Energy of Minas Gerais Co (CIG) 2021 Q1 法說會逐字稿

Good afternoon, everyone. I'm Antônio Vélez, Cemig's Investor Relations Superintendent. We now start Cemig's First Quarter 2021 Earnings Call and Webcast with the following executives: Reynaldo Passanezi Filho, our CEO; Dimas Costa, Chief Commercial Officer; Eduardo Soares, Chief Legal and Regulatory Officer; Leonardo George de Magalhães, CFO and IR Officer; Marney Tadeu Antunes, Chief Distribution Officer; Mauricio Dall'Agnese, Chief CemigPar and Strategy, Environment and Innovation Officer; and Paulo Mota Henriques, Chief Generation and Transmission Officer.

This broadcast can be followed via the phone numbers in Brazil, 55 11 3127 4970, and in the U.S., (151)-630-010-66 as well on the links available on our RI website, ri.cemig.com.tr. For the initial remarks, I would like to turn the floor to our CEO, Reynaldo Passanezi Filho.

Good afternoon, everyone. Thank you for being here in this call with us. For us, it's always a pleasure to bring to you our results. I also would like to thank to have here with us all of you in our Cemig Day where we brought to you our strategic planning. We had a wonderful attendance in our Cemig Day, and that's where we presented the main drivers of the company. And I repeat here in a very direct way, our main objective is to focus and to win. And I think this sets up the tone of our main objective, which is to focus on the businesses that Cemig knows its core businesses: distribution, generation and transmission, and trading within the state of Minas Gerais and to win and to be a recognized company with the best service to customers and clients in that area; therefore, divest from any other businesses. This is a main message that we carried out then and I repeat it now.

We do have a bold investment program of BRL 22.5 billion up to 2025, a huge increase in investments, especially in distribution; and also, a bold program of divestments in the amount -- estimated amount of BRL 9 billion. So this is our draft. I think that we are bringing to you here another quarter of very positive results. And that go hand-in-hand with our objectives, which is to focus in these areas, to resume investments, to look for more efficiency. And we see a positive quarter in all the segments. Trading gas, transmission, distribution, also our -- we had a BRL 1.8 billion EBITDA and adjusted BRL 1.6 billion in the quarter. I think this is a very positive figure. Leonardo and Vélez are going into the details, shortly. But this is a another quarter of consistent results, positive results. And also that shows that we have a good path for the year because we do have an additional recognition that should happen still this year, which is the GSF recognition.

And here we also have figures that are close to being approval with the agency of over BRL 1.3 billion, also during 2021. So we have a quarter with consistent results and important recognition that should happen during this year that is higher than BRL 1.3 billion. We now have a tariff adjustment that is going to be -- I believe we are going to be a company -- the company with lower levels of tariff adjustments because of our prior efforts regarding the credit of PIS and Cofins, and ICMS because of that double charging, and we are returning that to our consumers.

And we move on in our transformation process. I think we have a lot of initiatives that are ongoing. And once again, I'm repeating myself, but this is how we are working, focus to win. We're investing in the clients, digitization, efficiency. We have the project that is called [cater to clients. This is a project that we are starting in an omnichannel. This is a -- we would have a single provider to cater to the customers. And all of that would be integrated.

The systems before were not integrated. And the objective here is to integrate all the service channels to clients using machine learning, AI. So this is very positive. I believe it's going to be really a model for the country. Obviously, we are just starting. The process is being executed, but we do have a transition period here, and which obviously is to train people, train new professionals. But here, we do have a very positive perspective of improvement in customer service. So that on the side of the customers, I'd like to highlight that this project cater to clients is ongoing, and this is a transformational project.

We also have a recovery in our investment level. Here, this is still under the speed that we would like to have, but that is because we are reviewing our contracting model. We have a consulting service that is revealing all our contracting models for suppliers. And also because we are concluding this major reorganization of investments and distribution with the possible launching of a program that is going to call Minas 3-phase that is to work on a gradual replacement, especially on the rural grid from which is a mono phase grid and turn into a 3-phase grid. And it is being very well received. We have talked to city's administrations and I think to boost the agricultural area in Minas Gerais and, therefore, this area is going to be focused in the agri business, the rural area.

