Centrais Electricas Brasileiras S A American Depositary Shares (Each representing one Common Share)

Ladies and gentlemen, thank you for waiting. Welcome to the videoconference of results, disclosure of the second quarter of 2022, Eletrobras. With you, we have Mr. Rodrigo Lin, President of Eletrobras, Director of Finances and RE, Ms. Camila Gualda Araújo, Director of Governance, Risk and Compliance, Mr. Pedro Luiz Jatobá, Director of Generation. This videoconference is being recorded and will be available on the RAE website of this company. It will have the presentation in both languages. If you need simultaneous investing, we have this availability on the icon, translation on the icon, english or portuguese if you choose english you can silence the original audio in portuguese clicking on mute original audio for q a we suggest you send your questions on q a your names will be announced and you can ask her questions live and then a request to activate your microphone will be available on your screen in case you don't want to all open your question to the public, you can ask us to read your question out loud, but make sure you write that down. The statements made here concern the perspectives of business of the company. Business projections, operational and financial goals are based on believable and foreseeable information. Future considerations and future facts involve risks, uncertainties, and depend upon circumstances that may or may not occur. Investors may understand that operational factors and economics may influence future results and considerations. Now the floor to Mr. Lind, President of Elefagras, to start the presentation. Mr. Lind, the floor is yours. Thank you. A good afternoon to all. Welcome. Welcome to our presentation of results of the first quarter of 2022. It's a great opportunity To share results, we have this commitment with transparency and dialogue to the whole of the community, media especially, and it's a satisfaction. Our colleagues here from the board, RE, legal, finances, accountancy, that may contribute to the presentation. during the phase of questioning i'll start opening the detailing of the financial pieces of information and miss elvira will go into more detail with the dates of the companies in the company in the last quarter first slide a disclaimer that has been mentioned in the beginning, and then the context, sectorial and economic. The above graph is the load of energy 2022 versus 2021, first quarter growth of 3.4%, that points out to a growth post-pandemic In this first quarter, we felt this impact, but we are retaking that more robustly. And that is affecting daily load. We have GSF and PLD. They showed the recovery of the hydric crisis that affected Brazil in 2021. the most serious one in 91 years. And we had, since the beginning of the rainfall season, a reappropriation and measures that were taken by the government, the regulating agency, that allows for an improvement in the scenario of services providing in energy reservoirs reservoir wise and distribution gsf the distribution of these reservoirs measures wise and the best rainfall scenarios and gsf around 95 97 in that order last year we were around 67 and the same interpretation in the crazed hydra crisis we have a pld in the order of 56 around 60. halfway last year we had 600 or almost that currently we have a scenario that is much more favorable that we had in 2021 we have the performance of the generation Eletrobras is responsible for 28% of the installed capacity in our system. In the first quarter, we were responsible for 38% of the total of the energy consumed in Brazil. A very strong number due to the best hydrate conditions. and affect our participation in the generation of energy we have uh energetic energy balance as you can see in the lower portion 21 22 we don't see major alterations revenue that will go into detail later on we had a considerable growth in generation item by item these values show weight growth and nuclear energy the revenue grew by 300 million compared to the first quarter of 2021 the next slide performance of transmission electrobras has 39.6 percent in the last quarter we had a little above 40 so it dropped slightly compared to the last quarters in the last years it has happened as well performance-wise we had a very robust trying quarter last year we had a lot of results from investing in improvements. 2018, we see an improvement that's significant with disconnection of lines and availability operational of transformers. We have very favorable numbers in terms of availability. Cuts of loads, 42% less. Variable installment, 1.2%. 