Companhia Paranaense de Energia (ELPC) Q1 2024 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen. Welcome the video conference of Companhia Paranaense de Energia COPEL to discuss the results of the first quarter of 2024. The video conference is being recorded and the replay can be accessed at the company's website, ri.copel.com. The respective presentation is also available for download. [Operator Instructions] Before proceeding, we stress that forward-looking statements are based on beliefs and assumptions of Copel's management and on information currently available to the company. Forward-looking statements may involve risks and uncertainties as they relates to future events and therefore, depend on circumstances that may or may not occur. Investors, analysts, and journalists consider that events related to the macroeconomic environment, industry conditions, and other factors may cause results to differ materially from those expressed in such forward-looking statements. With us today for this video conference Mr. Daniel Slaviero, CEO of Copel, Mr. Adriano Rudek de Moura, CFO of Copel, as well as officers of the subsidiaries. They will also be available for the Q&A session. I now would like to turn the floor to Mr. Slaviero, who will start the presentation. Please, Mr. Slaviero, the floor is yours.

Good morning, everyone. I would like to thank you very much for being here with us in this videoconference. I would like to start this call in solidarity to the people of Rio Grande do Sul for the unprecedented tragedy that is a strike in the state. We acknowledge the restless work of our colleagues from the industry and also the whole population in the area to overcome this very difficult situation. Now talking about our quarter results, we did have another period of sound achievements, especially the best quarter in the history of our distributing company with 34.4% of efficiency in the last 12 months. Congratulations to Max and the colleagues. This is an amazing result for, this quarter, and Copel distribution and Copel consolidated results. Adjusted EBITDA was BRL 1.4 billion net income, a little over BRL 500 million. Moura will go into the details on these results shortly. And I will be concentrating myself in the status of the changes that are happening in the company since we turned it into a corporation. You have seen, and you're following that up with us that the pillars of this new stage of the company are people, operating efficiency, and capital allocation. And this has been stressed since our roadshow and then Investor Day and I'm going to go into each one of these fronts and what we have been doing in each one of them. In shareholder's meeting of April 22, we have approved one of the most powerful tools to attract and retain talents, the long-term incentive plan. As the name itself says it, this is the best way of aligning the administration's interests, both the objects of value generation in the long-term and especially to foster meritocracy culture and a high-performance culture that is we want to foster that ownership feeling among the employees of the company. This will also allow us to attracting new and needed competencies for the challenges in the industry. I would like to say also that in this meeting, we brought in 2 new members to our Board of Directors, Pedro Sales and Viviane Isabela de Oliveira Martins and also 2 new members for the fiscal Committee. And with time, this will flow to all the other levels of the organization. Operating efficiency, we have seen significant gains for supply, and we move on with our works on ZBB. In the second stage of the ZBB, we will be disclosing the full results also in our Copel Day in November of this year. Now about the energy trading strategy, we were able to see good prices with the market volatility that happened over the first quarter. And we are very much focused and paying attention to new opportunities that might arise in the next few months. But we still have a positive expectation here with about the price recovery, especially starting in 2026 on -- what we saw in the first quarter is a clear and new reality that we'll be facing in this industry with a significant increase of price volatility, and it will be in the hands of companies to seize these moments to then execute their strategies. And we are going to be faithful and consistent to this strategy and the long-term plans for the company for value generation, of course. Now going into digitization. In March, we closed a deal with Google, and we'll be migrating our IT services to Google Cloud. This is a strategic measure to scale gains by the means of data analysis tools, AI, machine learning, allowing us to have more competitiveness and agility in developing our businesses. And now to conclude, with a pillar of capital allocation, just yesterday we have communicated the market the beginning of the stage of non-binding proposals to -- for divestments of small-sized generation assets. We have 13 of them totaling 118 and 119 megawatts. The process is part of the value generation strategy of Copel, and it aims to improve operating efficiency of GET portfolio as well as the optimization of capital allocation and will also allow us to reuse qualified professionals, trained professionals that will be then reallocated to different challenges, considering also the ones that will be leaving the company in the voluntary severance program. And what is most important here in this initiative more than the money itself in terms of the disposal of these assets that shows the consistency of Copel's execution according to its commitments and its plans and the commitment with investors. And this is what we have said in our Investors Day. And what we see that -- what's happening over the months prove that we have been very much consistent, focused and disciplined in the execution of value generation. And this initiative will allow Copel to dedicate itself to its major assets, major generating plants. I also want to provide you with an update about the divestment process for Compagas. We have handed the deadline to receive proposals. Now we are in the stage of analyzing a negotiation of these proposals. And obviously, for confidentiality issues, we cannot go into the details here. But we are really now in this stage of analyzing and negotiating these proposals. It's important to stress what we have already said in our prior call. The priority is not the deadline or the time, but rather the maximization of value of a premium asset, a renewed concession up to 2054, and the fourth largest economy in the country, which is Parana. So we want to have the right value for this asset. As far as innovation is concerned, our corporate venture capital fund has done its second investment now in the start-up NextronEnergia, a marketplace with integration between distributed generation and consumers that simplifies the access to clean energy by using a digital platform and also connects consumers to the renewable energy project by a subscription program. We are very excited about the synergies that we can have between the trading company of Copel and Nextron. This is a partnership that Copel is really dedicated to. And to conclude my presentation here, we are very excited about these first months of 2024. We know that we are in the right direction to deliver the promised results to all Copel's stakeholders. Now Moura will give you more details on the numbers for the first quarter, and then we'll be back in the Q&A session.

