Welcome to Light's Q1 2023 earnings call. I am Rodrigo Vilela. This is being broadcast with simultaneous interpretation into English. Please press the interpretation button at the bottom of your screen. Octavio Lopes, our CEO, will make his opening remarks, and then our CFO, Eduardo Gotilla, will comment on our results. This presentation can be downloaded at our IR website. At this point in time, all participants are in a listen-only mode. We will then have a Q&A session and further instructions will be given then. This webinar is being recorded and its audio will be available at our website. On to our disclaimer. Any forward-looking statements made during this presentation concerning the perspectives, projections, operational and financial goals are based on beliefs of the company's leadership, based on currently available information. Any of these statements do not involve certain results. They involve uncertainties and events that may or may not occur. General economic conditions, industry conditions, among other operational factors, may impact company's results that can lead to results that are materially different from those made in the forward-looking statements. I'll now turn over to Mr. Octavio Lopes. Good morning, everyone. Welcome to Light's earnings calls for Q1 2023. Before I talk about the numbers, I would like to once again point out that the leadership is confident that the Chapter 11 filing that has been approved earlier this morning is the best way possible to ensure the group's sustainability. In the previous earnings call, we shared the diagnosis that stated that the company had to go through this reorganization, given the Light SESA high debt levels. It has had structural problems in that concession. This is the best approach for the company. At the start of that process a month ago, we had a small number of creditors that did not want to mediate. They wanted to become a hurdle in that process that would lead to a chaos in the energy distribution. The Light S.A. was the only alternative to preserve the financial capacity of the companies and ensure the stability in the operations of our concessions. Light S.A. has the obligation to cover all the debts of the entire group. The distribution company and the generation company are going to remain solvent in all its sec tax and the payments of all investments to ensure the continuity of concession, including workers, suppliers, and service providers. Light SESA remains running normally, preserving the entire electrical industry and ensuring the quality of the service we provide to 11 million consumers. Despite that aggressiveness of that small number of creditors, we have been negotiating with a relevant portion of creditors, and we believe we can come up with a proposal on a short-term basis. This is going to be a plan to adjust the balance sheet of a private company with no burden to the government. We're going to, of course, establish negotiations with the conceding agent so that we can renew the concession. Our commitment is with the long-term stability of the company and the concession. Let me now address the Q1 of the year. We have been continuing the strategy we established in the past quarter, establishing the distribution company with more managerial control. We managed to reduce BRL 100 million in costs and expenses for the quarter. The distributor cash generation is up 74% to BRL 141 million when compared to Q1 of last year. We have strategically redefined the fight to loss proofing. Light has been focusing on these initiatives that will help provide better results based on a very profound analysis, trying to eliminate those operations that would hurt our cash generation. Distributor is increasing 46% in adjusted EBITDA with a negative result of BRL 2 million. Much better than the loss of BRL 137 million in Q1 of 2022. Despite that improvement, both the generation and the distribution companies have been provided consistent results, BRL 107 million in the quarter, reverting a loss of BRL 106 million in the same period of last year. Despite that scenario, the situation of the distributor that is far, very far from what we needed to maintain the stability. We of course, have to readjust its balance sheet. I'll turn over to Gotilla, and he'll be showing you the results for the quarter, and I'll be available for the Q&A session. Thank you, Octavio. Good morning, everyone. Let me now explain the results of Q1. That's on slide four. These are our efforts to financially stabilize the distribution company. Along the lines with the strategic decisions started out in Q4 of 2022, we keep on investing, adjusting investments and operational expenses. It was BRL 103 million below year-on-year. The biggest contribution comes from CapEx. The reduction is the result of the strategic revision of the loss-proofing plan. I'll be addressing that shortly. I would like to draw your attention to the smaller PMSO, despite inflationary pressure. On the right, we have improved the cash generation of the distribution company, measured by adjusted EBITDA and CapEx. We burned cash, BRL 61 million. In Q1, we have positive result of BRL 141 million. A significant improvement of over BRL 200 million. On to slide five. Let me show you the context of losses. Despite non-technical losses have been kept at reasonable flat standards, the reference market