70% minus 7.79 million reduced compared to last year. Last year we had a growth by 12% with some main factors that affected that. Affected the revenue the energy angle one and two a process uh associated to kanjata one and three and assets of retransmission she asked yes she asked i beg your pardon that affected positively the operational revenue of the company habitat and In that sense, we had a reduction, minus 3%, affected by CLD, associated by the distributor, Amazonia. The last quarter, we had a growth that was rather robust compared to the last quarter of last year, 69% of growth, 2.7 billion reais. That represents the best result of the first quarter of the company since 2006. In the beginning of the history, they started to be consolidated, and the results can be consolidated, and this is the best result for Electrobras in net results. It's very expressive. financial results we had something around ifrs uh net liquid 69 percent ebitda six percent nine point six percent and net revenue 66 percent 4.5 billion reais in this first quarter of 2022. next slide Some more highlights of the company in the first quarter. Capitalization of Electrobras by the controller's general office. The first stage of the approval of the process. The bonus of granting. associated to concessions on the 15th of february 2022 we had tons and minimum price of actions uh share shares by electrobras uh are well plus 12 percent pmso minus 3.4 is standing for the increase in efficiency of the company. The numbers of growth in net growth, we have revenue and exchange rate variation with a very, very important rate and very important role. We are still with the rationalization of dissociatory participation, CSI and in Gambaria we ceased relationship. We have 77 participations and specific partnerships. We used to have 118 in the beginning of 2017. So there has been a rationalization of dissociatory participation or shareholding participation. Liquid, the net bet, you see the numbers here, EBITDA of 2.4, 21.4, net bet 20.5, And then we have the annual, that has to do with the annual results from 2021. PLCD of Amazon, 1.226 million, very impacting. Electron Orchid, more impacting, 867 million. And the holding in the order of 359 million. they were very meaningful and negative. 300 million related to compulsory loans. The last and the no least important, the return of Electrobras in the portfolio of ISCB3. included in August 22, ICO 2B3, the Efficient Carbon Emission Index, the adhesion to the initiative, metrics of the capitalism of stakeholders, inclusion in the leaders list of engagement of suppliers in climate changes. adhesion to brazilian program ghg protocol you see the certification seals here that point out the commitment of electrobras that make us proud because that's about the recognition that we have within the theme and that speaks of for our presence and acting in the markets and here and on this note i wrap up my presentation miss elvira if you would carry on with the detailing of the financial performance thank you good afternoon all one more video conference of our results first slide As we do in every quarter, we have our results. The column in blue is IFRS, and the green is recurring. Non-recurring, actually. but based upon recurrent basis. We'll start with the most relevant ones and then we'll go into the EBITDA costs and what is more relevant and more clear. Gross revenue, as well pointed out by our president, we had a quarter that was very positive. The growth in the order of 11% of the revenue. This growth, when we see values, it's in the order of R$1 billion, 60% from generation, and 40% transmission. Generation-wise, this R$300 million, or in that order, have some important factors, among which, electronucleotide, we had the annual readjustment of rates related to the repassing of the nuclear fuel. And our other subsidiary, Electronaut, we have one contract with a very major industrial, a major derivative, that is controlled by the price of the aluminum almost 150 million reais in the transmission it's important that we we have been very successful in the focus that has been increased in improvements and efforts towards that, and this has been clear in this quarter. More than 350 million reais. And this 444 million came out of these efforts. And then we have the reorganizations of SPS, PSLE, is being used in the south southern region as well the revenue is being accounted for in the order of 134 million and other agents that are connected to igpm pnso wise we have to point out that it drops 3% based upon IFRS, with some important events. We are reducing these expenses, even though we had some of them that actually increased, such as employees' agreements and repass of some wages readjustment. And as we have done in the last few years, we have been able to cut down on these expenses. Raw materials and services are related to maintenance that are seasonal and happen sometimes a year, not necessarily every quarter. You see some costs going up. compared to last year. We have a more consistent shipping of our subsidiary furnace. The shipping was almost twice as much as last year, explained by the increase in the prices of fuel and financial results, very positive. almost 1.2 million, better than the same period last year, thanks to the exchange rates variation. Sometimes it's positive, sometimes it's negative. Rest, it has been based upon cash flow and not economics. We have applications, best, better cash flow, And at the same time, it compensates with the increase of tax burden and other expenses. Non-recurring. The compulsory loan, 300 million, based upon the SILIC index. Graphically, here we see what we have just seen. The gross revenue, 11%. You can see the bars, the green ones, the main ones, the generation was responsible for almost 60% of this increase in revenue. And as mentioned, the readjustment in electron-nuclear energy, UNGR 1 and 2. The contract is on brass-electron. Also, CHEST had an increase in new contracts, transmission. we have the impact of these investments in efforts and improvements, which is organic. We are increasing our network according to the needs of the system, and that translates into revenue. In the next slide, we