Light Sa S/Adr

Boa tarde a todos e bem-vindos ao webinar de resultados do primeiro trimestre de 2021 da Light. Meu nome é Rodrigo Villela, eu sou responsável pelo RI e serei o host desse evento. O evento de hoje será realizado em português e traduzido simultaneamente para o inglês. Para tanto, basta selecionar o idioma desejado no botão Interpretação, localizado na parte inferior da tela. For our non-Portuguese speaker audience, this event has been simultaneously translated to English. So please select the preferred language by clicking in the button interpretation, which is located at the bottom of the screen. Well, back to Portuguese now. The presentation and comments of the results will be carried out by the Director of Finance and Relations with investors, Roberto Barroso. Today, we will have the participation of the commercial director, Thiago Gutti, who will comment in more detail on the works that were and will be carried out in the fight against losses, improvement of collection and increase in the satisfaction of our customers, as well as an initial view of the Light plans for action in special communities and areas. Our CEO, Nonato Castro, is also with us today. The presentation that will be carried out is already available for download on our RI website, but it will also be possible to follow it here through Zoom. I would like to remind you that, at this moment, all participants are connected only as listeners. After the end of the presentations, in the Q&A session, I will detail the instructions for those who wish to ask questions. Este webinar está sendo gravado e seu áudio ficará disponível no site de RI. Como de prática, we have here our disclaimer. We clarify that any statements that are made during this presentation regarding the company's business prospects, projections and operational and financial goals, are based on beliefs and premises of the Light Board, as well as on information currently available to the company. Future considerations are not performance guarantees and involve risks, uncertainties and premises. These refer to future events and, therefore, depend on circumstances that may or may not occur. Investors must understand that general economic conditions, industry conditions and other operational factors can affect the company's future results and can lead to results that materially differ from those expressed in such future considerations. Well, due to legal warnings, I would now like to pass the floor to Roberto Barroso. Barroso, please.

