Centrais Eletricas Brasileiras SA - Eletrobras (AXIA) 2020 Q4 法說會逐字稿

Ladies and gentlemen, good morning to you all, and thank you for waiting. Welcome to the earnings call of Eletrobras for the 2020 results regarding the fourth quarter of 2020. We inform that everybody will be hearing the earnings call during the presentation. And thereafter, we will start the Q&A session, and you will receive further instructions.

We remind you that this presentation is available in a PDF file in the IR website of Eletrobrás. (Operator Instructions)

Before we start, I would like to clarify that the statements contain estimates and forecasts, which are not statements of facts happened in the past, but they reflect beliefs and expectations of our management and may stand as estimates and forecasts for future events, and these were based on information that is available to the company as of now. These are not guarantees of performance because these are based on facts that may or may not occur. You should understand that general economic conditions and other operational conditions might impact the results.

With that, we clarify that since March 16, 2021, the presidency is occupied in an interim way by Ms. Elvira Cavalcanti, also Financial Director and Director of RI. We will have Ms. Elvira Cavalcanti, Interim President and Financial Director of Eletrobras; Mr. Wilson Ferreira Junior, member of the Board of Directors; Prado Rodrigues, Director of Investor Relations.

Now I would like to give the floor to the President, Ms. Elvira Presta to start the audio conference. The floor is yours.

Good morning, good afternoon, everyone. Welcome once again to the earnings call of Eletrobras. And to comment on the results of the fourth quarter of 2020 and also to do the turnaround -- the evaluation of the turnaround process, we invite our guest, Wilson Ferreira Junior, from the Board of Directors to do the presentation, the floor is yours.

Thank you, Elvira. Good morning, good afternoon. To all of our colleagues and directors of Eletrobras, thank you for the opportunity to share this information about the last quarter of 2020. I would like to acknowledge our investors, our shareholders, the analysts that are following up on this closing of the year 2020. And we have a longer presentation today. I will be as brief as I can since we already published the results on Friday.

I would just like to highlight that we are on the Page 2 of the disclaimer. And due to the official letter to CVM/SNC/SEP 04/2020, issued on January 12, Eletrobras made the adjustment to the transformation rates of RBSE. They were classified financial assets for contract assets under the terms of CPC 47. And as a consequence, in order to maintain the same comparative base, the company restated the balances of these assets.

The accumulated reflexes of the restatement are found on the balance sheet. In the statement of income, statement of cash flow, statement of comprehensive income and statement of added value, presented below. And you can -- they are presented below as provided by the CPC 23/IAS-8 accounting policies, changes in estimates and error corrections, as per explanatory note 4.4 consolidated financial statements for 2020 for disclosing 4Q '20 quarterly results purposes, values have been restated with the effects of said letter, and are already being considered throughout 2021.

We will do the quarterly disclosures, comparisons with the 2020 quarters will be properly restated. There's a lot of work therefore that needs to be done.

And therefore, I will start the presentation, with the corporate and operating highlights. And you can go to Page 4. I believe that the main highlight here was the transmission RTP periodic tariff review, BRL 3.036 billion, from July of last year. Therefore, we will have a recurring EBITDA of almost BRL 14 billion, a 2% drop when compared to 2019. In the fourth quarter, more relevant value of BRL 4,575 million, with an addition of 46%, in regards to the fourth quarter '19.

And once again, we have the incorporation of that revenue, those 2 values deliver a recurring net profit of BRL 9.4 billion, and the value is 4.3 -- BRL 4.3 billion. And we have, once again, a leverage net debt, adjusted EBITDA of 1.5x LTM. With the new RBSE, we will have an indicator of leverage, and you can see the results.

We also have to highlight at the beginning of the year, the final payment of the dividends withheld in February 2021, BRL 2.2 billion, almost BRL 2.3 billion. We had with our consensual personnel dismissal, we had minus 562 people, employees compared -- in comparison to '19. And we have about 400 in 2021 in the first quarter. I'm going to talk about this. There is a personnel recurring cost reduction of almost BRL 400 million -- BRL 394 million. And we have the sale of 23 SPEs in the fourth quarter of 2020. And we have an inflow of cash of BRL 624 million. We also have an impact at the end of the year.

We have the adjustments of the transmission assets, and provisional measure of 1,031 in 2021, the Eletrobras Capitalization that we have the innovations in regards to PL 5,877 of 2019 the bill about capitalization. We have HPP Tucuruí new contract. We have funding resources for funds from the Legal Amazon and Watersheds of Furnas. We have Government Golden Share back. And we have the redistribution of the economic benefits between CDE and the federal government, 50% each and the possibility for BNDES already to begin its capitalization studies.

