Engie Brasil Ene Sa S/Adr

Good morning, everybody. We're beginning the ENGIE Brazil Energia conference call, referring to the fourth quarter, 22, and the full year. I am Rafael Bozio, the IR manager for the company. Some announcements before beginning the call. Everybody now will be in listen-only mode. When we go on to the question and answer session, you will be able to send your questions through our tool. I would like to remind you that this conference is being recorded at our site, www.ng.com.br. We have the files, the presentation, all the other results, and the documents that were filed yesterday at the SEC. We have income statements, operational statements, information on the implementation of new projects, and much more. Before we proceed, I would like to clarify that the forward looking statements made during the conference referring the company business should be dealt with as forecasts that depend on the general situation of the country. performance, the regulatory segment, and they are subject to change, of course. With us today, we have Eduardo Satamini, the CEO and IRO, and Marcos Malta, the CFO of the company. He will be speaking about the performance of Engie Brazil for the fourth quarter. For journalists who wish to pose questions, you can send them by email and send them to the press group from the company. Satamini, you have the floor. well thank you Rafael and a good morning to everybody once again it is a pleasure to share the positive results of the company in the fourth quarter and full year 22. at this point in time we like to speak about the annual results and not necessarily the quarter results because this depends on our forecast The quarter on quarter presentation is not fully representative, but, of course, contains important elements. We're going to begin on slide number five. where we can see that the strategy of the company for growth has been confirming itself as the projects come into operation when we look at our adjusted EBITDA. It has a minor drop, and perhaps you would think that the growth strategy is not being properly executed, but we do have the GFOM that impacted the results in 2021, 521 from EBITDA. Putting aside this factor, we would have a growth of 34.4% in cash generation represented through EBITDA. We do have several factors, as you can see to the right of the slide, an increase in price, an increase in volume, better results at the electric power trade board, and you can find these results in our released When we speak about net income, the growth is 109% vis-a-vis last year. This, of course, due to the acceleration of inflation, which has impacted us during 2021 and 2022. And in 2022, a significant increase in prices. Now, we... do have obligations for concessions that are pegged to inflation. And, of course, when there is inflation, there is a greater impact, which is then readjusted in our contracts when there is a drop in inflation. Inflation, we have a very good comparison base, and this is the year-on-year increase taking away that impact of the GFOM. We have achieved 110% for net income. In the next slide, we speak about our highlights. Last quarter, In the Azul Sol Photovoltaic Complex, we made investments of around $3.3 billion. This will have 752 megawatts of installed capacity. The highlight is our Energy Place platform for the commercialization of energy, which has just completed two years of operations with a great deal of success. And we're getting ready to act in this very fragmented market the coming year. We also signed the last quarter a financing agreement with the development bank amounting to 1.5 billion BRLs for Ceja do Azurua in Bahia with 846 megawatts of installed capacity. In the next page of highlights, yesterday at the meeting, we approve complimentary dividends of 1.4552 million reais. This will have to be approved, but this total dividends of 2.7 million for the year with 100% payout and a dividend yield of approximately 8.1%. Another important highlight, We have joined the Carbon Disclosure Project, the CDP. We saw that we needed to have this. We had a CDP and a CDP rating for NG as a whole. We now have our own classification, our own rating. And during this first year, we have achieved a B classification And, of course, we're working on enhancements to be able to improve this classification. In December of 2022, we also approved interest on shareholders' equity of 200 million BRLs. And the date of payment will be set forth by the management board. Another highlight on this page is our participation in the Corporate Sustainability Index. We are one of the few companies that do take part in this since its creation 10 years ago. This is the third consecutive year that we have had this. or we have been part of the B3 Carbon Efficient Index. Another highlight, a very important one, is that we obtained an extension in the concession period of Estreito Hydroelectric Power Plant of 852 days. This, of course, benefits our partners and allies that will have 60% more. It also adds value to us and this was due to a delay in the coming into operation of the plant at the very beginning of the construction. We continue on. We're going to... speak about