And this is a project that is in conclusion stage, and the objective is to turn the face of the agribusiness in the state, to change it in the state. And on the side of the generation project, we wish to grow into wind and solar projects. The objective here is very important. This is a new interaction from the water matrix to go into our own projects, into wind and solar. This is an innovative model, and we believe that we are going to gain traction over the year. So as far as investments are concerned, with Minas 3-phase and the approvals of the wind and solar projects with the conclusion of the reviewing of the contracting models, we are launching all the bases so that we can actually meet our strategic planning.

In terms of stakes, we have published 2 material facts. The first one about Taesa. We are in the process of divestment for Taesa. We are going to have an auction by the end of July. And Renova as well. We are -- we have resumed our works. We are talking to banks, suppliers. We do have a positive scenario there. It was a risk. And with the approval of the Bankruptcy Protection Plan, and now with the resuming of the works, we have a positive perspective to conclude this process. And it's very much needed. So for me, these are 2 initiatives that have very positive results.

For digitization, we start now to work with Pix for direct deposits, and we are making a new effort for an integration architecture to integrate IT and OT. And the objective here is to have market solutions, not only our own solutions. So these are initiatives that have the objective of changing, transforming this company and making it -- or allowing us to change lives with our energy to provide better service to customers and, obviously, generate value, a lot of investment as the base of remuneration, and that is crucial to generate value for our shareholders.

And I conclude here these initial remarks with some efficiency initiatives. We have our voluntary redundancy program, which is open. And 2, 3 weeks ago, we have also launched the proposal or a solution for Cemig Health. We are negotiating with the unions to change a little bit the health care plans, to have a more basic health care plan, and to work on the post retirement topic. And as you know, it has an actuarial deficit of BRL 3.3 billion. So this -- these are the initiatives and the topics in which we are working on and we are always following the strategic purpose to look for more efficiency, more digitization, focusing on customers and focusing on our core businesses. I think that's what I wanted to mention in the beginning.

Once again, this is another very positive quarter and not only the consistency in terms of past results, but above it all regarding future perspectives that we are maturing, we are working on them through these initiatives. And I'm sure all of that will turn Cemig into a company with greater sustainability in the long term. These were my initial remarks, and I will be open to take your questions later on.

So now I turn the floor to Leonardo.

Thank you, Reynaldo. Thank you all very much for being here with us. In the first quarter of 2021 conference call. So just like Reynaldo said, this is another quarter of consistent results. Cemig during 2020 has proven to be resilient even in a pandemic environment. Our results for 2020, in all the quarters, we understand that they matched the market's expectation. We are able to improve our operating efficiency. And the result in this quarter, more or less 20 years -- sorry, 20 days ago, we had our Cemig Day where we had at the end of the meeting to talk about our guidance and our expectations of results for 2021. And we understand that the results for the first quarter match our results expectation, and what -- and also what the company talks about in terms of strategic planning, operating efficiency improvement.

And here, we can highlight the main topics that we understand that have to do with what discussed 2 weeks ago in our meeting with investors, our Cemig Day. Here, we have the highlights and Vélez is going to go into the details about them later on. We have a significant EBITDA of almost BRL 2 billion, BRL 1.845 billion, much higher than '20. And even adjusted for nonrecurring events in 2019, we had some adjustments related. Actually, in 2020, we had adjustments related to light, and they had some nonrecurring events in the first quarter of '20, bringing it down. And even adjusting it, we had a result of 22% higher. And even in this year, although in the first quarter, we had FX effect that was high, and we understand that this is going to be reverted in the next quarters.

Net profit just as the same, BRL 422 million, affected by the FX variation. Not EBITDA, but the net profit, yes, it was affected. But even with these effects, we have the adjusted net profit at 36.5% year-on-year. Our quality indicator, that's important because we are bringing to you positive results, and we continue having improvement in the quality of service. We had in 2020, the best DEC in our history, 9.57 hours. And the DEC for the first quarter is still improving compared to what we have presented by the end of the year, in an annual year. And considering the year, DEC was at 9.55. And considering that we also had here the funds coming in from light. But basically, we had BRL 1.3 billion of payments and debts, and we still have a sound cash position.