It was really a few weeks ago, the recognition of Eletrobrás. Well, we are in the 80th position from 1 of the 100 better companies in terms of corporate reputation, we climbed 14 positions since '19.

Those were the highlights. And now let's talk about the sectorial and economic context. As you know, there is a drop in the GDP of 4.1%. Due to the COVID-19 crisis, we see that the drop here, the daily energy load at 2%. So the process of the quarantine started on May 5, 2020, with drop of 26.8%. The monthly electricity consumption was also very affected. We had a drop in the year from 2019 of 1.6% in the year. But as you can see in the second quarter of last year of the month, they were above in comparison to 2019 in blue, and there is an increase that led to fluctuations in the PLD settlement price for differences, as you can see in the graph. And the value dropped from BRL 500 to BRL 200, and the company had the allocated energy in the PLD in BRL per megawatt hour and they were regulated for 2019.

Let's go to Page 6. We can have a generation performance, a very clear overview. We have a reduction of market share now with 29% of Brazil with 50,642 megawatts, and we had 33% of the energy generated in Brazil. We have the renewal. We have renewable energy, and that is 5.5% regarding accumulated fourth quarter of '19. And we can see them below. We can demonstrate the energetic balance and the generation income. And we can see the contract with the ACL, we had from 34 to 39. ACR, we had a drop from 15 to 11. And that made the pre-allocated volume, it went from -- well, the ACL from 34 to 39, as it was mentioned. And we had here in the right, the generation income. We have them in percentages values with each effect in the graph here. We went from BRL 23 billion to BRL 22 billion. And here, there is a drop in the regulated market.

So there's a drop here and we have allocated more volume, more revenue, and that increases this about 4.1%. But you can see that the value of the ACL went from BRL 173 MWh to BRL 146 MWh. So there is an excess of volume that was not compensated by the drop in values in our assessment. And we had the annual adjustment, which had the same behavior, but there was a stoppage that is recognized in the third quarter.

Let's go to Page 7. More sectoral context and performance, you can see the regulated contracts in terms of volume. We have the same result. And down below, we can see everything that I was mentioning at the end of the contract to 0. We have the regulated contract of minus BRL 417 million. The hydro quotas are adjusted to BRL 132 million, the nuclear quotas, we have a negative BRL 29 million in the bilateral contracts. You can see in the free market, they have a higher sales and a lower price. So higher sales in supply and new supply and readjustments in the price, and the CCEE has a higher value of BRL 86 million. Those were the generation details.

And let's conclude on Page 8. And we have the future -- well, the generation plants under construction. So we have 1,571 megawatts that are being built, we should get by the end of this year, 154 megawatts, which is the conclusion of the combined cycle of Santa Cruz, 150 megawatts, plus another 3 megawatts from Casa Nova, 3 megawatts. There is the repower up to April of Curuá-Una, 12 megawatts. And there is a project of Angra 3 by November 2026, 1,405 megawatts. Speaking of Angra 3, we have an advancement here 75%, we did pre-investments, as you can see, BRL 8.5 billion. And the direct investment to be made, BRL 18.5 billion.

What is important to highlight here is the conversion of MP 998/2020 into Law of 14,120/2021, which has the legal security for this project. So we have the 50 years plus 20 years grant and the 40 years of supply contract. And of course, we have the assumption for the price, which is being done by PMDS through the economic and financial viability, and the issue due to the readjustments for the inflation and cost of the nuclear fuel, which is what happened already in the Angra 1 and Angra 2.

So we have the regulatory framework. As part of this, work continues to advance. And in February of this year, we had a public notice for contracting the civil work and part of the electromechanical assembly, the critical path acceleration plan. And we will leave the power plant for the conclusion of the work, as we mentioned, with the equipment and the assembly and the civil works will continue.

We're advancing a lot. Let's see Page 9. We discussed this in detail and the importance of this Law 14,052/2020. As you can see, which speaks of the established new conditions for the renegotiation of the hydrological risk in electricity generation. We had the time line, as you can see, and the CCEE calculation expected by March, we will have the publication of the calculation by Aneel. So the calculations of CCEE is BRL 4 billion for the corporate, direct operations by Eletrobras companies. You should remember that we have a limitation for Eletrobras due to the 7-year limit of the extension grant, BRL 3.2 billion.

As you can see here, the amount for January 2021, and we have BRL 844 million of SPEs, which -- of which BRL 335 million are proportional to the Eletrobras participation. Therefore, if you remember, we will have BRL 3.5 billion of participation in Eletrobras. And we have the Chesf, which is the amount unpaid for injunction, BRL 1.5 billion. The credit withheld by CCEE, BRL 803 million. So we will have to receive a payment of BRL 718 million, the net amount to be paid if the injection that limits the GSF of 95% does not succeed. So this is something that is ongoing.

