Good morning, everyone. Welcome to the earnings conference call of AES Brasil, referring to the first quarter of 2024. The presentation will be conducted by the company's CEO, Rogério Pereira Jorge, and by the CFO, José Simão, who at the end of the presentation will be available to answer any questions you may have. The highlighted simultaneous translation tool is available at the platform. To access it, please click on the interpretation button at the lower part of the screen and choose the language of your preference. This conference is being recorded and will be available at the investor relations website of the company at www.aesbrasil.com.br, as well as the presentation. We inform that all participants will be in listen-only mode during the presentation, and later there will be a Q&A session when further instructions will be given. Before proceeding, I take this opportunity to reinforce that forward-looking statements are based on the beliefs and assumptions of AES Brasil management and on information currently available to the company. Such statements may involve risks and uncertainties as they refer to future events and depend on circumstances which may or may not occur. Investors, Analysts, and Journalists should take into account that events related to the macroeconomic environment, to the industry, and other factors could cause these results to differ materially from those expressed in such forward-looking statements. We'll begin the presentation, and I turn the floor over to Mr. Rogério Jorge. Mr. Jorge, you may continue. Good morning, everyone. It's a pleasure to be here for one more earnings conference call of AES Brasil. Our CFO, José Simão, will share the presentation with me. We'll also have the presence of other officers of the company to support Simão and me during the Q&A session at the end of the presentation. Starting by slide two, I bring the main highlights that marked the first quarter of this year. I start highlighting the development of the construction of Cajuína 2 and AGV VII. The wind complex Cajuína 2, with 370 MW of installed capacity, is 96% completed in its construction, and only 13 of its 65 turbines are left to become operational, which we expect to happen in the first semester. AGV VII, with 33 MW of installed capacity, is within budget and schedule, with more than 85% progress. In the operational front, we use the scenario of low wind to accelerate the execution of our strategy to recover the availability of assets acquired in the M&A. The result was an evolution in the availability of our assets, with an improvement of 2 percentage points in availability when compared to the first quarter of 2023. We took this movement of hike in energy prices to increase the contract levels of our portfolio. In this quarter, we sold 101 MW average at a higher price than we had in contract on average. We are at a very comfortable level, with the prices above BRL 190 per MWh for next year. In the financial front, I highlight the net margin revenue minus energy costs, which totaled BRL 533 million in the first quarter of 2024. The adjusted EBITDA by non-recurring events amounted to BRL 368 million. Another highlight of the quarter was the debt management. We continue to follow this strategy to obtain long-term financing to replace short-term bridge loans that we got for Cajuína. This movement is lengthening the average price maturity, increasing the exposure of the company to IPCA, which makes natural hedge as the contracts of sales are corrected by the same indicator. Now, moving on to construction, on slide 4, we show the evolution of Cajuína wind complex, with a total of 684 MW of installed capacity in Rio Grande do Norte, divided in two states, two phases: Cajuína 1 and Cajuína 2. Out of 368, 684 MW installed, 610 are in operation. Cajuína 1 construction was completed in the last quarter of 2023, and now is 100% operation and has contributed BRL 20 million in EBITDA and 150 GWh in this quarter. For Cajuína 2, 96% of the construction is completed, including the beginning of operations of the first 52 of the 65 turbines, which total 266 MW of operational capacity. These 52 turbines in operation are linked to substation Caju, which is the same connected to the Cajuína 1. Castanha substation will connect the three remaining turbines that are still in construction and should be energized until the end of the first half of the year. Cajuína 2 will become fully operational in the same period. Now, speaking of Tucano, the complex is located in Bahia and has 322 MW of installed capacity and totally contracted in long-term PPAs up to 2042, with an average term of 17 years. As we already mentioned, we completed the construction of the park or the complex, and we went through a thorough review of turbines to ensure that any issues are identified and corrected before the final go for delivery of the complex. We identified that some turbines were not in agreement with the contracted requirements, and we have