Centrais Eletricas Brasileiras SA - Eletrobras (AXIA) 2022 Q4 法說會逐字稿

Presenting the team from Eletrobrás. We have here, Mr. Wilson Ferreira Junior, the new President of Eletrobrás; Ms. Elvira Presta, Investor Relations and Financial; Camila Gualdo Araújo, Risk and Compliance; Mr. Pedro de Oliveira Jatobá, Generation Director; and Mr. Rodrigo Limp, Institutional Relations; Elio, Business Strategy and Participations; and Jose Guimaraes Barros, our Legal Director.

We inform that this video conference is being recorded and will be made available in the site of the Investor Relations of the company, where there will be this presentation in both languages.

So I will highlight that whoever needs simultaneous translation, we have these 2 available in the globe under the bar below of your screen, so you can choose your language of preference, Portuguese or English.

For those who are listening in English, there will be an option to block the original audio in Portuguese. For the question-and-answer, Q&A, we tell you that you should send them by clicking on the bottom of your screen, your names will be mentioned and then you can ask your questions aloud. At this moment, you'll be requested to open your microphone, and then you can ask your question.

Some declarations during this teleconference related to the perspective -- the business perspective of the company, projections, operational metrics and financials constituting premises of (inaudible) Eletrobrás and will be made available for by the company. Future ones will be -- do not consider as performance because it will be considered risk.

The investors should understand that general economic conditions and other operational conditions could influence the result of such future conditions. Therefore, I'd like now give the floor to Mr. Wilson Ferreira, President of Eletrobrás that we can start the presentation. Mr. Wilson, you can move on.

Thank you. Thank you, ladies and gentlemen. It's a satisfaction to be here to share the results of this company in this fourth quarter, closing the year 2022. (inaudible) ahead of the company, I'm really, really happy to be here.

And especially to be together with my team that is here, and I thank them not only be able to make this presentation today but also to be one of the dates most brief where we have reported our results. We were talking about the 13th of March, but especially the content of these results, which I believe can be very well appreciated by each one of you.

So I'd like to start with these highlights, I'd like to move on to the next slide. We have here the main events in these 5 months. As I mentioned, there are 5 themes that are very relevant.

I believe that the first one is something that is really important for the company -- for the perspective of the company. It's the fixation of the voluntary dismissal plan. It has an BRL 1.2 billion cost -- estimated cost. We have over 1,000 people, who have been dismissed up to February. We're going to make a reported more specific of this program. We have another 1,000 more until April 30.

We haven't taken a lot of care. It's a recognition of all the professionals in the companies that built this company, but it's also something that established (inaudible), there is a perspective of bringing new people to the company, things -- something that doesn't happen since 2009.

The second theme that is very relevant and then in this -- in the Eletrobrás private auto buyers and deciding the future of Brazil. First of all, the regional funds we have already made it and fund of almost BRL 900 million and over BRL 300 million to revitalize the San Francisco Basin, also for the capitalization of the Amazonas, especially in these times of climate change that we have been living, and the revitalization, the basin of Furnas.

This has some that deposit already made last year into the revitalization of BRL 5 billion and other deposits that we make annually March and April of over BRL 600 million. So these contributions are important, be it for the development -- or the regional development or are also from the tariff review, but also for the events that may happen in the capitalization and privatization of the company.

So 3 themes that is very important. And also, first of all, in this compulsory loan, we know who participated the company refers to these loans over BRL 26 billion. We had here the approval by the board advisory in the policy of agreement. We manifested this publicly in the markets that are working on it and the satisfaction of in this first trimester that we started this activity, we have a reduction of BRL 1.3 billion in the provision stock and also being with a positive reduction of BRL 563 million.

It's a policy that shows that the advantage that the company has in order to bring forward resources so that we can reduce our provisions, our contingencies and also make -- put resources in the economy. And most of us we have industries on the other side that can benefit from this agreement and take on these actions to get the society.

We also had here in the beginning -- in January 5, the beginning of the year, the 185th EGM, where we made the payment, the incorporation of the minority stocks of our -- for our controlled companies. And they now become 100% belonging to Eletrobras.

And finally, here, the very important moment within a very, very volatile market, but especially in our vision of value in the company is very diverse in which we find it today. We started buying back shares.

So we had here the authorization to the acquisition of 10% of total shares in the market, over 202 million ON shares and over 27 million PN shares in a time line of 18 months because it creates values because this brings this clarity that this company is creating, is adding.

So it's a very important perspective that will be reinforced in (inaudible). As we share with you, how shares are moving forward.

And going on to the next slide, where we talk about our transformation process that started in -- in our start here in September. And we have here the first -- the guidelines -- strategic guideline for the company to have a long-term view, creating value to maximize the generation of value for all the stakeholders in the company and shareholders collaborators, consumers and contribute to this so that we have an improvement in our business environment in Brazil and also in relative terms to the environmental process is a process that supports on the transformation of resilience -- business resilience.

Here we have to lead this process of -- offers of quality service to clients and offer health and safety and development for our collaborators, our employees and also a sustainable growth.

This capitalization create a perspective in economic and financial so that the company has a virtuous growth focus on the things related to renewable energy, to the transmission of electric energy, to the commercialization of new geographies and also something very important for the company to be able to have a rigorous process of growth.

Of course, also taking care of being an excellence in the efficiency, which is in process as is the face of the company and also a great team, -- a great focus on governance, Board of Directors very focused on this vision and strategy and also a transformation that is very relevant, also seeking of innovation and technology.

We have a real condition that we're going to show later on that we can develop even more in the solutions that ensure our competition in the market, in the process, in having more productive operational process and more reality in this technology.

And this brings this vision, this green major. Looking at this global leadership, renewable solutions of infrastructure and low emissions. So this is -- this page summarizes in some way, the track record that we want to follow in Eletrobras and respond directly to the transformation and creating value and add value to all the -- everyone we have a relationship with.

Here, we have this evidence in which in just 5 months in my first participation here together with my colleagues in the reporting the November, the results, we already brought the slide. We already showed how the company has moved and has been driven.

And what we seek the leadership in terms of renewable energy, we were second player in this globally and with the least level of intensity inhibitions. So we are second place in each one of these aspects, but we are moving very quickly in this quarter.

We saw growth -- the buying in the -- with the purchase of Santo Antônio Energia and the conclusion of the 3rd, our machine. And we're also considering here the operation of our assets together with Santo Santo Antônio Energia. And also we had last year with a better situation over -- with this view of a lot of rain. We had a lot of reduction in the intensity of transmission.

So we are here confirming that the company continues growing towards the leadership of capacity -- of installed capacity. Looking at the leader, the first place, we had a strong movement here of over mega -- 1,000 megawatts, and we have another 1,000 megawatts in the second quarter.

We also had a reduction -- a relevant reduction of over 40% in our emissions, reaching to 52 tons of carbon per megawatt generated. So this track record is very confirmed in these 2 quarters that we had the opportunity to talk with you.

So this is what the company is now seeking and pursuing a leadership when the humanity needs companies that with renewable energy with focuses on ESG standards, so where we are involved.

So all of this in a way states what this (inaudible) this team of transformation. So privatized company since September, we started this transformation office. I'd like to say to thank you to Camila, who leads this effort, has brought this transformation process and remembering you that we had an elaboration work of conception together with initiatives -- with 40 initiatives in which with some 700 makers of important deliveries -- deliverables and over 40 initiatives, 17 of them have deliverables of impact on the short term.

I will talk about some of them, like for example, converging the companies and which brings advantage in terms of governance, in terms of agility of this decision process, obviously, of simplifying, but also brings impacts in the short term, 23 of them are initiatives that provide a plan. So we had a plan, the strategy of commercialization from last year to this year.

We are still, we're going to complement this work. But here, the revision -- the strategic revision is one of them. And it's very important to tell you that in this moment, 7 initiatives have been concluded up to February and 13 will be concluded up to March -- up to the end of March.

So we are here 2 weeks from having half of all the initiatives concluded and as I mentioned, 17 with important impact. And even in this quarter, we'll have 23 of 40 will be concluded in this quarter.

And due to this concluded process, especially those 23 plans -- 23 strategies that we have established, we have initiatives that will be -- that will be detailed so that we can have -- also share with you in what way the value will be created.

I just want to give an example on the following slide. About this journey that we are living. It starts here, as I mentioned, looking at the -- up to December, we had a conclusion of the commercialization strategy of short-term approved and implemented by the Board of Directors.

We're looking this way to organize in a systematic way, methodical way, controlled all our companies from the holding and a strategy that we share weekly, mandates that are -- that would be originate any sales in conditions of products in each one of the subsidiaries.

Remembering that in the month of December, that's when we concluded our -- the voluntary dismissal plan, it was a structure with over 2,500 people. We effectively we -- also we started the first group up to the -- the first group of people up to the end of 2022.