Let's talk about Page 10. The transmission operating results. Once again, the participation, we now partake 43.5% of Brazil, 76,129 kilometers of the total Eletrobrás transmission in lines, 70,092 kilometers, more than 230 kV. You can see here, these are the best results for operational availability of transmission lines, 99.94%. And we have a reduction of 14%, almost 14% of load shedding disturbances, and 4 years ago, we have not had any major disconnections. So Eletrobrás in this period didn't cause any sort of limitation to consumption and a variable portion. So the trustworthiness of the transmission lines, very favorable. We dropped from 2.8% to 1.84% in the fourth quarter of 2020.

We're one of the best transmission companies just last year. In comparison to the fourth quarter, we had a reduction of expenses with the variable portion of almost BRL 37 million, which indicates the trend to reduce the discounts by the Eletrobras companies. So there is more transporting and availability of our work, which will improve the reinforcement and improvement in the transmission under construction. We have here 24 projects related to substation, 56 projects related to transmission lines. Total planned investment, BRL 2.12 billion, and the revenue of RAP, and the allowed revenue of another BRL 191 million. Therefore, we have a perspective of an improvement of credibility and getting these results.

Page 12. We consider something very important, which is the journey that we are enterprising. There is a remuneration of the leadership. There is the work that is developed in the company, which is what we call the sustainability excellence with an important participation of the Board of Directors, we have the placement of Eletrobrás in the yearbook, The Sustainability Yearbook 2021, and we were considered Bronze in Sustainability Award. Bronze Class 2021 from S&P Global.

We are carbon efficient by Carbon Disclosure, you can see here, the carbon efficient index B3, and we have inclusion of ISEB3. And you can see on our site the 2020 journey, the Organizational Climate Survey. And you can see all the actions of ISE, we align our leadership, and we have the goals that are ISE that are related to the variable income. We are part of the 2010 Organizational Climate Survey, and we got 77.96% increase in the index of favorability since the last edition. And we have on the ICO2B3 Carbon Efficient Index at B3, and net zero emission of greenhouse gas emissions compensation target.

We are A minus on the Climate changes Water Security on Center for the Fourth Industrial Revolution, C4IR Brasil. And there is the recognition from Bloomberg from Gender Equality Index.

Even with all the pandemic, we've had wonderful positive results, and the company is performing in an exemplary way.

Now you can see on Page 13, the efforts of our controlled companies, Amazonas GT and Eletronorte, which jointly contributed with the 117 oxygen cylinders to the hospitals in Manaus and Presidente Figueiredo in Amazonas. And we also had the transfer of oxygen therefore in the state that was very important, and we contributed at that very sad moment.

With that, we go to the financial performance of Eletrobras in 2020. We have on Page 15, the income statement in millions of BRL. As always, we have the IFRS, the reported value in the first column and then the recurrent on the right to give you a better idea about the future of the company. We are going to work to achieve these results, we get revenue that is close to regulatory.

So the gross revenue grew 15%, the main contribution, here you can see on the right, we have BRL 1.4 billion. We have the revenue for Transmission, 52%, which was recognized and we had in generation, in the operations, with a higher ACL in the short-term, and the PIEs Amazonas GT and the 2 term electric TPPs Coari e Mauá 3. Therefore, we have the only negative effect in the ACR regulated market at the end of contracts, minus BRL 436 million.

With that, we still have, for both cases, generation and transmission, an increase of revenue, 1.3% generation and transmission 52%. We also have a positive news, PMSO recurrent when we see a drop here of personnel 7%, supplies and services, 10% drop. But we also have actuarial losses for the pension funds due to the volatility and that hindered the company, and we also see nonrecurring one traditional legal effect, which is PDC, Light Judicial Agreement you can see the main one with Light and Furnas representing the effect here minus BRL 737 million. The important thing here, personnel, supplies and services, these are relevant values for the company.

We also had recurring operating costs higher because we had the operations in the north. And here, there was a stoppage in Candiota, the investment was higher for construction, 7%. So fuel, 10% for Candiota 3, the stoppage lower than the energy for Santa Cruz.

The recurring financial results, we have the exchange rate variation. We had the effect for BRL 505 million, the derivative effect for Eletronorte of another BRL 265 million, the monetary adjustment, minus BRL 144 million, and the financial investments. We have something also very important, nonrecurring, the activation CGT Eletrosul's tax credit in the fourth quarter, a recognition of BRL 1,727 million. These are nonrecurring, of course. Monetary adjustments for compulsory loans and revenue from privatized distribution companies, bonus rollover prize plus FID commission.