Thank you, Daniel. Good morning, everyone. Thank you very much for participating here in this video conference. I also would like to show solidarity to the people of Rio Grande do Sul for the devastating impact of that tragedy that we are seeing there. Now talking about the quarterly results, we are very happy to deliver another quarter with sound financial results, robust cash generation and consistent improvements in operating efficiency in all our challenges despite of the challenges that the industry is facing with a typical climatic events, volatility in energy prices, restrictions and the wind farms dispatches, that is, all challenges that are being mitigated here at Copel with an efficient execution in our value generation plan, as Daniel has already mentioned. Now the financial KPIs, in a consolidated fashion the adjusted EBITDA is in line with our expectations. Here, we had an exceptional result of Copel Dis, which hit a record of BRL 636 million in the quarter, 25% higher than the first quarter of '23 that ended up offsetting partially the reduction of GET's results, which was affected by lower energy prices and also the frustration of wind farms generation, including the dispatch restrictions by ONS. And despite of the EBITDA reduction, the net income in comparison to the prior quarter was also benefited by the improvement in the net financial result of over BRL 60 million because of the maintenance of -- we maintained resources in the primary offer of BRL 2 billion that are awaiting payment of concession -- renewal concession of plans submitted for the second half of the year and also a reduction of interest and inflation and there was also robust operating cash generation of over BRL 1.3 billion. Excluding non-recurring payment, we would have done BRL 336 million of the first part of the arbitration agreement negotiated in January of this year. And part of this improvement, over BRL 300 million comes from the positive variation of sectoral balances of Copel Dis, thanks to the improvement in energy consumption in the first quarter of 2024.Next page, non-recurring items here. We do not have anything relevant about the first quarter. Remember that the results we show do not include discontinued operations of UEGA and Compagas, both in the results as well as in the balance sheet because they are posted as assets for sale once they are already discontinued. So EBITDA -- adjusted EBITDA per business here, we see the contribution of each one of the businesses in comparison to the first quarter of 2023. DIS grew 25%, BRL 120 million higher, reaching BRL 636 million, GET going down to BRL 129 million, 23% reduction, both in the first quarter with BRL 770 million. And the main highlight here of -- starting by Dis, the regulatory efficiency was of over 34%. The grid market grew over 10%, not including MMGD, which gets close to 8%. Also, there was a tariff adjustment of June of last year with an average effect and the Parcel B revenue of approximately 4%. ADA went back to the normal levels of 0.6%, 0.7% over total revenue. Remember, in the first quarter of last year, there was a reverse of BRL 15 million in the total ADA because of the DIS connections resuming in the post-pandemic period, which were restricted by state law. And this was extended only at the end of 2022.And the electric system maintenance cost are -- is still being impacted by atypical climatic events. RR level has increased more than 20% compared to 1Q '23. We have almost BRL 15 million more, but we are able to maintain the right level of DEC and FEC, and here, we are following that up, up and closely and checking how we can mitigate that impact. At GET, as I said, we have a performance reduction that was already expected, especially because of the contracting level. And also, these are the main highlights here, the average price reduction and energy sale of over 20% in the free market and the end of some regulated environment contracts, specifically over the energy. And the comparison of the quarters, the remuneration on assets and the transmission contracts were negatively impacted by the IPCA reduction, which affects the comparison of assets that are in the GET and also assets that are in our equity. The wind farm frustration of BRL 50 million, especially because of the provisioning are coming from greater operative restriction of transmission. And also, we have fully integrated operations of acquisitions of wind farms Aventura and Santa Rosa and Novo Mundo. For PMSO, I already mentioned some components as costs of electric system maintenance at DIS, which increased 20%, ADA with a reversal of BRL 15 million in the first quarter. Here, we see a variation quarter-on-quarter of BRL 56 million and part of this increase of BRL 97 million is posted as a provision and reversal. In comparison of PMSO that was reported, there was a slight reduction of 1.6%, including indemnity that was paid of BRL 138 million. That is non-recurring because of the additional 1/3 for vacation paid in January of 2023. And therefore, this benefit has been excluded from the salary base starting last year, and we start to see a reduction during this year. But if we do not consider these non-recurring items and provisions and reversals, there was an increase in PMSO of approximately 4% in line [indiscernible] excluding this indemnity impact, there was a salary adjustment in the ACT starting in October of 4.5%, which was partially offset by the reduction of 160 people that left since the first quarter of '23. Out of those 67 are already our voluntary severance program anticipated, which is counting on more than 1,400 people leaving up to August 14. Now in terms of cost reductions -- reduction plan, we are already at full speed at our ZBB second stage and we had the kickoff in February of this year. The company is fully engaged in this work. We estimate its conclusion in October of this year and eventual efficiency improvements might happen, and they should be approved and integrated to 2025 budget and obviously informed to the market in the next Copel Day. Now about the initiatives to cost reduction and also improvements and efficiency in the first stage of ZBB, which we disclosed at Copel Day last year, they're already part of the individual targets of ICP, and they are being monitored. Now moving on the investments program. We have a total amount forecasted of BRL 2.4 billion with total folks and revealing RAB for Copel Dis starting in June of 2026. Both the physical and the financial plans are moving forward. And this projection for 2024, we are not including the concession bonus for the beginning of the second half, which is of approximately BRL 3.7 billion. And this to be updated by Selic since January '24 up to payment date. Now turning to the end of my presentation. We maintain the leverage at the level of 2x, especially the funds of BRL 2 billion and the primary offering that are available in cash for the concession bonus payment, as we mentioned. Naturally, the concession payment and the CapEx level that have been approved for 2024 as well as the investment expectation for 2025, we focus in reviewing our RAB at DIS at the level of leverage should increase to 2.5 and 3. And now concluding, I would like to remind you that in the last shareholders' meeting, we have approved the dividends distribution in line with our policies and the payment of a remaining balance of BRL 632 million, which will be paid off in June. Thank you very much for your participation, and we can now start the Q&A session.