has been deteriorated for almost 10 years. We haven't even recovered volumes pre-pandemic. The simple calculation shows that the non-technical losses on the reference market has grown year after year, despite all our efforts to fight those losses. In late March, the distribution company was 22% above the points above the loss transfer. The difference between actual loss and regulatory losses impacts our EBITDA by BRL 582 million. That search for stabilizing the company has led us to review the loss-proofing strategy. We reduced activities on the medium and long-term basis. We discontinued those activities that would consume cash and provided limited results. We've included parameters such as possibility of judicialization by class, by region to bring those back collection. We'll therefore have sustainable results in the periods to come. On slide six, we have the distribution company EBITDA. It grew 46% and BRL 108 million year-on-year. Most important effects came from gross margin due to price increase in 2022. PMSO is in line with last year's numbers, despite inflation almost 5%. Contingencies, we had less net losses due to better settlements, reducing average costs of cases. The apparent increase in PLCLD is driven by a change in recalculation method. When we compare BRL 250 million, PAC LD was down by 35%. In conclusion, about the distribution, we have BRL 456 million of PIS and COFINS taxes, and we offset only BRL 163 million. That difference demanded BRL 292 million from our cash. Finally, on to slide seven. Our energy business had a gross margin, slightly higher, and combined with smaller PMSO, we have 4% more adjusted EBITDA, reaching BRL 202 million. I'll turn back to Rodrigo Vilela for the Q&A session. Thank you. Thank you, Gotilla. Let's now begin our Q&A. If you want to ask a question, please press the Raise Hand button at the bottom of your screen, and then your microphone will be unmuted. You can submit your questions in writing using the Q&A button at the bottom of the screen too. Questions will be answered as they come in. André Sampaio from the Santander Bank will ask the next question. You can unmute your mic and ask your question. Good morning. I have two questions. I just wanted to confirm to make sure I heard that correctly. You talked about the initial plan was first establish an agreement with creditors and then start negotiating with the government. Is that the roadmap? I just wanna make sure. Second question, is this negotiation process include the possible sale of the generation company? Thank you. Hello, André. This is Octavio. Thank you for your question. As to the time frame, they are interdependent, actually, and we have no control over them. We believe that the solution or the rebalancing of the company would be quicker. That would be the, within the time frame by year's end, and the final solution for the renewal would be addressed next year, expecting to do that for 2026 in advance. In, in answering your question, yes, we expect to address the issue with creditors first, then the issue with the concession. Onto the possible sale of generation. We do not have a process in place to do that. Then we don't believe that would be the best solution for the group. Thank you. Thank you. Henrique Peretti asks the next question. Your mic has been unmuted. Good morning. My question is about regulation. The negotiations with ANEEL. Are you expecting any regulatory changes, maybe special regime? Is it just an adjustment of current standards, maybe just adjusting the loss%? Thank you. Good morning, Henrique. When you look at the Light case, we have two parameters. According to current regulation, to transfer those losses, we believe there's an imbalance as to the formula and the way it was applied last year. We have that extraordinary request to adjust tariffs. That would be the first step. According to current standards, we have already requested that change so that we could increase that immediate losses transfer. Number two, just like we said before, in that process of reviewing tariff, we believe that a concession such as that of Light, that we have some significant portion of restricted operation. That requires a differentiated treatment for those ASROs. That's why we want to have that special treatment for the next concession cycle, for the next 30 years. Thank you. One of the questions here from Daniel Trevisan, from Safra. He's an analyst from Safra. How is this RJ project or will happen that reorganization? Are you going to resort to the legal system? Because one of the companies cannot file for Chapter 11. Do you believe that you can anticipate that concession renewal process? I'll turn over to Octavio. Thank you. Thank you for your questions. I'll try to address all of them. Number 1, first, for the reorganization filing. It's a traditional reorganization filing according to the law. Since the request was from the holding Light S.A., including the debts of its subsidiaries, because they are co-responsible for those debts, we have that standstill. We can negotiate the debt in the reorganization environment because that can be very helpful to everyone. At the same time, we'll be able to maintain operations, running business as usual, and we'll be solvent, maintaining service quality and fulfilling all our obligations with consumers. That's the route we chose to preserve