have the main events and the average prices, mean prices, where we trade our energy. We have a bit regular and the free market. So, regulated market-wise, we have three blocks. Regulated contracts, quarters, and nuclear. This trimester, despite having a drop in the volume of the regular markets on account of the prices that have grown in this period and the readjustment of the prices of the electronuclear, we had an increment in the revenue. The bilateral contract that I mentioned, we talked about the contract with Electronauts that has the derivative that is based on the price of the aluminum or aluminum that affected our numbers we had the regulated contract non-recurrent ways exclude this nevertheless in the gross revenue we have that into account we had a legal decision that had to do with a public bidding that was pending and was actually decided in favor of the company and was converted in 100 million reais. I think these are the main events that we have in terms of revenue, generation, the next graph, when we bring the PLSO, operational revenue, expenses, services and others, the left we have IFRS, recurrent basis, and the drop of 1%. Here we have our employee in blue, 60% of our IPMSO, And as I mentioned, we have had some increases due to inflation points, the collective agreement concerning wages reposition of losses, and we have also measures implemented in previous years, raw material and services, The growth, the increase that we see here, actually, is due to maintenance and similars. And there is no seasonality here. Others, we had a reduction for having less expenses with income taxes that impacted the numbers last year, and that didn't happen this year. In this new slide, we have the detailing of the provisions. The President mentioned that we had an impact of PCLD, Amazonas Energy. Most of it we call PCLD perspective. and this PCLD is subdivided in sales of energy that is in the subsidiary ElectroNorte, a former Amazonas GT, and the other part is financial contracts and debts of Amazonas Energy with Electrobras Holdings. what is in green light green 1.2 million we have a highlight on the right side the composition of that 867 million referring to the credit pcl pclb concerning electronology and 360 million for the holding and then you can understand the values involved. And we can show the total of indebtment of Amazon Energy, 7.185 million. Those are fines plus the recurring debts in the order of 2.6 million. accrues provision 3.5 billion, almost 50% of this total credit. The composition of the 3.5 billion, half approximately is financial contract and the rest energy. A good share of it is prospective, but to your right you have the value that is expired is matured in the end of the semester 546 and taxes and the remaining in contracts of energy we have the value of the trimester compared to the child the same part or last year by trimester here understand quarter. We have foreigners compulsory loan. We had moving goods that were unfavorable. In some other cases, they are pulverized. We have a lot of legal suits ongoing that may represent gains in the future. So far, 300 million in this quarter. That is the evident graph, a growth of 9.6%. Graphically, we see that this growth is in the increase of the revenue that was detailed 920 million and shareholders in the same trimester last year we had a negative result in shareholders that has represented a gain we had an increase in costs part of this Increasing the revenue has to do with that. And the shipping of these thermal power plants, that's explainable. The provision perspective that I just explained, we see that on the right, out of the axis of the recurring EBITDA, you see minus 1.6%. That has to do with the recurring perspective. And then we have the net revenue, 66% in recurring basis plus 69%. We see here EBITDA, and as we have seen in the previous slide, the most impacting factor was the exchange rate, having to do with the strengthening of the real, the Brazilian currency. Those effects actually add up revenue taxes. It's not cash flow based, it's economy based, economics based. and let's see what's happening in this um aspect we can look now at the maps that four quarters have been studied with the um Evita that growth number is in 48 million and 600. We have long term minus financing that we still aren't to receive. We reach. I forgot to point out our cash flow consolidated. that is steady compared to the last quarter with a net that in the order of 20.5 million we have some events that are subsequently a sequence as a consequence of that in april back in 2019 when we came back to that market. We had debentures issued that matured in April 22, 1.2 million that was actually fully paid off. We have fundraising for Furnas, C3Z transmission that happened in April that was informed that we have a reinforcement of the cash flow of 1.1 million. And this graph in yellow is the EBITDA 12-month. The last slide, CAPEX, our investment generation and transmission. We can see here the generation of this trimester with a little more hardship. One third of what was planned for was actually accomplished due to challenges. Firstly, we have our planning for this year that was very much focused in the increase of renewable sources. And this is a segment that is very promising, regulatory framework-wise, and suppliers are overloaded as well, and that has been giving us challenges in