And then we started also a new structure at the top of the company, and we started also the first wave of negotiations of loans already with an effect -- with the initial effect of reducing of BRL 1.3 billion in our provisions were [26.5%] in just a quarter.

Now bringing these advantages that I will detail a little bit more up ahead also with our committee, and the Board of Directors that we have the serenity in the process and a conclusion in this process.

We also had here, due to this work, the utilization of one asset of the company that maybe is not so visible, that is the fiscal loss. We have a lot of credit there. And in this quarter due to this process, we could be able to use over BRL 700 million. So it's an intense work that continues to happen here in this journey.

So when we see the first quarter of this year, that we are living, as I mentioned, we are -- due to that conversion of those controlled companies, subsidiaries company, integrated subsidiary companies that have already been concluded, we had already deferred the main gains in the supplies over BRL 200 million, BRL 120 million CapEx, 9% of efficiency with a baseline of BRL 1.4 billion.

And here, a reduction of BRL 80 million with an optimization of OpEx, 38% of efficiency versus the baseline of EUR 230 million. So work that is really important.

And here, you would imagine that -- and I have no doubt that you too that we imagine we have here a space of gain of efficiency. We are with consultancy. We are here with 3 waves of -- the first wave here of -- with great results already.

And we are here, together with the Board of Directors in the final stage of concluding our financial -- our strategic plan -- in our fiscal plan (inaudible) so that beginning here in the month of March and I hope that in this market that this new structure, organizational structure that will follow -- that I will show you can be appointed.

And so that I hope that this happens. And I hope to release this up to the end of the month -- of this month. And one of the most important things for us is the incorporation of the -- in the culture of the company of the meritocracy of all the executives of the company.

They have been assessed, then we started the recognition of this structure, you know [appointing], and based on the consideration of the results of this assessment. So this is still happening this month.

And with all of these assessments will be made available in N-1, so that they can priority -- in a priority way and not having any options internally where we're going to go to the market that will have the system -- the systematic approach, and then we'll have the 2nd and 3rd teams of dismissals in the same period of March, over 500 people by the end of this month.

And then we'll have a view here of the second quarter starting in this April with a new organizational structure and governance of the holding and the subsidiaries implemented. So our how -- the work will happen in the second quarter, and we'll have the solution -- now the defined solution of San Antonio Energia, SAESA, in the process of the acquisition together with -- of assets that can add value to the company and renegotiating debts.

This has been the objective of the financial directors and of the business director. So along this trimester, we have the conclusion of over 85% of the voluntary dismissal plans over 2,100 people. And parallel to this, also seeing here, 832 replacements based on those O&M like based on new hiring on all Brazil.

And again, in this trimester, we'll have an even bigger evidence in the conclusion, this first wave of -- in terms of actions and supplies in our procurement. We hope to have a reduction of CapEx of BRL 200 million, 6% of the efficiency with a baseline of BRL 3.6 billion and also an expected reduction of OpEx of over BRL 160 million, so around 23% with a baseline of BRL 0.7 billion where we are included.

So this is an important activity that we really have a lot of work, but we have a great clear perspective to share with you. And in the second semester, we have continued this action that we started with no judicial agreements, legal agreements with -- here we're looking at a target.

We're looking -- we're working hard internally. We have a great potential. That is not focused exclusively on compulsory loans. We're looking here -- great focus on the committee. We started working on other alternatives, labor alternatives, civil tax so that we can advance these legal agreements.

But we have a long-term strategy for commercialization. Looking at the leadership of the market starting in 2024, starting the Group B and then -- and how the company positions in terms of each one of these alternatives -- these temporary alternatives, what is the best strategy so that we can capture and attract clients to the base.

So the plan of 2023 optimization of SPEs, this is -- we made a consultancy. We still have 74 SPEs. And we're looking at a reduction to inhibition to the end of the year to have 31 of them. So it means that 27 of them will be objective of sales, 7 will be ceased. And then we have 5 acquisitions of incorporations or for incorporations.

So these purchases, these acquisitions, this like what they are called crossing will be in the Neoenergia and also in the case of SAESA as well that we will be in a due moment, generating benefits -- tax benefits that are known to all of you.

So just for you to have an idea that these are some of the initiatives. If I click here, I will detail for them. Just for us to have an idea when I'm talking about the dismissal plan, the top structures, the conversion of subsidiaries and some loan negotiations. So let's move on to the next slide.

I will start already with this view of the dismissal -- voluntary dismissal plan. We have here 2,500 people that have signed up with a potential of what we thought would be 2,700, but it's very important to say that this is in fact the recognition of the contribution of our retirees. They have on average 62 years old and 33 years working.

So this process has started for everybody to adhere with a guarantee that in a moment in which the company decides to subsidize they have a guaranteed at any moment, a recognition in terms of salary bonus that has been offered to each one of them about 9 annual salaries. And also other benefits that complement in some way, this retirement, maybe that all the employees, they are covered by pension funds -- private pension funds that are for all of them have a plan -- a health plan that following the retirement can be used the same plan individually. And the resources that we are sharing that for this plan.

So on the one side, we're making resources available in the economy, over BRL 1.2 billion inject into the economy to make this recognition to all of them. It's not an obligation of removing these 2,500 people looking at -- we're working to reach 2,100 of this total.

But we're guarantee, as I said, it's a recognition to all of them after the moment that they are still working in the company. So it's important to highlight that we are working on this replacement of employees.

So we have a process here of looking for hiring OEMs in all of Brazil, so that we have any type of continue process. As I mentioned, we have over 1,000 that have adhere. By the end of this month, 1,500. This process is undergoing. So in this quarter, over 500 people, that ends in March.

So then in this investment of BRL 1.2 billion an economy of -- in our payroll of BRL 95 million. And so the payback is around 13 months. So again, something very relevant that the company did never had this transformation or had not had this transformation in a long time.

And we're doing this recognizing the contribution of these employees, clearly compensating people for this contribution, obviously, and making a new phase where we can now resume in a vigorous way due to the capitalization of the company, a process of growth and modernization.

So the next slide also talks about another important activity that will be the process of leadership. As you know that the company had an overall control the companies over 4 of them plus the holding a high level of redundancy.

So -- also with the support of consultancy, we have created an organizational structure that has a concentration on the holding, of course, where we can develop strategically planning our actions that the company will develop. We haven't have a structure to a head start, so that we can have a development and in a depth into our strategy.

So we start here with the CEO, Vice President of Operation and organizational security, and this executive will be responsible for the management of the 4 controlled companies and (inaudible) with the structure, (inaudible) simplified related to what is their focus on O&M, focus on commercialization and administration and finance.

So these 4 companies will have modernized support and also base, especially from investors relation, commercialization, financial aspects, orchestrated so that we can have the best efficiency. We're creating here a Vice President of Engineering -- of Expansion Engineering so that we can use better CapEx and develop more and advance this great investment.

So no commercialization -- the commercial activity, which is core to the company will answer to over half of our activities and have us already been created with the presence with Eletrobras and the strategy in the business development, where we're looking at this rationalization of SPS, the sales of the subsidiaries and the relation -- our Vice President of Regulation, Rodrigo Limp; our Vice President of -- Financial Vice President and Investor Relations, Elvira; Vice President of Governance and Risk and Compliance, which is already taken by Camila. So we're looking at Vice President of Supply and Service, focus on these activities.

And this wave that I had mentioned already in the rationalization of our operational service through the complete acquisition of the union of -- join of our (inaudible) shared service and the Vice President of People Management and Culture able to establish a management model based on meritocracy and collaboration.

And as we have a culture that is enthusiastic to people, motivational to people that we can attract people in the market so that in the construction that is being done here in Eletrobras, Vice President -- Legal Vice President because we have over BRL 35 billion in liabilities.

And we have demonstrated already in this quarter that we can -- what we can do to make this liability an asset for the company and the counterparts and also Vice President of Innovation, Research and Development and IT what is the most modern -- what is the most -- what is the best way that the companies can grow in a most efficient way now making the job easier -- the people's job easier, employees or stakeholders of the company, shareholders, clients and so on.

And I also have the support of 2 departments, the department of a communication that we can -- so the activity of communication is always an activity that is really, I will say, it is less due to the lack of resources that the company has. It's less realized and seen by the market.

And here, we have an activity that is really important of communication in Eletrobras. After all -- besides of all that it can do in the teams where it's involved in its main activity, we believe that here, we will have an activity that is -- that can look for clients from B2B and from a medium to long-term capacity.

If you look at the clients in the consumer environment, consumer -- energy customers environment, so the activity of communication to share the development with our stakeholders or to attract a new client will be an activity that is really important.

And all of this supported with a view of sustainability in ESG agenda that is different. The mix is different from companies in this sector. So we have an ambition to be really a reference in this area and some steps that are already being taken, and we're going to put this in the answer.

