Good afternoon, ladies and gentlemen, and thank you for waiting. Welcome to Energisa's conference call to discuss the results of the second quarter 2021. We would like to inform you that this event is being recorded, and during Energisa's presentation, all participants will be in a listen-only mode. Afterwards, we will begin the questions and answer session when further instructions will be available. Should any participant need assistance during this call, please press star zero to reach the operator. Both audio and slideshow for this presentation are being broadcast simultaneously via webcast and may be accessed through the website, ri.energisa.com.br. Before proceeding, let me mention that forward-looking statements that may be made during this conference call regarding the company's business prospects, operating and financial projections, and goals are based on beliefs and assumptions of Energisa's management, as well as information currently available to the company. Forward-looking statements are not guarantee of performance. They involve risks, uncertainties, and assumptions as they relate to future events, and therefore depend on circumstances that may or not occur. General economic conditions, industry conditions, and other operating factors may affect the company's future results and may lead to results that differ materially from those expressed in such forward-looking statements. Now, I would like to turn over to Mr. Ricardo Botelho. Please, Mr. Botelho, you may proceed. Well, thank you, operator. Good afternoon, everyone. We start another important teleconference for the results of the second quarter of 2021. Here with us today we have Maurício Botelho, the RI and Financial Vice President, Gioreli de Sousa Filho, Vice President of Distribution, Alexandre Ferreira, Vice President of Regulation, Daniele Salomão, Vice President of Human Resources, Antonio Carlos Silva, Director of Corporate Finances, Newton Santos, Director of Revenue Protection, Roberta Godoi, Vice President of Energy Solutions, and finally, our investor relations team. To kick off our presentation today, first of all, I'd like to kindly ask you to look at slide two. It should be read carefully before we make any decisions on investments by the company. On slide three, I would like to present the highlights for the meeting today. They include the performance in the energy market, energy losses, quality indicators, DEC and FEC, delinquency rate, collection rate, net REV evolution, and Parcel B evolution with the tariffs for this year. Special highlights throughout our presentation today will be on one important factor we have observed in Acre and Rondônia in terms of operational efficiency, improvement for client services, and financial results. We expect to overcome the internal goals for the transformation plan, we'll celebrate with you. After that, Maurício Botelho will present the financial highlights, investments, and advances in the transmission segment. Finally, we are going to open for Q&A. On slide four, we have the operational highlights of the group and the performance in the energy market, which had the highest growth in nine years for the second quarter with an increase of 7.9% when compared to the same period last year. Even though the market in 2020 was impacted by the COVID crisis, this recovery demonstrates that we're going back to track with our in full power growing even when compared to pre-pandemic levels. Actually, we're present in a large part of Brazil, and our 11 concessions were benefited by the recovery of economic activities this year with a growth in the consumption of energy in this quarter, especially those located in the southeast of the country. Also, in the consumption classes, all of them had an expressive growth. Industrial consumption, with an increase of 14.4%, has guided the positive result for this quarter, which was leveraged mainly by the cement production sector, textile, food, vehicle parts, mining, with the resumption of the consumption market for these products. For the residential class, which is the most important one for the group and represents 40% of the total, was also a highlight, improving 4.7% in face of the energy increase recovered with a good performance of losses that we will demonstrate immediately after. I would also like to highlight that the growth higher than two digits in the business class, in the order of 13.1%, which was harmed in 2020 with the paralyzation of the activities and business and services since the COVID first wave. All of our 11 distributors have benefited from this growth, and it has been possible because of the advance of vaccination and social distancing flexibilization. However, the class is still below the pre-pandemic level. The rural class has had a relevance in the growth of our consumption with an increase of 4.0%. This was leveraged by the production of eggs, soy, rice, cattle raising, especially in the Mato Grosso do Sul concessions, Tocantins, and in São Paulo State because of the higher irrigation services in Paraíba and Sergipe. In slide five, we can see that the average consumption of Energisa is 200 basis points higher than the national average in the last 10 years. I would like to highlight that in the last quarter, our performance was lower than the average in Brazil. This is perfectly explained by the facts that happened in 2020 in the peak of the pandemic, as it can be clearly shown in the graph. With this, the comparison basis was harmed. Now in slide six and seven, we can see the losses with a highlight for Rondônia and Acre since December 2019. In this quarter, the 12-month curve, the indicator of total loss were in the order of 13.11% with an expressive reduction of 0.66 percentage points when compared to March. It is the highest value for this area. I would like to reinforce that the consolidated losses of