEX-SIM, and another part by the floating ones, which will be into CEMEX-GT. So now we have in operation 19 plants, in construction 51 plants, and being developed the three floating plants, the solar plants. Installed capacity is growing. So we have 52 plants. megawatts in operation in construction 168 and being developed 274, a significant growth in distributed generation. And that is going to be going into our EBITDA in the next few years. And recently, we have concluded the bidding process to build 23 solar plants that will gradually be in operation by 2024. Now, to conclude, I will turn the floor So Leonardo, he's going to discuss and talk about our commitments and challenges and opportunities. Thank you, Carol. We like to finish with this slide because this is our commitment with the investors. And these commitments come from our strategic planning. And most of these commitments are being met by the company. Some of them have already been achieved, such as the OPEX below regulatory limits. Our EBITDA is over the regulatory limit. The losses also are within the regulatory limits. And also the strengthening of CEMEX-D requirements. investments program, and that's a great advancement from what we had in the past. So, we used to invest 800, 900 million in the past, and now we have a bold investment program for this year, 3.2, and we understand that, and we feel confident, and the company has already contracted these materials, these services, and we are ready to invest. Now, what is in progress, the divestment of non-strategic assets. We understand that a large part of these assets have already been sold, such as Light, Renova, Axion. And other assets, Santo Antonio also was divested. And we continue with the divestment process. Digital transformation, we intend to invest 1 billion reais up to 2027. Renewables investment that are going on at full power, as Carol mentioned. Also, growth in retail electricity sales and the bonds liability management, because little by little, we are reducing our effects For the future, we'll continue investing in renewable folding generation sources and windfalls of concessions, and the company is already preparing itself to be ready to renew the important concessions in our portfolio for energy generation. That's it. Thank you very much. I turn the floor back to Carol, and now we can start our Q&A session. Thank you all very much. We'll now start the Q&A session. So we'll now start the Q&A session. Please ask all your questions at once and wait for the company's reply. To ask a question, please send them via the Q&A icon on the bottom part of your screen. Your names will be announced so that you can ask your question live. Then a request to open your microphone will pop up near a screen. If you do not want to ask your question live, just state at the end of the question, no microphone. Then Carolina Sena will read your question. The first question is, from Andres Sampaio, cell site analyst from Santander. Please, Andres, you may open your microphone. Good afternoon, everyone. I have a question about GASMIG. Can you comment on the results? Why was the results so much higher than the regulatory limit? Is there anything there that this is non-cash or is that a non-recurring effect? And it makes sense to imagine that a huge gap vis-a-vis the regulatory limit. I will turn the floor to Leonardo. Hello, Andrea. Thank you for your question. Yes, Cosmic is a company in the group that has very relevant and important results. last year. It is bringing consistent results in EBITDA and profit. The company has low leverage. It just went through the tariff review and it has some special aspects. Differently from the electric sector, all the regulatory limits for the electric sectors are posted in the balance sheet. For GASMIG, they are off balance. And when you have a tariff review, that's when they are integrated into tariff review in the tariff and all of these offsets that are off balance. And GASMIG has had a very important tariff review this year, 15%. And that's a way of bringing into this balance, the offset of these regulatory balances. That explains the results. Last year, already we had good results. But this year, it is even more significant. And maybe this is one of the explanations because it is over the regulatory limits. And so this is a company that has low delinquency levels. And we understand that these are consistent results. Of course, that, as I mentioned, because the regulatory assets are off balance when you have adjustments, this ends up affecting the results. And we might have a period when the results are much higher than the regulatory. But in the long term, these are consistent results. The company is fully within the regulatory limits. And so we are very optimistic about GUSMIX results in the future. It was another good quarter in terms of results. It already was good in the first quarter. But in this quarter, the adjustment of 15% and the rates improved. the results for GASMIG in this quarter and this semester of 2023. Thank you, Leonardo. Our next question is from Marcelo Sa, Southside analyst from Itaú. Tadeu, our officer for generation and transmission, will answer that. I will open the microphone. You can ask the question. Hello, everyone. Thank you very much for the call. I have two questions. The first one is to try to understand what is the company's position as far as Argentina exports are concerned. The current rule is to be able to export. But my question is, can you also export this extra investment in the future? So maybe you need to convince the government that it makes sense to be done. So I would like to understand your position about that. Second question, about the plans. So you will request the renewal for the quota system. It's not going to be a renewal with control sale. that would have to go through the state government's administration, right? OK, about the first question. Yes, the trading makes sense for that energy, whether when it's being turned or transformed or in the future. We know that the reservoirs have high levels right now. They tend to end the dry period also at a high level, so it is possible that we see new transformations