And let's see on the gross revenue, the evaluation here. We have the evaluation of the 15% that we had already mentioned. These are recurrent -- well, the recurring gross revenue and the gross revenue, IFRS are basically the same. We have generation and exploration, minus BRL 52 million in exploration. And we have the activity of O&M in the pre-market, BRL 132 million. This is very important for the transmission.

For O&M and construction and the contract revenue, we have 83%. We had a loss here of BRL 61 million of other revenue, several things. We had the Furnas, out of the BRL 61 million the Furnas deferred net actuarial gains of BRL 1732 million in the fourth quarter 2019, and BRL 67 million in the fourth quarter 2020. And the stoppage of Angra 1 and 2 and the Inflexibility of Candiota 3 as the main contributors.

So gross revenue growing 50%. And from now, we understand that the -- there will be less impact from the nonrecurrent.

So let's see the PMSO. We have basically the maintenance of the PMSO for '19 through '20. As I have mentioned, there are 3 favorable items: personnel, supplies and services. And all of them, the relationship you can see here. The actions on the way on the left, and we have the negative BRL 187 million, which has to do with the actuarial losses of Furnas and the bank guarantees, the investment in the discontinued project of Eletronuclear and donations and contributions, which is BRL 25 million. These are the under, let's just say, recurrent items in this period.

As you can see down below, nonrecurring items. We have the Light Agreement that we have for BRL 496 million, which is not just cash, there is also assets of Furnas to Light. There is Cien of BRL 134 million. We concluded that process. And we had a few things that we have from Eletronorte here. We have the operating provisions, a few characteristics, a part is in the report. All the explanations are in our statements. But the main one, clearly, is the compulsory loan, 590%. We have for the total volume. And it was recommend by the lawyer that we have the judicial process from Rio de Janeiro and enforcement of claims not provided in the initial petition, and then in the federal district, we had repetitive unfavorable decision reports.

In both cases, lawyers representing Eletrobras. So the main tension is in regards to the provisions we had here. The positive effects, in the PECLD, in the financing and loans we had reversal in accounts receivable from Amazonas Energia BRL 217 million. We had a new agreement and the reversal in Furnas due to the loss of CIEN lawsuit in the amount of BRL 134 million reduction here, to BRL 93 million in this agreement. We also had PECLD consumers and resellers Amazonas Energia's energy debt with Amazonas GT BRL 95 million due to the decision of Aneel to do the renegotiation. And it will be a positive contribution as well. We also have the stoppage at Candiota 3. There are those aspects as well. And mainly, the impairment of long-term assets.

We have BRL 515 million this year. These are positive effects from TPP Santa Cruz and Camacari, the reverse on those. We had the Candiota 3 Phase C constitution, Eletronorte, losses on fixed assets in progress BRL 84 million and HPP Samuel minus BRL 52 million. You can see that care and the provision is very important. But each of these themes have the perspective in the financial results.

Let see Page 19, you can see the EBITDA, the variation. The variation of recurring items here. We have the nonrecurring items, minus BRL 115 million, we already talked about it. The positive results of our presentations -- shareholding participation, see higher costs. We had more generation, which had fuel to power the plants and there is a variation of the NFO. There is the recurring operation -- operating provisions with from the PCLD and the improvement in the GAAP provision and nonrecurring items, which is very big. You can see BRL 4,874 million, contingencies, BRL 3,128 million, investment losses, BRL 568 million, and other BRL 674 million. These are the costs. And they are reflected in the net income. And we see the net income BRL 1,269 million in recurrent, it is affected by the growth of the EBITDA, BRL 1,451 million. And the result recurring financial and D&A BRL 485 million. The negative results.

The nonrecurring items are the adjustment to the EBITDA on Slide 19 that we already talked about for BRL 4,874 million. And here the monetary restatement of the compulsory loan, Selic contingency. We have here the results of the company.

So how do we do the destination of the results? The -- well, we can see the reported net revenue. We have the legal reserve, and we had the realization of the revaluation reserve, the prescribed dividends. We have the result of BRL 6.28 billion net revenue. We have the minimum payment 5% adjustment of the net income. And we have the mandatory dividend at 25% net adjusted net income, BRL 1.5 billion. We have the balance to be allocated. And we have PNA 1.038, PNB 1.038, ON 0.943. And we have the investment here, net revenue, statutory reserve, and we have a retention of profits, article 196, BRL 1. 471 billion, and BRL 201.7 million referring to the resubmission of the financial demonstrations of 2019, and the retention of article 196 Law 6,404.