our annual KPIs for ESG on slide number nine. These are very important. As you can see, we continue to grow in terms of installed capacity and our generation of renewables. We do hope that in 2023, with the closing of the Pampa operation, we will reach 95% of renewables. This also contributes to the intense emission. We had a significant reduction. We did have a problem with a boiler in Pampa Sur. Well, this already was a reduction vis-a-vis what we had in 2021. There was a steep drop because of this problem in the boiler and took Pampa out of operation. It has returned to normalcy since August of this year. It is not being dispatched at present because the price in the spot market has fallen a great deal and half of it is somewhat above the PLD. With this, we had a reduction in emissions in 2022. I can say that we're a net generator of credit at this point. If you look at the credits generated minus the emissions, which are the company emissions, it would make us a generator of benefits in terms of carbon in the society. Now the water... very connected to the thermoelectric plant because of what we did in 2022, but we have had a significant reduction. Another front in ESG is diversity. You see the percentage of women in the workforce were working Broadly, with affirmative policies to bring women into our operation, we have two programs that we implemented in the last few years, the training of operators for our wind plants, and we're doing the same for our hydroelectric plants in areas close to our plants and our national parks. trainee program, women, once again, that have summed their work to our labor force. We have a 50-50 balance at present, but in operations, we still have a lack of female talents, but it's not enough to become resigned to this situation. We do have to find a way to introduce female female labor into the operations. When it comes to our social responsibility investments, the goal is the percentage of resources invested in social responsibility and the incentivized resources that has reached 100%. We spend these incentivized resources from PRONAS, from other programs, and all of these resources are aimed for use in projects. And you can find more information on this in our sustainability report on our YouTube site. These are really very useful. interesting projects. Let's go on to the next slide, energy sales. And let's speak about the energy commercial strategy that you're very aware of. We're working in segments of industry and trade. We do have a diversified concentration in food, in steel mills as well, because of the importance of this activity in consumption as a whole. It's an electric intensive activity and we're seeking diversification and limit our exposure to specific segments Now, because we're trying to dilute our risk, we have a commercialization system where we're always selling energy and gradually changing our percentage of contracting. And this is what you will see to the left. where our contracted energy volume for 2023 has been fully sold out, and the exposure will be extremely low, of course, because of the low price in the spot market in 2024. We still have 5% of our energy that is uncontracted, but this is a very small percentage, and gradually it will increase as our contracts mature. I would like to remind you that in the contract in the free market, we do have some contracts that are signed for an average of four to five years of duration. And it's natural that our contracts in the free market are now maturing and we will have uncontracted energy. We're in a very comfortable situation during this period with high levels of energy. contracting and prices, but we are concerned when we look ahead. The prices have been announced in the market below our expansion limit. This is what we're faced with. Of course, we will be frustrated in some of our projects that will not become feasible because of the low prices. In the medium and long run, Nevertheless, there will be a marginal cost of expansion that we will use for nonconventional and renewable energy. Let's continue on to the next slide. energy commercial strategy. We have focused on the company for the market opening. We had a reduction of customers in 2021 because of the very poor hydrological condition. We sought out more security for our customers. In 2022, the commercialization levels continue to be normal, but we're getting ready to face significant growth in the number of customers Because of the market opening in 2024, we have been signing several contracts for the customers that will become free customers in 2024. And we do have platforms available. to have a low transaction cost and become ever more competitive. We go on to speaking about expansion. We have a report on Santo Agostino. It will come into operation in the first semester of 2023, the first stage, and then we will gradually come into full operation. It has 434 megawatts in Rio Grande do Norte and until the end of the year, until the beginning of 2024, it will add to our total installed capacity. Transmission for Novo Estado, a rather important plant. The construction has been fully executed. We're at 99.2% of work progress until the end of last year. And