the group for this quarter were below the regulatory limit for the first time since the fourth quarter of 2018, when we started recording the losses for Rondônia and Acre. This performance is explained by the consistent improvement in the electrical system, also the use of technology and analytic intelligence and capacity building of all of our employees. All of these measures have led us to reduce the loss indicator in all 11 distributors when we compare March 2021 and June 2021. The Mato Grosso and Paraíba distributors have had descending loss curves with levels that are close to the regulatory limits. Paraíba has produced its best results since September 2019. The losses in the second quarter of 2020, in the peak of the first wave of the pandemic, were explained by the restrictions in our field team. I would also like to highlight our Rondônia and Acre concession, where in slide seven, I present since 2019, the trajectory of losses with improvements of 5.8% and 7.3% respectively. When we compare this to March this year, we can see that in June and March 2021, these reductions are even more relevant. For Rondônia, we have decreased the distance between this indicator and its regulatory limit in 2.5 percentage points when compared to a distance of 4 percentage points presented in March 2021. The Acre concession has performed below the regulatory limit since December 2019, with a relevant increase in performance in March and June 2021, with reductions of 2.4 and 3.3 percentage points, respectively. In both companies, the loss reduction was accelerated by the implementation of analytical tools and management tools of the processes that are used in all of the companies of the group, and the system migration took place in December 2020 and March 2021. In slide eight and nine, we can see the performance of the DEC and FEC quality indicators of our 11 distributors with excellent results in both indicators. This quarter, the companies who had their historical minimum in DEC were Energisa Tocantins with a reduction of 2.9 hours or 14.7% when compared to June 2020, overcome its historical minimum in the previous quarter, and Energisa Paraíba with a reduction of one hour in the interruptions. Once again, I would like to highlight the good progression in Rondônia and Acre, slide 9 shows a trend towards decrease since December 2019 with a reduction in the duration of interruptions of 17 hours and 8.4 hours, respectively. Rondônia remains above its regulatory limit with a difference of only 4.37 hours, and we are working to have the connection of the nine isolated system in the state take place this year. Regarding the FEC indicator, all of the 11 distributors remain below their regulatory limits, with a highlight once again to Rondônia and Acre, who have their historical minimum in the second quarter. These two companies also have presented a decreasing trend for this indicator of frequency of interruptions with a reduction, which is 10 times and 9.5 times, respectively, since December 2019. In slide 10, we can see the results for the group of distributors with an improvement of 0.7 percentage points, and this is still impacted by the COVID pandemic. The actions that have been implemented have allowed a gradual recovery, and the results confirm the expectation of sustained improvement. We have also had a decrease of BRL 142.6 million when compared to the second quarter in 2020 in the delinquency. Even with this improvement, the scenario is challenging. It is more optimistic if compared to last year when the indicator reached record levels. Our collection actions with more flexible payment offers and access to digital media has contributed for a better performance in this indicator. In the graph below, we can see the performance for the quarter in Rondônia and Acre, which have reverted their provisions for PECLD continuously. In slide 11 and 12, we can see the progression based on the liquid payment of Parcel B in the distributors of Borborema, Minas Gerais, Nova Friburgo, which had their reviews performed by June 2021. The Energisa Sul-Sudeste distributor with a review in July this year and Energisa Paraíba. We can see the graph with an increase in the net base for the fifth cycle when compared to the last two quarters. These results reflect investments and the good asset management, which has been done consistently in these companies with a highlight to Energisa Sul-Sudeste and Paraíba. With this progression, I'd like to show you in the next slide, where we have had improvements in the payment of Parcel B. In other words, we were able to guarantee an increase in 4 of the distributors in the Sul-Sudeste and Paraíba, which together have an actual increase of Parcel B of approximately BRL 72 billion when compared to the previous quarter. We can also see that this performance, once again, shows the company's discipline with the main leverage we have, whereas we provide improvements in our services to all of our clients. Now I turn over to Mr. Maurício Botelho, who will present the financial highlights for the quarter. Thank you very much, Ricardo. Now let's move on to slide number 14. Here we're going to highlight the controllable expenses, which were reduced in 11.9% in the semester and 4.6% in the quarter. We have PMSO, which grew 5.3% in the semester and is below the IPCA inflation of 8.2% and IGPM of 35.8%. In this quarter, we can see a total of 663.7 million BRL, an increase of 110.2 million BRL when compared to the second quarter of 2020. It's important to highlight that in the second quarter of last year, it was the first wave of the pandemic where we adopted severe contention measures for costs and service delays, in addition to the benefits that were granted at the time by means of a decrease in labor payments based on Provisional Measure 936. For PMSO in the first quarter of 2020, which is before