It's important to say that this structure has been formulated in a way that is really cautiousness -- with a lot of cautiousness by the -- all the directors so that we can go ahead in these values that are being here highlighted.

But also keeping our brand, our company, our efficiency continue, especially our reliability in terms of our systems so that we can, again, make this modernization of the company. We're adding value keeping our traditions.

So it's worth highlighting that the 4 companies in the group, they have a regional presence -- relevant regional presence, continue to exist. There's always a question about that, but these companies have regional presence. They have characteristics especially in terms of taxes in the state incentives, regional incentives.

They have all the resources. They are allocated in these companies. So in fact, we are recognizing the importance of them and establishing a governance model that -- the management model that will be a greater synergy among them.

So now going on to the third example that I mentioned, which is the loan -- the compulsory loans and we have an evolution. So we started from a stock of BRL 25.8 billion. This is a stock that is updated by the Selic rate has over BRL 284 million. We had a reduction of operational provision of BRL 41 million, and we had a payment of liability legal payments of BRL 482 million.

It's worth highlighting -- it's worth saying we have here the first package of payments of legal agreements BRL 770 million (sic) [BRL 737 million]. And so it's important to highlight that this doesn't sum BRL 1.3 billion.

These agreements, they are done -- some of them can be paid in the quarter and some of them are paid in the following quarter. But the registration of these agreements and the benefit of this agreement, that is done -- in this here -- when it's -- the agreement is said, it's worth saying that we had this movement.

Some of them have already been paid, BRL 770 million, and all of these agreements, they have already been registered in -- it's also highlighting that our base, you know BRL 26 billion, BRL 1.3 billion have already been reduced in this last quarter.

And this is just the approved. We also have around BRL 770 million that is called off balance of those possible provisions and remote ones. That is also object of this agreement. So almost BRL 2 billion that we had to judge here, and they have been eliminated due to this agreement.

So we're going to continue looking at this important gain that will allow us to choose our losses in the end. This will bring -- we had smaller exposition -- monetary exposition due to the Selic rates and these agreements are done to eliminate totally the demands, not just that are proper, but those that are in remote -- the counterparts, something that is -- that we are happy to mention.

We are seeing here disposition of making these agreements that is favorable to both parts and now following here the second page. Now we're looking here the conversion of these subsidiaries. So bringing more efficiency to Eletrobras.

So we make these companies to have assemblies to release some teams, meetings with the Board of Directors, with OTC. So this -- they had basically had the independent level, which will also make a different sharing the synergy and so on. So the operation was approved January 5. The shareholders have the option of withdrawing or incorporating shares.

So we can see here in the right block where we have BRL 286 million in investments, in which -- means over 5,872,000 ON shares will be divided holding. So the investment to these minority stakes were done in BRL 212 million. We had here some PNA shares that 202,000 over 4,361 shares. And on the ONs, BRL 226 million, 3,451,000 shares to our treasury.

So this process makes Eletrobras 100% owner of these subsidiaries, and this has generated 31 new shareholders that in exchange with one of these shares -- Eletrobras shares increasing our free flow and the number of shareholders that are investing in the company.

So this is a structure that allows our governance a more effective account, better coordination among the companies, agility in the decisive process, of having 100% and also making it possible the new structure that we will simplify and we will make this decision processes faster and more agile.

So now moving on to one more slide. I'd just like to highlight and conclude here in the space of the -- talking about transformation. So we are here with 40 initiatives ongoing that we will conclude the first [20] of them in this month of March.

And we'll have here over 20 undergoing, so over 36 at the end of the semester. We have here a lot of ambition to 23 of them that established strategic plans so that we can deploy with plans that can guarantee new shares, impact and results.

We have here a new investment so that we can get this impact, and we also released this strategic plan that is now concluded in this month -- up to the end of this month, so we can release this new strategic plan. So we have talked a lot about it. We have shared a lot of guidelines, but still -- we still need to integrate this document that will be the base of our strategy publicly.

So following only talking about the operational challenges and the operational performance of the company, speaking very briefly about generation last year. So the company has 23% of the generation -- installed generation capacity in Brazil, 97% clean energy sources.

So we have -- so by privatization or other segregation of our assets of Eletronuclear over -- we know Brazil has overall by Itaipu over 41,500 and now reaching here 42,500 in this quarter in Santo Antonio and also Curua-Una in the second.

And in this quarter, we also had the operation related to our -- the breakdown of the assets of this (inaudible) and Eletrobras, and over 29% of (inaudible) in Brazil was done by Eletrobras of the total installed capacity of hydroelectric have done an even better due to the hydraulic fluids. We have 18.5% gigawatts average now of 20% of Brazil so and -- of physical guarantee.

So here, we have the performance of our sales. Just to make clear to the market that our operation here, as you can see are 16 -- 17,000 on the year. We have [17% out of 18.5%] .

Basically, we have 2 types of assets, assets that were quote, assets that were renewed as Tucurui and in the condition of independent production and also where we see 2023, the first movement of the (inaudible) which is (inaudible) which 5.7% and moving forward and this -- all of this that we want to bring to you is this.

How can you compose the drafting of the structure of Eletrobras? It's all resources of the installed capacity that is highlighted there on the left. And also buying energy because we have here a set of assets that in general where we buy a part of the energy directly from. And this composes the resources of the company so that it can make sales of energy.

So it's composed of own resources and also buy energy. I'm mentioning some examples where we have this type of thing. The sales of the company is also here highlighted following this. And the sales, as you can see, less value, [BRL 26 million, BRL 24 million, BRL 25 million] because it hasn't sold the whole energy.

And I just remember that these sales together are some contracts -- bilateral contract with ACL and (inaudible), I would go to part of -- removing from the state. And here, we have the composition of ACL and ACR and the average values of sales (inaudible) and also average of purchase that mentioned looking at the average megawatts mentioned here in this line.

So this process generates a balance here of capacity that we are not able to sell and also making a relationship directly to the relevant part that our plants are hydroelectric (inaudible). So we're looking at -- we're still in the month of March and only 12% of the volume is not sold considering the head that we're going to use for 2024, 34% and this way forward, and we're making -- we're doing this together with these clients who are mentioned below, 48% of our commercializers, 43% are free consumers and 8.7%, generators.

So due to this energy balance here, we're having the following page, a detail of our GSF, as you can see, it was better last year from the year before. Clearly, the 2021 was very dry. And we reached the year 85% and due to this elevated volume of water, we had a better period, but what weighs all of this scenario, you can see in the left side on the bottom, the variation of our revenues of generation in the -- in the semesters, in the years and in the last -- just going to look at the right side, our revenue has gone up to BRL 24.2 [billion] and this has increased to 6.8%, as you can see into the the composition, we have reduced our liquidity in ACR.

And therefore, we had an important growth in the sales of 16% in the market sales ACL and also the decrease of price of to -- prices up to BRL 190 billion in the annual basis. Looking at yellow, we have there, the regulated contracts from the company, going up to BRL 288 billion , 22% increase. And also the Cotas (inaudible) by inflation, growth of 11% from BRL 4.22 billion to BRL 4.7 billion .

So this year, you know confirm there's a strategy of the company that I'm very happy to say that we have already produced effect. So we have here 12% of our capacity to be sold this year, 2023. Also, in the next slide, we have here just an important picture related to transmission. The company invested very little due to its low financial capacity. So it was in the transmission of over BRL 1 billion -- less than BRL 1 billion.

And now in 2022, we had this increase both privatization, we had already a growth of 95%, the double in 2 years to 50% related to 2021, which has already been a good year and also highlighting that we have 31.1% of our Brazilian system transmission, 280 stations -- substations and 74 kilometers of transmission line.

These are -- 42 ventures of great sizes. And we include more transmission lines and more MVAs with an RAP of increase of BRL 150 million. So we also have done a lot of work here with SPEs of 353 kilometers related to the previous year.

So this year that already is very positive for the transmission that we'll have auctions. Some of them already mentioned over BRL 15 billion that we have participation of Eletrobras. So the next thing, just to show that where this advance is producing results and the many of them, as you know, variable parcel.

And the [stock] should be charged when it was extinct. And this is the result -- global result of Eletrobras. A great work that has been done led by (inaudible) we will be able to reduce greater reduction in our best level 1.56%. It's a drop of 26% related to the year before and the reduction of BRL 65 million. This is a positive result for the group of the best quality of our assets. So again, with this, I end my highlights. I'll move on to Limp where we have regulatory highlights.

I'd like to thank everyone, who participate, of my team here, Jatobá in Generation and Commercialization, and Marcio in the transmission who has helped share this data and achieve with your team, this great results. So Limp, you can move on.

Thank you, Wilson. So it's a great pleasure to be here, talking to you, having the (inaudible) to show you very briefly some themes that are regulatory related to the last quarter of -- and also the discussion here in Eletrobras starting with RBSE, which is some of the themes that is not only related to the last quarter, but has been discussed for a long time.