[Operator Instructions] The first question is from Ms. Maria Carolina Carneiro from Banco Safra.

We cannot hear you Carol. I think we may turn to the next question, and we'll come back to her later.

Our next question is from Mr. Andre Sampaio from Banco Santander.

I have two questions. If you may start talking about DEC and FEC, we see that they are not as good. And I would like to understand what is the plan for new climatic events, that more complex ones, so that this won't happen again? And really -- and also stress after the 5 years of the contract, how the new rules work after the fifth year in regards to the process and just to have that in mind. And second, dividends, if you plan to switch to change anything in the policy?

Andre, I will start by the second question, and then Mauricio you can talk about DEC or ELC. Well, dividends, Andre, we move on with the payout line following our policies with a payout of 50% under normal and regular conditions. But if any extraordinary effects, especially regarding divestments, if that happens, we'll obviously will evaluate any extraordinary payments as our policies already allow it. So we are following the original plan and over 2024 anything deeper regarding the policies or a different capital structure that is adequate to this new stage, we intend to have this discussion over the year of 2025.So our policies are very well adjusted. It's very simple and easy to understand and that also allow not only extraordinary payments up to 1.5% of leverage up to 2.7 50% or 25% higher than that. And so extraordinary payments already allow us to have the flexibility in a way that the company does not have the inadequate structures. Today, with this leverage close to 2 -- is not really real one because we have BRL 2 billion more in the follow-on and also the concession bonus payment, and we will have another funding close to BRL 2 billion that we should be concluding in the beginning of the second half of the year. So I think this allows us to have flexibility according to the right levels to review and evaluate the possibility of extraordinary payments. Now about DEC or ELC in the -- since the end of last year, in the last quarter of 2023 and the first quarter of 2024, we have seen the effect of ANEEL more intense storms, more frequent storms, heat waves. This has affected the ELC and the EFC of all distributing companies in Brazil, but Copel is really following all the roles very much abiding by the limits established by ANEEL. We are always looking for an excellent -- excellence standard in these climatic events, catering to clients, and also to follow up the extraordinary growth that we see in Parana. We grew 5.8% in consolidated data here on the GDP. This is the double of the average. And Copel has executing all its investment in the past, and this is already bringing us positive results in the operation. So Max, if you can go into the details on what we have been doing in the ELC and EFC area and what do we have around that for concession contracts? Murício Schulman: I think Daniel said it well. We are having a hard time with the climatic problems, not only here, but also you see in Rio Grande do Sul what is happening there. This is also affecting us by the end of last year. And in this first quarter, we are facing atypical number of storms and this has affected these indexes. To react to that, we have this main investment that we are doing and the grid. We are reassessing all of these issues, analyzing all the areas that were hit by these storms in a way to have a more robust grid. We are looking for new options for supply so that the places that have been affected are not as damaged. And also, we are working hard for preventive maintenance. This is reflecting in our expenses in the first quarter, and we are trying to significantly increase preventive maintenance to avoid problems. And a special highlight here has to do with plant suppression, just cutting trees and trying to replace trees that are already too old and the trees that could fall over the grid. And also in the rural area, we are removing plants under the transmission lines. So we are focusing in preventing problems to happen. And therefore -- and also if they happen, we can quickly react. I can tell you that Copel is very much prepared to rebuild the networks if anything happens. Now in the past, we did have this automatic exploration, but now we no longer have that. And we are working with the regulating agency to see what are the penalties, but we do not -- no longer have that with the first cycle. So from now on, we have to follow all the discussion process with the regulatory agency, but we do not have the exploration process anymore. But to conclude, Copel has its renewed contract, so all the rules are already stated. So we are far from this macro discussion, but quality is a priority. So regardless, if the contract is a -- an older one or if it's a contract for new distributing companies, quality, abiding by the rules in the company, not only in the global ELC or EFC, but also to look at the whole picture and to be within the rules and the limits, this is our main priority here.