And we understand that this is important so that the company can fulfill its bold investment plans for this year and next year before the tariff review and also in terms of the debt management. In our liability management of the bonds, we understand that we have cash and at the right time, we can offer the market to buy partially these bonds. So it's important to have these funds strategically in our cash.

On the next slide, here we have the DEC. I have mentioned the best one in history. This is the -- what we have to meet by now this year is 10.08. In a yearly measurement, we have 9.55, so we continue improving our operating efficiency and the quality of our service to customers. Our FEC is 25% lower than the regulatory levels. We are at a very good rate. Here, we have a small effect vis-à-vis 2020, but we understand this is seasonal, and we still have a very good indicator when we see what legislation demands.

And on the next slide, we have our losses. On the Investors Day, we mentioned that by the end of 2022, we intended to reach the regulatory limits for losses and understand that this is a process and several initiatives have to be taken by the company vis-a-vis -- in terms of the first quarter, we basically had no changes. We have a gap of more or less 1.2%. That Cemig D has to reduce in terms of losses to meet the regulatory level. But we're still confident that with the measures that we are taking internally, the company will be successful. And by the end of 2021, we will have a gap between total losses and regulatory losses much lower than 1.2%. And by the end of 2022, we should meet regulatory cover -- regulatory losses covered by our tariffs -- our rates.

A slide about our delinquency and how we're fighting it. And [ConCemig] Distribution area, in the first quarter, we -- with the worsening of the pandemic, the state was in the purple wave, which is the most severe in the state. Therefore, that could have an impact in our collection. And because of that, the company has taken a whole set of measures, internal measures, making it easier for them to pay -- encouraging them to take cash, creating different means of payments as options. Such as debit card, credit cards, automatic installments, 12 payments in the credit card, 12 installments in the credit card. We developed -- we also implemented Pix, which is an online transfer.

So with all these initiatives, our collection in the first quarter was 97.37%, even higher than 2019, which was the year where we did not have the pandemic and higher than 2018 as well. Therefore, we are able to maintain our collection in a level that we understand to be adequate, right and in normal terms for our concession. For that, also, we increased 60% the number of disconnections. 330,000 suspensions of service. This was much higher than what we had in 2020. This was just in the first quarter, but we do not forget the low-income clients. For them, these connections have been suspended. But at the same time, it created conditions for these customers to renegotiate their debts with the company.

We understood that we were successful with these measures in the first quarter, and that was reflected in the collection index and also in our PDD and our receivables. Here, we had greater accuracy in the provision criteria so that we could reflect in the best way the estimated losses in the commercial and residential areas. But with that, we had a provision that was lower than 50% of the provision amounts in the first quarter when compared to the first quarter of '20.

On this slide, as Reynaldo mentioned, this is our voluntary redundancy program. It's a little bit different from last year. We had a voluntary redundancy program, where they would pay a penalty out of their FGTS. Now it's a little bit different. Now this redundancy program is upon request and now we are offering them a multiple for each year worked. Therefore, we encourage employees to enroll in the program. We understand this is important for the company.

It allows us to have a benefit even switching an employee that might leave the company because he or she retired. And hiring new employee, this new employee has a much lower cost, and that is important in our operating efficiency so that we can reach our regulatory EBITDA by the end of 2021 as promised in our Cemig Day. This is our objective for the year. Vélez is going to talk about that. We already reached this regulatory EBITDA in this quarter. But our commitment is that by the end of 2021, we would meet our regulatory EBIT -- EBITDA considering that our EBIT -- our OpEx -- regulatory OpEx was already met.

The next slide is about the GSF, which Reynaldo also mentioned. Here, in Cemig, we have BRL 1.146 billion to post financial assets in terms of results for 2021, that is because of our expectation regarding the GSF agreement will extend 2 important concessions for us: Emborcação and Nova ponte. They will be extended in 2 years. They would end in 2025. And now we can have cash generation in these plants for more 2 years. This is an important cash generation for us. It allows the company to manage its liquidity in a way that's going to be ready to come up with a proposal to -- for a granting bonus in order to extend these concessions as needed and according to the regulatory schedule, of course.