And here, I will bring some updated status since June last year, we had some manifestation from the technical team of ANEEL and also from the Attorney's office from 2022. With our SGT, we also -- we have a little improvement in the memorandum from the same technical team.

And then we had a legal aspect of the team. And with the discussion with the Board of Directors, we decided a monocratic, decided from the director, which is partially agreed by all the members and then determined to the new simulations and new calculations that had been sent to the transmitters from August.

And in this, the official document the technical areas executed, the comment of the company, even though we did not do any evaluation of merit. So since August, we have not had annual official position from the agency. We are in the process with the (inaudible) directors, Eletrobras together with other transmitters. They have participated in the discussions directly also due to our association with transmitters.

And also, we also talk to only one director to make a meeting which is set for now the month of March. And they will be keep on defending our point of view since the beginning that legal security, regulatory stability based on ANEEL's decision, another team that with a magnitude that is less, but also it's something new since the contract -- transmission contracts that we signed due to the 579.

We had recently in the approval from ANEEL for the incorporation of assets that were utilized for importing, exporting energy to Venezuela and Uruguay in these concession contracts of Eletronorte and CGT Eletrosul and these before being incorporated in the base, they headed to remuneration when the export and export was done, export to Venezuela since in 2019.

So these assets were not being remunerated. So now we start having remunerated (inaudible). With the RAP approved by ANEEL, this brings greater increase in our -- in the revenue of these assets. Moving on to the next Slide, 2 themes related to generation and commercialization. One of them is the minimum PLD, which has been discussed annually and now defines the regulation agency.

The least and the maximum PLD also based on hour. So in this discussion, that was performed by ANEEL in end of the year. There was some discussions under the criteria -- the criteria adopted by ANEEL, which was a criteria that has already been adopted by them by many years, which is the greatest value between now in the TEO of Itaipu, this was BRL 69 was established based on January 1, 2023.

Some commercializers went to justice and some of them were not defined. And then some of them were considered in a process, which they know they have not been affiliated to Itaipu anymore. These decisions have not had effect. They had not the legal possibility to implement the decision because it was not defined what would be the value to be considered for minimal PLD. So this was not implemented.

And also, there's an occasional discussion where this would only happen to the whole market or not. And what we are clear about this change of rule of PLD along the year without a due process of discussion. Regulatory process would also affect the financial condition of the sector.

We also had last year for the 709 approval, which talks about the physical guarantee of revision of the -- as we had plants from Eletrobras. They had new contracts that they started with a process of physical guarantee. So they had a reduction of physical guarantee over 7% of physical guarantees.

So these plans do not go through the process of revision last year. they -- since 5 years and the other plants -- which would 36 -- 1.2 megawatts average with a reduction of 2.2%.

So better values of -- it is also related to the plant from Eletrobras, already had been -- had already gone through a process of physical guarantee, the other plants, not under this process. We had a reduction of 35 megawatts average, which is negative 0.3% inside the Eletrobras portfolio.

So this team -- this all has judicial process included. So generators, they started -- they filed a lawsuit at the end of the year, defending the alteration of the critical period adopted by the Ministry to define the value of physical guarantee and the suspension of this law 709.

And this request had an urgency request and it was denied yesterday by the judge. So the discussion now has ended. And possibly, there will be -- we saw some appeals.

But in the first moment, the judge has denied that this urgency requested by the authors. So this law 709 continues to be in effect and also as a legal security to the sector and also that another discussion has gone through the no audience discussion and the physical guarantee of the process.

So moving on to the next slide. This theme is, in fact, relatively new, where there's a direct relationship with recognition by the service provided by the hydroelectric. So with this part of the energy, there could be for (inaudible), so this cannot be exported that -- that was developed by law (inaudible) by the Ministry of Energy and Mines.

So it was possible the exportation of this energy, but it was a modality. That was a swap where you generated credit or debt in the neighboring countries and then compensated. It was not done on modality that is commercial, like the one that is this, that is one that held open audience participation. And also, there was another law that generates to energy coming from hydroelectric plants.

So we have identified that -- but the exportation of this -- the exportation of thermoelectric energy, and in blue, the energy of turbo energy, and this -- it can offer values and -- to buy these energies. So CCEE, which is responsible to define this -- the value of this process at the beginning of the year was BRL 75 million, which was the POD plus 10% CCEE, identifies that the competition among the segments of thermal electric and hydroelectric and the potential of acquisition from the importer part to improve the process of defining the legal -- the least value.

So it goes on to the -- in our graph in this black line, the increase over these values, in exporting level, we have BRL 241 million and we have observed great increases in terms of production especially since the end of February, and this has generated the -- they generate exportations so much in the prices.

And -- but the amount that exported is automatically, we had a greater energy located to MRE, which reduces the GSF, and this also benefits the generators and the consumers of energy, especially those that have the hydrologic risk impact.

So this benefits the consumers and also the generators looking at the total amount and then the increase of the minimum price also adds benefits to the consumer and that part of energy that goes besides the GSF, also the part of energy that is also [quote] and also as it generates an increase of revenue there for the generators.

And this generates the greater proportion of energy by the unit states and cities by the CFURH, which has strengthened the roles of the hydroelectric. So I think this is a new process that no doubt adds significantly to the relevant results to the hydroelectric plants.

So moving on to the next slide that we will talk about Amazonas Energy, where we had a moment and the provision would be the better detailed by our Director of Elvira.

And here today, we have -- considering all the credits that we have together with Amazonas with BRL 7.7 million, we have a provision over BRL 7 million, which over 90% of the debt. So when we look at the holding, these non-provision credits. It's important to clarify that this amount has 344 refers only to the ICD, which is the assets then that happens due to the privatization of the distributors.

So it's a credit that has guaranteed, has been paid in a way that without any default, and also had a little value of GSF, which there is no default for Eletrobras -- Eletronorte in the same way we had provision values, and this value debt that is shown as non-provision value is in the flow of the Eletronorte and Amazonas.

So here, I would like to highlight the -- looking in a prospective way our sales with Amazonas, what would the expenses where they had with the independent and especially those who depend on the default that they had with Eletronorte have already in terms of BRL 270 million made by the distributor. We have -- we received directly from CCE, which is a part of the CCC (inaudible) decision of ANEEL from 2020.

And we have here -- we have a new action now to receive the rest of this amount from CCE, which would reduce our exposition to the risk of default coming from Amazonas. We had a statement from ANEEL last year, suspending some of these actions and the new director -- if they approve the process by the technical areas, our current exposition with Amazonas will be restricted to values of average ACRS so looking at BRL 20 million.

So it's also important to highlight since May 2022. Amazonas is 100% insolvent with the -- due to the law that was made by Ministry, it has a monthly payment of CCE due to the expedition and volatile position and also some actions that we have done with the distributors.

So in the side scenario of insolvency, it's much better than those that those seen in the beginning of 2022 where we had (inaudible) between January and April. So I think this is the last slide of the highlights of regulatory. So very quickly, but the main themes, our hydroelectric, (inaudible) PLD, the Amazonas situation and things that have been less discussed, but we are following up.

So I end up -- end my part here. So then we can go on to financial performance. I would also like to thank you and say -- just one slide to give the floor to Elvira.

And also -- so we are reporting this result that is due to a series of events, many of them nonrecurring. So for the good understanding of the performance of this quarter, so changing the slide, I would like to report here our net income of BRL 90 million, but we have a variation that is great. We're reporting BRL 1,420 million, and if we eliminate some factors that are non-recurring, we will be talking about an EBITDA of BRL 1,420 million, but we'll be -- the last line would be very different.

And here, we will be talking about BRL 2.5 billion in profit, but we're talking about BRL 500 million loss, especially because these things happen, especially because the caring -- having these provisions, the PCLD of Amazonas. This event that Limp already mentioned of BRL 2.5 million that eliminates completely our risks related to this team.

So it's a pity, but we're going to keep on going fighting for this and negotiating. We're working on contributing with ANEEL -- interacting with ANEEL that we can have a good solution for Amazonas, but we have done all the things necessary and the provision of BRL 2.5 million.

So we generate a great value, which is the -- so the PDV -- so the dismissal -- voluntary dismissal plan. So we have here we are -- we have provision of BRL 1.2 billion. We also have -- here, we have done this transition with Neoenergia. And it's the first moment. We had the provision for Teles Pires of BRL 469 million.

We are sure that the conclusion of this operation will have the Dardanelos adjustment that will happen in the operational sales, that should be positive. But in this moment, with the Teles Pires, which also max BRL 469 million.

So we're talking about BRL [4.4] billion. It's more than the EBITDA that we would report. But to effect our data, there's 2 additions. The first one is the one that is reoccurring -- that happens when the process -- the process of privatization, the amortization of new assets, the new generators that will be renewed and the obligations of CDE that would happen along the period of 30 years.

