Companhia Paranaense de Energia (COPEL) Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 7, 2025

Key Takeaways

  • Positive Sentiment: Copel reported Q2 2025 recurring EBITDA of BRL 1.3 billion, up 4.2% year-over-year, with recurring net income of BRL 452 million.
  • Positive Sentiment: Capital expenditures of BRL 975 million in Q2 keep the company on track for its BRL 3 billion 2025 guidance, while net debt/EBITDA leverage stands at 2.9× after the Baixo Iguaçu acquisition.
  • Negative Sentiment: The planned migration to Novo Mercado, designed to unify share classes and boost liquidity, was deferred by CVM for up to 15 days due to a minority shareholder request.
  • Positive Sentiment: Copel completed divestments of small hydro plants and asset swaps with Eletrobras— including Mata de Santa Genebra—advancing its portfolio optimization strategy.
  • Negative Sentiment: Ongoing regulatory uncertainty around provisional measures on tariffs and social subsidies may pressure future earnings and requires close monitoring.
AI Generated. May Contain Errors.
Earnings Conference Call
Companhia Paranaense de Energia (COPEL) Q2 2025
00:00 / 00:00

Transcript Sections

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Moderator

morning, ladies and gentlemen. Welcome to Compania Paranaense G Energia Copel's video conference to discuss the earnings for the 2025. This video conference is being recorded and will be available on the company's website, ri.copel.com. The presentation is also available for download. Please be advised that all participants will only be watching the video conference during the presentation, and then we will begin the Q and A session when further instructions will be provided.

Moderator

Before proceeding, I would like to note that the forward looking statements are based on the beliefs and assumptions of Copel's management and the information currently available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors, analysts, and generally should consider that events related to the macroeconomic environment, industry, and other factors could lead results to differ materially from those expressed in search for looking statements. This video conference will be presented by Mr. Daniel Claviero, CEO of Copel Mr. Felipe Gutierrez, CFO of Copel as well as directors of the subsidiaries who will be available for the Q and A session. I would now like to turn the floor to Copel's CEO, who will start the presentation. Please, Danielle, you may begin. Hello. Good morning.

Moderator

I thank you all for attending our video conference. We're presenting yet another quarter with sound business results. EBITDA of BRL one point three billion, a growth of 4.2% compared to the same quarter of last year, and recurring net income above 450,000,000 barrels. Our CapEx in the period was of approximately 1,000,000,000 BRL 975,000,000 to be precise, in line with our projection of more than 3,000,000,000 by the 2025. We are monitoring every week the execution of the investment plan, especially in the distribution company because this is the last year of the tariff cycle.

Moderator

Our leverage closed at 3.1 times, basically due to the temporary acquisition of Baixo Iguacu, and we'll complete the second stage of the operation, which is the sale of the entire asset now in the third quarter. If we consider this process, our leverage is at 2.9 times net debt over EBITDA in line with our dividend policy and our projections, always noting that we have the leverage contracted for the coming years, especially due to tariff review, reduction of costs that Copel has been running on its plan and its market commitment, as well as the improvements that we've been perceiving in the price of energy sold by our company. So speaking of divestment, in July, we also had the conclusion of the small hydro asset sales that were part of Copel's divestment plan, and we closed yet another tranche of this operation with the final element, which is the Figuera plant that will likely conclude its closing now in the third quarter. Combined to that in the second quarter, we also had the closing of the asset swap operations with Eletrobras consolidating the results of HPP Mawar and the transmitting company, Mata de Santa Genebra, two important steps in our strategy to optimize our portfolio.

Moderator

In this period, we also had important recognition that reinforced our commitment to excellence and sustainability. We received the best ESG award for the electrical sector granted by Izumi magazine. And for the third consecutive year, we ranked first in Annelle's Ombudsman award. I would like to congratulate everyone at the distribution company for this award, and thank you all for your engagement and commitment to all of our collaborators at Copel receiving these awards and recognitions. So without their efforts, dedication, and professionalism of all Copelians, these accomplishments would simply not be possible.