today, per se, we are at 100% of this work executed. We're scheduling the... Energization of the last part of the lines that will put into effect 49% of the total allowed revenue on the 25th of February. Not this weekend, which is Carnival, but next weekend. the energy from the last part of these transmission lines will come into operation and the line will become fully operational. And this will enable us to show our execution capacity and the ability to take sustainable energy in line for consumer markets. This is the role of transmission, an additional project, a marginal project. It is basically an expansion that we won last year. We have the suppliers already contracted, and everything will happen in this first quarter of 23. That's the beginning of the implementation. The CAPEX had a significant reduction in the contracting vis-à-vis what we had originally obtained. Another WIN project under implementation, Asurua, It is in the stage of the signing of contracts. We have signed that financing contract with the BNDES. And, of course, the environmental installation license is expected for 2023. We started up with the license and we have now begun mobilizing the teams at the site. The photovoltaic project of Azul Sol, the contracts have already been signed. We have supply and service agreements that are under execution. And in the second quarter of 2023, we hope to be able to begin the construction of this project. When we speak about expansion, okay, we have to refer to Jirao. Jirao is a project that was built by the holding company Engie Brazil. And at some point, it will be transferred at least 40% of the project to Engie Brazil. Last year, we had a review of the tariffs of the precision process. The drop was 35%. And with this, the plant, the SPE, began to have a cash generation. And, well, in my perception, this is a sign that the project is beginning to attain a level of maturity that will enable us to bring the project in-house. The controlling company has not. signal this but we do believe that at any moment this will materialize and we can begin to include this in the governance of our assets it will be part of the minority shareholders with very well renowned companies and investment banks to help us define a fair price in this transaction The year before last, there was a transaction done with two solar assets built by a company that we have at global level. We had a very good transaction at that point. that brought about very good returns for the acquisition of the Maracatu forest for Jirao. We hope to follow this same approach to offer security to the market, and we hope to have a fair transaction. In the next slide, projects under development, we have a pipeline of 1.8 gigawatts with a great deal of complementary projects. This, of course, complementing the existing projects. We do have a commercial advantage going forward. And unfortunately, an environment of low prices We will delay our decision-making process because of this. We're hoping to go back to a more normal market to be able to execute these greenfield projects. In the meantime, if we want to continue to grow and use cash generation and capital that we have available, we will delay. Look for an acquisition, one where we can truly generate value, somewhere where we can use our assets with synergy and show our operational excellence. Very well, we will now go on to the financial performance. I will turn the floor to Mr. Malka, and we will once again speak at the end. Well, thank you, Satamini. A good day to all of you. This slide shows us some of our performance KPIs in the financial part. As you can see, we have had high levels of return on equity and on invested capital. 2021 was the year of exception with a reduction in our profit, especially due to the negative financial impact on our debt. To the right in the chart, we show you our performance indicators. From 2016 to 2022, we invested 25.7 billion BRLs with a leverage of 75%. Our proprietary installed capacity was increased by 21%, and we highlight the renewable part with a growth of 36%. We acquired a stake in TAG. We entered the transmission business, as Mr. Satamini mentioned, the coming week. We will obtain full implementation of these assets, generating an RAP for 2023 of approximately 620 million reais. Our adjusted EBITDA for the period had a growth of 108%, and net income 65%. Between dividends and interest on shareholders' capital, we paid 13.8 billion BRLs. This next slide shows you the net operating revenue change with some significant impacts. First, the increase of price by 11.5% and the sales volume of energy of 4.3%. At the trade board, CCE, we had a negative impact in our revenues. But on the other hand, we also had a cost reduction of 461 million reais, which led to an increase of our EBITDA by 250 million reais. This is mainly due to that combination of increase in the TSF that went from 0.03 to 0.85 in 2022 and to the reduction of the PLD that as an average stood at 60 reais for 2022. In the trading operation, we also had a reduction in revenues a drop in our costs with the trading operations, generating a negative impact of only 2 million reais in our EBITDA. Now, this