Release Date: August 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cajuina 2 wind complex with 370 megawatts capacity is fully energized and expected to be fully operational by the end of September.
- AGV VII with 33 megawatts capacity completed work ahead of schedule and began commercial operations.
- Net margin increased by 8% to BRL558 million in Q2 2024 compared to the same period in 2023.
- Average availability of all assets improved by 4 percentage points compared to Q2 2023.
- Successful sale of 100 megawatts average PPA with favorable pricing between BRL185 and BRL206 per megawatt hour for 2024 to 2030.
Negative Points
- Significant curtailment issues, especially in Cajuina and Alto Sertão 2, with curtailment levels 5 times higher than the previous year.
- Adjusted net income reported a loss of BRL104 million in Q2 2024.
- Financial expenses increased by 21% in the quarter, impacting overall financial results.
- Lower cash balance of BRL2.8 billion in June 2024 compared to BRL3.9 billion in June 2023.
- Challenges with wind speed and curtailment affecting wind generation performance.
Q & A Highlights
Q: We've seen a high level of curtailment for wind in the sector. Does the 6.4% curtailment level mentioned consider official data from ANS or your internal data? And what are your expectations for curtailment levels for the rest of the year?
A: The data we presented is from ONS to allow market comparison. Our internal data shows curtailment levels 2.5 times higher than ONS, suggesting a 15% curtailment. For the future, while new transmission lines may reduce curtailment, increasing distributed generation and renewable energy commissioning could offset these gains. We are also involved in legal proceedings to address curtailment discrepancies.
Q: What is the company's position on liquidity for longer-term energy contracts, and is our end involved in decision-making?
A: We see a resumption of liquidity on the purchase side, with customers interested in buying due to lower prices. The market is experiencing increased volatility and risk aversion, prompting customers to secure contracts for future years. Our end is not involved in decision-making; decisions are made by AES based on market conditions and risk-return assessments.
Q: How is AES Brasil managing the energy balance and decision-making in light of the upcoming combination with our end?
A: Until the deal closes, each company manages its portfolio independently. AES Brasil continues to make decisions based on its market vision and risk-return analysis, ensuring the best possible outcomes for its current portfolio.
Q: Can you elaborate on the factors affecting curtailment levels and the process to address discrepancies with ONS?
A: Curtailment levels are influenced by transmission capacity and distributed generation. We are working with ONS to refine curtailment assessments, focusing on operational procedures and data delivery. This includes addressing discrepancies in wind measurement data and improving visibility of data delivery.
Q: What are the financial impacts of curtailment on AES Brasil's operations?
A: Curtailment has significantly impacted our operational margin, particularly in the Cajuina complex. Despite positive contributions from new wind assets and improved availability, curtailment has offset these gains. We are actively working to address these challenges through legal and operational measures.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