acquisition. We need to have some adaptation, some level of adaptation. Another important point, Santa Cruz thermal power plant, it was actually, it left in the first quarter. In transmission, we had great results, more than 90%, more than planned, and as I mentioned, Revenue-wise, we have projects of reinforcements and improvements that have proven very important for our revenue growth. We covered about 50% of the plan for the quarter, and on that note, I end my presentation, and we are available for Q&A. Thank you all. Now we'll start the Q&A. We invite you to ask your questions all at once and wait for your response from the company. Click on the Q&A icon on the lower portion of your screen. Your names will be announced and you can ask your questions live. And upon that, you'll have a request to open your microphone live. If you do not want to ask a question live, we can read it for you. Just let us know inviting. Our first question by Mr. Marcelo Sá, CellSight Analyst from Itaú. Marcelo, your mic will be up. Floor is yours. Hi, everyone. Thank you for this call. I've been wondering about what's happening with Santo Antonio. We have a legal dispute and there was a loss and that decision will have to be paid off. I wonder what happens to eletrobras if things keep on this direction if eletrobras takes full control of that power plant and whether that would affect the offer schedule or that wouldn't whether that wouldn't affect it at all thank you This is a theme that must be approached. We have to send a vision of the company that is a theme that when we have relevant information, we maintain our commitment to being transparent and maintaining media and investors in the loop. in the beginning of february there was an unfavorable result concerning the arbitrage related related to saiza 1.5 billion reais with financial information is still related to the last quarter of 2021 concerning accounting and results of that last quarter fourth quarter we mentioned uh we included forna furnace 43 percent of that 1.5 billion provisioning from the fourth quarter and we zeroed down our investments and results so that we can deal with this 1.5 billion s plan saiza defines sets forth forth um some things they had a shareholders meeting so that they would uh talk about increasing their capital to 1.5 billion. It was a positive result from most of the board, and now we have 30 days so that shareholders can consider the subscription of the shares. and the fundraising and the payment of the installments say is uh mentioned or disclosed to the market that will not fund selic selic's parcel installment a bigger pardon we are taking our actions so that we can make a decision about this funding including the scenario that you mentioned of non-apport by the other shareholders the assessments economic and financial also an evaluation evaluation uh legal in case of these necessary annuances that are necessary from debtors and Others, other parties. We need an assessment of foreigners. We need an assessment of risks within foreigners. This is a process that is within expected. Saiza has behaved this way. Eletrobras has 77 subsidiaries and with the need of assessments and considerations following the due diligence for us to make a decision. There is no relation with the process that was submitted to the um assembly of the uh the shareholders the assembly had items defined in the law the resolution of the ppi SAISO is a matter of the management of Eletrobras that was decided for GE and the process of capitalization. We don't see this need to revisit the matter of the assembly, just based on that. We are working on both SAISO and the schedule of the offer and the deliberation by the the controller's general office it's very clear thank you maybe one more question additional provisions wise concerning amazonas how is the company uh make what kind of effort will make sure that you'll get assets. A debt concerning fuel, very high. Loans that keep on growing. What are the chances that, as a matter of fact, you get you are paid back these resources? I would like to understand this perspective a little more. part of the amount that you have here that Anil can actually execute. If Elvira and Mr. Getobald like to complement, it would be great. This is a problem not only of this trimester, but from last trimester as well. Amazon distributor is an area of concession that is complex. When we had the bidding, the public bidding, we had major challenges of management, regulatory-wise especially, and we had a problem with the company and the distributor. We do not have the structural balance that we need. Some measures have to be taken. There are some regulatory proposals and measures of management of the company, mainly when it comes to the reduction of losses. Systems of measurement we have treated in a way that so far haven't had do not reinforce any concern, regulatory points that are helping us. I think Elvira and Jatobá may help us in this point. Mr. Jatobá, in this matter of ANEEL, this resolution that has been rather recent, concerning the contracting and we do not have to wait one year to have the impact that affects the operational capital of that. The crisis increased a lot of prices. The liquidations were happening at very high prices And it didn't impact as much as one would expect. With the rainfalls and the drop in the prices of energy, we have this discussion happening over again.