is mainly due to the mark-to-market of our When it comes to transmission, we do have an accounting rule that is specific to record revenues and the cost of transmission. our revenues correspond to our capex plus a margin besides the remuneration of the financial assets linked to transmission therefore we also had a reduction in the transmission cost of 1.404 billion that led to a positive variation in our EBITDA of 291 million. I simply would like to highlight that as the work moves forward, we have a reduction in the cost and in the construction of assets. This slide shows you the financial performance of TAG that ended the year with a profit very close to 2,200,000,000 reais, representing an increase of almost 600,000,000 reais. Our stake in that profit was of 727 million, an increase of 125 million vis-à-vis the previous year. This slide shows you the EBITDA evolution. As mentioned by Eduardo Satamini, the impairment of Pampa Azul and the result of the selling of Jorge Lacerda are recorded in the EBITDA of 2021. We don't consider that. We have a result of 7,217,000. Another adjustment done. was to clean out the impacts of transmission on our results. These impacts are mainly economic and in the evolution of EBITDA, we did take into account the RAP. The main variations presented in 2022 were the increase in price and volume as mentioned, the transmission RAP 348 million for the year, As I mentioned, in 2023, it will go on to 620 million reais. In the CCE, the trade board has mentioned an increase of 247 million in EBITDA, a reduction in the cost of coal or fuel because of the sale of the Giorgi Lacerda assets and the Equity over shareholders over TAG led to an increase of $125 million for TAG, an increase in the volume for the purchase of energy. And this increase mainly arises from the acquisition of energy from Diamante. That operation was contracted when we sold the asset. The GFOM impact, as mentioned by Eduardo Satamini, of almost 1.6 billion reais. If we eliminate this effect from the EBITDA last year, as mentioned, we would have an increase of EBITDA in 2022 of 24% approximately. Here we see the net income change as we did with the EBITDA. We have eliminated the impairment impact. Here we have net income, social contribution reaching 2,369,000,000 adjusted net income and the main variation during the year as mentioned was the reduction of financial expenses, mainly because of the combination of the reduction of inflationary indices and an increase in the CDI of TJLP. Here you can see the evolution of our indebtedness and the leverage since 2019, a significant growth in our debt in 2022, a reduction of approximately 1,800,000,000 BRLs, thanks to the reclassification of the Pampa debt as we sold off the asset, the accounting rule, sets for the need for a reclassification of our debt for the liability and assets account. This led to a reduction in our net debt EBITDA ratio. On the other hand, we had an increase in net debt EBITDA ratio because of an expressive consumption of cash in 2022, mainly due to the investments that we made and also because of the payout of dividends. here you can see the dead profile and the composition of NG, the first graph shows you our payment schedule, which is quite balanced. The duration of the debt stands at 7.6 years, and in 2021, it was six years and nine months. To the right, you can see the breakdown of the debt by index and interest. You can see the expressive make-out of IPCA, the Broad Consumer Index, the TGLP, for the debts contracted with the National Investment Bank and CDI, which are the shorter-term debts. We would like to remind you that the debt... Indexed to the IPCA is hedged by our energy contracts for sale, and they're totally indexed to the IPCA. The nominal cost of the debt stands at 11.4% per year, equivalent to IPCA plus 5.3%. This is the Capex since 2019 and the forecast for investments until 2025. Between 2019 and 2022, we invested approximately 15 billion reais. In 23 and 24, we should be investing approximately 12 billion reais in the Santo Agostino projects, more specifically in Santo Agostino, Serra de Azurua, and Santo Sol, which are still at a very initial stage of construction. Here we see the background of our dividend payout. As mentioned by Satamini yesterday, the Board of Management approved payment for the full net income representing 8.1% a year. dividend yield. With this, I would like to end the presentation of the financial part, and I return the floor to Rafael Bozio. Well, thank you, Malta. We do have some questions here. I will begin with the first, Maria Carolina Carneiro from Credit Suisse. Well, in truth, there are two questions. The first refers to the commercialization during the fourth quarter. According to their analysis and the evolution of our balance, what we presented in the third quarter, they have identified sales above 200 average megawatts between 2023 and 2027. She would like us to remark on what is happening with the energy market, the terms and the prices. Well, this is a focus for the present day moment. Well, I can take care of that. I can do that. Thank you for the question, Carol. Basically, our strategy is when