Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Centrais Eletricas Brasileiras SA (EBR, Financial) achieved a 16% reduction in PMSO year-on-year, with a target of BRL6.3 billion in recurring PMSO for the year.
- The company has made significant progress in its ESG agenda, including the sale of thermal units and achieving a golden seal in the GHG protocol.
- EBR successfully incorporated Furnas, simplifying its corporate structure and improving capital efficiency.
- The company reported a strong financial performance with a 9% increase in revenue and a 10% growth in EBITDA year-on-year.
- EBR has a robust cash position, with cash reserves covering almost three years of debt repayment, enhancing financial stability.
Negative Points
- Despite improvements, EBR has not yet reached the profitability and efficiency levels of its peers.
- The company experienced a 31% drop in IFRS-based profit due to adjustments, impacting dividend payments.
- There are ongoing negotiations with unions and the higher court of labor, which could affect cost management.
- EBR faces challenges in managing its liabilities, particularly with the Amazonas Energia provision impacting financial results.
- The company is still in the process of optimizing its trade strategy and customer service structure, which may affect future growth.
Q & A Highlights
Q: Can you elaborate on the credit recognition with Furnas and the hiring strategy that led to a significant increase in volume?
A: Eduardo Haiama, EVP of Finance, explained that the tax credit was not previously booked due to Eletrobras being non-operational. Post-incorporation, there's potential for future use. Ivan de Souza Monteiro, CEO, highlighted the trading strategy focusing on end customers, which led to an increase in customer portfolio and improved margins.
Q: Could you provide details on the agreement with the government and the capacity auction timeline?
A: Ivan de Souza Monteiro stated that negotiations are ongoing with a 45-day extension granted. Elio De Meirelles Wolff, EVP of Strategy and Business Development, mentioned preparations for the capacity auction, awaiting final rules and dates from the ministry.
Q: What is the outlook for investments and EBITDA to free cash flow conversion?
A: Eduardo Haiama emphasized maintaining asset operationality and addressing energy transition opportunities. Elio De Meirelles Wolff added that investments focus on modernization and robust operations, balancing safety and opportunities.
Q: Can you discuss the disposal and swap of assets and the effects of Amazonas on your results?
A: Ivan de Souza Monteiro mentioned ongoing asset transactions without specific details. Eduardo Haiama clarified that Amazonas Energia's risk is transferred to the buyer, affecting the selling price. Elio De Meirelles Wolff noted no current restrictions for capacity reserve projects.
Q: Could you update on negotiations with unions and the impact on costs?
A: Jose Renato Domingues, EVP of People, Management and Culture, stated progress in negotiations with unions and the higher court of labor. Marcelo De Siqueira Freitas, Legal VP, added that agreements are attractive and ongoing efforts aim to finalize them.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