Page 22. As you can see, financial discipline, will do the follow-up of our leverage, we got in '16, it was 6.1. And we have the net debt/EBITDA without RBSE, and we have the net debt/EBITDA with RBSE and then the net debt input. You can see on the graph the results.

We've incorporated RBSE, we got to 1.5. The net revenue -- the net debt, 20.3, and the recurring EBITDA was BRSE BRL 14 million. It's a very important value. The capacity has -- more capacity turnout with a clear demonstration of our goals, financial goals, which is the goal being the net debt over the EBITDA -- over the adjusted EBITDA being below 2.5.

Might be the investments of the company. We have here, you can see the slide, the BRL 3 billion in 2020. It is true that we had favorable effect, you can see here BRL 700 million. The credit from the SPE, BRL 696 million. This is BRL 4.5 billion. The corporate total because we generated cash flow. And beyond this, we had impact of efficiencies of the recurrent with the COVID and Candiota 3 stop, you can see here up here. That's basically BRL 1,301.4 billion, which are processes that are delayed, but will be done. So the saving would be BRL 700 million for the year, which will give you a realization of 60%.

I'm going to conclude the presentation, speaking of the turnaround. In the 5 years, we can see here the legacy that was instituted over these 5 years. We started with a company that had 26,000 employees in 2016. And we had the consensual dismissal plan, PDC, we got to the end of the year of 2020 12,527 employees, at the end of March 2021 12,088, and we are in a negotiation with the union collective bargaining agreement, and we should get by October of 2021 with 11,612 employees, it is an important reduction, we can see down the growth, a reduction in the PMSO from BRL 12.8 billion to BRL 9.1 billion, with a reduction in 2020, the value will be lower in 2021. And we have the implementation of SAP, the OBZ, the economy OBZ, the economies of BRL 263 million in '19 and BRL 281 million in OBZ economy.

We can see that we had -- we dropped from 3.6, the net debt-to-EBITDA adjusted to 1.5. And here, the market is recognizing the problem, the improvements, the -- in 2016, the market value was BRL 27 billion. And now the market value is BRL 35 billion. And a fundamental demonstration of that in an alignment, and you can see the number of shareholders. We had 23,000 shareholders at the end of 2016, and now we have 140,000 at the end of 2020.

Maybe I also should highlight the restructuring. We had 178 SPEs and we had difficulty in the registrations. We created a board of conformity. We reformed the bylaws, and we started to sell and privatize the distributors Ceron, Eletroacre, Cepisa and this was fundamental for the company. The resources addressed from the privatization of the distributors, Amazonas Energia and Ceal, BRL 3.6 billion, and now we have 94 SPEs, restructuring, CGT Eletrosul. And at the end of the year, the goal for the company is getting to 49 SPEs, and we can see that we're closer today. And the incorporation of Amazonas GT, which prepares the company, and we advance the company for the new structure. We have leverage and an improvement of our governance, and we will see a little bit of that.

Page 26, we have cost and expenses reduction in PMSO, already demonstrating the numbers that we already talked about. Here, looking at the details, the average age in March of the people that were -- that left, the average age is 62.5 years, the average fixed remuneration of almost BRL 20,000. The number of disconnections you can see here. And in November, we have another 476 disconnections. The disconnection dates, you can see here, from November. The estimated cost of terminations is a plan that has an economic advantage. We spend BRL 111 million to actually get a saving of BRL 180 million. And you can see for 2021, it's BRL 245 million, trajectory on BRL 292 million back. And we have the negotiation with the unions. The byelaws of the company should be modernized, having (inaudible) company.

27, the cost reduction. You can see the graduated functions of Eletrobrás companies. There is an organizational structures from -- we had 269 to 942 (sic) [2,069 to 948]. There is a reduction of bonus functions of 54%. And just with those, there is a cost reduction from BRL 212 million in '16 to BRL 105 million in 2020, observed to what the company worth BRL 9 million. We had 885 number of directors, and now 162 Board of Directors. You can see the Board of executive officers, of fiscal council, Board of Directors and the total. And now we have a drop from 885 to 468, mainly basis the selection we had.

Page 28, we see the rationalization of SPEs. We have under close another 12 that were authorized by ANEEL, the case of Pindaí 11 and IGESA 1. We shall finish March with 82. We have received our preference in 2 SPEs. We are incorporating another 1. These are corporate assets of Eletrobrás. We are in the year the process of closure of another 14. You can see Baleia, Famosa, CSE, 1 LNT portfolio and uncrossing 15, we should get to by December, 49. Out of the 20 that were incorporated, they had a gain for Eletrobrás of BRL 133 million in EBITDA and the sales allowed for the BRL 2.2 billion addition to the company cash flow.