the pandemic, it was BRL 648.4 million. We had, in fact, a nominal increment of only 2.4% in face of this normalized expense level. I highlight in the second quarter an increment of BRL 27.1 million in expenses with materials, this results from a combination of factors such as increase in the price of commodities and the resumption of activities when compared to the same period last year. This is the result of higher expenses such as steel, parts, and accessories. In the service line, we had an increase ranging in the order of BRL 23.8 million in the quarter, due especially to the resumption of the activities with a higher volume of services. On slide 15, we have the EBITDA for the second quarter with an increase of 90.5%, or BRL 658 million when compared to the second quarter in 2020. In the accrued for the year, the increase was 70.8%, or BRL 1.1 billion. This performance is explained especially by the increment in Parcel B of the distributors, which totaled BRL 602.7 million in the quarter and was impacted by the reviews and readjustments in the tariff. In addition to that, we also had a contribution from the regulatory EBITDA of the transmission without the O&M revenue. The EBITDA, without non-recurring effects and non-cash effects between quarters, had a growth of 109.8% and reached the level of BRL 1.25 billion. Then moving on to slide 16, we're going to talk about the adjusted EBITDA in the last 12 months. In this graph, we can see that the volatility is removed as well as the seasonality. We had an increase of adjusted EBITDA on annual basis of BRL 695 million when compared to the first quarter of this year, and it is BRL 1.7 billion higher than when compared to the last 12 months. PMSO also went down from BRL 2.82 billion in the second quarter of 2020 to BRL 2.65 billion this quarter. The PMSO ratio for EBITDA went down from 34.9% in the second quarter last year to 48.2% in this last quarter. We're now going to the next slide. We're going to talk a little bit about Acre and Rondônia. Ricardo had already mentioned this. We had an excellent recovery in these two areas. We have demonstrated the PMSO and adjusted EBITDA progression in these companies, and as you can see in the 12 months graph, that we have had continued slow reduction in PMSO in the two companies since the first quarter of 2020, and an increase was recorded only now in the second quarter, and this was impacted in large part by the factors that were mentioned previously. We can also see the adjusted EBITDA, which resulted in a joint variation for the two companies of BRL 52.7 million when comparing the second quarter of 2021 to the first quarter of 2021. This growth is even higher. It is of BRL 611 million when compared to the performance of these companies, when we compare the performance with that of the first quarter of 2019. In slide 18, we highlight the progression of the two last acquisitions. Please note that after the initial period of consolidation of the two former state-owned companies, we have already operated with overperformance of 54.4% when compared to the regulatory EBITDA. Energisa Rondônia went from a negative EBITDA, and now we are in the positive. However, it is still lower than the regulatory level. In Acre, since last year, we have overcome, we are above the regulatory EBITDA. There is still a lot more to do, but we can see that these companies are gradually being transformed into efficient companies. In slide 19, we're going to talk about our net profit. In the quarter, we recorded BRL 749 million when compared to losses of BRL 88 million in the second quarter of 2020. Here we have some exclusions. We have excluded non-cash and non-recurring effects in addition to other effects. The growth in profit is still relevant. The profit was BRL 355.3 million between quarters, with an increase of 397.1%, or the equivalent of BRL 218.9 million. It's important to mention that Energisa maintained its tradition of paying for dividends every semester and decided to pay BRL 0.65 per unit of dividends, equivalent to 35% of the net profit. In the semester representing BRL 235.3 million, on August 18, 2020, the shares are going to be negotiated ex-dividend, and payments will be made on September 29th. On slide 20, we're going to talk a little bit about our debt. It was BRL 13.9 billion, representing a decrease of BRL 314 million when compared to the debt in March 2021. In the second quarter this year, we performed 15 operations, including expansion of deadlines, roll-outs, which totaled BRL 1.5 billion, with a capitalization of BRL 3.1 billion in the year. We have concluded the quarter with a robust cash position of BRL 5 billion. The average time of our gross debt is 4.1 years, and the average cost is 7.08% in the year when compared to 5.15% in March 2021. CDI is our main index, and it is 64.9% of our debt. The leverage indicator, the net debt, according to the adjusted EBITDA, closed in June at 2.5x when compared to 3x in March 2021. When compared to the second quarter of 2020, we represent an expressive reduction of 1.2x. The covenant limits of the net debt by EBITDA for the 2021 year is 4x. In other words, a more comfortable situation in this indicator. Moving on to the next slide, we can see our investments in this quarter, which were in the order of BRL 909.2 million, an increase of 35.4% when compared to BRL 771.5 million in the second quarter of 2020. This increase was observed for electric and on non-electric asset values. Taking into account the electric assets, there was a growth in investments in the order of 41.3% or BRL 226.3 million. Of the total invested in this period, 78.6% were directed to the distributors and 13.5% to the transmissions that are being constructed. In regards to these investments in distributed generation, we have 11 ongoing projects, of which four have been inaugurated this