Moderator

Thank you all very much. And now we will enter the first or the top subject of the this moment, which is the migration of Copel to Novo Mercado. I'd like to remind you all that in addition of being at the highest level of governance of p three, our main objective with this migration is to unify the classes of shares generating increasing liquidity for the company and to all our shareholders. The terms approved by the board of directors consider in the first phase the unification of the two classes of preferred shares without prejudice to any right of the classes involved. The following step in the proposal will be the migration without dilution to any shareholder in a ratio of one to one and to equalize dividends with a payment of a premium to preferred shares of 0.7749¢ of real.

Moderator

This stage will depend on the approval of the majority of preferred shareholders in a special meeting that will be booked by the company at the right time. So in addition to guaranteeing equity between the classes of shares, the proposal includes the migration of all preferred shares to common shares, which will grant the same right to vote and alignment between shareholders. We believe that this will unlock a lot of value for the company through higher liquidity of shares, as I mentioned, and it will be an important tool to attract new investors to Copel, especially foreign investors. However, on August 1, we were surprised by the deferral from CVM of a request to interrupt the general meeting for up to two weeks, fifteen days that was requested by one single class a preferred shareholder. I note that this class of shares represent approximately only 3,000,000 shares in a universe of close to 3,000,000,000 shares.

Moderator

So a universe of 3,000,000,000 shares. So that's slightly over 0.1% of the company's total capital. And even with this representation, our proposal brings benefits to class a preferred shares, in particular, a significant increase in liquidity. We are convinced that the proposal presented by Copel is in compliance with the legislation and protects the interest of all shareholders for the company. We are dedicated to clarify all of the points raised with CVM with full transparency and responsibility so that this process may be resumed within this, fifteen days and follow its natural flow that is to be assessed and discussed with our shareholders.

Moderator

We trust that CVM will not harbor any type of abuse from any minority shareholder to the detriment of the best for the company and our more than 360,000 minuteority shareholders of Copel. We'll continue to maintain the market informed of all the relevant steps of this process, and I now turn the floor to Felipe, who will detail the results of our quarter. Filippi, please. Thank you, Danielle. Good morning, everyone.

Moderator

I would also like to thank all of you for attending our earnings conference call. I would like to start by highlighting the 4.2% increase in recurring EBITDA, which totaled 1,300,000,000.0 in the period with G and T and Com representing 58.4% of this result and 42.6 remaining are generated by the distribution company. The variation was a result mostly of the better result of TNT, mostly due to the best results of transactions in the short term market, lower generation deviation in wind complexes despite the higher curtailment, increase in revenue from the availability of electricity in the incorporation of Mata De Santa Genebra. These are the three main points. But on the other hand, there was an increase of 126,300,000.0 in the cost of purchase energy purchase for resale, which partially pressured the results, especially in the distribution segment.

Moderator

Still, the consolidated performance reflects reflects the consistency of our strategy and the company's capacity to generate value sustainably even in a challenging scenario as well as the power of the integration of its business. At Copel G and T, going to the next slide, we posted recurring EBITDA of 761,400,000 barrels, up 12.6% compared to the '24. Note the positive result in the short term market with 45,000,000 additional coming from the time modulation and lower generation deviation in wind complexes contributing to more than 18,900,000 despite the cost increase in energy purchase for resale, and the result maintained the consistency in operating results. In transmission, we had an increase of 16,900,000 with the consolidation of results at MSG. In terms of sales, we found liquidity in the price market at prices that we considered adequate, which allowed us to close contracts, reducing on average the exposure of our portfolio in approximately 50 megawatt year between '27 30.

Moderator

This result showed those solidity of our operation and Copel Jets capacity to generate value with discipline and technical excellence. On Slide nine, we'll have more color on distribution. Copel Distribution posted EBITDA recurring EBITDA of 569,300,000.0, up point 6% compared to the same pre period last year. This performance was driven mostly for tariff adjustments in June 2024 with an average increase of 2.7% on to to USD. However, this quarter, the effect was practically neutralized by the drop of 2.6% in the build grid market.