So here in the trimester part of the year we're looking at BRL 1.5 billion. But what is this as a negative effect because in the last year, we didn't have this positive side that corresponds to the sales of energy of all volumes. So it started from the ongoing year.

So here, we have sales for 2022, we had only the payments without the kind of part of our income revenue. So we don't -- so this has to be explained by the (inaudible), but the way in which we reported the transmission revenue, we have made a great effort as I mentioned.

When we look at the -- our regulatory, we've seen a growth of our revenue, even though the way to report this transmission revenue as a remuneration on the ongoing assets, considering that we have a variation -- in part of variation of IPCA 3.4% in 2021 to 0.7%. We have here a cut of BRL 1.4 billion.

So this -- adding these other effects, we're talking about BRL 4.2 billion plus BRL 2.6 billion, where talking about BRL 7 billion, we had here a positive highlight. We have, as we already mentioned, the agreements of compulsory loan and also consolidation of revenue of SAESA, even though it has a relevant EBITDA that we're going to look on its efficiency.

But it's important that we're talking about a quarter that had this data as a conclusion of a petition process without covering the revenues. So especially related to all the management decisions we have made, especially in the voluntary dismissal plan, which I believe are important, but they affect our reoccurring EBITDA. So we talking about BRL 4.4 billion without these effects and now the result in the last line of BRL 2.5 billion in the quarter. So this is evident that the way that the company will take in the following quarters.

So Elvira, it's on you now.

So thank you, Wilson. Good afternoon. Let's move on to the next slide. So here, I will detail some of the main effect. We also have already highlighted some events that are very relevant. So starting with, as you know, this model, the chart here on the left shows our results, the fourth quarter of this year compared to the third quarter last year. And here in the column on the right, we talk about the adjustments of what we consider events not recurring. And so here, we can mentioning here in the revenue, as in the first line, our gross revenue that had this fall of 9%. It has as a main reason of this reduction, this effect on IPRS in the transmission that has impacted BRL 1.4 billion in reductions. So we're going to show [ahead], although from a regulatory point of view, the impact may be different. So it's a question of context.

So next year generation can highlight we'll have a greater increase in revenue for the consolidation of Santo Antonio Energia, BRL 1.3 billion. And also, we had a less import of Uruguay of because Uruguay also has the cost of buying energy. So in the revenue part, these are the main highlights. In the PMSO, which we will show later a graph that is more detailed, it is important in the PMSO that we had an impact from the impact of PDV from the dismissal voluntary plan, mainly by this impact. We also had our collective agreement last year that was agreed and also had here, in the services area, some expenses from the transformation plan that has been detailed by Wilson.

So in this first moment, we'll see increases in the expenses of consultancies, but will be compensated by the gains that we are already showing. So in cost and operational costs that we have highlighted here related to the less importing from Uruguay. So we don't have the revenue, we also don't buy the energy. So this didn't happen due to the less necessity, the activity in 2022, where we had a full reservoir. So a different situation of what had happened in 2021 when the country had to import energy. So here, we have the consolidation Santo Antonio Energia will bring revenues and also bring the acquisition of energy. So no points in these parts of cost.

And in the depreciation and amortization, Wilson has already mentioned, we had amortization of new contract with the privatization some activation of BRL 75 billion for the next 30 years. So this is already being -- having the amortization. In the Electronorte we have a positive effect related to Tucurui. In 2021, we had the GSF law that allowed -- we had registered as a cost reduction in that time the contract at Tucurui was going to be -- is going to expire for around 3 years, so 2026, as there was a renovation of this contract that allows prolong the period of this amortization. So this is an impact that is also positive.

And also the financial result, the most important points to highlight is the consolidation of Santo Antônio Energia. We are also bringing our financial expenses of BRL 430 million. We also have an increase of Selic, the rate that impacts the expenses. Also mentioned by Wilson in the [few previous slide] the impact of the capitalization that in this moment of 2022 are still not followed up by the revenue that will come in 2023 with the exports and also this correction of duties and also special projects added BRL 900 million. And from a positive side, we had the revenue of financial application with a positive currency exchange as the main impact.

So moving on to the next slide. We're going to see that in the detail of the composition of the gross income, so year after year, so as we can see in the previous slide, great impact that shows here in red are 400 are the results of the effect of less information in of IPCA was 0.7%, in the same period was 3.4%. So this reflects as I can, as I mentioned, in -- the next slide, please? So we here try to bring in a more didactic way these effects. So we have the table on the superior parts of the slide, talks about the fourth quarter 2021.

And then the other one, the fourth quarter 2022. This is what we call regulatory is the new norm and also we have to follow a CRS. We have to follow the laws. So there's no difference in the way of accounting this. So we had BRL 5 billion, and it's equal in this, the same industry concept and below in 2022 in the same way BRL 6 billion in each side. The problem helps in the transmission due to new accounting rules that are driven from the regulatory rules.

So as you can see last year, the regulatory revenue was BRL 3 billion and then BRL 3.9 billion which is highlighted in green, which increases BRL 816 million in the regulatory revenue, as Wilson mentioned. But in the gray area, the accounting is the contractual asset, which has increased. So where we had '22 in the first line, it was 59, it has gone up to 61. So we increased our contractual assets, which is the reason of investments. We have gone up BRL 1.53 billion. But as [CREA] says that when you judge this by the indexes of PCA that have gone down to 0.7%. So this revenue also falls in the view of IFRS. So this explains this variation in our revenue.

So the following slide, we detail as we do every quarter, how the negotiations in several segments have happened in the regulated and in the free, and also what is the spot contract and also short-term one. Also, shows here the revenue, the average cost, the first of darker blue, we have regulated contract. We [have an] expressed value to Santo Antônio Energia. So we highlight BRL 700 million in the increase of geologists Santo Antonio Energia, which has increased the average price to [see] into the first line to BRL 292 million this has increased the revenue. So the cost, as we have already highlighted, we only start I did quote 2022, we had 7 gigawatts. So the price is the contractual adjustments which has been 15% increase in the revenue.

In the bilateral contract, we had a positive impact on the volume of Santo Antônio Energia. As we can see, there was an increase of almost 20% increase in volume and an average price of -- it has a small fall, BRL 186 million, which reflects the prices falling due to the PLD that -- the right side has a highlight the PLD in the first quarter was BRL 135. And now in this quarter, we had due to BRL 55. And also CCEE, the most important to highlight is that the greatest reduction was not properly by what would be the spot sale, but the reduction of importing energy of Uruguay due to the hydrologic situations in this moment. This is due to the smaller PLD.

So moving on to the next slide, talking about revenue. So here we highlight the PMSO. The first graph, as we can see the superior was done IFRS. IFRS and is recurring. So as we can see in the superior table, so we have an increase, but this is -- this has to do an event -- has to do with the dismissal plan with this -- which has accounted to BRL 1.2 billion. So when we look at the recurring, we have explained, we have some events that were extraordinary, mainly expenses with the consultancies because of this transition and of the consolidation of Santo Antônio Energia, which we start bringing the expenses from Santo Antônio Energia in this quarter, I would like to highlight that all is BRL 18 million, but a number of a trimester from Santo Antônio BRL 100 million but we had a positive impact now reoccurring, which is the end of this arbitraries, and then you could be able to capitalize part of its revenues in the past that was due to the performance of the plant. And he has done that, the expenses of the quarter have been less than usual.

The most important to highlight is that the, so the positive impact on the "P" because people, the reoccurring people, we exclude the [PMSO SAESA] plan has gone up 4%, even though we had a -- we have an agreement of 12% in collective agreement. So it shows that we are being more efficient in the expenses related to people.

Moving on to the next slide, we're going to detail the main impacts on the provisions. So starting with the left side, this table shows what were -- what constituted this fourth quarter in 2021 , fourth quarter 2022. In the previous -- in 2021, we had done a -- had the provision of -- as you can see in the last slide, BRL 3.5 billion, they have reduced to 1.100. It's very great. So it's BRL 2 billion less, so that we have done a constitution of 2 million of PCLD Amazon that has already commented, which is highlighted in this green on the left side. So even having BRL 2 billion in Amazon, we still have a fall in the volume of provisions. So this explains in great part by the composare, also highlighted by Wilson, due to the negotiations that to be started with allowing us to reduce BRL 500 million in the provision compared to the constitution of 7 million the previous year.

So this -- and also we had important highlights that it's here in yellow, the repairment (sic) [impairment] provisions, even though we had a constitution of Teles Pires already explained by Wilson. This happened because the statement of [deparation] is a trigger to make the provision of the operation that we are buying. But even though the one that is being bought, another one that is being sold. And the conclusion of this operation is what allows us to account the gain with the plant that is being sold. So as this operation still depends on the authorization, the [farthest representation]. And now we had to register the part that we have already the information of the losses. So this is -- these are the BRL 468 million, and this had reversions related to what is being provisioned in the previous quarters. So I think there were the main points that show a reduction of our level of provisions.