six turbines in retrofit process. As the turbines are accepted by AES construction team, they will be under FSA agreement with Siemens Gamesa, with a five-year term extendable for another five years. This contract establishes a minimum availability for the turbines in operation: 97% for the first year and 98% for following years. Whatever is below this availability will be refunded by the vendor. I would like to highlight the commitment of our team to ensure that this equipment operates in complete conformity to our excellence standards, ensuring efficiency and reliability of Tucano in the future. Our final highlight is the AGV VII with 33 MW of installed capacity, which accounts for 8 MW average of generation. It's being constructed in an area close to the solar complex of Boa Hora and Água Vermelha in the state of São Paulo. The construction is within budget and schedule, with more than 85% completed. All the modules and trackers have been assembled, and it is expected to be fully operational in the third quarter of 2024. When AGV VII becomes operational, AES Brasil completes the obligation of expansion in the state of São Paulo, which dates back to the privatization of hydropower plants. Now, moving on to the operational part, I'll start on slide six, and we show the performance of winds in Brazil in the first three months of 2024. This has been a very bad quarter in terms of wind for the whole country, except for the Southern region. In Cassino, with 664 MW of installed capacity in Rio Grande do Sul, generated 13% above the same period of 2023. However, the Northeast of the country, where the other wind parks are located, had very low winds, mainly because of the high volume of rainfall in the region. Just for you to have an idea, Rio Grande do Norte, where Cajuína, Ventos, and Salinas are located, rain knocked down or caused problems for two times in the road that leads to Lajes, making it difficult to reach Cajuína. On the right side of the slide, we show three maps of Brazil showing the wind behavior in the first quarter of 2024, comparing the average wind between 1991 and 2020. January, February, and March, El Niño prevailed in the region where our complexes are located: [Foreign language], which means that in these three months, winds were 15% lower than the historical average. This had a direct influence in the wind generation, with the highest impact in Alto Sertão 2 in Bahia, 40% below the volume generated in the first quarter of 2023, and Salinas, which generated 33% less. Now, looking to the left side of the slide, we show the average capacity factor for wind generation in the Northeast, which is the generation of average megawatts divided by installed power in megawatts per quarter and per year. We can clearly see that the first quarter of 2024 was the worst in the last four years, reaching a capacity factor of only 28% there. Moving to slide seven, we see the development of the turnaround of wind parks that we acquired since 2021 in the M&A process. Our strategy to acquire parks with operational challenges is, as if we add them to our portfolio, we use the experience we have to dedicate efforts to recover them in the first years in order to restore the availability levels that are expected. The slide brings the evolution of availability per wind complex since the acquisition of each one of them. At Ventos, with 187 MW, we improved 4 percentage points of availability. In addition, the end of O&M contract of two out of three complexes that composed the park, with the completion of the internalization expected for the second quarter of 2024. Mandacaru and Salinas were acquired from Cubico in April 2021, where we recovered 7 percentage points in availability, reaching 87% in the quarter. In Ventos do Araripe, with 110 MW, the average availability in the first quarter was influenced by the exit of one out of two transformers of the park, which limited its maximum availability at 55%. That's why you see the average availability of 52% in the first quarter of 2024. In March, we replaced and energized the reserve or the backup transformer to repair the other one. After that, the availability of Ventos do Araripe reached 95% at the end of March, also shown on the graph. Caetés has 182 MW, and its average availability reached 89%, with a 4 percentage points increase compared to the average of 2022. We acquired this from Cubico in December 2022, as well as Ventos do Araripe and Cassino. I would like to highlight that, as shown in the previous slides, winds in this first quarter were way below average. With that, we took the opportunity to advance some preventive maintenance scheduled for the second half of the year, having more availability at the end of the year when winds usually are better. So if there was something good about this low wind zone, it is that it opened an opportunity to advance maintenance of our assets, because when it's very windy, we cannot go up on the cranes. And with low winds, our team