And here, we have, for instance, Aliança BRL 137 million assets to be posted. And these BRL 137 million are regarding to just Cemig's portion. So we have BRL 1.333 billion of nonrecurring effects that will be posted in 2021. And we'll have an important impact on the company's results and also in this proposal for dividend payments over the years.

Moving on, this is our last slide before we go into the details about the results. We published our divestment, Taesa. You already know about our interest of divesting Taesa in 2021. And this is our schedule. Of course, this is a tentative timetable. But if everything works up, we believe that by August, we can rectify this auction that would allow us to conclude too within 2021. This would bring some efficiencies to the company. But in any way, we understand that Taesa's sale is within our strategic planning of reinvesting and focusing on investments where we have the control mainly within the state of Minas Gerais. So this is our tentative schedule. And it's still depending on some corporate approvals, but we do believe that we'll be able to make it.

Now we are going to turn to our results in detail, I will turn the floor to Vélez, our Superintendent in Investor Relations, and he's going to go into the details of the figures. Vélez?

Thank you, Leonardo. So now let's turn to the results analysis itself. I just would like to highlight some effects that were more important -- and that have affected the results in the first quarter. So that it can -- it will be easier to understand the presentation. In the consolidated figures for the holding, we had a positive effect. In the equity method, results of 45% growth from BRL 82 million in the first quarter of '20 to BRL 119 million in the first quarter of '21. And this was mainly thanks to positive effects in Taesa's results and also impairment reversal in Guanhães.

For Cemig Distribution, we had also a very relevant increase in the volume of electricity distributed. The captive market had a drop of 1.7%. And transport for clients was up 9.7%. Also here, we had a migration from free clients, and I will talk more about that shortly. Our OpEx in Cemig Distribution, as Leonardo mentioned, and our CEO also mentioned is within the regulatory target. And for Cemig GT, the main impact was the marking to market of the Eurobond that has generated a negative effect in the first quarter of 2021 of BRL 619 million net of tax. So here, we have the explanation or the details of the negative effects of the mark-to-market of the Eurobond.

So this was because of the dollar behavior. The real had a depreciation. Therefore, generating the negative effect was BRL 751 million. And with the increase of the interest rates, future interest rates that also impacts us negatively in the hedge sold and impact in the financial results at the end was a negative of BRL 939 million. And negative impact in the net profit was BRL 619 million, as I had mentioned. But as you know, the dollar -- the FX exchange rate for the dollar and at a level of BRL 5.697. And today, the dollar is already at BRL 5.26. So the real already had an appreciation from then to now. So if we were to close that today, we would have an improvement of BRL 600 million-or-so.

And this chart shows how sensitive that real bond that is according to the dollar variation, so at every $0.10 up or down, we varier that in around BRL 150 million. If it reaches BRL 5 per dollar, we'll be at BRL 7.5 billion. And that is, in the quarter closing with BRL 5.697, we reached BRL 8.546 billion at March 31.

Now talking about the EBITDA and the net profit in the first quarter. We see that we had an increase of 133.2% in our IFRS EBITDA. And according to our EBITDA for non -- adjusted for nonrecurring effects, it was almost 23%, BRL 1.349 billion in the first quarter of '20 to BRL 1.658 billion in the first quarter of '21. Just as the same, our net profit adjusted by the nonrecurring effects had a growth of 36.5% from BRL 589 million to BRL 804 million. And on the bottom of the page, we have all the facts. One of them are the adjustments to fair value for light, which we had last year, and we did not have this year. So we had to work on -- to show the adjustments so that you would understand the comparison. Another interesting or important effect is the FX exposure in the Eurobond, and these are the more relevant effects.

Turning to the results for Cemig GT. As we mentioned here, we did not have any nonrecurring effect, so the EBITDA IFRS, neither in the prior quarter in 1Q '20, 1Q '21 had effect, so we can just have a direct comparison. And the EBITDA was up 8.4% for Cemig GT from BRL 688 million to BRL 746 million. Net profit, really, the FX variation did have an impact because our dollar-denominated debt and the analysis is better understood in the adjusted results. So the net profit had a growth of 12.4%. The adjusted net profit from BRL 274 million in the first quarter to BRL 308 million in the first quarter of '21. The adjustments once again are down below in this chart.