So moving on to the next slide, we have the EBITDA graph, showing the variation among these quarters, and we can see these columns in blue and the other are in the adjusted basis. We're moving the events that are nonrecurring that basically are related to these compulsory provisions and PCLD Amazon. And we think that the revenue falls in the first column 1,100 and is following in the revenue is due to transmission and less index of PCA. So in the expenses part, the positive effect is related to less import of -- less importation. And also in the provisions, we also have some reversions that already of operationals that have been recovered and less provision constituted as shown in the slide before.

And for the next slide, to conclude the view of the net profit base, there was a reduction of 27%. And we explained that due to -- the previous slide is the variation of EBITDA. It explains BRL 400 million. They have BRL 110 million debt, that is the most relevant to highlight below on the left side is that this expense is related to the capitalization, the expenses of this retailization process, and any investments in Amazon. This is about BRL 900 million, as we have already mentioned. And the consolidation of Santo Antonio that brings financial expenses and also a positive impact on cash and also exchange rate.

Another point I'd like to highlight is that in the income tax, a positive impact of BRL 995 million. And also the JCP that has been agreed with our control that brings tax growth. We had some agreements that have been celebrated that already mentioned, the payment being made. And most important, the revision of the income tax rate from Tucurui because with the extension of this, we have taken the incentive of from [Sudam] based on this as the contract from the plant of Tucurui before acquiring this. We were not able to use the full benefit, so now it only translates into a tax benefit. So depreciation and amortization we have already mentioned, and we have impact from a short-term initiative, and also an impact on the BRL 75 billion that we had to achieve due to the capitalization, and this will be depreciated along the time.

So moving on to the slide of debt. So it's a slide that we show every quarter. So on the left side on the superior side, we see the net debt and EBITDA and the yellow line represents the indicator of net debt and EBITDA over 12 years. We have shown since the third quarter, the net debt has gone up due to the consolidation of Santo Antônio Energia, which brings BRL 20 billion in debt. So we all see the EBITDA below along the months. So it's also important to highlight even though we had 100% of the debt Santo Antônio Energia already consolidated. We only have 6 months of EBITDA in this consolidated because we only started on the Santo Antônio consolidation in the third quarter.

And the following semester we will have this reflection of from Santo Antônio, and also, we had a debt of BRL 59 billion with great solid cash condition, which brings net debt, BRL 35 billion. And it's important to highlight that we were able to make -- December, we had an acquirer in commercial in an operation that went very well. And we had an obligation in the short term this year, the dividends that we will pay of almost BRL 900 million to be paid over the 2 months. And also, we have the work of a legal compulsory loans. And the first installment of CDE, which last year, we put BRL 5 billion, and now we have -- and now in April, we'll have this hole of BRL 575 million that will still be corrected, and there will be BRL 590 million that we will pay in April.

The last slide before we come back to the President. And then the last slide, which is a very important slide that highlights the evolution of our investments, the acceleration that we have already been showing after privatization. So the blue line reflects the CapEx 2022, then the green one the CapEx of the previous year. So the accumulated in the year, we have been able to do 20% above related to the value in the previous year, over 1 million more, and this acceleration is clearly seen in the second quarter where we start to show agility of the company operating as a private company.

And then on the right, we see -- so we highlight some investments. In the generation, we had the wind park in Eletrosul, in the state of Rio Grande do Sul, BRL 230 million invested there. In Chesf, it's important to highlight the plan that we are doing of modernizing the assets of these old plants. So Sobradinho and Paulo Afonso IV we have the transmission. Wilson has already shown how much we have advanced in transmission that has increased 100% related to last year has doubled really in 2 years. We have almost BRL 2 billion investment improvements and that bring revenue and the SPES the main highlight is the fund done with the Furnas. This support with 72% of the capital as we have.

So I end my presentation of the financial detail, and I come back to Wilson.

Thank you, Elvira. I think it's now show the last slide, which is exactly this one: the recognitions and the demonstration of our link to this ESG agenda, especially the set of recognitions that we have had in this quarter. The transparency trophy, which is very well-known in the business environment, that we have here and that we are here in the second consecutive year in the satisfaction to have recognition by Elvira, by our Financial Director, as the CFO of the Year 2022 in the 39th edition of the Equilibrista Ibef Prize in Sao Paulo. We also had the Capitalization of the Year. We have in New York and London in the end of this month. The Follow-on of the Deal of the Year, which is another important process for Brazil, globally speaking.

And for the third consecutive year, we are the first place by Merco, the ranking of Brazilian energy in the electric sector, the best reputation in Brazil in the Sustainability Yearbook from S&P Global, one of the most sustainable companies of the world of 82 out of 100. So the companies in the group have been recognized again by the Bloomberg CEO of Gender Equality are very, very high, something very, very important. So being seen here in the agenda of a portfolio of B3 ISE, also with the increase of scores and participation.

It's the greater liquidity that we have been offering and the commitment that we had with biodiversity here, we have adhered to the Platform of Action for Nature with a Positive Impact by the CEBDS for the implementation of guidelines on the task force of nature-related financial disclosures.

And in the United Nations, we are the only company by the United Nations to participate in the opening the Forum of companies, Human Rights in Geneva in Switzerland. So our presentation today even to give a better clarity to you here of this 6 months, specifically in the last quarter, that has been very challenging and very fulfilling. So I close here the presentation, we'll be open here to questions from my colleagues. So we are at your disposal.

(Operator Instructions)

Our first question is from Marcelo Sá, sell side from Itau.

I have 2 questions. The first one is, you talk a little bit about the balance of the energy. So you sold a lot of volume with energy and the average price has gone down as we expected. And we're trying to make an accounting here reconciliation to see we have some difficulty due to the contracting in this period. So I'd like to comment a little bit what would be this rate that you have closed on contracts?

And the other question is related to the use of fiscal credits. So if you plan to use [one as a show] to optimize the payment of taxes, as you have a fiscal credit, we have some companies that are not able to use while one pays a very high rate of taxes. So if you -- when you're planning to implement this plan.

Thank you, Marcela. I would just like to start with -- by the last one -- we're doing a great work here and no doubt about it. There is the optimization of fiscal incentives and had a lot of credits, but the volume of credits is so big that I would say that this transition is not just the first one that we will be evaluating. In the first moment, we are certainly looking at keeping the 4 companies. We have this in this process, a lot of credit to be incorporated. And obviously, as -- but to spend 3 years in this transformation process, where we participate 2 years, observe, evaluate other alternatives now. So in this first moment, we have conditions and we have enough credit to be optimized by the company, in a way that this bonus is not something that we would consider to start our transitions. There's a lot to do before that.

Related to the energy balance, I will ask Jatoba and the team that you can talk a little about that. But looking at the last quarter of the third and the fourth quarter, the variation is not so relevant because the numbers that we were sharing with you, we have 15% of the volumes of 2023 not contracted, we fall to 12%, so there is some for sale naturally, but not so big that it would change the perspective. Jatoba, if you can then complement, please?

So perfectly present. We, Marcelo, we have living in a moment of reduction in the [prime] market prices. But this is the conjunction of now over offer due to the accumulation of projects in the portfolio and also the favorable positions of technology. So what we are seeing, now looking for effectively capturing bigger values and also in the long term. And something that we could see in a mix where we have regulatory and also new contracts that will come in. And then that will be a difference that you will see.

And also as the President mentioned, we have a new policy of commercialization that integrates all the companies into one, is a policy of the management of risk that is very sophisticated that allows effectively this [index] criteria, the sales of this -- the sales in a vary criteria taking in consideration the risk.

You cannot give me an idea of prices of '23, '24, '25 that you're looking at, so that we have an idea, given that we have a lot of contracted energy?

The price we evaluate within the market situation, especially in the hydroelectric system, where we are creating affluence of reservoir but also related to demand. So we evaluate this. And what we look at are those niches in the market where the prices are more attractive, we remember that we have a strategy in the free market for 2024, 2025. And certainly, these are layers who are layers that where you have a capacity of basically to practice better prices than those constituted the consumers from the free market.

Also, I'll complement Marcelo, that we show you here the configuration of the PLD. So we are operating here with our PRD in our base. So the only way for you to have to sell at a better price is for it to sell volumes of energy in greater terms. So recently, we in a water subsidiary or in our car company, we participate in auctions in terms of 4 or 5 years where we are able to operate with prices 130, BRL 140 per megawatt water -- megawatt hour. So this is what Jatoba mentioned, the way in which we have great volumes of contracted by a greater term, so long term. So this type of solution is not even one [who des], and this may be the main advantage of Eletrobrás: we are operating in a moment in which the price -- the base price, the average price of energy is based, and we are avoiding is to make sales movement of short-term projects that we would have made available that seek in some way that viabilize the volumes of energy at greater price, greater terms and greater deadlines, which should be greater price. Just to complement that, in fact, the medium term, naturally, the prices go to the marginal cost of expansion, which is above the value that is reflected in the market in the short term now. And that is the reason why we expand this product in a contrast related to the short term.