was able to advance some maintenance that was scheduled for the year in order to ensure continuous and reliable operation. Now, let's move on to slide eight while I'll talk about the performance of wind complexes in the first quarter. The first quarter was marked by very low wind, with the average speed weighted by the capacity of the parks reaching 6.6 MW per second, 10% below, with a direct impact in the generation. The generation volume has reached 1,058 GWh, with a growth of 10% when compared to last year, a direct consequence of the growth of installed capacity in the portfolio, with the phased operation of Cajuína and Tucano. Considering the generation of wind complexes, except for Tucano and Cajuína, there was a reduction of 25% in generation because of the low wind speed of parks where these are located. There was an important evolution with 2 percentage points between the periods without considering the limitation of Ventos do Araripe. The greater developments in availability were recorded in Ventos and Caetés, which went up more than 5 percentage points each as a result of operational improvement after maintenances, according to the turnaround plan. Once again, I reinforce our priority to continue to recover the equipment and to improve the efficiency of complexes acquired lately. On slide nine, I would like to highlight the operational excellence of our solar parks that for the second consecutive quarter, I reached 100% of availability. It's also important to mention that El Niño contributed to increased irradiance, and therefore, there was a growth of 10% when compared to the quarters. Combining these effects, the volume of energy generated grew 5%, reaching 153 GWh in the first quarter of 2024. Following on to the next slide, we'll talk about the hydrological performance. It's important to highlight that the revenue from these plants is directly generated through our strategy of energy allocation. This is due to the fact that our plants and almost all hydropower plants are part of MRE, which shares the hydrological risks between the agents. The plants between AES Brasil account for 2% of all the physical guarantee. Differently from previous years, we didn't adopt MRE allocation in 2024. We allotted Água Vermelha, which accounts for 58% of the physical guarantee, total guarantee of AES Brasil, with more energy in the first quarter, while the others followed the seasonality of the system. As a result, both the physical guarantee allotted by AES, as well as the total volume of plants on MRE, were higher in the first quarter of 2024 when compared to the same period of 2023. This has shown to be the right strategy. The dispatch of the plants that's determined by ONS has been lower in this quarter to preserve reservoir levels at comfortable levels since we had low rainfall, which explains the reduction of volume generated by AES Brasil. In this quarter, the average affluence of the interconnected system reached 33% of the long-term average compared to the 105% of the last quarter. As you may be aware, although we went through a period of two years of high rainfalls and a high record of reservoir levels, October last year until April this year was not so good and was one of the worst rainfalls of the historical periods, which resulted in a reduction of the average volume of reservoirs from 80% to 66%. Even so, the volume remained above the average in the last 10 years. Reservoirs are currently at more comfortable levels when compared to the crisis faced in 2021, but this scenario cannot be sustained for many months of low affluence. According to ONS, the load was 5% above what was observed in the first quarter of 2023. This growth can be attributed to the resumption of economic activity along with high temperatures caused by El Niño. As a result, the GSF of the quarter was 91% lower than 101% observed in the same period of 2023, and the average PLD remained at the spot price of BRL 61 per MWh established by El Niño. The only factor that could be attributed as single responsibility of AES is availability, although it's subject to the agenda of maintenance of the national operator of the system. We reached more than 92% above the last quarter of last year. These are the main points we would like to highlight regarding our energy strategy and challenges faced in the period. But I would like to highlight the role of our team that's always attentive to the industry and an effective management of the portfolio. To finish this slide, I would like to talk about what is expected for weather, because this affects the dynamics of the power sector. As I mentioned before, the long-term charge or load is increasing, boosted by several factors. One of them is the accelerated growth in data centers that's demanding more and more power. In addition, there's an interesting movement in the production of fertilizers, especially in the Midwest and Southeast, which demands extra power, especially to green hydrogen and its application