Thank you, Rodrigo. Good afternoon to everyone. It is a great pleasure to be able to present and discuss the results with you again. Regarding the results of the first quarter, we will give a great overview, but before we start directly with the results, we would like to review the Board of Directors that has just been elected to the Assembly of Company Agencies on April 29th. We managed, with the support of the shareholders of the company, to set up a 100% independent and totally professional council. The council is led by Firmino Sampaio, a professional with great experience in the electrical sector. We already had the opportunity to present him previously, he already participated in one of the results of the company in the third quarter of last year. Junto com o Firmino, também agora como vice-presidente, está a Ana Tone, profissional com grande experiência no terceiro setor, presidente do Conselho da Transparência Internacional, já teve passagem pelo Greenpeace, e vai ajudar com... I'm sure the company is now making progress in ISD initiatives. I also have the advice of Abel Rochinha, a professional with great experience in the infrastructure segment, with a degree in VPAE and many years in the Enel Group. Hélio Ferraz is also a member of the Council, he is a lawyer, vice-president of the Rio de Janeiro Commercial Association, he also participates in the Brazilian Commission of Mediation and Arbitration. He is also with us in this new Council, Lavinia Holanda, an economist, also an engineer, a partner of Scopa Energia, a professional with great experience in the energy segment, also with a background in the financial market. With us is also part of the Council, Vanessa Claro, also a professional with great experience in the area of risk management, she was also the director of TAM Telefônica, a great background also at PwC. Also part of this Council is Vinicius Roriz, a professional also with great experience, passing through Ambev, Invepar, he was also president of Conurb. Also with us, Wilson Poit, entrepreneur, also superintendent of Sebrae de São Paulo, passing through Endeavor. And also, to close this council, Iwiti Lopes, Professionals also with great experience, passing in the financial market through GP, Goldman and currently in LTS. So, a totally professional council, with three of the nine women members, a third of the council, and we believe that these professionals with great experience and totally differentiated skills will contribute a lot to the company's executive directorate for this moment of transformation of Light. Moving on to slide number 3, we selected some highlights of the quarter, o trimestre que foi muito positivo do ponto de vista da Light Energia e da Lightcom, a geradora e a comercializadora da companhia, e um trimestre desafiador em relação à distribuidora, a Light César, onde ainda temos impactos da pandemia, tivemos impactos negativos em função da temperatura bastante elevada nesse trimestre, mas também tivemos alguns avanços, como a gente vai discutir agora, Thank you very much. also due to the increase in unpaid energy due to the heat observed at the end of March 2021, and a reduction in the energy incorporation in 120 GWh related to the management of cut-off stocks. Regarding the front end of personal, material, service and other expenses, we closed the quarter practically in line with the PMSO of last year, Em relação aos custos de pessoal, material e serviços, aumentaram 2,8%, um pouco abaixo da inflação do período. Conseguimos reduzir 20 milhões nas contingências judiciais, aumentamos em 0,7 pontos percentuais a taxa de arrecadação nesse primeiro trimestre de 2021, quando comparado com o primeiro trimestre de 2020, e apesar de um aumento na PCLD de 0,1 ponto percentual, fechando em 4%, no primeiro tri de 2020. Em relação ao EBITDA consolidado, fechamos o primeiro tri desse ano com 429,8 milhões, uma redução de 9,9% em relação ao primeiro tri de 2020. Houve uma redução de aproximadamente 35% no EBITDA da Light César, mas houve um aumento significativo no EBITDA tanto da Light Energia quanto da comercializadora da companhia. In relation to the EBITDA liquid debt, we managed to reduce it to 1.4 times, less than the fourth quarter of last year, when we closed the indicator at 1.73 times, and the liquid debt closed at 4.3 bi, a reduction of 20.9% in relation to the fourth quarter of 2020. We also closed with a robust cash position, the first quarter of 2021, with approximately R$ 4.1 billion in the company's cash. And finally, with the negative impact of the market marking of the SWAPs in the financial result of the first quarter of 2021, we closed with a loss of R$ 41.8 million, reverting a profit of almost R$ 167 million in the first quarter of last year. Moving on to slide number 4, we present a little summary of the behavior of the FII load of the invoiced market. The company's FII load rose 4.4% compared to the first TRI of last year, mainly due to the increase in temperature, which was higher than an average degree in this first TRI of 2021 compared to the first TRI of 2020. No entanto, o mercado faturado não teve o mesmo comportamento. Ele acabou tendo uma redução de 1,7% no primeiro trimestre desse ano, em comparação ao mesmo período do ano anterior. Por dois motivos, basicamente. O primeiro deles foi uma redução no consumo das concessionárias. A Enel mudou um ponto de conexão in the healthy withdrawal substation and reduced the consumption in that substation, the consumption related to the dealers, if we exclude this effect, the turnover market would have risen 0.4%. And the second effect, effectively, is in relation to the increase in losses and the issue of the unpaid, that we had 150 GB which was the heat of the end of March, but which will be calculated in April, during the second quarter of 2021. Regarding the behavior of the market calculated by segment, we observed a growth of around 6%, both in the residential segment and in the industrial segment. o aumento no segmento residencial foi principalmente decorrente do aumento da temperatura nesse verão de 2021, já no segmento industrial o aumento foi principalmente pelo avanço no segmento siderúrgico que tem conseguido ter um excelente desempenho ao longo dos últimos trimestres. Por outro lado, temos observado um desafio tanto no consumo do poder público quanto no consumo do segmento comercial. Ambas classes têm tido uma recuperação bastante lenta na nossa área de concessão, principalmente ainda sentindo os efeitos da pandemia. O segmento comercial também tem um consumo muito relacionado à temperatura, mas mesmo com a temperatura mais elevada, ele teve uma redução de 5,7% quando comparado com o primeiro trimestre de 2020. Moving on to slide number 5, we have the progress of the behavior of total losses on the wire charge in the company. We were able to observe in the first quarter of 2021 a growth of 1.6 percentage points, going from 25.92% to 27.18%. Nesse indicador, tivemos esse efeito que eu mencionei da redução do consumo faturado para as concessionárias, que acabou impactando negativamente esse índice. Mas em relação ao volume, são três efeitos que eu mencionei que efetivamente explicam esse aumento de 555 gigas no primeiro trimestre 2021 a maior temperatura média em comparação ao primeiro trimestre 2020 esse efeito da energia não faturada de 150 GB estimados pela companhia e quando você tem um calor muito forte na segunda quinzena do último mês in the quarter, the reading cycle of the readers for the purposes of billing ends up not being able to capture all the energy effectively consumed in the quarter. And finally, the improvement that the company has made in the management of the cut-off stock, which ended up reducing, making the billed volume smaller than that of the first quarter of 2020. In relation to the non-technical loss indicator on the low tension market, we observed an elevation of 50.82% to 55.46% this quarter, still with an indicator far above the 36.06, which is the loss index inserted in the company's rate. When we observe the graph to the right, we observe the behavior of the volume of energy loss between the areas of conventional treatment