Moderator

Even with these challenges, Copel does maintain sound results reflecting operational dis discipline with an EBITDA regulatory EBITDA 42.8% higher. I also note that the new tariff has an average effect to be perceived by consumers of 2.02%, impacting results as of the '25. '25, the trading strategy progressed. Sales increased 21% compared to the '24, reflecting a more dynamic efficient activity in the market. However, we also had a drop of 15.3 15,300,000 on margin impacted by market factors and adjusting adjustments in the operation structure.

Moderator

We also had a deep an increase of 40.2% in expenses with PMSO to prepare the units for the new growth cycle. We are confident that the change in course at Copel Trading strengthen the trading company and consolidate our relevance in the our relevance in the free trade energy market. We posted a 3.7% reduction in expenses with PMSO totaling 708,300,000.0 compared to 735,900,000.0 posted in the same period of last year. This result was driven mostly for the almost 15% drop in personnel and administrative expenses in addition to a reduction of 13% in costs with pension and assistance plans, especially due to the voluntary severance program that was partially offset by the salary adjustment applied for the between the periods. We reduced costs, increased efficiency, and at the same time, we're leveraging the safety of the operation and the quality of services provided.

Moderator

It's an important point here in this compilation of actions. Moving on to net income. We delivered recurring net income at BRL 452,400,000.0, down 9.5% compared to the '24. EBITDA increased 4.2% versus to second Q twenty four despite an increase of 38.7% in financial expenses as a result of the increasing debt required to face the renewal of concessions, investments and acquisitions in line with the company's strategy as well as an impact of a higher CDI compared to the same quarter of last year. Copel's performance remained sound reflecting disciplined strategic management.

Moderator

Now discussing the investments, consolidated CapEx totaled 975,300,000.0 in the quarter and 1,600,000,000.0 year in the first half of the year, maintaining the planned pace. Investments are concentrated in assets that expand the remuneration base, focusing on quality of services, operational efficiency and modernization of infrastructure as well as one off investments in strategic areas. On our last slide, the '25, the company's leverage was at 2.9 times net debt over recurring EBITDA, excluding the effects of acquisition of Baixoig Vasu that will be concluded in the third quarter. The divestment will be concluded. This level is in line with our optimal capital structure.

Moderator

Total net debt was 16,600,000,000.0 with a diversified composition between financial institution, market instruments with debentures, and securities. Rating was reconfirmed as triple a reinforcing the trust on Copel's financial soundness. As for the nominal debt cost of debt, even though it went up, the equivalence to CDI went down, demonstrating the efficiency in our funding. We remain attentive to the market dynamics and committed to the maintenance of a healthy capital structure, structure, disciplined, allowing Copel to continue to invest safely, generating value to our shareholders. This concludes our presentation, and we can move on to the Q and A.

Moderator

Thank you. Thank you. We will now begin the Q and A session for analysts and investors. If you have a question in writing, please use the Q and A icon, including your name and company. First question, Luisa Candiota, Itau BBA.

Moderator

Please, Luisa, you may go ahead. Good morning, everyone. Thank you for this opportunity. I have two questions. First, I'd like you to, if possible, give more color about the trading strategy for the quarter since there were some movements of asset swaps and the comparison with the first quarter is a little bit more difficult.

Moderator

But it apparently, you focused on selling more on longer vertices like 28, 29. So if you can give more color in the trading front. And the second question about the migration to Novo Mercado, as you mentioned in the beginning of the presentation, just to understand if in your mind, it's still feasible to conclude this migration by the end of the year to have a little bit of a perspective of your timeline? Thank you. Good morning, Luisa.

Moderator

I'll start from your second question, and then we'll complement. But since this interruption was for fifteen days, Luisa, and this will be next Saturday, we're doing, as I said, providing all the clarification and all the additional information. And if if this is resolved in this period, which is what we believe will happen with a favorable decision to the company, it will be feasible for us to maintain our timeline to get this all concluded by the 2025. So despite this slight delay, depending on the decision, we will have to resummon the general meeting, and this fits into our timeline. We had some excess time planned, and then things will be a little bit tighter.

Moderator

But the other issues that do not depend on CVM continue to be prepared and continue to advance waiting for this point that will be solved by the sixteenth. Any comment about this, Felipe? No. That's it. Rodolfo?