semester, with investments of BRL 48 million in a capacity of 12.7 MWp. The investments for the second quarter this year for the projects under constructions, we have a total of BRL 125 million in Minas Gerais and Rio de Janeiro. In 2021, we have record investments that total BRL 3.8 billion. In the distributors, we're going to have BRL 2.8 billion invested in the transmitters. In Rondônia, the expected investments are of BRL 747 million, of which BRL 314 million in electric assets and BRL 410 from special liabilities, including the interconnection of nine isolated systems in the second semester. The concessions of Mato Grosso and Mato Grosso do Sul together represent about BRL 1 billion in investments. In the next slide, we're going to talk about transmission. We can see our enterprises of transmission, which represent BRL 283.1 million for the 2021 cycle. We signed a concession contract on March 30 of Energia de Transmissão do Amazonas with a payment of BRL 239 million to Amazonas Geração. This refers to the acquisition of the existing assets in this concession. We have also received a 30% of the RAP in the month of May this year, and this is retroactive to April. We expect an average anticipation between 12 and 18 months, including the revitalization of the existing assets. In the last month of June, we had a victory in the ANEEL auction. This includes the acquisition of a new yard of 138 kV of the Gurupi substation in synergism with Energisa Tocantins Transmissora. I finalize my presentation with a very good piece of news. We had the approval of BNDES and BASA for the funding of our transmission project Interligação Continental, and the amounts are BRL 166 million and BRL 327 million respectively, totaling BRL 493 million or about 75% of the estimated CapEx. I thank you for your attention. We are now going to open for Q&A. Operator, please. Thank you. Ladies and gentlemen, we are now going to start the Q&A session for investors and analysts. To ask a question, please press star one. If your question has been answered, you can remove yourself from the queue by dialing star two. We kindly ask you to lift your phone up when you ask your question. With that, we will have better sound quality. Our first question is from Carolina Carneiro from Credit Suisse. Hello, good afternoon, everyone. Thank you for the call. I have two questions. The first one, in this semester, you had a very good performance in terms of default, and this was before the most recent facts. I would like you to comment whether you expect to have any changes in this level because of the increases in the tariffs, or if you haven't seen that yet, and perhaps you have already worked or are trying to mitigate the impact. The second topic, if you can comment, you have been very active in GD, and this week we've seen a new project to discuss GD, which will probably be voted next week. Could you please comment a little bit about your expectations of what is being negotiated? Thank you very much. We're going to divide this answer. About the role of tariffs in the default. We have seen the results in the residential area, and we did have an impact. We have had increases in default payments. Your second question. I'm going to turn over to Alexandre and Ricardo so that they can both answer this question. Well, thank you, Carolina, for your question. You would like to know what our impression is about the project and what is the impact on our companies. The agreement has not been voted by the Congress, and this is how this will have to be solved. This is not beneficial for anybody, not for the distributed generation sector, among others. We have a 12-month period after the law has been approved. For those who come in between month three and 18, the old rule will be applied until 2031. Those who come in after month 19, we will have gradual increases, and Parcel B will have to be paid totally to the distributor. Based on the view of the distributor and the difference between the payment of the whole parcel and this payment in different steps is something that will probably lead to increases for the consumers. This is well known, and we have discussing this for a while. There is a specific rule for shared cases after month 18 and 19. The parcel will be paid, and then 40% of the transmission parcel and 100% of the tariff. I believe that we will have enough time to adjust to the new rules, and the assets will be managed in the long run. This is our opinion about PL da GD and its impact on the business. Thank you very much. Our next question is from Guilherme Sampaio from Santander. Good afternoon. I'd like to ask a quick question about Parcel B. I know that there is a reasonable possibility that we will have an impact of inflation on the tariffs in addition to water shortage. What do you see this for next year? Thank you very much. Can you please wait a minute? Hello, good afternoon. This is Alexandre. Regarding the perspective for Parcel B next year, what we see in a welcome example is what happened this year. We are trying to do something with the government so that we can comply next year. We've seen this happen early this year when we're trying to find solutions. We have had a winning solution. This is being dealt with ahead of time, with more time than what we did last year, I do not see any problems for next year. Thank you very much. That's perfect. Our next question is from Marcelo Sá, Banco Itaú. Hello, everybody. Well, actually, there is a question by ANEEL. In the beginning of the year, ANEEL carried out a study and it showed that if we did not control tariff increases, we would have an increase of 18%. With all of the measures that were taken, we would have an increase in average of 10%. We have payments of Parcel B and other measures that were taken and ended up being successful. I know that if we have a stock, which was not