in green and the areas of special treatment in yellow. We observed a stability in the volume of losses related to the area of special treatment, which is a good sign this quarter, but we actually saw an increase in the loss indicator, in the loss volume, related to the conventional treatment area. Part of this increase is related to almost the totality of the 150 gigas not earned, which we will end up observing this earnings in the second quarter of 2021, but a good part of the temperature increase impacted this segment as well, and we will attack from then on. A good news that we also observed this quarter in relation to losses was the transfer of 17,000 consumers who were previously classified as special treatment areas and now we have transferred them to the conventional treatment area. Already in our initiative of approaching community leadership, these are areas that the company has already returned to do an action de forma convencional. Still talking about the action in combating losses, the company continues with a total focus on energy incorporation, as will be explained in more detail by Director Thiago Gutt. We managed to make 27,000 Toys in this first quarter of 2021, a much larger volume than the first quarter of 2020, but we have been very cautious in the revenue of the REN, the Retroactive Consumption. Continuamos com a política de somente faturar aquilo que a gente tem perspectiva efetiva de recebimento. Então, a gente observa que não temos visto um crescimento muito relevante no volume faturado de recuperação de energia e seguimos com o foco de melhorar a cada dia a incorporação de energia, onde a gente consiga reduzir perda de forma sustentável e também conseguir melhorar a arrecadação da companhia. And speaking of collection, moving on to slide number 8, we managed to advance in all segments, in retail, in large customers and also in collection together with the public power. We closed with a total collection of 25.7%, 0.7 percentage points, the 12-month collection closed in the fourth quarter of 2020. Here, we managed, in the first quarter... after the beginning of the pandemic, to reverse this trend that we have been observing of difficulty in relation to collection. This is the first quarter that, after the actions already implemented by the Commercial Directorate, we observe an improvement of this indicator in all three segments. We have not yet achieved, as we can see on the right, an effective reflection in the reduction of the PCLD. at least we managed to practically stabilize the indicator that had grown in a relevant way from the first quarter to the second quarter of 2020 and from the second to the third quarter of 2020. We closed in December with 3.9% of PCLD over HOB and we now closed the first quarter of 2021 with 4% of the PCLD indicator over HOB. Moving on to slide number 9, we have the results of our main operational indicators, both the duration of interruptions and the frequency of energy interruptions. We had another quarter of positive results in the two indicators. We closed the DEC for the first time below 7 hours, already at the beginning of 2021. We had a summer... Difficult with some storms, but we still managed to close with 6.95, well below the limit defined by the NEO of 8 hours. In relation to FEC, we also achieved another advance. This is the best result of the last years of the company, we closed with 4.41 times, and the limit of our concession contract is 5.15 times. Moving on to slide number 10, temos a variação do EBITDA do primeiro trimestre de 2020 para o primeiro trimestre de 2021. Conseguimos avançar no faturamento de receita líquida, principalmente em função da temperatura e da nossa gestão de energia, não somente na light energy, mas também na comercializadora, mas, por outro lado, a elevação de perdas acabou por... retirar esse ganho que a gente tinha obtido em conjunto com o aumento dos custos de compra de energia nesse primeiro trimestre de 2021. Conseguimos ficar próximos em relação aos custos gerenciáveis de pessoal, material e serviços e também em relação às provisões. Fomos melhor nas provisões de contingências, mas acabamos tendo uma elevação ainda na PCLD nesse trimestre. we were able to close with EBITDA at approximately 90% of last year's EBITDA, which represents a drop of R$ 45.9 million in this first quarter of 2021, compared to the first quarter of last year. When we show this breakdown by segment, we observe that we had a reduction no EBITDA da distribuidora, por esses efeitos já mencionados, o aumento na PCLD e também pelo aumento no indicador de perdas, mas tivemos avanços efetivamente em conseguir manter um bom desempenho em relação a contingências e manter o PMSO praticamente estável. In the LatEnergia segment, it was the main highlight in this quarter, we managed, despite the lower GSF in the first three months of this first quarter, in relation to the first three months of 2020, we managed to do a good management of energy seasonalization and avoid energy purchases as we did last year. We managed to increase in 52 million the EBITDA of Light Energy. In relation to the commercialization, we also achieved a great advance, we achieved an advance of 12.8 million for a better management of trading commercialization of our energy contracts, some of which were even adjusted by IGPM and IPCA, which were the indicators provided in these contracts. Moving on to slide number 12, we have an evolution in relation to contingency expenses. We managed to reduce 73.6 million in the first quarter of 2020 to R$ 53.3 million, a drop both in the civil special judiciary and in our contingencies of civil processes. We had another quarter of process entries against Light lower than the first quarter of last year. Reflecting on our improvement in the management of our commercial processes, And even with the progress and increase in energy cut activities to protect the company's collection and improve the collection this quarter, we still managed to have the amount of process entries against the company be less than the same period of the previous year, which helped in reducing the contingencies this quarter, once again. And moving on to slide number 13, we have here the progress in relation to the company's liquid result. We left a profit of R$ 167 million in the first quarter of 2020 for a reported loss of R$ 41.8 million in the first quarter of 2021, mainly for two factors. The first related to the reduction of EBITDA of R$ 45.9 million, And the second factor, effectively, were two lines in the financial result that were worse in this first quarter of 2021, a negative impact of the market marking of our swap instruments, of protection against exchange exposure, in the first quarter of last year. With the arrival of the pandemic and with the stimulus given by the Central Bank, there was a reduction in the interest rate and with the reduction in the future interest rate, we had a gain of more than R$ 100 million last year in market marking of dollar exchange protection instruments. And already this year, the opposite happened. In the first quarter of this year, there was an inflection of the future interest curve and there was an increase in the future perspective of the CDI in Brazil, which negatively impacted the market marking of these financial instruments. With that, we had a variation of almost R$220 million of market marks, comparing the first quarter of 2021 with the first quarter of 2020, and we had an increase of almost R$60 million in relation to the cost of IGPM, in relation to the of the Light Energy debt in the CCE. This debt was paid on April 6, Light Energy paid R$ 1.3 billion, which was all the remaining debt in the CCE, precisely to avoid new impacts of the GDP in the company's results. Moving on to slide number 14, we present the robust position of Caixa, which we closed the first quarter with R$ 4.1 billion, facing a profit in 2021 of R$ 2.1 billion and a profit in 2022 of R$ 1.8 billion. The company's debt duration is 2.1 years and we have worked now for us to make the extension of this debt duration with new emissions. The cost of debt is this discipline that we managed to... in the