Moderator

So if you can give a little bit color about the trading strategy, please. Excellent. I think the first point referring to the m and a and this asset swap strategies. Since the beginning when we outlined our long term trading strategy, we already had a plan for this type of operation. So irrespective of what happened, there were slight adjustments.

Moderator

But in any time, did we have to buy energy or reduce the price? That's the first important point. With that said, we also saw during this quarter great opportunity, especially for the long term. This is a movement that's been unfolding since the end of last year with a change of perception and the complexity of the system operation. In September, when we saw the need of dispatch from thermal power plants to cover that, the market started to see our levels, and this materialized this quarter.

Moderator

So we made the most to sell 27, 28, 29, almost 40 BRLs above what was sold in the past. We don't see the same for 2520 So there was space for some portfolio adjustment, but we focused a lot more on this longer sales. The price is very contained waiting for better windows. Just to add, Luisa and everyone, these volumes, these percentages here are still very small considering the amount of energy that the company has for these medium term periods. And this is within our strategy and dilutions between eight plus four plus three plus two.

Moderator

So that's in line and showing this volatility of the market either from the price parameters, the complexity of the operation. The need for power has been showing opportunities in the trend of continued improvement in our view in the PLD price. Very clear. Thank you. Our next question, Bruno Amorin from Goldman Sachs.

Moderator

Please, Bruno, go ahead. Good morning, everyone. Thank you for this opportunity. I have to I'd like to get an update about the strategic view looking forward. You delivered some important levers in terms of creation of value recently, establishing the new dividend policy, the migration to new Novo Mercado.

Moderator

You put together a very strong team of directors in this recent months. So the question is, to that end, you are clearly preparing the company for the next cycle. So if you can comment about this coming cycle, the areas of interest in addition to the auction of the capacitive reserve, the what you believe will be interesting for the company. Should we expect any relevant m and a movement this year or next year, or is this something more for 2027 onwards? So if you can give us an update on the strategic side of capital allocation, how you see the company going forward, that'd be great.

Moderator

Thank you. Good morning, Bruno. Thank you. I think you mentioned something important here. Going back, all of the promises that we made since our follow on, we've been delivering in full all of the promises.

Moderator

In many of the cases, delivering them even faster and with better results. So quickly, renewal of the brand bonus renewal of concessions. That was the first item that we always talked about. The second, a significant reduction in the PMSO costs through the first voluntary dismissal program. We're seeing the results of the PMSO considering inflation, in the p line.

Moderator

Third, it was the decarbonization of the matrix with the sale of CompaGas in WEGA port. The reorganization of the portfolios on the small PCAs and the crossing, the swaps, and the the portfolio with the assets with the Eletrobras. That was the object that will be concluded this half year. We also saw the reorganization of the company and the attraction of new talents as you so rightly mentioned. And this has an effect not only on the c level, but also some strategic areas in leadership and other specific areas has been said in a lot of units of the company.

Moderator

So in retrospect, this maintains the optimal capital structure. That's an important promise. The update in the dividend policy. And for us to close this cycle of promises, what are the three that are moving along to be concluded by the 2026? It's the migration to Novo Mercado that we mentioned, the tariff review in 2026 that has a a follow-up from the entire company, not only Vilela or Andrea from regulation or Felipe, but this is a a big group considering the relevance and the results that we will deliver to the company and the market.

Moderator

And finally, what's also the closing of the complement of the final reduction of our commitment to reduce 20% of costs with based on the 2023 nominal LTM that we intend to present all of this closing by the end of this period in 2025. So it's a long story short just to reinforce the excellence and the consistency that Copel has in delivering its commitments. So with that said, in a medium to long term, we're still a lot being done in the company. Not only the capacity bid, but digital transformation, restructuring, migration to new systems, the transformation of technology. So a lot of other fronts and questions in addition to those three.

Moderator

So commitments that need to be delivered. And we're moving along and increasing the attractiveness and the enthusiasm and work with our team. So long story short, we don't have any view or any rush to consider M and As or capital allocation allocation because I think we still have all of these path to generate value. So in this path of extracting more value of our current base and at the in this Copel Day on November 19, we'll invite all of you to attend. We will show what we see, the avenues for growth from now to 2035.