the concession, the service, but enables a healthy negotiation environment. We have 60 days to come up with a proposal to our creditors. We'll be doing that, of course, even before that legal timeframe. Then we have to come up with a majority to support that process. That's what we are striving for. As to resorting to the legal system, a reorganization process is already in the legal system, so we are comfortable with that request. It has been approved early, earlier this morning, whether they're going to resort to the legal system or not. We do believe it holds, and we'll be able to come up with a solution for balancing the balance sheet, focusing on Light SESA, in which there's a clear financial imbalance. As to the renewal of the concession, of course, we're not committed or there's no commitment from the part of the conceding power of the government per se to advance that. We believe it makes sense. There have been several cases in which that concession was anticipated. In the energy industry, within the contract time frame, we're going to make a statement that is non-binding about our interest in renewing that concession. The conceding power has 18 months to make a decision after we make that statement. That would be November 2024. We're making a non-binding statements that we are willing to renew the concession to turn the page and to going back to having a healthy Light S.A., Light SESA. [Foreign Language] All right, moving on. Marcelo Sá from Itaú BBA asks the next question. [Foreign Language] Good morning. You had a material fact, meaning saying that there was a sale of 15% stake. We have other relevant stakeholders or shareholders, actually. [Foreign Language] He's breaking up. I can't hear what he's saying. [Foreign Language] I think there was an indication that this new investor is willing to come up with BRL 1 billion in to invest in the company. Have you been talking to ANEEL to maybe change the flow of that PIS/COFINS transfer? Would that be beneficial to the company? Now on to the reorganization. Have you discussed that with ANEEL as a possibility, or did you make that decision unilaterally? Maybe is there a possibility of ANEEL, if they don't agree to it, to have an intervention in the company? [Foreign Language] We had a hard time hearing you in the first and second question. Could you please repeat them, please? [Foreign Language] My question is about Tanure. Tanure purchased a 15% stake, and my question is whether that was a strategy in agreement with other relevant shareholders, including Tanure. [Foreign Language] We read in the press that he would be willing to inject BRL 1 billion in the company. My second question was about PIS/COFINS and the return flow, because ANEEL controls that. Are you discussing maybe postponing that flow? [Foreign Language] Hello, Marcelo. The company that we, the information we have is that the WNT fund got in touch, and they informed that they purchased first a 10% and then a 15% stake, and the board defines the company strategy. The way we see it is that nothing changes. The board was elected in the past meeting, seven candidates with a 2-year term with a 100% of the voting members. No connection between those shareholders and the company's strategy based on the model we have been operating under. As to the PIS/COFINS returns this year has already or have already taken place. We started out that 12-month period in March based on that year tariff revision plan. From that point on, that criterion hasn't been defined. That's up to ANEEL. Finally, as to the reorganization. We don't see any reason for any intervention because the reorganization is from the holding company, not the distribution company. On top of that, Light is a company that is solvent with all its quality measures, all its industry's obligations. Unlike reorganizations of energy companies in the past. Those were companies that were under a lot of stress, operationally speaking. We on the contrary, we are operating normally, and that's what's important for the regulatory agency. ANEEL should concentrate on service quality, expansion, investments and solvency. That is one of the top objectives of our reorganization. We want to maintain our solvency for Light SESA. Thank you. Gustavo Faria from Bank of America asks the following question: Just to follow up on Henrique's question. Do you have a timeframe for the RTE analysis of ANEEL? Can you share your EBITDA or your EBITDA increase once ANEEL accepts that request? They do not accept that request, what other regulatory mechanisms can you resort to? Hello, Gustavo. Thank you for your question. The RTE process does not have a predefined course. We believe it's going to take 6 months, give or take. All the details of that request are public. It's worth taking a look at. Our request is for an EBITDA of BRL 500 million. As to other regulatory requests, just like I said before, in that regulatory tariff framework, we requested an increase in losses transferred to the tariff. We believe that once we renew the concession, we believe that this is a singularity. We have a very expressive SRO stake, and that should be addressed once we renew that concession. Thank you. We would like to thank you all for attending our call, and the entire IR team is available to clarify any questions you may have. Have a good day. Till next time. Thank you.