I'm going to conclude my presentation now talking very quickly about Eletrobrás future and relevant themes. These will be the themes that Elvira will talk about the -- well, our potential succession, and regards the Privatization MP 1.031/2021. It was published by BNDES in March. We have the inclusion of the Eletrobrás companies in the PND by March. We have the approval of the MP by National Congress deadline for quick discussion 120 days, no commissions foreseen for the pandemic. And we have the economic benefits. We have to define the assumption for calculating the economic benefit. This is calculated by the differential value of the decotization -- GSF, decotization period. This generates a difference in value that guarantee the press of the future energy. So these are the important definitions that ANEEL and the government are under the responsibility.

In the economic benefits, you can see here on the right, the value that will be paid will be contract to all obligations, and it's to 30 years. You can see the values that were established with the MPs, the funds -- secured funds, BRL 8.75 billion. We have share benefits for the electric sector. We have -- you remove this, you get 50% for the Union granting bonus of 15% for CDE, 30 years to be paid. You see it happens. And you have realization of BRL 51 billion, the benefit -- well, the subtotal for the economic benefit to be calculated at BRL 51 billion. And then you have the CCC compensation up to BRL 3.5 billion receivables. You remove BRL 2.5 billion. And you have CDE, BRL 25 billion, and, once again, granting bonus for BRL 25 billion.

These are primary shares the government doesn't take part. The government can sell the shares. Eletrobrás, as a corporation, has its controller. The capacity for the Eletrobrás shareholders is limited to 10%, and, well, the voting capacity of Eletrobrás shareholder will be limited to 10% regardless of their shareholding position. And Eletrobrás must be able to sell the energy at prices in line with the Brazilian market under the quota regime.

Let's talk about the CEO succession. We hired Korn&Ferry, the headhunter. We had a meeting with the Board to understand the profile of the new executive, with the Director of Governance. Well, again, the candidate will be subjected to a rigorous integrity and eligibility analysis in accordance with the requirements of the State Companies Law and Eletrobrás Companies Nominations Regulation. And we also are linked to the Board of Directors. The temporary commission for the support of the succession process of the President of Eletrobrás is linked to the Board of Directors and the Eletrobrás management and People and Eligibility Committee.

They follow-up on this process. And the selected candidate will be recommended to the Board of Directors, and they have to be approved by Casa Civil. In this process, we are at the end of the process. The Board of Directors appointed Ms. Elvira Cavalcanti Presta as of last week should be the interim CEO. And I would like to thank all of the directors of the company for the work that we shared. And we have the integration of all of this capacity, the leadership with all the collaborators and we have the support of the Ministry of Mines and Energy.

These are my -- this is my presentation. Sorry for the time. And I am available for Q&A.

(Operator Instructions) First question Andre Sampaio from Banco Santander -- Santander Bank.

I think it's very important. I want to understand your overview. Well, we have new proposals for privatization. I would like to know what is your opinion on the discussion from the Congress. And the question about the SPEs. You said that you will have 49 in '21. Are you doing a second round of analysis of the remainder of the SPEs?

Do you want to say anything?

Okay. I'll start on the SPEs. We are going to get to the end of the year with 49 SPEs. I note from then on, the company should evaluate. And you remember, when we decided strategically to sell the SPEs, we sold the ones that do not have an impact in regards to the price because of the GSE. They remove the value of the company. And from the moment on, a great deal of the SPE that we will have will be hydroelectric power, Belo Monte, Altamira, et cetera, and also the deadlines, Madeira, et cetera.

What we understand is hydroelectric power plants, we are waiting for the conclusion of GCE (sic) [GSE], and we have preference. We can evaluate it. So there is an open path to do either. But remember that the value is safe. And remember, Madeira, we had a problem there with the commissions of any yield. And the company has the value of SPEs, and we'll be able to evaluate strategically what is the best way and working with the movements that the controllers want. A couple of things I already said there.

In regards to what you said about the Congress, the reporter read was it -- is that it relates to the people and is hearing what the people are saying. And I shared that we had discussed all the alternatives that we have. And we are evaluating what is acceptable and not. And we have the provisional measure that was published. Probably that we had an initial overview and now interacting with us and the Ministry of Economy and everything. There's nothing you can think a little bit more about this puzzle, which is the evaluation of the ministry in regards to the alternative. And I believe that we will have -- we will be talking about along the lines of the proposal that was presented for the capitalization at the National Congress.