Our next question is from Maria Carolina Carneiro, analyst sell-side, Credit Suisse.

So for questions, she asks 2 questions first. So we've seen an evolution of the loans in the first semester. So can you give us more details on how many of the number of processes that have been settled or in negotiation -- these negotiations are within the expectations. Can we wait for similar volumes or negotiations for this period?

Paula, would you like to mention? Paula is our queen of Compulsory Loans. So I'd like to highlight something of a concept here, [Carolina]. Obviously, we have here a segmentation of this process. So we are here in this first moment in a segmentation that look at the grid process, where we believe that on the counterparty, which are companies and we can generate a benefit of this resource in a [moment time] when the financial market has a restriction. So -- but we should not -- part of our advantage is a volume of capital that is finite and that we are renewing. This is an allocation of resources that we're doing to -- that has to generate an advantage for the company. So it's a resource that the Board of Directors approves in terms of absolute value, that we're not going to say which one it is. That provides us this possibility to make negotiations that bring almost a minimal value of debt -- so that this allocation of resources is profitable to the company.

So we have the trade-off that we're using here, looking at what we know that the financial market is also -- needs the resources and this option to make an agreement with the advantage to the company when the interest rate is very high, becomes a benefit for those who offer like in our case. But then the company that can make an agreement and recognizing that the cost of taking these resources in the market would be much bigger. So we're, in the first moment, we're looking at the top of the pyramid in a process that has the conditions to make us this to give us this offer. But if you like to complement, Paula.

So you mentioned Wilson, just like to add Eletrobrás also wants to use the resources in its own process. So we have deployed the judicial process. We have guarantees. We have -- we also make a -- we try to make enjoy better these agreements. [Seize] these agreements is very strategic, but we're not going to mention the details. But along the year, you start to see behavior in the reduction of liabilities.

So it's a great allocation of resources, we can tell you, recognized by -- and remembering that we take these liabilities so it's less than half of our provisions of comps are lows we evaluated by the Selic rate. We have an effect of every quarter in the financial expenses that is high due to the high Selic rate, but it needs to have an appropriate location to have these payments in a quarter [lease].

The second question from Maria Carolina is the following.

So the energy balance and the new sales of 140 megawatts near the (technical difficulty) I would like to more detail on the term of these contracts and the level of prices. So in the past, we had 140 megawatt energy prices, and that's for the contract and medium or long term to short term, 100 megawatt hours. Can you mention something about this?

I believe it's a little bit about what I've just mentioned. The market is operating as a base of below 100 megawatt hour, for sure, both to operate [which will have] 140, 150 with a long term such 4 or 5 years to capture the curve going up in expansion. The -- I'll give 2 examples, in the car manufacturing and also in the sanitation companies, they have this demand that are using this demand of greater periods of. And this is an advantage, a competitive advantage of Eletrobrás because we have this volume, we were bought in this volume.

So it's a way that you can mitigate the risk that if you were going to sell products in the short term, the more -- as much as the company could do, it will not be distant from the base of the market. So we're looking here at a strategy that looks at the consumers that have a demand for energy in the long term and that we can recapture. So these are the numbers for contracts for around 4 or 5 years now over BRL 140 megawatt hour. So we have 2 contracts in basically closed in this direction. Jatobá, if you want to complement.

I just want to reinforce that in the long term the projection of price is always near how much this expansion will cost. And we're seeing here an expansion due to the heating up of the demand of renewable energy by the war in Ukraine, so the expectation of prices will be greater. Remembering then, then we will be very competitive, as we have a quantity of energy to be contracting in this horizon.

Question from Gilmar Lima, analyst sell-side from Santander.

I have 2 questions. The first, Wilson mentioned many initiatives to the deficiency, if you like, to comment a little bit more how the company expects the behavior of your tax in the 2023 implementation of some measures and when the company wants to achieve in reoccurring levels that would be this level of recurring events and to give us an idea of the current level in this quarter and what you can achieve by the end of 2023, 2024?

And another question that I had, a question that has already been answered in a way. So I'd like to now ask about now transmission auction interest, how do you evaluate this competitive market? What -- which blocks could be more interesting? And how do you evaluate the attractiveness of this auction has an important CapEx versus the accelerated repurchase as it has been following a loss of this value, how attractive it is to make this auction.

Let me start with the end. Yes, the transmission auction is a priority in the company. So the demonstration that we have put here is that in terms of applying resources into transmission is a show of this. We have seen -- we have been even more efficient. We have to prepare that in the future, we have a reduction in our EBITDA so that because he has a defined peer. So we invest in assets that bring the Eletrobrás profile that has a volatility due to the market price, but also that can have an important incur related to the profitability on the assets on the long term, such as transmission with the generation that we are positioned in a market -- a regulated market like Santo Antonio is a great demonstration showing this, and we have interest in terms of transmission.

We understand that these are projects that we're not in the condition (sic) [position] to say which, but we have a team here and [Ado] and our transmission team are focused on this, and we're taking evaluations in terms of priorities. But evidently, we have assets here that are greater value that and being a greater competitiveness. There are not many people interest in this financial capacity, with financial capacity at this moment. So obviously, we're looking at this, and we are talking with potential partners in a way that we can be in the auctions in competitive conditions. And as we do to the repurchase and we reported to you the process of repurchasing we have 18 months to do the value of the share, its attractiveness is a great allocation of our capital.

Our only event here is to respect what periods and also annual is a relevant event in which we can identify in the period that the things are happening. But looking at our transmissions as an event or as an asset that as a long term, but the shares of Eletrobrás is a great allocation of capital, so related to the OpEx, and we are in the process of -- an [MSI] and maybe looking at a great application, if we look at the material that we have a new process to the purchase of synergic data that bring our volume to the advantage of the company. In this way, we are looking at a program that go to 1 or 2 years. So the values that we imagine are -- have a reincurring potential of 13%, 20% will happen starting in 2 years.

So there is a curve as we already shared, some advantage in this quarter, we showed you in my presentation. Obviously, we're going to keep on working on this direction. Maybe you cannot see so much in CapEx because this is going up. But speaking about the price that we are acquiring, the advantage that have been pointed out by the first wave that we shared today is something that you can look for. So looking at the team of people, we have here 2 agreements related to the union, they represent the employees of the company.

In the first movement, the one that is ongoing, which is the recognition to the retirees. Our evaluation is that [uptraper] will have something around 2,000, 2,100, 2,000 people, which is not the total, which is exactly our objective. There are people here that need to have a mix of diversity. It's not just new. It's not just younger. We have to keep here the white haired, the experienced together with us. So it's a process of looking at this balance related to our employee chart. This program had to happen before the second which will be launched in April. For that, they can offer to the employees starting in May, other employees, so the same plan, so the movement of related to the retirees that has already been offered. The people have already adhered, and we will have here 2,500 adherents and we will have up to month of April 2,100 people being dismissed.

The second is a movement that looks at, in the beginning of the month of May, what is the reference of the company of the -- so related to last year, last people who have left or more -- or these 900 people, that we are putting and bringing to the company. So then you have -- we can make an offer to no more than 20% of this number of people for the next year from May to April to the following year. And I'll say that this -- we will make a dismissal, a voluntary dismissal plan, and we will offer that, and we'll have this the main distribution of efficiency of the company. So this will be really important for this adjustment.

And I would say that this should be the point of view or reoccurring point of view of the OpEx of the company, so it becomes something recurring as we move along. So starting April of next year. So as you will see in the economy of a greater economy per month. And then later, you have an impact of additional investment on this plan, up to 20% of the number of people with values that will be less than that, remembering that the retirees are those people who have the main remunerations of the company due to the advanced age and also the experience, average experience experienced in the company of 33 years. So these are people that are in positions on top and then here, we have a payback bigger in this group. So would you like to say something else, Elvira, about this?

I believe that you have explained the processes in construction. We will have this reduction in expenses in a gradual manner. In the first moment, we start with a bigger expenses due to the dismissal plan. The second one that will come up. So we only see the full effect of this on the payroll next year. And then the other expenses is very similar because we are starting to change the process of purchasing. We have some examples of contracting of insurance that we have centralized that have shown expressed gains of 30%, 40%. And this we intensify as long as we renegotiated this contract, but it doesn't start from the [date shin line] . So it's a greater volume of contracts and this -- all of this has to be renegotiated. So this takes time.