Our next question is from Mr. Daniel Travitzky from Banco Safra.

I also have 2 questions. Well, starting on energy trading, we saw that the company signed contracts at very interesting prices in the quarter. I would like to understand your forward perspective. And if you can also describe the dynamics in this quarter that resulted in these interesting prices. And my second question is about the divestments in the smaller plants. I would like to understand, well, first your timing, and I would like to know for the future, what is under the radar for the divestment in addition to Compagas that you already mentioned, but what else would be on the company's focus.

In the trading, what we have seen in this first quarter is what the sector -- the industry should have started seeing since 2021. And now more recently, because of the climatic conditions and also a strong presence of the intermittent sources and also wind and solar. Therefore, we have price volatility. We have had BRL 160 million, BRL 170 million for the subsequent years. You have seen that we were able to have over 100 megawatts and -- so that we could sign some contracts in that range. But this is our understanding, we want to have a -- an allocation of portfolio and risk. We do not want to have everything at lower rate. It's not a low rate, but it's not significant either. But we want to watch for the average price because it has a significant impact, of course, and this does have an impact on Copel GET. So this is our perspective in this dry period. The prices will be moving sideways. We will be executing our strategy for this period in a conservative fashion, but we'll be active in the market as well, especially when our client's portfolio allows it because it's important that we -- I think it's important to work proactively in serving our clients. So we will see now what's going to happen in the next well -- period and the La Nina intensity. This will be important so that the prices levels should be consolidated. But considering what we have already seen in the period and how the models will work the volatility for 2025 and 2026, I am sure that this will be more present, especially because we have seen less rain in the past few months and also a high probability that a rainfall might not be at the needed levels for the reservoirs. And so this is something that we are mindful of. So I will talk a little bit about the divestments, but if anyone has anything else to comment, feel free to do so. Well, the divestments are more of an economic rationale, but -- and they are also an efficiency rationale. So we have small-sized assets, we packed them in clusters, and we are going to the market to execute our strategy to be more efficient and also to better allocate our financial and human resources. So this is a simplification strategy. In another stage, as we said in the Investor Day, and we can evaluate that possibility, possible on crossings of assets or other opportunities that might arise, whether consolidated for us when we already have a major position or even divesting when we have minority conditions here that will depend on the market's dynamics and the opportunities that will arise. This is about the simplification and optimization of our operating structure because a part of these employees are going to be reallocated to large plants. They already know plants they have training so they have the needed competence. And we also have an investment plan and the priority is the capacity auction, the public hearing period ended. And Osorio is very well positioned for a possible second project and Bertol and the whole team of new businesses is in the front line so that we are ready with all the environmental licenses, pre-projects and negotiations with partners and suppliers. [indiscernible] would you like to add anything about the -- that strategy?