Moderator

So this is something we will address. So why such a long environment? Because we are here with a long term view with a commitment to generate value. And the final point here on our energies that are being focused currently, they're very strong in an aspect of strengthening the culture of Copel as a corporation. So the elements of ambition, purpose, values, what guides us because we consider this as a competitive differentiator in our management model.

Moderator

So this needs to be consolidated. People in management is an area where all of us, partners of the company, in particular, Marcia Bayena, that's the management VP that's been dedicating a lot. I went on for a little bit too long, Bruno, because this is something that I really enjoy talking about. That's a view of a trajectory of generating value in the long term, but these these things will need to be done at the right time. And we have here a lot that may be delivered in this execution process without any transformational movement that will have to come, but in a view of '27 2027 onwards, in a way that this may come up.

Moderator

But we don't have anything on the short term. Excellent. Thank you, Danielle, and congratulations again for the deliveries so far. Next question, Maria Carolina Carneiro from Safra. Please, you may go ahead.

Moderator

Good morning, everyone. Thank you for the call and the opportunity. Danielle, I'd like to since you talked about what you've been delivering in terms of cost, This is another consecutive quarter where we see a lot of lines improvement. You mentioned you're going to talk about this on the Investor Day, but if you can give us an overview of the type of measures and projects you're adopting. Let's say this, so called second wave of efficiency so that we can be prepared for the coming quarters of where this additional outperformance could be coming up that remains strong quarter on quarter.

Moderator

And if you can also talk a little bit about the other side, We've been seeing energy tariffs being a bother. I mean, pressuring somehow the public opinion, the government thinking about solutions, like the measures that we saw. How this been reflecting in the com trading policy, your management of ADA and other companies have been com commenting on how this has been the trend of working closer in the trading side and paying that on PLD, the spot price of each classes. If you can talk about that a little bit as well, that'd be interesting. It's a a broad scope of your question here, Carol.

Moderator

So I'll break it down, and I'll ask Felipe, Vilela to please also contribute to the answer. So first about the levers. I think the company, Copel, has been coming from a very serious efficient management even before the transformation process. So it had already been demonstrating good deliveries, but always in line with our roadshows. You probably remember, there was also that discussion of Copel had already had deliveries, and the inherent ties of a company always allow for opportunities.

Moderator

I think we've done some things, and the people part, I think, is already overcome, but there's always we always look not only supplies that you've been able to change everything in procurement and supply with the director that is connected to Felipe, a review of some contracts, some gains in scale that were achieved and do not require bidding processes so we can gain agility, flexibility, not only for the contracts, but also volumes. I'd say that we've been seeing good reflexes of that on G and T. So there's all that shock in a third wave and the shock of digitalization, transformation, project revision, not only with smart grid that we have the largest smart grid in Brazil and the investments we've made, robust CapEx, but also in technology and processes, and then a coming wave that we're already perceiving for artificial intelligence. So there's nothing major, but if you add up the small consistent moves, that's how we intend to get to that commitment of the 20%. So I think this would be a first main step on your question.

Moderator

The second part, the tariff side is a concern for all of us, not only here in Parana, but also everywhere in Brazil. Just before continuing on the tariff, all of these moves that we're making to reduce costs and improve performance, the objective is to seek efficiency, but always, always focusing on improving customer service. That's why this in some areas, in some lines at the distribution company, you've been seeing a certain increase in service provision because at the end, what's more important is to always take care of our customers, especially in a concession area that has been growing historically above national averages. So that closes the first part because it's also a strong focus. Our view is the quality of service provided to our customers that are demanding more and more quality, especially in the economic growth we're seeing.

Moderator

With that said, the tariff aspect is a point of attention. It is a point of concern. But historically, in the tariff adjustment this year shows that at the concession here in the state of Parana, we are seeing considerably moderate adjustments. I think a lot of it still comes from the subsidies to tariffs. This one of the 2%, two point o two, more than 5% come from costs at the city.