So we can have 100% of the contracts renegotiated. So anyway -- so renegotiating these contracts, it doesn't require this investment. So how much we need to make this plan of supply and long term and short term. And these are some of the examples of insurance. So the first moment the company has dealt with this before of the insurance of operational assets, life insurance. We have had, in fact, as a fruit of the synergy. Another, related to volume, especially CapEx, we have -- what are the volumes that have to be done, what to [bring currents], how long this should take place? Is it better to have stock, not have a stock -- and so this cost of SML will fall along the time.

So we have an important investment to make this mobilization, but we also get advantages of [back end] payback of 13, 15 months that will allow to verify the reduction of this cost along time. Our objective people is to, in fact, be the company of the less OEM costs in the generation and transmission. So this is the commitment of the company. We're looking for this. And I think this has become [so could be along to] the year 2024, '25. But these measures for us to reach this in this condition are taken in 2023 and ending this '24. Thank you.

Our next question now. [Isonde Nedealmeida], sell-side analyst from .

So we will read the question.

I would like to confirm what will be the hedge that will be used for the energy balance that 15% that is generated or if it operates another value that in the graph you didn't mention?

Around 15%.

The next question is from [Giuliana].

So it's very interesting to see that the generation of value comes from -- so the compulsory loan, it's a little part of the OpEx, what comes from the optimization of taxes. And I think the main ones that the company is exactly those in the generation of sales of energy. I congratulate you this presentation, which is very well focused on the generation of value. But something that draws my attention, would also now would like to just know, have a better understanding is, when I compare the energy balance of the third quarter with the fourth quarter, I can see that there is a contracting of energy 170 mega, 320, 158 million in 225. So making a quick math, we can estimate that the price of contracting on these prices.

And then maybe what comes to my surprise, I would like to hear from you is the explanation, is that the price contracting in the fourth quarter 2023 would be BRL 80 megawatt water to 2024, 70 megawatt water. In 2025, it falls even more to BRL 64 megawatt water [hands]. So I'd like to understand more if there is something else related to the negotiation that -- that closed as a disagreement with the sale of energy or something else. But this contracting with the average price below becomes a surprise for us.

Thank you for the question of valuation. I will send your question to Jatoba, but to make this discussion duration is related to prices.

So [Giuliano], thank you for the question. I received by writing, I couldn't analyze it. So the calculation that you did is the net difference in which we have the total volume contracted in the third quarter, in the fourth quarter between the average prices. So this is the sum of all the changes that we have had. We had some of these contracts, the long term, some of them contracted that were not done in this average value that you mentioned. There are some contracts that come in due to the -- to be a regulatory mandatory 80 megawatt obligated to sell for the transposition of San Francisco at a value below the projected value by the market, all of this sums and provides this effect, but this is not in any way that the value that we have been -- we have -- we are practicing and which we reach this price exclusively should the differences that have been affected exclusively in the fourth -- in the fourth quarter, where we have a series of different nontypical situations.

Thank you, Jatoba, thank you so much. Just I would like to ask tomorrow, the first week, they should be the -- should the numbers of now should publish the numbers referring to the first auction of industry transmission, something here, BRL 20 billion. And as I understand your head here, do you plan to participate of this auction? It's a great auction that needs to have partners I'd like to understand your expectation?

The idea, yes, is we are evaluating the participation. We believe that the business transmission gives a stability to our prior results. We understand the difficult position of this is the stability and also have the possibility to create value with a great -- much more dynamic is what will happen to the free market. Some people see some concerns with lower prices. But in 2021, a day like today, we would be so happy to be selling energy at a greater value. So obviously, the strategy of the company considers [different] things. Besides this, I'd also like to say that the strategy of the company, the only thing that we will not have is to be a minority as we were in the past in terms of 49%.

So obviously, we see the possibility to be together with our competitor that has advantage -- competitive advantages, technical knowledge that we can in a pair control the venture and create more fares and become more competitive, but we have no problems in doing this with our competitors. And some of them, in fact, we are partners, even though in the -- if you're a condition of the 90%, but the share control to create value, to be more competitive is part of the strategy of any business, any private business that is serious in this.

So surely, we will consider this, we will consider the financial capacity that differential in the market. In the moment, the market is not so has so much liquidity, so together with the Board of Directors, we will work on the fixation of the rates that recognizes this moment of financial [model]. But I would say that no doubt, this is one of the alternatives of [involve] investments and sustainable growth of the company is transmission, and we are working seriously to be competitive in this auction in that there are no other alternatives. I would also like to say, I forgot to say a comment that no doubt should pay compulsory loans, and should make agreement to compulsory loans. Using electricity is one of the alternatives that we are considering together with these counterparts.

So stimulate in revenue and also -- but we still have not done any of them, just to be clear that those values that you saw, that Jatoba explained to you don't have these alternatives, and I hope we were able to evaluate some of them and to be the competitive for -- and this generates value for both parts, especially in this moment.

And then I'd like to just seize the moment and ask one more. We have 3 events today that are a little bit out of your control, which have caused a little bit of stress, which is the [Hebethe] that I think [Amin] has mentioned. But another one is the [Andra trace]. So understand a little bit with you what is the expectation for Andra trace . Then until when there's -- so there is cash for construction and expectation on the tariff.

Let me -- the company has cash up to the end of the year. So these are the values that have been located by before the prioritization, they are following the, what we call investment in the critical path, which is those under expectation of a definition related to tariff. And here, an important point here is we are in this moment waiting for the [regenary] process to review these numbers from the development bank. And also the [senate biasi] can get together up to June to approve this tariff. But once the tariff is approved, we will be able to have, let's say, a process, a tender process to get this financing. So this company has -- the continuity of the investment will be based on -- starting from the financial position once the equity has already been based. This company will be here, 70% of the construction is done and in 4.5 years to 2027, 2028 to be concluded this important venture. So we're waiting for this evaluation from TCU to have this, to go on with this work. The tariff, that has to cover the capacity to take the finances in the market and also recover the equity of that have already been allocated to the company.

So we end now the session of questions and answers. We will have -- we will give the final word to Wilson Ferreira to the final remarks. Please, Wilson, go on.

So thank you so much to everyone who could follow our conference results. So I'm sorry, it should be a little bit long, but it was important to characterize this process of change. I have mentioned to my team that we are a company that does generation and transmission, we should have a certain stability with the investors. But with the profitability on the results that have already been seen, the operations we have seen, we have seen this already.

So on one side, we try to have more of a final cleaning of the balance and on the other side, our initiatives that we have the possibility to [erect our fence] to direct our people the OpEx and the CapEx related to acquisition services. I think we have the second block, which is to potentialize the value in our liability, contagious here in the company. So we are taking the first steps that are very important. There are assets that are very important, which is the fiscal credits that we're trying to be selling energy, to generate operation of advantage or can post our loss to use these fiscal credits.

And clearly, the other side is that the growth of the company. So the strategy of the company is to in the final phase, together with the Board of Directors, is come to reinforce this growth line in the renewable energy, especially in the transmission, the area of transmission, which these are ventures that are happening. So the fact is I would like just to highlight that the company is 6 months as private. We have seen [increase] expressive investment, over 50%, and those are greater investment of initiative of the company. We have taken control of [compte] like Santo Antonio from a minority way.

We have already planned important plans to the presence of available data is showing that we have a capacity to make the less movement related to SPS and the rationalization of SPs, which are not just to know the transition that have been here. We have done a benchmark, identified all the potential value creations that we have here, we have 74, we say well, who's operating better, who's operating worse and what recommendations can we do. And we have seen the potential and the value creation we have for the first time conditions to guide board of advisers to really meet this expectation of an increase of generated value in these ventures. So it's the second point that we're looking.

So at the moment is demonstration of a strong grit of a private company contributing to the growth, and this is also very important, 600,000 investors in the company, 370,000 of them have got together by the compulsory loan. So we have a commitment with all of these investors of the company in this creation of value sustainably, so strategy of the company will show this. This is the first quarter in which we showed you that where we are heading. So we also like to say in the moment that we are building this new team in the company, bringing people, people who have a great experience in our group. We will move on in this journey of generating sustainable value with all this balance in the growth process, which is a global corporation with the same pride of a company like Vale, like Embraer, that are companies that are Brazilian companies that are represented, that are managed by Brazilians, that are advised by Brazilians in this process.

So we have a great virtual way to follow, and the first spring has already been done in the first semester with a great examples in each one of the areas that we have spoken about. This is the commitment of the team that is here represented together with the managers and employees of the company. So our commitment with the Brazilian society of generating value sustainably in an area that will be especially important globally. Not just for Brazil, Brazil will be the main point of this area, no doubt. Eletrobrás will be the main [example] in this new economy that is showing up in the economy, the sustainable economy, the decarbonization economy. So we will be this great example.

So thank you so much for everyone, and see you in the next meeting in May.

Bye-bye.