last years, we managed to reduce the company's debt rate, which was higher than 8% nominal, below 7% already in the last three quarters, and from the point of view of real cost, with the increase in inflation, we have managed to significantly reduce the real cost of the company's debt. In relation to the debt profile, we made amortization of two debts in IPCA in this first quarter, de 2021 após a entrada dos recursos no caixa do follow-on concluído em janeiro de 2021 de 1.3 bi efetuamos o pagamento de 300 milhões de dívida do BNDES que tinha um custo médio de IPCA mais 5.11% ao ano e também pré-pagamos uma dívida which had a cost of IPCA of 5.74% per year, which was a debt related to the company's non-emission of debentures. With this, the profile of the company's current debt is practically two-thirds indexed to the CDI and one-third indexed to the IPCA. Regarding the EBITDA liquid debt, we managed to significantly reduce the company's leverage over the last three semesters. We had an evolution of the company's EBITDA in the third and fourth trimesters of 2020, in conjunction with the receipt of COVID-19 account resources. which significantly reduced the company's leverage in the third and fourth threes of 2020. And in this quarter, the main highlight for the reduction of leverage was the conclusion of the primary in the follow-on in January 2021, which improved the capital structure and allowed the entry of 1.3 billion reais in the company. With that, moving on to slide number 15, we can also observe the advances in the local rating improvement of the company. From 2017 until now, we had two upgrades by S&P, the current rating of the company is twice as high. In FIT, shortly after the conclusion of the follow-on, we had another rating increase, we went from A- in March 2018 to double A- now in January 2021, and at Moody's we went from September 2018 from triple B+, to A- now, A1, now in May 2021, when we had the most recent upgrade by Moody's. Passing now to slide number 16, many of you heard from the management of the company on our side, we made a mention of the 100-day plan that the entire board had been working on since January of this year, we completed this plan now in April and we had an advance on several fronts. This plan sought to analyze the organizational structure of the company, also go through a review of processes, an advance also in the institutional aspect. We did a great budget review and also initiatives to adapt our systems. Within the organizational structure, we focused on attracting talent, seeking to have effectively strong leadership within the company. In the process optimization front, we have already made a series of improvements with the implementation of a new management methodology, with several committees already implemented and fully in operation. From an institutional point of view, we have reinforced and have tried to reinforce the authority of the company's concession and improve the image of Light in several stakeholders. From the budget point of view, we reviewed and approved the budget together with the Council, with the new premises, and we are now in the final phase of definition and also the deployment of goals. And from the point of view of systems, we will be, in fact, intensive in technology and we will have an even greater emphasis on operational efficiency. Moving on to slide number 17, we brought here only some of the highlights that we were able to summarize here, also considering the time we have to present the results, we will brush some of the main results to share with you. From the point of view, looking at the area of ​​finances and R&D, we were able to improve the company's capital structure in January of this year, we have now had a total focus in the improvement and lengthening of the debt duration, with an already planned agenda that we are already implementing, and we have also managed to make the payment of the GST repayment in order to avoid new impacts of GPM in Light Energy. Looking at the distribution front, Light had until then, several decentralized operating centers, the company had six operating centers, it was done now, the centralization, an integrated operating center was created, where we managed, in a single center now, to manage the entire network of high and medium and low voltage, improving the quality of service to our customers and reducing OPEX and centralizing and now having an even more agile decision making. With this, we expect, in fact, an increase in productivity, we made a series of re-adaptation of the structure of third parties within the front of the distribution board, in order to bring an important cost reduction throughout the year of 2021. From the point of view of the legal directorate and institutional relations, we have already implemented a judicial demand committee that has identified root causes and improved even more the subsidies, with the goal of following this trend of reducing the number of processes against the company and also reducing provisions over the next few years. On the institutional front, we have been able to increase Light's credibility with several strategic stakeholders. Talking a little bit about the Directorate of People and Management, we are implementing an excellent management program, where we have sought to capture the results in the best way possible, with the adoption of a new management model, where we, even to speed up this process, we hired a consultancy of management that has helped us here in this faster implementation. We also made a new organizational design, which we are now concluding, where an efficient, agile structure was sought and that allowed synergy between the company's areas. And we are also implementing a new methodology of definition and deployment of goals to be applicable already for the year 2021. Talking a little bit about the administrative control board, we also updated a good part of our technological park and we have a whole plan, technology director of information and we are preparing the company for the process now of digital transformation. Also, this board has coordinated and has achieved a great work of contract revision, with a focus on reducing costs and also aligning the interests of our suppliers and service providers with the company's results. Also talking a little bit about the Regulatory, Energy and Commercialization Directorate, all the monitoring governance for the March 2022 tariff review process is already structured and we are already doing 15-year periodic monitoring of this tariff review process 2022, which for the company has already started a long time ago. We have had a very close and relevant monitoring of the regulatory agenda for the company, we have actively participated in public consultations in progress, referring to losses in the risk areas, referring to irrecoverable receipts for the next tariff review, also operational costs, the very question of of PIS-COFINS, which is relevant to the company, we had yesterday the decision of the Supreme Court, which confirms the understanding that Light already had in relation to the unlawful transit obtained by Light in August 2019, and we also have the close monitoring of CP35, which is already in its third phase, which discusses the economic balance of the impacts of the pandemic. And finally, in relation to the Regulatory Directorate of Energy and Commercialization, we have the construction work of the Bypass Tunnel in the Lages Complex, which has already had its environmental licensing completed, it has also had the hiring of the construction consortium and the review of the executive project has already been initiated. So the work is already in progress and we intend to build this Bypass Tunnel In 2023, last year, we obtained the approval of ANEL as a prudent investment, and if the supply of light energy is not renewed, light energy will have the right to the identification of all non-depreciated value. Finally, I would now like to give the floor to Thiago Gutti, the company's commercial director, who will make the presentation also of all the improvement and the dynamics that the commercial board has made over the last four months.