taken into account for next year, and we have very high levels of IG, yes, at high levels. I know that there's a lot of pressure, and part of it somehow is already being taken into account, but we still have some amount left. When we look at all of these factors, next year, we're probably going to have another year with some tariff pressure. Why do you think that the impact is not going to be as relevant for next year? Alexandre. I'm going to answer it. Marcelo, good afternoon. You did mention a series of factors related to the tariffs, and a large part of them will be minimized by the increases in tariff. We already had an increase in July. We will probably have another one next month after our public consultation, so that we can have a reaction during this critical period of time. In addition to that, there are other actions that we can take. For example, ICMS. Recently, we learned that the actions in Acre and Mato Grosso were considered relevant, so we're trying to obtain the credits of these COFINS. There are other actions that are being evaluated. It's important to say that we do have alternatives, as I answered in the previous question. It's important for us not to have these potential readjustments. We have different actions being taken into account. We do not think that there will be an impact. Okay, great. Also talking about the water crisis, the government announced incentives for large consumers so that they change their consumption profile. I've seen different reports and consumer reports and the way it was proposed, it does not seem that we will have a lot of adhesion, and it won't be very effective. The government also mentioned that it will announce a series of measures to encourage consumption reduction by residential and commercial consumers. Do you have any idea of what these measures are and whether there are any financial incentives? If so, who will pay the bill? Will it be paid by the consumer later on? How do you think that this is going to be implemented? Well, this is just a comment. Perhaps I have the same level of information that you do. We are using our branches, our association, to try to understand how this will work in terms of consumption. We're trying to better understand how these mechanisms are discussed. We still do not know what they will be like. It's very difficult for us to come to conclusions without more concrete information or information that has not been disseminated yet and that's not available to us. Perhaps we should look at past experiences of the previous water crisis and analyze what measures would be applicable today. I don't really know how this will take place. We have had discussions with ANEEL, with the ministry. The agents have not been involved in this discussion. We have requested our branches, our association for support. We expect that in the near future, we will have more information on how this will be done. We understand that the water situation is complicated, it is critical, and we have different measures by the government regarding the management of the reservoirs. We know that we will also have to have measures based on the demand and on consumption. Okay. Thank you very much. It is very clear. Now, if you allow me to ask a last question regarding the tax reform, which is being discussed and the tax changes all the time. If we think that we will have some reduction in taxes, I would like to know how you see the impact of distribution. According to our understanding, a distributor that pays 34% of tax income, this effect should be neutral. That will be also included in the tariffs. You have, for example, SUDENE, which have a negative impact because the tax reduction that you have will be minor because it will be calculated based on lower values. I don't know whether that's your understanding. We have discussed with our clients, and perhaps ANEEL should review the regulatory framework. I would like to know if you have considered these possibilities and whether they make sense. Marcelo. As you well mentioned, this reform comes and goes. There are different operations that are being conducted, taxes of dividends and the reduction of the corporate amount. The advantage you have in one region will be decreased because you will have advantage, but in terms of changes or regulatory changes, it would be a bit too early for us to say anything right now. Excellent. Thank you very much. Our next question is via webcast from Carolina Gades. Good afternoon. I have two questions. First, what are the projects of the company for the long run? Can you invest in something outside of the energy sector? The market is more and more competitive. Do you see any possibilities? Carolina Gades. Regarding the deadlines review projects, we have confirmed activities. We have projects in our portfolio for distributed generation, renewable generation, and also we're looking at other aspects. Right now, we do not see anything outside the market. We do not intend to go into, for example, the sanitation market. We have to evaluate opportunities very carefully. The resources are a bit more stringent in other segments. The Q&A session is now over, and I would like to turn over to Mr. Maurício Botelho for his final considerations. Mr. Maurício, please move on to your final considerations. Well, I'd like to thank you all for your presence in this conference call. We understand that the results were superior this quarter. They were quite sustainable throughout the year. In the whole value chain in the energy sector, with assets that will generate higher returns, reinforcing our business platform. I would like to conclude our session today, and I thank you for your participation. Thank you very much. The teleconference of Energisa is now over, and we thank you all for your participation and wish you a good day.
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