we feel this price pressure and we were observing that this was happening with the improvement in hydrology and the continuity of this favorable hydrology during the year 2023, there is the possibility that prices in 2023 and 2024 being impacted because of this effect and because of that we sped up our sales if we had held back those 200 megawatts in our portfolio we would have lost value for the company At that point in time, we understood that although the prices were not favorable, it was the right time to sell so as not to further deteriorate the energy in our portfolio. And do recall that the company's strategy is to always sell. We need to sell out our portfolio at market prices. We seek out the best prices and we speed up or slow down based on our perception of price variations. Now, this is the impact. I think it was a very good strategy on our portfolio by foreseeing what would happen We need to work with the market for a return in prices and to be able to make investments. While this does not materialize, we're going to sell according to our normal strategy. Do we have further questions? Yes. A question on the price increase during the quarter, which is the target price and SG&A for the quarter. She's referring to the quarter, quarter on quarter, fourth quarter, and year on year. Well, that's very simple to explain. Well, the company is growing when we look at a growth of 23.4% of EBITDA. We have new operations about to begin, and many of them beginning operations, but still not working with personnel. And, of course, we have a higher personnel cost in the operation when we speak of SG&A. We can justify part of that because of an increase in our levels of activity. We marginally have a growth. And another very important element is the company that is getting prepared for this new market scenario. training of the team, an increase in the number of sellers, investments made in technology to be able to face the market opening. Not only that, we had a very good year in 2022. And with that, we're going to pay the share of our employees. We did have a good profit. And we have provisions for the changes that will be happening the coming year. So these are the main factors. Well, Carol, you know that we're extremely careful with cost. We have a very good cost performance. But as you grow, as you attain good results, these costs end up increasing nominally. and representing a significant growth. And you did draw our attention to that. Simply to complement this, Satamini, I think it is worthwhile underscoring that our cost-as-GNA ratio over EBITDA has had a reduction through the years. This shows the efficient management of costs and expenses in the company. Yes, thank you, Malka. Thank you for your comment. We can, in the next presentation, perhaps come up with a graph to show you that. Yes, we will show you. Well, we show that frequently to our controllers in-house, of course. The next question is from Guillerme, our individual shareholder. Good morning. If we take into account the growing competitiveness, will the company remain being – will continue to participate in auctions for transmission? Yes, in transmission, there is a great deal of competition, very aggressive bids. And if we look upon this in the longer term, somewhat longer term, in the last auction, I understood that there was a reduction in the amount of aggressiveness, although some players continue to be very aggressive. This is normal in the transmission sector. There are cycles, cycles with less attractive prices, more attractive prices. and we have enormous financial discipline. We're willing to go until we know that the investment will create value for our investment portfolio. The last auction was somewhat more aggressive. We came out in third place. The Fight among the players tends to be quite harsh. The next auction in June with 16 million KPEX of ANEL, perhaps we will have an opportunity. There are large lots, and we see that some of the players competing with us in the market are disinvesting from some of their assets. because of the local risk to reduce exposure to the Brazil cost. And perhaps we will find a propitious moment for the company to capture more opportunities in the transmission sector, something that will be important for the country. for the renewable energy, because it does bring renewable energy for the consumer market. And this is the main role of the auction. And we believe that opportunities will come about soon. We are going to participate in June and in the end of the year as well. That has a significant amount. We are working with our team, guiding them so that we can have good projects and good returns. Thank you, Satamini. The next question is from Mr. Sosa, a sales side analyst. If you could speak about the drivers and the growth of TAG and if there is need for greater infrastructure in the sector. TAG has a base of assets that was assessed when we acquired TAG, and it already presented good results, an ever-growing result, because the indebtedness that we went into to acquire the asset is quite short in terms of its amortization. If I'm not mistaken, it's seven years. Well, the growth will come about in terms of our