to the production of green ammonia that can be used to produce fertilizers. So one thing leads to another. In addition, we see a consistent increase of 3%-4% per year in the load, exceeding the GDP growth. So we're going into the La Niña period, which usually brings higher temperatures, which can increase the demand for power for cooling purposes in the country, which puts an extra pressure on our system. Even if the country is able to dispatch thermal power plants for peak hours, their generation is not enough to avoid the possibility of operation under red flags and therefore increasing energy bills. There is a contrast scenario in the country for the future. Most weather models show that El Niño is weakening and becoming neutral, that in August, September, and October could be followed by the return of La Niña, boosted by the expectation that the Pacific Ocean will cool in the second half of 2024. This will generate higher rainfall in the North and Northeast and lack of rain in the South. However, we have to be careful about the timing and precision of forecasts, especially because forecasts during fall are not as accurate as in other periods of the year. Looking forward, we see a pressure starting in the second half of the year when rainfall decreases in the North and the generation of the plants at the North also decreases. As of June, we can no longer depend on rainfall to recover the reservoir levels because the volume is very low. In the Northeast, the trend is to have lower rainfall than average during May and June, differently from April, where the areas in the North and East had high rainfall due to the warming of the Atlantic Ocean. The area where wind plants are located is where higher rainfall is expected, which could impact the wind generation because it winds less when it rains. It will have less wind or less rain in Rio de Janeiro and Espírito Santo. In addition, temperatures should remain high in the state of São Paulo. When we have very high temperatures and cloudy days, it has a negative impact on solar panels. Now, reaching the end of the operational part of our presentation, I will talk about the evolution of the contract levels on a consolidated basis for our portfolio. The portfolio of AES Brasil plants is composed of 2.3 GW average of physical guarantee, and wind and solar sources account for 1/2 of this amount. To help in the presentation, the green bars show contract levels and volume are the contracted levels. We see that the operational has been fully contracted, and incentivized energy has low volumes to use the spread of the incentivized energy, even for wind customers that buy conventional energy supply. In addition, it's part of our strategy to leave 15% of energy without contracts to protect the GSF. As the year proceeds, we adjust this amount according to the performance of the market. Our purchase and sale operations continue at the high level to optimize the strategy of the trading board. With the equalized contracts for the short term, we continue to contract for two years and five years, where we see good opportunities to capture on operating margins. With the growth of average prices in our current state, our prices are above BRL 190 per MWh starting next year, which generates predictability in our earnings. The prices in the free and regulated markets are adjusted by inflation on an annual basis. Now, I turn the floor over to Simão, who will present the financial highlights. Then I'll come back for my final remarks and the Q&A. Thank you, Rogério. Good morning, everyone. It's a pleasure to be here with you again to share the results of the company. I'll start with slide number 13 when we see the net operating margin. In the first quarter of 2024, it reached BRL 533 million, a reduction of 5% when compared to the first quarter of 2023, which reflects the wind margin drop that was impacted by the low speed of winds, although it was somewhat offset by the higher availability of our fleet. Starting with the water part, water plants increased by BRL 8 million in margin, reaching BRL 336 million in the first quarter. The highlight was an increase in 41% in the volume of energy, so then a drop of 27% in the price of energy in the period. In 2024, we didn't follow the MRE with all the plants. In Água Vermelha, we did not follow because it generated more energy, and we ended up in a balance with 70% more energy in the first quarter of 2024 when compared to 2023. In the wind, we noticed a reduction of BRL 34 million, reaching BRL 146 million in the operating margin. This reduction was mainly due to the wind speed in the quarter, which was 6.6 meters per second, a reduction of 10% when compared to 2023. This was partially offset by the availability of assets, which is 2% higher, and the phased operation of Tucano and Cajuína, which have contributed BRL 55 million in the margin. Another important point to remember is that in the first quarter of 2023, we accounted BRL 26 million in the