Moderator

So I think it's a structural concern. And when you talk about opening the market and the provision measures and so on. They always have to open, but we cannot lose sight of the client, the customer who's at the base because the customer is being penalized with rates and tariffs and subsidies. That's a big issue. And to close the PC the ADA question, I don't know if you have Philippe, anything to add to that and the ZBB.

Moderator

I can I have some comments? I think there are some very relevant fronts in these levers as we did in the ZBB exercise and implementation. So some units will be more diversified in 2026, especially at the distribution company. The supply department has a strategy to review all contracts, simplify contracts, unify contracts, which also brings a new competence for negotiation that we always obviously capture value. This is intensifying, and there is a important front of reviewing and simplifying processes where technology plays a very relevant roles.

Moderator

So when you combine all of these fronts, that's where we find opportunities for cost efficiency. We prefer the concept of efficiency rather than reduction of cost because you also have best a better allocation inefficiency. Just to add this question, Carolina, is in line and connected to Bruno's previous question. And one thing that I've been saying repeatedly internally and to the market, no company generates long term value simply by reducing costs and selling assets. The company must make good capital allocation.

Moderator

So that's why the phase three of the expansion is very relevant in the medium, long term for the company. Right now, hear about ADA and cost to see that we have that very controlled in the company. But if you can, Vilela, give some color on the initiatives to address Carol's question. Excellent, Carl. We have a strong culture and a robust process to call for collection and many negotiation channels and payment in installments.

Moderator

And this year, in the first half, we achieved 1,500,000.0 in smart meters. That's one of the biggest smart grid programs in the country. So that allows us to remotely shut down the energy without having to go to the customer's house. And when the payment is made, the client is reconnected So all of that and that combined to the state of Parana's culture, which is a paying state.

Moderator

We have an ADA below the tariff coverage. So I think this is a big strong feature for Copel. Excellent. Thank you, everyone. Next question.

Moderator

Andre Sampaio at Santander. Please, Andre, you may go ahead. Good morning. I have two questions here quickly on my side that's to add to what has already been discussed. First, about migration, I'd like to hear a little bit from you about the dividends dynamics or what the strategy will be in the announcements for the year if there is any delay, if there would be the announcement of new dividends before the migration, potentially adjust the numbers or potentially delay dividends?

Moderator

And the second questions in the provision measures, I'd like to hear a little bit from you about implementation, if we have any if we should expect any positive or negative surprise in the process. Hello, Andres. So let's go, Felipe. First about the migration and how we address the dividend policy, and then I'll talk about the legislation side of the thirteen hundred, thirteen o four. We continue working on our migration program with dividends payments by the end of until the end of the year.

Moderator

The dividend policy is whole, both in the parameters for payout payments and the minimum number of payments of dividends. So this is the scenario we work on today. So, basically, our policy talks about at least a minimum of two payments, two annual events, and we always have in the fourth quarter. We announced a dividend of the first half of the year. So the idea is to maintain that.

Moderator

Of course, with this migration to Novo Mercado, it is also part of this equation, as Felipe said. But what's most important is that we'll maintain the two events that we committed to in the policy and the announcement of that during the fourth quarter as the company has always been doing in recent years. So that addresses the first part of your question, Andre. The second part about the environment. I mean, everybody's seeing the news and discussions.

Moderator

The political institutional environment in Brazil is highly contaminated, very controversial, and this has an impact in all fronts, either in the naming of new directors at the different government agencies or the developments of bills and provisional measures in congress. So at least we are monitoring all of that, but I believe that no one, not even the highest authorities, are able to know exactly what's going to happen because every week, there is something new. There's a new decision. There's a new tariff or an evolution or a legal decision. So everything ends up contaminating the political environment.

Moderator

But bringing it to our question, I think in the base scenario that we work on, m p 1,313 o four will probably merge in a single text, and one of them will have to be approved at some point because of the implementation of the social tariff, which has already occurred. So this must be approved. So even if it's a minimum scope of the approval of anything of these two thirds, That's our base view. It will be needed. And I think this is a point that is feasible in our view that generates one element and another important view for the government and society and the discussion is opening the market.