results. were obtaining results beyond what was expected. Now, the growth drivers are an increase in the consumption of gas throughout the country, an increase in the industrial use, which is the bet that we had made. We're going to have domestic gas in great abundance in the fields, especially in the pre-salt areas. And with this, we will have new entrance, a more dynamic market. The exit of Petrobras allows greater dynamism to the new entrance, and infrastructure will be necessary to manage a larger grid. a grid with a higher level of operational complexity and opportunities will come about because of this we already have investments for terminals for new customers and as the market progresses as the number of agents increases these opportunities and attraction will increase Thank you, Satamini. The next question from an individual person called Pietro, who asks if there's an outlook to reduce payout because of the robust investments that you have set forth for 23 and 24. No, at present, we don't expect to reduce our payout outlook. We have been carrying out payouts of 100% in the last few years. And if we look at the last 10 or 12 years, the payout on very rare occasions was below the 100%. If I'm not mistaken, this happened during three years. One. A year where we had a non-cash effect, the GFOM, where we distributed 100% of the cash results. The following year, we offset this. And in a certain fashion, we have been able to grow by paying 100% of the dividends out. We're in a very comfortable level of indebtedness at present within our covenants. And we cannot foresee any reason today to alter this policy. I would like to remind you that it could happen if we have a very large volume of investments or a loss of market. And if we deem it to be prudent, we will reduce the payout, which did happen yesterday. During some phases, especially in 2014, where we had a political crisis in 2015, also due to the GFOMS. But when there is a crisis, we do try to preserve CAS, preserve the soundness of the company, and wait for the crisis to blow out to go back to our 100% payout policy. There's no reason to do anything at present. Satamini, a question now that refers to dividends coming from another individual person, he makes some remarks and asks why the company... Well, why our dividend payout policy is not more regular and why it works quarter by quarter with dates that have been specified so that the individual investor can have a better view of what happens. where our policy is to normally pay out dividends twice a year on our own capital. This is done three times a year based on the company cash without great variations. We don't pay this every quarter. Were we to pay quarter on quarter, It would be a TNB. We don't see any need or reason to do this because we don't have uniform or homogeneous quarterly results. We have variations in market prices, variations in energy allocation, and the results take place in a non-uniform way during the year to pay out twice a year, I think. is in accordance with most of our shareholders. Well, thank you, Satamini. I prefer to pay 100% twice than to pay 35% three or four times a year. Next question from Enrique Peretti, sell side analyst from JP Morgan. And he would like to clarify our growth strategy. If we could remark on our commercialization strategy for the ASUSO project. 200 reais per megawatt hour and everything else is below that level. He says it's difficult to justify the development of the project at this point in time. Well, Peretti is right. When we approved those projects, we did take into account that we would have an initial period where the cash generation would be lower than the average of the project, but important enough, and it made us take the decision to acquire the project. It is a project that if we don't work on now, we would have to work on in a few years, and it would be less competitive in the market, which was the idea, therefore, to work with the projects presently, although in the first years, we will have a lower term in our portfolio and I do remind you that these projects represent five or six percent of our total portfolio of contracts for the year 2022. This is very bearable We can work without contracting. We knew that in the first years we would have lower prices that would be recovered in coming years because the system cannot grow with prices that are lower to those of expansion. This is natural. An investor will not feel motivated to to add new capacity to the system if this capacity is not managed adequately. Therefore, the prices will resume, and we will resume to the levels and obtain additional benefits. Now, these benefits will increase as new layers of customers are released into the free contracting markets. High voltage has been fully released, totally released, and we're going to work with low voltage as well. Thank you, Satamini. Changing topics, we have two questions from individual shareholders. on hydrogen projects the questions are how ng is getting ready for the green market and which are the outlooks for that market in our opinion that market currently is still very uncertain for us. When we look at green hydrogen, there's still