margin for compensations for delays in the construction of Tucano, which was a one-off event. Solar plants delivered a margin that's BRL 94 million, which reflects the higher generation due to the increase in radiance that's 10% higher and availability, which increased 2 percentage points. And combining all that with the authorization of contracts that are adjusted by inflation. On slide 14, we talk about the OPEX. OPEX are operating costs and SG&A, which added BRL 293 million. When we adjust this for non-recurring events, we reach a basis of BRL 166 million in the first quarter of 2024. Out of this amount, they are compared to BRL 151 million, which the adjusted OPEX, excluding one-off events, in the first quarter of 2023. So comparing the adjusted basis, we went from BRL 151 million to BRL 166 million in the first quarter of 2024, a 10% increase, which I'll explain with the three main drivers. The first was inflation, BRL 6 million account for inflation, which is the IPCA in our cost base, which is more than offset in revenue because all our contracts are adjusted by IPCA, mostly in January 2025. So it's just a matter of timing. We'd have BRL 7 million due to growth. We have a recurring increase, only BRL 2 million in the quarter, which shows our discipline in efficient cost control. The main non-recurring events are a low in provisions due to the sale of the distributed generation plants. In the first quarter of 2024, the main element is the adjustment of the purchase price. We had discussed and said we would pay more for the asset if it generated more than forecasted. That happened. It's completely neutral because the asset is worth more, so we're paying more because it is delivering more than was expected at the purchase time. The PMSO metric, divided by the number of installed megawatts, this multiple remained very similar when comparing the quarters, which shows the discipline in cost management. Now, moving on to slide 15, I saw the EBITDA and the net earnings. EBITDA was BRL 409 million when adjusted by non-recurring events. Now it's BRL 368 million, which compares to BRL 409 million in the first quarter of 2023. By source, we see in the water the EBITDA, BRL 235 million contribution, which is mainly the same as the first quarter of 2023. In wind, a reduction of BRL 43 million in the contribution to EBITDA. Now it's BRL 94 million. This deviation was due to the lower wind speed and the compensations recognized in the first quarter of 2023 resulting from the delay in the construction works. These were partially offset by the availability of assets and the greater contribution of Tucano and Cajuína to the results throughout the year. Solar plants had an EBITDA of BRL 46 million, an increase of BRL 5 million between quarters, which reflects a good operational performance and a radiance that increases. When we look at the net income, we see a loss of BRL 102 million in the first quarter, which, adjusted by non-recurring events, leads to a loss of BRL 84 million compared to a profit of BRL 68 million in the first quarter of 2023. In addition to the variation of the EBITDA, we had a hit of BRL 68 million in the financial result of the company, BRL 74 million less in financial revenues because we have less cash invested. We used to have a very high cash balance in the first quarter of 2023 because we're ready for the investment cycle. Now, of course, we have less cash. The average CDI rate also dropped. When we look at financial expenses, there was an increase of BRL 27 million due to the lower capitalization of interest. A great part of Cajuína and Tucano are operational. So we no longer capitalize on financial expenses. There was a reduction of the debt balance, debt BRL 11.9 billion-BRL 11.7 billion, and an important reduction in IPCA and the CDI. In addition, there was a depreciation amortization higher in the first quarter of 2024 because there's a higher asset base. Now, moving on to slide number 16, I show the consolidated cash flow in the quarter. We ended with BRL 2.4 billion, which is lower than December of 2023. This is the reflection of the use of funds to build wind complexes. The cash from operations totaled BRL 295 million due to the phased operation of Cajuína and Tucano and the wind generation scenario with lower wind speeds. We invested BRL 145 million in the quarter to finish Cajuína 2, in addition to the execution of AGV VII solar power plant in São Paulo, BRL 210 million, and the refunding of Bridge Potengi, which leads to a balance of BRL 90 million. The BRL 2.4 billion cash, we showed the commitments for 2024, amortizations in 2024, BRL 568 million for investments until the end of the year, and BRL 640 million in the reserve account for funding. We see the debt structure of the company in the first quarter of 2024 on the next slide. On a consolidated basis, we started with a gross debt of BRL 11.7 billion in 2023, reaching BRL 9.2 billion in net debt. This net debt plus the reported EBITDA gave