Thiago, please. Good afternoon. First, making a return, a rescue of what was talked about the loss result of the first quarter of 2021. I think the highlight was the effect of the temperature and the unpaid. Con relação ao estoque de cortados, efetivamente, nós tivemos um reflexo pelo aumento do volume de corte a partir do final do ano passado, para que a gente pudesse combater, trazer inadimplência para um patamar mais razoável. Isso pressionou o aumento do estoque de cortados até o final do ano passado, início desse ano, mas já conseguimos reduzir esse estoque. Ele começou o ano com R$ 480 mil, cut clients, closed the quarter with 476,000 and we are already advancing in April and May for a reduction of these cut stocks. It is also important to say that the effect of this was a smaller increase in energy in this initiative, which was partially compensated with a greater increase in traditional energy recovery actions. This is an important process for the company that we will continue to improve, including to bring a profile of collection associated with the cut-off regularization initiative in a more sustainable way. So we believe that throughout the year, even with the intensification of the cut-off and combat initiatives, we can bring the cut-off stock to a lower level, and increasing this energy with this initiative. Regarding the company's loss strategy, it is important to emphasize that our strategy is based on a sustainable energy increase and on the use of the energy recovery process, the energy retroactive, the consumption, which is also associated with a collection that is good for us to be able to reduce the incorporation of the PDD, the PCLD. So, this action to combat losses is a structural action and that, over time, we must see the reflection in the company's results. Unlike the collection process, in which we have already been able to adopt quick measures, and change of management of the collection process and bringing the best profile in the collection already at the beginning of the year. Regarding the structural actions of increasing energy that will come over time, it is important to highlight some movements that we have already done, such as the incorporation of professionals with high experience in the fight against losses, training of practically all the team of the field company in the identification of a series of frauds that were not identified before. We also reviewed the contract of the partner companies and even the management of the own teams with a significant increase in productivity. We started a normalization work of clandestine clients that should take up a larger volume in the coming months. We reviewed the process of network shielding, which is a process that already existed in the company, its effectiveness was still limited. So, in the first review of the constructive process of this shielding, we have already managed, in the circuits that we operate, to reduce a loss that in the first shielding had reached 40% in critical areas and now they can reach the 7% range. This is a structural process that requires investment and that we had to, at the first moment, now at the beginning of 2021, calibrate the execution and also the acquisition of some equipment so that the shielding was effective. And we see now in the sequence a series of actions that will demand a more just structure so that we can work on strengthening the company's park, thus avoiding access to new fraudsters. Examples are the replacement of obsolete meters. Today, the company has a park of about 900,000 obsolete meters that generate, from easier access to fraud, even to an administrative loss. We have already mapped all this park, we are going to insert in our program an acceleration in the substitution of these meters. Also the implementation of a measurement balance that had operation problems that we have already put to work and acting strongly on administrative losses in the management process, both of the telemetry as in conventional reading, already in the first quarter, reducing the volume of non-read clients in a significant way and also in the reduction of reading errors. In addition, we are working hard on structuring and retrofitting the telemetry park. Today we have 200,000 telemetry meters, which are also obsolete and in which we need to do the retrofit. Finally, I gave some examples of structuring measures that we understand that the medium-term strategy will bring more energy increases and the natural process of fraud identification inspections will have to be calibrated and has been calibrated with a collection strategy. So, one of the works of the commercial directives was to integrate the poverty plan with the loss-fighting plan, so that we could consider the customer's payment capacity to the energy recovery process and the volume or the amount of retroactive months that we could apply to the customer's payment profile. So, this is important. So that not only do we bring a sustainable energy recovery, but that the collection of the energy recovery process increasingly reaches a higher rate, also helping us in reducing the PCLB. Commenting a little more on this in detail, regarding the collection structure, we did a review of the company's collection management, We implemented new selection tools and the work of the collection rule. We have already implemented a cognitive URA for the collection of our clients. We are working on a series of other negotiation initiatives so that we can make a collection, both from an administrative point of view or even from the execution of the teams making the cut. Important, this operational work here will also help in the reduction of cut-off stocks, considering that our volume of relegation for each cut executed was lower than the market practiced, in the 60% range, and with the review of the contracts and the management of the contracts, we have already managed to reach this value to the next 100%. This helps us to pressure less the stock of cut-offs. Finally, a structuring action in relation to the communities, which we also understand that the focus will be the increase in energy and not the recovery, so that, in a sustainable way, we can bring losses to a better level, but with an increase in energy. We have already started the approach with 180 community leaders in a process of with the communities, establishing a broad communication channel, creating a management of communities and a dedicated structure of social managers, in which we can establish a better interlocution with the communities. We started our project with four communities, the community of Babilônia, Ladeira dos Tabajaras, Chapéu Mangueira and Pilar, already establishing visits to the locations, mapping the clients that are now clandestine, so that we can make a comparison, a registration survey. We started the communication process to understand what countermeasures we can make using the resources that are already approved for energy efficiency and research and development, and we are also articulating with the stakeholders whether private or public, so that we can also give an adequate equation to the issue of payment, of the payment capacity of these communities. I would like to highlight that we are very excited about this initiative, the response of the communities, although it is structural, has been very positive. Other communities have sought us out for this work that we started, already wanting that we regularize some units even before the project is 100% structured. The idea is that we pilot these four communities so that we can affect the gains, adjust possible opportunities for improvement and then be able to scale this for 2022 and in the coming years. and certainly also expand the communication process to increase the number of normalizations of these clients in these communities. And the last line, also structural, is the investment in technology. We have already started the use of analytical tools to help us in the fight against inadimplency. We have a structured project of a system for the management of field staff, a market solution, well positioned in the evaluation, which will give us a lot of efficiency in the management of field teams. So our project has already started and we must complete it by the end of the year in the commercial area and by the beginning of the year in the technical area. Also important, once again, in the line that the fight against losses involves the entire company, we are working hard on customer service, considering that, many times, due to a lack of connection in service with the company, the customer can be accessed there to make a fraud or even to make a clandestine connection. So, more than ever, considering the LAT market, we need to have an agile, digital and simple service that facilitates the interaction with the client. So we started a revision project of all the service flows of the company and digitization of these flows throughout 2021, in the most important flows, and continuing this project to 2022, the project we call Atende Resolve. e também o investimento em tecnologia para que a gente amplie ainda mais o uso de analytics na área comercial. Com relação ao parque de telemedição, também temos grandes oportunidades no uso das informações para nos direcionar ao combate às fraudes. Estamos fazendo isso e já estamos colhendo fruto ainda no primeiro trimestre de 2021. Finalizando, Summing up the commercial strategy, in addition to the operational management and revision of the management process of the entire company, which Roberto Barroso commented on, in all areas of the company, the commercial area has been working in a structural way to increase the increase in energy and recover energy in a sustainable way, also helping a sustainable collection curve with a reduction in the PCLD. Our expectation is that this year we already have a result in terms of collection of the PCLD that is very significant and that in the fight against losses we begin to see the effect of these structural measures. I will now pass it to Rodrigo.