And we're going to miss you.

But I am still in the Board of Directors.

(Operator Instructions) Next, we have Carolina Carneiro from Crédit Suisse. (Operator Instructions)

Now I have 2 questions. The first 1 is about the succession process of the CEO. Elvira is the interim CEO, and we believe that this is a great choice. And we saw some -- well, some of the press that we would have a list -- a short list of names, so we just wanted to know how is the process of choosing the name of the new President and the new steps and the other steps.

Second question about the 1.031 MP, we have the values suggested initially. But as you remember, there are some items that were not taken into consideration, the integration of other power plants, GSE. So if you can help us with which items are relevant, that are still not considered in that first account? And what do you think that the market should pay attention to? And what should be included in the final evaluation of the company?

Thank you for the -- your comments about the management. The succession process is advancing, of course. Our President has -- Ruy has talked about getting this done as quickly as we can, so we can invest. We are at the end of this process. I don't want to actually discuss the numbers of how many people were interviewed. And if you want to remind me, you have to be submitted through Casa Civil. You have to call in an assembly of councilmen, and then the councilmen will evaluate the candidates and the candidature of the Casa Civil. So we still have time, but we need to get this done. Elvira is in the work, along with the Ministry of Economy that is following up on this process. It's important that this new President, woman or man, is leading the company because we have new proposals of the company. And we have to demonstrate the Ministry of Economy the importance of this capitalization process.

Which is the second thing? The second thing is indemnification. The nonamortized process of Tucuruí and, therefore, this was not demonstrated. There are some assets that we have to contribute -- that we have to think about. And I think it's relevant, the discussion of the variables themselves. There is an increase of capital, and we have to be very careful to think about the future of the energy, and we've done a few simulations with the chart. And probably we have to be sure that we have parameters, and the parameters for future energy, the GSE losses, the standard of what is the rate for this flow. So we are sitting down on the table. And we have to recommend this to the Board of Directors. There is a lot of responsibility as quickly as we can. And obviously, the company will assure that we have inclusion of these values. And in absolute value, this is the main one, the indemnifications that were on paper, but these are followed by. So Tucuruí and there is BRL 3.5 billion, and this is recognized by ANEEL.

Now we will have Marcelo from Itaú Bank.

Still talking about the premises, I have a comment that I wanted to talk about the document. The guarantees in the account of the ministry, if you can talk about the provision and the long term energy. Is the government establishing a higher price in the long term? Do you think that there is a space for this long-term number?

Thank you, Marcelo. Certainly, those have to be reviewed. We have to discuss at the Ministry, and we have that overview. And we have -- this will be very important for Eletrobrás and other state-owned companies and can advance in the same direction finishing the quarter of February. And we believe that this will be done. I confess, I do not remember. And maybe you can discuss the value of the physical guarantee. There was a mistake. I should say that was higher than what we had. And we have the set of reports. All of the power plants of Eletrobrás went through that review of the physical guarantee and some of that were limited to that value of 5% or 10% of the concession. Now we have -- the creditor has to be incorporated, but the government has 500, and then we can share this information with you.

No. I was talking about the fixed guarantees because in the past, there was a discussion -- structural discussion that you had to change the calculation methodology. And the only limitation is whether it's a second renewal. But I wanted to understand, is there more of a structural change? We know that in North Sea we don't have the physical guarantee. This is the government that really has a higher effect. It is this a possibility or...

Well, I believe that there's a possibility. It's no use generating a guarantee if you cannot generate a guarantee. And here, you'll have to do the real physical guarantees, and it will be reduced here. And we will have the proportion of volume in a physical guarantee but in a real way. And I am certain that this will happen.

(Operator Instructions) The next question will be from Miguel Rodrigues from Morgan Stanley.

Congratulations for the work that was done. Two questions. In the context of the MP about the capitalization, I wanted to see whether it is the possibility in the models for Itaipu and Eletronuclear? And when can you consider the migration of the company for the new market? This was discussed in the first proposal for capitalization. The second question, what is the status of the shareholder participation that were guaranteed in the past? You considered the constitutional guarantees for those participation to be able to be sold. I wanted to get an update on that process and specifically on a few cases.

Thank you, Miguel. In regards to your models and the separation of Itaipu, basically, I have 2. We have the simple one, which is the specific case of Itaipu. We only have the social capital. As you know, as defined tariff for the power plant, it's by national, so very -- from that perspective for the remuneration for the social capital that is different from what is defined in the Annex C of the Itaipu Treaty. We had $50 billion that has to be updated, the shareholder participation, because the power plant will be 50 years now at the end of 2023. So the shareholder capital has to be passed on to a public company, and that's the main option.