No, I should say that we are more optimistic than what we were with the price improvement. And we believe that the perspective is a little bit better than it was in the end of last year. About investments, these are 13 plants, [indiscernible] SHPPs, UHP and also Figueira TPP. And for some of them, we have -- we'll be able to increase efficiency by selling these assets. And a final comment here, Daniel, is that this price perspective, obviously, we work with that with balance, not with euphoria. You see all the projections, the -- an excess of supply, but you have to remember that a year ago, everyone thought that we're going to have the floor price and that -- for renowned competent companies that we would have the floor price up to half of this period. So no one is talking about that anymore. Now we are talking about how much it's going to be and what will the level of prices will be and when they will stabilize. So we had something that was minimally attractive but with this perspective that we mentioned, it will depend on the load and -- or the natural energy inflow and everything else that affects it.

Our next question is from Ms. Maria Carolina Carneiro from Banco Safra.

I would like to know your opinion about the discussion of provisional measure that is moving on in the industry about the possible tariff reduction and how to reach it.

What we know are -- the information that we have is from public data, our evaluation and the best scenario is that this provisional measure will not be approved. It will expire. That's our evaluation, but the Congress has its own dynamics and its own characteristics. I would say that the main objectives that this provisional measure has about everything, it tackles, they will be partially or fully concluded during the working period of this provisional measure. Therefore, we believe this will expire. But all data that we have is the public data, and what we have is a very critical understanding about postponing subsidies. There -- it's not needed for the current moment unnecessary for sources that are already mature. So we cannot pressure tariffs anymore because of subsidies that are not right. And Brazil has shown that this learning whether by wind farms and renewables in GND Brazil has to be very careful when providing subsidies to sources, batteries and so on that we will see in the future, because once you provide a subsidy, once you grant a subsidy, it's very difficult to take it out. And also, we are very careful about what we consider about excessive interference by the National Congress on -- now and things that should be -- on things that should be decided by the regulating agency.

Our next question is from Mr. Henrique Peretti from JPMorgan.

You mentioned that the distributing company closed the first quarter 34% higher than the regulatory EBITDA. I think this is your historical record, and this is in the 12-month view, so this should be inflated by a few quarters. But what would be the recurring level that you see a high performance when we remove the extraordinary volumes?

Very good question and you said it well. This performance is very much related to a growth of 8%, 10% without GND, but 7.9%, basically 8% in consumption. We are working up to the end of the cycle that is 2025 in 12 months, right, with over 20%. At the level that COPEL is and with the level of strategy, efficiency and technology, I think this is a figure that is around 20%. This is the level that we consider to be adequate. Well, and you know it well, it has -- it happened this year after this tariff cycle ends, there -- probably there is a reduction, then we will have a new cycle, a new investment strategy. It will have special dynamics that is still being analyzed and studying here. But we -- it will have -- it's a special characteristic based on the company that had robust investments. So it has an initial drop, but it goes back to increasing. And thanks to the efficiency and competence of our team.

Our next question is from Ms. Luiza Candiota, Itau BBA.

I missed part of the Q&A session, and I don't know if you have already talked about the next capacity auction, but I would like to have an update on the process to know if you believe that it's possible to have this auction in the third quarter at the end of August as forecasted, and which are the main topics still to be developed? And for [indiscernible], which would be the additional estimated CapEx to expand the capacity? And my second question about energy trading, we see that you sold an amount -- a significant amount for '24 and '25 seizing this window of opportunity in the first quarter. And I don't know if you already mentioned, but I would like to have more color on the average price of the contracts, if that was in line with the [indiscernible] that we have seen in this period.