Thank you, Thiago. Well, now we are going to start our session of questions and answers. Como o habitual, aqueles que desejarem fazer uma pergunta, por favor, utilizem o recurso de Raise Hand, que está localizado na parte inferior da tela, para que seu microfone seja habilitado. Também será possível enviar perguntas escritas pelo botão Q&A, localizado na parte inferior da tela, e uma vez recebida a pergunta, nós iremos responder ao vivo aqui. Starting here with André Sampaio, from Banco Santander. André, you can speak now, please.

Good afternoon, guys. I would like to ask you some questions. I think the first question would be related to the issue of ICMS at the Piscofins database. We had the decision of the STF yesterday and I would like to hear a little bit from you in more detail, if you can pass on some new information. If you think something has changed, if you think it is feasible to increase the value for the outstanding in the grade, for example. We heard recently with CPFL that it would not be feasible if it had already passed the trial. So if you could comment on that, I think it would be important. And the second question I have, in relation to a graph that you put in the release, was a graph that caught my attention, which was the level of energy price, of energy sale. Then I was in doubt if this price of sale here, it would be exclusively for the commercializer, or would it really be for the entire GT business, let's say.

Perfect, André. Thank you for the two questions. First, regarding the question about yesterday's decision of the STF. First of all, we are waiting for the publication of the decision. We followed the votes, we already know the result, but it is super important for us to wait for the publication of the decision. We will evaluate it together with our lawyers. Patrons of the process, for us to evaluate if there would be any kind of change in the ICMS paid for the ICMS highlighted, even highlighting that the transit decision in favor of Light, in the specific case of Light, mentioned that we obtained the favorable decision regarding the paid ICMS. So, we don't have that answer now, we will need to analyze more carefully, not only the decision, but to analyze our specific case. The most important, effectively, is that we had a very high confidence that it would be a completely illogical decision if the modulation changed the decisions already passed in the court in a negative way. So we understand that this was a positive decision of the STF, the removal of any kind of discussion to change the cause already effectively judged. In relation to the price chart of the energy price, this was even a demand that we had from several investors in relation to our disclosure, this is the price current in the January 2021 database, the contracts are already at the end of the Light Group for the final customers, so you will get there, it would be the Lightcom contract, para os clientes finais. Então, ali não tem transfer pricing da Light Energia para a Lightcom, já é efetivamente o preço final, data base de janeiro de 2021. E agora, a partir de todos os próximos releases, a gente vai manter essa informação atualizada para o mercado, é uma forma que o mercado consegue agora já ter qual que é o preço médio da carteira já vendida da Lightcom, consolidado.

Thank you, Barroso.

Thank you, Andrea. Now, I'll pass the floor to Marcelo Sá, from Itaú BBR. Marcelo, you can continue, please.

Hi, everyone. Thank you for the call. I have a few questions. First, regarding the loss, I think what also drew attention this quarter was the increase in loss in the good area. You explained some reasons for the increase in loss, but I think the magnitude in gigawatts per hour impressed. There was a lot of reclassification that made this mix change so much. How can you explain this great difference that there was of worsening in the good area and in the risk area? That's the first question. And then looking at the part of the tariff review, I remember that in previous conversations that we had with the company, part of the lawsuit that Light would have with the regulator would be to try to recognize, I don't know, a large part of the loss in the risk area, and maybe a lower loss level for the good area to have this separation to be able to define what would be the new regulatory loss. I wanted to know if this type of conversation is advancing with the regulator, Do you see the possibility of having a big reduction in the gap? Because today, looking at the reported number, you already have a gap of 800 points of loss. And then I wanted to understand what it could be looking at the universe a little slower, longer, sorry, at a more normalized level.

Thank you. Perfect, Marcel. Thank you for both questions. Regarding the elevation of losses in the good area, in the conventional treatment area, The main reason is actually in those three lines that we highlighted. The main volume related to the 555 GB of increase in the quarter was in relation to temperature, so we would say that around 300 GB of this elevation is related to temperature and mainly in conventional treatment areas. 150 GB, I think this is important to highlight, I don't know if this was actually clear, it impacted 95% by our estimate, it impacted the conventional treatment area, but it will be factored now in April in the conventional treatment area itself, so we expect a reduction in the volume of losses in the conventional area related to this energy not earned in March due to the effect of the reading calendar, but it will be effectively earned in April and will positively impact, let's say, in April in the area of conventional treatment itself. And as the previous loss plan was basically focused on the areas of conventional treatment, and as Thiago explained now, there was a whole re-planning and a very large focus now on structuring the new action by the Commercial Directorate to combat losses, there was a reduction of 120 GB in the management of cut-off stocks, which even, as... the previous fight was only in the conventional area, when you look at it quarter by quarter and it has 120 GB less, this impact is also all in the conventional area. What happened in migration between customers from the special treatment area to the conventional treatment area, the impact is limited, there were 17,000 clients transferred, as we always comment with the market, we reclassify once a year the clients from the conventional treatment area to special treatment or from special treatment to conventional treatment. Just to recap, at the end of 2019, there were around 600,000 clients in the special treatment area, this number went up a lot in 2020, sorry, from 2018 to 2019, went from 600 to 704,000 customers, and now, from 2019 to the end of 2020, it went from 704,000 to 653,000, with 17,000 being reclassified to the conventional treatment area, and approximately 30,000 customers, in fact, disconnected from the Light network. So, today, we have active clients registered as a special treatment area, 653,000 clients, December 2020 database. In relation to the discussions with ANEL, Light made the contributions within the public audience, which is CP29, which is the CP that deals with the repayment of losses in the rate. For the next tariff review, within the methodology, there are two types of treatment. It would be conventional treatment, which is by the complexity ranking. In the previous methodology, Light was the second most complex distributor, behind only the SELPA. This complexity ranking is now being updated and has the alternative methodology, which is to have a specific loss, as you mentioned, for the risk areas and a loss a little lower than a complete area, if you actually separate the risk area from the conventional area. Light has already had meetings with some of the directors of ANEL and with all its advisors to present the contributions that the company has made, and we have followed this work of discussing with responsible superintendents and now we are already with agendas being marked with the other directors so that we have the opportunity to present our contributions. However, ANEL is still discussing, we don't have any news regarding the agency's decision, because it is still under construction and the companies are at this moment, have already made contributions and are eventually making some presentations regarding the material that was presented as a contribution.