And you asked about Eletronuclear, almost 100% Eletrobrás. So you could sell the social capital of Itaipu by the updated value and you can do an evaluation of both. And you can sell the control of Eletronuclear. 50% is preferential capital. Eletrobrás would get 49% of control as a public company to control Board participations. The full capital of Eletrobrás and then a control of Eletronuclear. These are hard values to validate this selling of these 2 participations. And this is a decision-making process. There is a mix change of share that the government will have in the company that will be -- in a public company, it will be lifted or not. And I understand that this is a process that is predicted. But it will take longer, I believe the vast, the simplest way to do that.

Now in regards to the -- this will be a provision of the company, and this is something that is desired. We evaluated many times this option, since 80% is ordinary, 20% is preferential. And you cannot have the national treasury as a minor shareholder. The shareholding participation, yes, we have a decision from the Board to monetize. There is an investment in the liquidity of the -- this consortium. We have 10%, 15% of the shares already released being listed, and we have a permit in the sense of the exchange of guarantees of share because we have, in some cases, opportunities for business when the company is working in the sense of substituting these guarantees to release them. We will work to release them.

Next question will be from Pedro from JPMorgan (sic) [Goldman Sachs].

I am Pedro from Goldman Sachs, actually. JPMorgan a long time ago. I would like to congratulate your work. Thank you for all the interactions, and it makes our lives easier. I would like to actually talk about the golden share. What has been discussed in the golden share? We had the official discussions when I heard from you, Wilson. What have you discussed in that sense?

Thank you, Pedro, for the question. Golden share is something that the Congress itself did. Golden share can limit the value. Government may sell what we had, number one, the maintenance of the headquarters of the controlling companies, the assets and the power to have any concentration. These are the powers of the golden share that were being discussed. The idea is to have a golden share that's related to the asset, Eletrobrás, that relates to the 4 main operations, and, obviously, to the capacity of keeping those capital overruns. These are the powers that were considered with the golden share. Thank you. So that were the rational use of golden share. So that this is an independent corporation, resolved of the position of the government at the end of the capitalization. Yes, this is what the market had discussion -- discussing.

And another question. And remember that this was the mantra, which is a reduction in leverage. We see the 1.5x in EBITDA. And you say that the goal is to be below that. It might not be optimal because there I think you have this generating of cash, and it will lose a little bit of the optimum structure of the capital. This will be a challenge for the next CEO of the company. But what is within the discussions that you've had? What is the target of the company post capitalization? What would be the perspective for the maintenance of our leverage close to optimum? Would it be an increase in the payment of dividends? Will it be seeking new investments? Now are you going to talk about to the other shareholders to consolidate this? What would be the path for an optimum leverage?

Pedro, a value of 2.5 is a value -- then we still have a lot of volatility. When we drop from 3 to 2.5, that's short term. We cannot forget that we have here a big operation in the case of Angra, and we are getting equity in the company to take it for our public bid. And from then on, a great deal of the capital will be for financing. So the company will releverage. And when you look at the company, you need to look at this perspective. And we have transactions such as the one that you mentioned. We haven't started to have the discussion, and we have to be prepared for this. This is something where the company can repeat. But we believe that we have this -- that we reach to have a perspective that is quicker with the entry of Angra with drilling in Angra 3 and the other ones.

Ladies and gentlemen, we close the Q&A session. Now we give the floor to Wilson Ferreira Junior for the final thoughts. The floor is yours.

Thank you. I would like to thank everyone here for taking part in our earnings call. It was an honor to be a part of the Board of Directors and lead this company in this restructuring process. I have a lot of love for a Brazilian company, probably very important -- fundamental importance for Brazilians, and it was the best professional experience that I've had and I've honored the Board of Directors. We have (inaudible) everybody else, very important, in the construction of this company. The director is just about in March Elvira, and we have a company that the main legacy is the training of the people of all the companies that are under the control of Eletrobrás, and we are very proud.

We have very consistent results, and we've had an evolution in regards to the positions. And we are stabilizing the company, a robust company, transmission 45%, good professionals, excellent governance. And this will be a leverage highlighted by the process of capitalization. I see that the successor, the Board of Directors, I had the honor to lead them, and I would like to thank the shareholders and investors that trust our company. I am a shareholder of Eletrobrás, and I will continue to be because I believe strongly in this company and the evolution process of this company. Thank you for your attention. And I wish you the best, especially to my colleagues and the Board of Directors. And I wish you the best in this wonderful company that we managed to recover.

Therefore, we close the teleconference of Eletrobrás. Thank you for your participation. Have a excellent afternoon.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]