Engie Brasil Ene Sa S/Adr

Send their questions using the Q&A tool on Zoom. This video conference is also being recorded. You may find on our website www.ng.com.br all the files of the presentation. and the earnings release, in addition to the ITR and other documents which were filed yesterday at CVM. They contain details of the analysis of the financial statements, operational results, ESG indicators, and progress in the implementation of new projects, including other highlights in the period. Before proceeding, we would like to clarify that any forward-looking statements that may be made during this video conference relating to the company's business outlook should be regarded as forecasts, which depend on the country's economic situation, on the performance and regulation of the electricity sector, and other variables, and are therefore subject to change. We remind you that journalists... who wish to ask questions may send us an email to the company's Press Advisors. To present the development of the performance of angioplasia regia in Q2, today are with us Eduardo Takamori, CFO, and Rafael Bosio, IR Manager. I now turn the floor over to Mr. Takamori to begin his presentation.

Good morning. I hope everybody can hear me.

Good morning. First of all, thank you all for attending this video conference. It's the first time I'm going to speak as the CFO of Engie Energia. And Moving on to the highlights, first of all, I would like to say that it was a very exciting quarter. We had many relevant effects. Some of them were non-cash. And looking at EBITDA, I just said EBITDA was $1.8 billion relative to $1.9 billion. in the previous quarter, in the same quarter last year, a drop by 5.2%. However, this adjusted EBITDA increased over 10% if we take into account the transmission business. And when we look on a semester basis, the first six months of 22 versus the first six months of 2023, we see a 2.3% increase in adjusted EBITDA. The main drivers were non-cash with the non-cash effect, but the main drivers of Q2 were the following first 239 million of positive effect when we recognize the fair value of the extension of the Estreito HPP. This was recognized in Q2 and the Estreito concession will be extended by two years and four months. And we recognized this. Then as negative effects, we had an important effect of IPCA in this quarter as compared to the IPCA last year. And therefore, there is a smaller remuneration of the generation. Part of it is IFRS. and also a smaller remuneration of contract assets, and that has to do with our transmission assets. Additionally, there was a periodic transmission tariff review, which had a negative impact of 64 million. This, again, is a non-cash effect. This review happens at the turn of the quarters, but we do have to recognize the future values. The upside is that when we look at the net income between the quarters, we see on the right-hand side there was a substantial increase from 514 to 806, a 57% increase approximately because of the IPCA again. When the IPCA goes down, we have a lower financial cost. but this is a net financial result, which is positive for us. Year on year. And when we compare semester on semester, the adjusted net income increased to 1.69 billion, nearly 50%. I'm now going to turn the floor over to Rafael, who is going to give you a little bit more color about the highlights of the quarter. Thank you very much, Takamori. Good morning to all. Good morning, and thanks for attending, and thanks for your interest in energy energies. On slide six, you see the non-operational highlights, and as Takamori said, it was a very special quarter. Many important events happened, and I'll start with the success we had in the transmission auction carried out by Arnel in June. We acquired Lot 5. This is a project that we are already developing, and it will include 1,000 kilometers in transmission lines crossing the states of Bahia, Minas Gerais, and Espirito Santos. And this will help us transmit the energy we generate in the northeast to the load centers in the southeast. The second item, which was a landmark and the crowning of a long-term work we did was the completion of the sale of Pampasul thermal power plant. We changed our strategy and the group decided to no longer have coal-fired power plants. This was finalized now with the asset of this asset on May the 31st. And now, Engie Brasil Energia is now the largest generating company in Brazil with 100% renewable electricity company in Brazil. Then the third event is the recognition of the amounts relating to the extension of the estretto concession. This was something that we had communicated to the market in a material fact in January this year, and we are now recognizing the effects of that in our financial statements.