in the near future. So we believe that this makes sense, and we are part of the group that is trying to work on that possibility. Now, about concessions, CEMIG is working. with all possibilities of renewal and they include the requests to renewal for quotas also the renewal by selling the plants or transferring the control of the mother company. So what we are working on today are all opportunities. And obviously that depends on the granting power and for us to see which one will happen. So we're not leaving anything on the table, but we are not choosing one for the other. No, we are looking at all the alternatives right now. Thank you, Tadeu. Okay, Marcelo, go ahead. About exports. I understand that. But how is the negotiation going with the government? Do you have already a method on how this is going to happen? Do you need thermal dispatch in order to Compensate for it. Is this something that is going to be defined in the next few months? Or is this something that is going to take a long? I don't have the answers for you right now. We are still discussing the methodology. If that involves the study of hydrology, the study of the sector, the energy surplus, So I cannot give you a straight answer right now, but the discussions are happening via the associations Abraji for the HPPs, for the hydroelectric power generating plants, whether the big plants or the SHPPs. These are the groups that are ahead of this movement, but we do not know how long this will take. We would like it to happen as soon as possible so that we can be successful in the next water season, next wet period. Thank you, Tadeu and Marcelo. Now, moving on, I will open the microphone. The next question is for Leonardo Giorgi. And the question is from Daniel Travinsky, sell-side analyst from AfroBank. Daniel. Oi, pessoal. Hello, everyone. Thank you very much for taking my question. I actually have two questions. The first, that investment of 1 billion in automation and technology, is that going to go into the remuneration base of the distributing company or just part of that? And how much? A second question about the strategy for the euro bond rollover. Eurobond debt rollover, how do you intend to deal with it? Are you going to maintain that as a dollar-denominated debt because of the high interest rates that we have now? I would like to better understand that. Thank you. Thank you, Daniel, and thank you for your questions. About our Eurobond debt, In 2021, we published our strategic planning for the first half of the year. We said that we are going to do the liability management in different stages. We have already reduced that debt. We reduced it in 50% our fax exposure, and we intend to take another step by the end of the year. And by December of 2023, Semiga can rebuy the bonds without paying premiums. So we intend to... by around 350, 370 millions of buyback by the end of the year. We understand that this is part of the process so that little by little, by the end of the year and in 2024, we can eliminate our effects exposure via Eurobond. And we're always comparing the costs of international emission. And now here, including 100% of a hedge, with a local emission, we understand that it's more attractive for the company right now. It's cheaper to have a local emission. So our strategy right now is to switch this euro bond by a local debt. This is the strategy that we are choosing to follow right now. And we intend to do this for the next franchise. And the euro bond buyback, we have around $750 million. Remember that we have a protection of up to five reals. and the principal, and we will continue buying it back. Right now, local emission is more affordable for us. We are a company that has all the revenues Real denominated revenues. So this local emission is more interesting for us. This is our expectation for our Eurobond. And the first question, Daniel, is about our IT investment, right? So we are... investing there, and most of that investment is OPEX, but it goes under announced coverage of tariff review. This is the bar investment. This is already forecasted and the rate. I remember that even considering robust investments that we'll be making in IT, we are committed. Because even having those investments, all our OPEX will be within the regulatory limits established in the tariff review. We are not going to go over one cent of the regulatory limits. So we do have an internal challenge to cover these costs in a way that we have 100% of the costs, including this investment. and technology being covered by the tariff, by the rates. Excellent. Thank you very much, Leonardo. Next question. I will read. It is for Marco Soligo. Please. It's an update on GASMIG if you are going to list the company and about the divestment and Taesa. Great. So first, let's talk about Taesa. So the studies, internal studies and the banks also that help us that aiming a possible divestment, all of those continue to happen. And we want to be prepared for when the opportunity arises that can be applied for Taesa and also for Allianz and for the other ones. So there are several studies running and being developed. About GASMIG, all the preparation work, internal preparation work of the company for a possible IPO have been concluded. that IPO has not been decided yet. So we might not move forward with it because that has to do with the process of privatization of CEMIG. So maybe CEMIG can become a corporation in itself in the future. So that is up to be decided. Thank you for your answer. So now, Dr. Reynaldo, our CEO, will conclude our earnings call. Once again, I would like to thank you all for your participation. Thank you very much for your participation. Thank you for the questions. We hope to be here in the next quarter, right, Karel? Bringing to you, once again, sound and consistent results. a company that is happy helping to develop and to foster development in Minas Gerais and at the same time generating values to stakeholders and to investors and shareholders of the company. Thank you very much. Second quarter 2023 video conference call has ended. IR superintendents are available to take further questions. Thank you very much and have a nice afternoon.