Let me just confirm if I understood correctly, because I thought that this issue of the division of good and bad areas, risk areas, would be something that would be discussed more in the specific scope of Light's tariff review in 2022, and that now this discussion that was in the CP was more for conventional treatment, some kind of change in methodology in conventional treatment. Apparently, this CP may have a conclusion for both situations. So, maybe we end up having a news regarding what would be the level of the loss of Light even before 2022. Is that correct? Or, in fact, will a methodology be made and the final outcome of this methodology, we will only know in the specific review of each company?

No, your perception is completely correct, Marcelo. Just to remind us, in the 2017 tariff review, Light had the loss methodology applied exactly as the model was planned at the time. The only exception was the cap of the most complex distributor, because there was no output of the model, and Light's 3606 was exactly the output of the model. We had the case of Enel Rio, which had a different treatment for the losses in relation to the anticipation of the tariff review. On the other hand, Enel Rio signed an additive to the concession contract, just as Light signed in 2017. And Anel brought a big advance, which was, in this CP29, two models were discussed. The conventional model, let's say, and even for the agency not to do something totally specific for each distributor, the agency itself already proposed an alternative model that would treat those distributors who were in risk areas in a special way and would apply the model. So, Light made contributions in the sense of improving the methodology already proposed by the regulator. And then, as you said, if this methodology is approved now, during the second semester, for example, this year, the company and the market could already make their estimates of how much the model's output would be even before March 2022. Of course.

Perfect. Thank you.

Thank you, Marcelo. Relembrando, aqueles que desejarem fazer uma pergunta, por favor, usem o recurso de Raise Hand para que a gente possa abrir o microfone, ou então aqueles que preferirem fazer de maneira escrita, utilize o botão Q&A para que a gente possa responder a sua pergunta ao vivo. Passando agora a palavra aqui para o Wellington Center.

Wellington, pode prosseguir, por favor. Wellington, I think your microphone is in the world.

Well, remembering once again, those who wish to ask a question, please, that use a RACE HAND resource or Q&A. Passing the word now to Henrique Peretti, JP Morgan analyst. Henrique, you can continue, please.

Thank you, Rodrigo. I wanted to ask a question about demand. So we saw that even with the help of temperatures, demand fell in the first quarter. I would like to hear from you if you already have It's a perception for April and May, for us to have an idea of how it's evolving. And the second question would be about the sensitivity to the rate, right? Because if the ring ends up raising the rate loss allowance, I don't know, we don't know if it's going to be... 37, 38, it may be that it will continue to be flat, but each one or two percentage points will have an impact on the rate. Do you believe that the positive impact on the increase in loss coverage would compensate the effect that this would have on an even greater incentive for loss, an even greater incentive for energy efficiency and also a drop in consumption? Because Light already has one of the highest rates in Brazil. And the second point is that, at this moment, 58% of low retention is loss. So, you're basically telling the population that 50% has to subsidize the other 50% that don't pay. So, I would like to hear from you if this strategy would actually be a very significant increase in the coverage of losses and if this could have some negative collateral effect on the issue of collection and also losses in the future. Thank you.

Henrique, thank you for both questions. First, regarding the demand, We still don't have a clear picture of how it will perform in the second quarter of this year. Remembering that the base of last year, the second quarter, was the quarter most impacted by the pandemic. We had now, closing the first quarter of this year, the 12 months effectively impacted by the pandemic. We have seen a positive recovery of the industrial segment and the residential segment. This has been coming as a positive recovery since the third quarter of last year. the segment of public power, of concessionaires, when we look at the metro and train segment here in the metropolitan region of Rio de Janeiro, there has still been a slow recovery. even because it is a sector that has not had any kind of help so far from the government itself or any kind of subsidy to recover from the impacts suffered by the pandemic, and mainly the commercial segment, which we ended up seeing in the first quarter of this year, a series of restrictive measures throughout the months, mainly in February and March, but we have already observed relief in these restrictive measures, even with the progress of vaccination now in the months of April and May. If we have a greater regularity of the vaccines and we can have these restrictions of circulation being more relaxed now over the next few months, we expect that we get a recovery of the commercial segment at a better speed than we observed over the last few quarters. So, we hope that we have a second quarter more positive from the point of view of demand than the first quarter of this year, since we have seen some positive signs. However, there is still half left, do segundo trimestre e caso a gente tem algum tipo de medidas restritivas mais fortes, essa expectativa que a gente está aqui pode não se concretizar. Em relação à questão da tarifa, a gente até fez questão de divulgar, assim que a gente teve a aprovação da ANEL no dia 9 de março, para o reajuste tarifário desse ano, within the composition of the tariff, every R$ 100 of the energy tariff of Light, only R$ 15.2 stays with the company. And as you well observed, and Marcelo himself also said just now, today we already have 8 percentage points, practically, of gap between the loss that is inserted within the tariff of Light and the loss effectively incurred in the last 12 months reported, which means that if the agency have an understanding that, effectively, the complexity index of the Light concession has deteriorated over the last five years, and that the fair rate is a loss repasse above 36.06, our understanding, and even based on what the regulator has done with numerous efforts to reduce the costs of of transmission, which was the refining of the transmission costs, it may be that we have a fair repassage in the rate in March 2022, but that the perception for the consumer is not even an increase in the rate, because the regulator has already effectively managed to implement a series of measures that reduce charges and energy purchase costs like the Itaipu dollar, for example, which was one of the measures that the regulator managed to advance over the last month, and the transmission refueling itself. So, we understand that having the right recognition in the loss rate would not generate a disincentive to the consumer, because it would have a relevant impact on the rate. Our understanding is that this impact for the consumer should not be relevant, since today only 15.2% of the rate is the component that fits the company. To make all your investment in distribution, to cover the regulatory depreciation, to cover the distributor's WOC, to cover the operational costs and the loss review itself. So, today, Light's rate, the part that makes up the distribution cost, is very flat, as we announced on the 9th of March. I don't know if it's clear to you, Henrique.