I think we have already talked about the trading. So the highlights of these opportunities are within our strategy. This was a strategy that took advantage of this volatility and price increase, but also aiming at risk mitigation and portfolio. So we still have some vision for '26 on, and we have a moderately optimistic view here. And we had annual sales and also strategies in the beginning of the year and the end of the year. And we can conclude that this was in line with the DIS. And maybe in the afternoon or tomorrow, we can talk to you so that we do not need to go over the strategy all over again. Now about the capacity, we believe that the capacity auction, it should happen in the second half of the year. There is a good chance that it could be postponed in 30 to 60 days, but we do understand that it should happen over the second half of the year, we have a positioned -- the CapEx, we do not have any civil construction works and environmental area is ready, is prepared. We just need minor adjustments. So the CapEx perspective, we are not disclosing that for strategic reasons and it has to do with our competitiveness and our strategy. Number two, about preparations and you can go -- can you go into the details to Luiza and everyone. Well, on April 26, we had the conclusion of the documentation for the public hearing. And so the auction should happen in the second half of the year, maybe September, but it's going to be the second half of 2024. For -- the conditions for Copel to participate in this auction are very good. We already have the environmental license, so that we can move forward with the construction works. So we have the basic project, the ordinance has been already published. So we have everything ready, all the technical and legal conditions to be part of the auction. The commercial deals are being done with the suppliers of turbines for that type of power of 400 megawatts. So we are in very favorable conditions waiting for the auction to be set. And as far as we know, we only have 2 products, wind and thermal -- I'm sorry, also hydro and thermal 2 products. So and -- a good perspective here, and we also have valuations for future capacity auctions and also expansion for capacity and power.

Our next question is from Mr. Gustavo Marcus, investor.

Will Copel increase the generation portfolio for solar and wind energy, reducing the hydro generation.

Gustavo, in the short term, not this year and neither the next one, we do not plan to invest in the expansion in these sources because of energy prices. We are analyzing it but we have no projects, not in the greenfield neither in the ones that we have in the market, none of them meet the returns expected by the company at least in the short and medium term. And medium term, I'm saying here, it's 24 months. On the other hand, we see more and more that the water source is needed as strategic and important for the industry. So we have an agenda for the mid and long-term so that the water source attributes and this capacity auction is a first and initial movement here, but -- and they are crucial to the energy security of the country, both hydro and thermal for our -- and also energy, sustainability and security.So the company is always paying attention to that. Our business is always analyzing it following up the market's movements, checking new opportunities. But I would say that these sources and despite of being important it is strategic or not in our priority. First, we have the capacity auction. Also in the second half of the year, we have -- we will have a transmission auction that might make sense to Copel's strategy considering it will be closed to Parana and south region, but these are opportunities that are still being analyzed here in our internal flow. So our priority now is the execution of value generation strategy to conclude the renewal to deliver the efficiency milestones to work on the divestments, to conclude Compagas, and now these small generation assets. This is our strategic vision. And then with the company then 100% in line in this first stage, will -- it will be able to analyze the allocation. Any company that generates value in a perennial fashion also has to have a very well-balanced and safe strategy, and it has to be very much discipline in its capital allocation.

Our next question is from Mr. Leonardo Gonzaga from BNDES.

I would like to know if you already have a forecast for concession payments. There are discussions about the possibility of tax paying on possible capital gains regarding the renewal of those or this is a topic that is no longer being discussed?

Let's divide here the answer for this question, okay? We'll talk about taxes as well. Well, with the auction capacity that should happen in the beginning of the second half of the year, it's very clear that we will have the renewal contracts signed, so -- around the same date. We are discussing that in the beginning of the second half of the year, we might have the signing of the contract and then the payment. And then, Moura, if you can go into the details on the accounting of that.

Well, we are moving forward on the study of the tax impacts in this concession. We should conclude this work in the next quarter. We are working on a number of possibilities. We have a strong opinion on what would be the best option. We will be checking this in order to conclude the process and present the results to the market in the next quarter.

The Q&A session has ended. Now we would like to turn the floor to Mr. Daniel Slaviero for his final remarks.

I think we tackled all relevant topics in the company, a quarter that is in line with market's expectations. Once again, bringing sound results for Copel Distribution and on the other hand, it's within our perspectives. Now to conclude, I would like to say that we are dedicated to our execution capacity, and we are very much focused in the value leverages, all our internal stakeholders and external stakeholders as well. We are very much excited about this process and the change that the company is going through. The internal opportunities are also great for employees that remain with us. We are having growth and recycling in the company. So I thank you all very much, and we will be moving forward with this perfect execution and our commitment in delivering results and improving Copel's governance. Thank you all very much.

Copel video conference has ended. Thank you all very much for your participation, and have a nice day.