In the short term, it gives us a possibility of

equation that's totally with this default more recent in the realm of the regulatory agency. We have to keep track and help to find the solutions for the structure we were able in the past a few things and this is the objective great thank you thank you for your question thank you marcelo our next question comes from julia zaniolo analyst south side santander this is this cu controllers general office approves that tomorrow what are the next steps julia julia thank you for your question we had in the last meeting with the controllers general office expecting to go back to this discussion on the subject tomorrow that actually as informed changed our window for the capitalization process we are presenting now looking at the recent milestones we advanced in important points the launch of the offer in february we had the extraordinary assembly of the shareholders the 20th that was filed in the beginning of march and the most important and necessary that was realized yesterday with this presentation in case the tcu approves that then that doesn't include what is mentioned in ppe cca and what was sent to assembly of action is after analysis will have to analyze the agreement of pcu so that we analyze whether all the documentation was submitted to the action to the shareholders and we have two levels the updating of the reference form uh concerning results of the first quarter we have to finish the document of the prospect it's a complex work involves all lawyers hired and the independent auditor the regulatory limit the deadlines of sec we have around august to conclude the operation But if we think the holidays in the Northern Hemisphere that start in July, in Brazil we want to start that as soon as possible. We are not going to define any date because we need that assessment. in january we point out pointed out that a start of the schedule the prospect of the offer in the second quarter that notice is still valid we have no dates but we are working for that we are working towards building the set of documentation that is necessary, and we are taking all necessary action to have that same schedule as presented for this year. Thank you. Our next question is by Giuliano AGG. cell-side, OBS SBB will open your audio so that you can actually ask your question. Hi, Elvira, Nipi. I have some questions. Let me just go back to Santo Antonio. What is the worst possible scenario? For instance, in Santo Antônio, making unviable Santo Antônio, and it's still on Santo Antônio, what would be the increase in the minimum capital to avoid this scenario? and thinking on this scenario that you assumed and you have more than 50%, how would be the leveraging of Petrobras if you could minimize payment of dividends or minimize a future CapEx? this is the first set of questions concerning santo antonio and i have others about santo antonio on capitalization santo antonio is one of our greatest uh that we have to assess any point that may affect this scenario with all scenarios in mind, including those that the shareholders do not do the funding. We have to explain what would happen in the worst possible scenario. We would need to analyze the impacts of all the alternatives so that we can make decisions based upon the continuity of Santo Antonio Energy, that is one of the largest subsidiaries of the company. Discussions happen independently. One company of the size of Santo Antonio, if there is a problem, it's a point of attention. That's part of our we are looking at the increase of capital so that we can make the best possible decision for sant antonio fullness and the lesser brass as a whole and we had the consolidation of the debt that is part of our analysis we still do not have the conclusions of this study, but with the consolidation of Santo Antonio, we have EBITDA and we have an index of leveraging that has room that we understand as proper within our business plan. with focus on financial discipline, and anything will be taken into consideration, though that's financial discipline. Elvira, would you have any comment? This is exactly what you mentioned. Indebtment has to do with consolidation. We have a debt that is very relevant, and it will come a long time and will consolidate. You may have a stronger impact in the beginning. And besides the fact that we have a leveraging level, very manageable, and these analyses are being made, through its studies, and we are waiting for the decision of our governance, as mentioned here. Thank you, Len. Thank you, Elvira. A point that is of interest of everyone, capitalization. The roadshow would start in June. on the live side of Eletrobras 15 days with the publication of the reference form at the end of the month. And I'd like to hear your opinion. We have the controller's general office assembly tomorrow, but tomorrow we'll have a response. This report on TCU have some determinations i would like to understand with you whether there is a base case if you agree with me and that would be necessary at least 10 days to deal with those determinations and if within that we can start in june

We have to see the deliberation.

We do not know the determinations over what happens. We have to estimate what we still don't know. If there is something that doesn't impact what we have seen, and we still maintain what I mentioned in the beginning of the year.

Thank you, Juliano.

Thank you, Juliano. Our next question. Henrique Peretti, sell-side analyst, JP Morgan. I have two questions considering capitalization. Can you explain whether, according to the the votes of the relator, whether that will require a new GE. would be necessary a new GE? And the second question, how would work the mechanics of the minimum price? This is something that we have heard a lot. The minimum price will not be open. We don't know whether it will be

We have the whole book building and if we would do a cross-checking and see if during the process

there is any type of indication. Basically, we want to know whether you do the whole book building process with the mean price that has been realized. Thank you, Henrique, for the two questions. The first related, do we have a question? We had the contribution of other ministers. We do not have a clarity in terms of what we have in common with most ministers. We had some discussions that have advanced. We have to be conservative. And then we have the votes that agreed with the decisions of other ministers. that might have been a misunderstanding of us, and that's why we want to wait for the final decision of the Controller's General Office. We didn't discuss minimum prices. the BNDES have contracted that. They do not have knowledge of the minimum price, and we are going to work without knowing the minimum price. Elvira, if you feel like you can add anything. Yes. We know that the PNVS, we do not know that we have to do evaluation. These studies have been submitted. I think that the information that we have that the decision will affect the price book building will be discussed slightly ahead by the BNBS and that we are certain of this process. The first one is still open for answer.

Thank you.

In order to ask questions, you have to... In the lower button of the screen, your names will be announced and you can ask your questions live. now we would like to end our q a session mr limp if you would I have your final remarks. Mr. Limp, please. Thank you, Louise. I would like once again to thank the presence of everyone, everyone that have been here with us, asked questions, and I reinforce our transparency in the disclosure of all information and it will be a pleasure to answer your questions whatever they are send them to us and we have been recognized as a company of a management and a governance of transparency the numbers were very positive results in general were very positive and always searching for the best possible for the company. Have a great day. At this point, the conference of Electrobras is adjourned. We thank you all and have a wonderful day.