us a leverage of 5.6x with a lowering trend towards the end of the year, aiming at an optimal debt structure with a 3.5 leverage rate, with an average term of 2.4 years. During April, we continued to work on the effort to do the takeouts on short-term structures. And therefore, we have a schedule for updated amortizations or repayment of loans with those that have been agreed to. In April, we also did some important issues that are the funding of BRL 900 million, two tranches, 15 years for one tranche and 20 for the other, IPCA +7, and another long-term funding for Potengi in the BRL 210 million amount, IPCA +7, 18.5 years of debt. So we did important movements to change short-term structures for those that have 15, 18, 20 years of maturity terms. With that, we see the average term going from four years to an average term of six years of our debt. Our average cost is following 50 BPS. The repayments have a much comfortable schedule that's shown below: BRL 800 million in 2024, BRL 1.8 billion-BRL 2 billion in 2025. There is a bridge that we're going to take out. But there was an important movement in the quarter to adjust the capital structures with significant improvement when compared to the previous quarter. With this, I close the financial part, and I turn the floor over to Rogério. Thank you, Simão. Now, moving on to the last slide of the presentation, I once again highlight the priorities of management for this year. First, I'll talk about our dedication to maintenance and operational improvement of wind assets. We highlight the performance of our action plans to increase the availability of assets. Although we have advanced in operational efficiency, there are some important steps to be completed. Once again, I reinforce our commitment to carry out this process as planned, trying to reach operational excellence of our wind portfolio. The active management of our portfolio is also important. As presented earlier, we took advantage of the higher in the energy prices to increase the number of contracts above BRL 190 per MWh. We keep focused on increasing our level of contracts. Another priority is to keep the discipline in management of costs and expenses of the company, completely aware that this is key to maximize the return to shareholders. In addition, we're strongly concentrated in deleveraging AES Brasil with a full takeout of bridge loans that were to mature in 2024 and 2025. And finally, we'll continue to act as protagonists in the main regulatory discussions in the industry in order to have a more fair recognition of the contribution of water plants for the energy matrix of Brazil. Now, we can start the Q&A session. Thank you very much. [Foreign language] Thank you. We start the Q&A now. If you want to ask a question, please click on the Q&A and type your questions. To use the microphone, please click on raise hand. Our first question comes from André Sampaio from Santander. You may go ahead. Good morning, everyone. I would like to use your expertise to try to understand these weather conditions that are so complex now. We've seen this high rainfall and flooding in the south of Brazil, Rio Grande do Sul. There was a dam break. So I would like to understand the risk factors and the impacts on the operator. I'm not thinking about any specific asset, but I would like to understand if it happens, what are the actual impacts in terms of availability or CAPEX? So could you address what would be the impacts and what is the insurance you have to protect that, to understand the risk dynamics? Good morning. This is, yeah, it happened yesterday. We did not have access to anything that happened. But from the system point of view, there will be some impact on the reservoirs with the dam collapse. That reduces the storage capacity of the region because, although in the South, that's not so large. There is the MRE impact as well within the regulatory aspect, whether there was any maintenance scheduled. There are several aspects that could have an impact up or down to the energy allocated for that dam. So there would be impacts on MRE and allocation of energy, CAPEX to adapt the plant, but we still don't have any information to share. Okay, thank you. [Foreign language] I would like to remind you that in order to ask a question, please click on the Q&A icon to ask questions using the microphone. Please click on raise hand. Please wait while we collect the questions. [Foreign language] Please click on raise hand to use the microphone to ask a question. Please hold while we collect the questions. [Foreign language] The Q&A session has now ended. I would like to turn the floor over to Rogério Jorge for his final remarks. Thank you all very much for attending this earnings conference call, and I'll wait for you in the next quarter. Nice to see you. Have a good day. The conference call of AES Brasil has now ended. We thank you all for attending and have an excellent day.
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