some pending issues regarding the competitiveness with the normal hydrogen. We're going to require government action for the development of this market, not only for Brazil but globally, incentives so that consumers will begin to use green hydrogen, and we can say that Brazil is in a highly favorable situation for the development we have abundant hydrogen and if we look at sun and wind energy and hydroelectric energy which is also renewable all of this will enable us to operate 24 hours with renewable energy for the generation of hydrogen, optimizing the utilization of the plants. Then of course this will lead to a change. In Brazil at present we see a situation that is quite different from other countries in the world. Now we do have a very good matrix We have a marginal expansion cost, while in other countries the situation is the opposite, a very high price of energy. We deem this to be a considerable opportunity because it will speed up the development of hydrogen in Brazil. And It will also be a factor of regulation in the market. If you have demand for the hydrogen, if you have oversupply, this supply will be consumed at greater speed. We still have some pending issues. We require infrastructure. We need to converse about the agreement with the government. We look upon this very positively. And how are we preparing for this? We have a global team that is looking at technology opportunities. And in Brazil, at NG Energy, we created a group last year. We're looking at some projects and getting ready to capture opportunities. So this is being developed in Brazil, and we have global teams also looking at opportunities so that we can become part of this market in the best way possible. Thank you. A question from Guilherme Neiman from Santander Bank, Southside. He asked about the transfer that you already remarked on. So far, there is no signal that there will be this transfer. Now, when that materializes, should it materialize? If we would maintain the payout of 100%, or if this could exert pressure on the payout, Because of the amounts that we imagine, I don't think it would be a limiting factor As the acquisition is with the holding company, we can carry out payments according to the cash ability of the company. The sale is not done because the holding company needs cash. The controlling company is releasing CAPEX in other areas, especially in services in Europe. Therefore, we truly do not think that the acquisition of Jirao because of the amount and because of the group's financial situation will exert pressure on our cash or lead us to having to reduce our payout. Okay, thank you, Mr. Satamini. We're heading to the end of the call. We have two additional questions. The first regarding M&As in the transmission sector. If NT would be interested in acquiring transmission lines from competitors, and if we're going to increase our stake in TAG. First, we will respond to the question in transmission, M&As in transmission. Yes, we did have some situations, and we saw that M&As in transmission have lower competitiveness when we look at the added value of a strategic player. The value is very small. The cost of operation of a line of transmission system tends to be very low. It's more about... the return that you require and the cost of capital. Now, when you think of investments of individual people supporting these amounts, we end up seeing that our competitiveness is not very good. It's different when we speak about more complex operations, when you have a synergy with your assets, when you have the technical competency to resolve problems, which is the case in generation, a great capacity for commercialization, generation, management capacity, geographic location. The situation is different. I don't see that we have great competitiveness, although we do look upon those situations. Perhaps they will make sense. Our last question referring to TAG from Carlos Arida, an investor. Good morning. Given the scenario of interest rates and exchange rates in Brazil and the term mentioned of seven years, four of which have already gone by, is there any forecast of the company through Engie to renegotiate the debt, the debt profile, and the leveraging of the process? It's a possibility. that's simply being raised, the leveraging, it's always good to have a partner with a cost of capital. And of course, this capital would be used to pay out additional dividends for new investments. But there's no decision made regarding that so far. These are factors that we're assessing, of course, without having made a decision. Thank you. With that, we would like to end the question and answer session. I return the floor to Eduardo Zatamini for the closing remarks. Malta, well, thank you very much for your attendance once again. It's always very positive to have this interaction. I wish you all a very good carnival, and we will be back in the next quarter. That's it. Once again, many thanks for your attendance. We had a large number of participants and excellent quality of questions. And our message is that we continue to grow in any environment. We will deliver results and stick with us. We're still going to make you very happy and enjoy Carnival.