It's clear, Simba. Thank you very much.

Passing the word now to Matheus Amorim, from NAVE. Matheus, please. Hi, can you hear me?

We can, Matheus. Thank you guys, Barroso, Rodrigo, for the call. There are two questions. The first point I wanted to understand is about the regulatory vision. We know that there is this PL now of GD, which in fact has very little or almost no effect to slow down GD's progress. in the country and, in fact, Light is a concession that has a lot of effect for the fee to be expensive, for people to have a greater purchasing power, right? And, in addition, it was approved yesterday also a substitute of a law project that basically has the objective of taking the resources of this MSB Piscofins and use it to be able to is is more pressure from ANEEL to be able to reverse this value for tariff purposes or not. I know that the company has a very strong legal lawsuit to be able to take a relevant part of this for economic purposes for it. So first I wanted to understand these regulatory discussions. And my other second question is, I wanted to understand a little how your vision is now for this year, because the rainy season hasn't come yet, so there is a pressure to increase the rate, with the red flag potentially at level 2, starting in June. There are also discussions about increasing the sectoral costs to connect thermoelectric plants outside the merit order, and also with the economy that doesn't seem to be coming back the way we expected, especially in Rio de Janeiro, when I look at the data. I wanted to understand this side of the challenge, da concessão ao longo desse ano, porque a gente sabe, obviamente, que existe um nível estrutural de perdas e de PDD que vocês imaginam, mas eu queria entender se a conjuntura desse ano permite que os frutos que vocês vão ter desse trabalho que vocês têm desenvolvido já são possíveis de ver esse ano, ou ainda tem alguma barrigada para esperar algo mais para, de repente, início do ano que vem, meio do ano que vem. Obrigado, pessoal, é isso.

Perfect, Matheus. Thank you for all the questions. Let's start talking about this regulatory overview. As I said in the penultimate slide of the presentation, we have had an intense regulatory agenda and we have also had an intense institutional agenda. IPL, DGD, Light, together with all the distributors, have tried to contribute from the point of view of consumer protection. This is an issue that ended up having a side initially and you had a unique discourse. and now we have seen an increase in a slightly more balanced debate. You can clearly see that the debate has two sides and we have tried De fato, caso você não tenha uma regulamentação e uma legislação justa, os consumidores que não migrarem para a AGD poderão ter um incremento tarifário relevante no futuro, uma vez que o subsídio hoje acaba sendo inserido dentro da tarifa. É um assunto que... um ponto de atenção relevante e a gente tem buscado a contribuir para que esse assunto tenha o melhor entendimento for the largest number of possible parliamentarians so that we can have a relevant discussion and that we, if this issue goes to an approval, that it is a balanced approval. So far, in our understanding... has not had a balanced path and would still need, in fact, greater discussion. This is what we have tried to encourage with a relevant institutional agenda, which is the same aspect in relation to the PL yesterday that passed through the Senate, which still has a long path of discussion in the Chamber itself, it can go back to the Senate, so it's a long way where we will also discuss together with all the other distributors who have relevant discussions of Piscofins, who were leaders, and we have seen the regulator also trying to contribute on both fronts. The ring also, in our understanding, expects something always balanced when the issue can impact rates. So, our expectation is that we can move forward with an effectively balanced regulatory agenda. From the point of view of the reservoirs, in fact, the reservoirs are in the worst condition in the last 22 years. Desculpa, na segunda pior condição dos últimos 22 anos, então a situação do ponto de vista de tarifas é uma situação que exige atenção, é um cenário... Indeed, the Brazilian energy matrix today is very different from the past. We had a series of thermals built, the development of the eolic matrix, of the solar itself, so we don't see with concern a situation of rationing. However, the issue of tariff flags is a situation that, effectively, tends to stay at red levels for more months throughout the year. The cost of ESS for distributors also tends to be high, in case you don't have a rainy period anticipated, for example, for September, October, May.

Matheus, I think Barroso had a technical problem with his internet connection. I think we managed to cover a good part of your question. I think maybe 2% is missing. Just a question.

Red is level 1, does level 2 change a lot for you or is it little? It's the rate.

Existe sim um impacto, tá? E o impacto, ele não é considerável, mas ele é de alguma magnitude sim.

Obrigado, pessoal.

Well, guys, I don't think we have any more questions here at Q&A, nor any manifestation of interest in asking questions. We are also here at 1h27. I would like to thank, on behalf of the company, the participation of everyone, and we are available for any clarifications of doubts that all of you have. Thank you very much, and until the next presentation of results.