Moderator

The discussion is whether the proposed timelines are in line with what is feasible and addressable for the questions and a reduction of subsidies. So I think these points are in the right line and the opportunities that may be for any change. And our advantage, at least in the 1,300, is that we have a writer who knows it in-depth. It's a congressman, Fernando, who's very reasonable, competent. He knows this in-depth.

Moderator

He used to be minister. So I think this brings confidence to the players. But a concern that is left is that everything that comes in, congress never knows what comes out. The concern is that what comes out of congress includes more subsidies. When there was that discussion of the videos, they actually made it worse for the tariff environment, for the safety, and the planning the technical planning was made worse.

Moderator

So this is a point of attention that we have, and and we work here, Andre, institutional, through the entities or with Copel directly. We work to defend and stand for what we consider fair in the political institutional environment. So that requires permanent monitoring, considering the reality, as I mentioned, then something will be approved because it carries the social tariff aspect, which is something that is very dear to the population and the government. Great. Thank you.

Moderator

Our next question is in writing from mister Reynaldo Vericimo. He says, at the conference last quarter, you informed the intention to participate in the bid of two energy generators. Could you update us? Is there anything new on this? Hello, Reynaldo.

Moderator

I think here you're mentioning the capacity bid LRK that we have two plans, Pozjarea and Segredo, that are two robust, very competitive processes. I imagine that's you're referring to because there's not any other view to invest in plants in the short term other than these that we mention mentioning in the LR cap. Unfortunately, since our last conference call until now, that's almost ninety days, the ministry has not published the ordinance yet, and the ordinance is crucial for that. This ordinance will not only bring the guidelines because the bid should have happened at the June, but the ordinance will also bring some evolutions. And what we're seeing, and these are statements by the ONS itself, is that there's an urgent need of power for the system and the load and the expressive increase of PD with the generation.

Moderator

There's an increase of excess energy at lunchtime and a deficit of power at the end of the day that's been basically fulfilled by hydropower plants and thermal power plants. So this need is urgent for the system. It's not we saying that is the government's declaration. And what we're expecting is that for the coming weeks, we should have an announcement so that the bid could occur in the 2026. I don't see possibility for this to be delayed further because people are even talking about a very expressive bid way above 12 gigs in the need of power to supply the next two years.

Moderator

And the advantage here is that hydropower plants like Copel and others with more than five giga gigawatts registered is that it's a completely renewable source Without a doubt, it will be the lowest cost for consumers considering all products of all years, and this will always be done with technology products and equipments that are national. It's clean, sustainable energy, the most affordable for consumers, and strengthens the Brazilian industry. So we don't see any other path different than giving room and preference to the size proportional to representation. And we're working on our side doing our homework.

Moderator

We pretty much concluded everything for both projects, waiting for this definition of the ordinance and the date of the capacity auction. In order to ask questions, please click on raise hand. Please wait while we collect the questions. The questions and answer session is concluded. I would like to turn the floor to Mr. Daniel for his final closing remarks. So if there are no further questions, I would like to once again thank you all for your participation. I send my greetings to my partners at Copel, all Copelians for yet another quarter of consistent deliveries without hiccups, delivering what we had committed to not only during the last few years, but year on year in terms of efficiency, quality to our customers, and valuing and strengthening of our team and our. So we move forward with the execution of our strategy plan, and the priority now is the execution of the plan and the deliberation to our shareholders. They will discuss, and whatever they discuss will be the role in our meetings, but so that we can, as soon as possible, continue on with the Novo Mercado process.

Moderator

Because in our view, this will unleash more value, as I said, and will generate value or benefits to all shareholders, every shareholder. And the biggest asset for valuing the company is what drives us forward and what unites us. So I'd like to thank you and say that we remain committed with the delivery of excellence and execution and the operation of our assets, our companies, the care with our people, and complete full discipline and capital allocation so that with all of these elements, we can continue generating a lot of value to the company and to all our shareholders and stakeholders. Thank you very much. Have a great day.

Moderator

Copel's video conference is concluded. We thank you all for attending. Have a great day.

Analysts
    • Moderator
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