And before talking about the EBITDA and net profit of Cemig GT, I would like to talk a little bit about -- of Cemig Distribution, I'm sorry. We would like to talk about the market, which had a strong recovery in 2021. Here considering the billed market and really if we see end consumers and transported energy, there was a growth of 3.3% in the total of distributed energy. And as I mentioned, the transported energy for free clients was up 9.7% in the period, while the sale for end consumers was down 1.7%. It's important to highlight that here, we have 181-gigawatts-hour in the first quarter of migration of free -- or actually captive clients to free clients. And that affects a little bit the comparison and the transported energy if we make that adjustment, would have grown 7.9% and the sale for end consumers although -- instead of having that reduction of 1.7%, it would have grown 0 9%.

But even more important is the evolution, is the performance of distributed generation and that is not considered in the sale for end consumer or transported energy, but the energy coming from distributed generation increased 120% from 125-gigawatt-hour (sic) [195-gigawatt-hour] in the first quarter of '20 to 430-gigawatts-hour in 4Q '21 (sic) [1Q '21.] That's a very relevant growth. So today, distributed energy, distributed generation already represents more than 3.5% of the total energy that goes through our system. So it is very relevant.

And as you know, this has a significant impacts for Cemig Distribution's tariffs. And that's why we believe to have a discussion about the subsidies by having a tariff policy and the discussion should be a national one for national tariff.

And finally, I would like to say, that we know that residential consumers have been very resilient and also because of what we are going through with the pandemic, so residential was up 3.2%. But really, the main driver here for the increase in the electric and energy consumption and distribution -- Cemig Distribution, is industrial consumer. It's a very relevant player, and it was up 8.4%. The commercial clients had a reduction of 12.2%. And as we usually say, the EBITDA, both EBITDA and net profits for Cemig Distribution was very positive, very strong in the first quarter of this year. We didn't have growth, which was very significant, relevant, however, you look at it.

And the main nonrecurring effect that we had here was a reversal of tax provision related to the profit-sharing program of BRL 79 million in the EBITDA and BRL 52 million in the profit. If we made these adjustments, we had an increase of 34.5% in Cemig's EBITDA -- Cemig's distribution EBITDA from BRL 495 million to BRL 666 million. And in the case of net profit, we had an increase of 72.6% from BRL 197 million last year to BRL 340 million in the first quarter of this year.

About costs and operating expenses, we had a total increase considering energy purchase and other costs, nonmanageable costs and PMSO, we had an increase of 14.3%. Looking at only the PMSO, there was an increase of 8.3%, that was because of outsourced services. And we believe that this was a onetime off with increase of some expenses such as communication and trees pruning that we haven't done much last year -- in the beginning of last year. And so it was -- we had to do this year. But as you will see, this is within the regulatory limits.

And other expenses here, most of them have increased because the increase -- because of the cost of energy purchased for resale from BRL 2.8 billion to BRL 3.1 billion, this in the first quarter of this year, and charges also increased a lot, almost double-well from BRL 365 million to BRL 747 million this year.

In terms of operating efficiency, and here, I'm comparing with the regulatory OpEx as, we already mentioned. Here our distributing company still has a more efficient performance, more efficient than the regulatory level in the first quarter in BRL 53 million. And this is thanks to the PMSO, which was BRL 157 million lower than the regulatory level. But we also had other expenses like the postretirement, the voluntary redundancy program. And our CEO already mentioned that we are working on it. We are also working on our health care plan, and we have also ideas for the pension plans. So basically, that's it. We had an OpEx of Cemig Distribution of BRL 712 million. And the regulatory OpEx is of BRL 765 million, so we are BRL 53 million lower than the regulatory OpEx.

About the regulatory EBITDA, we also had a performance that was better. It was BRL 124 million higher than the regulatory EBITDA. That's basically because of our OpEx, we had also other changes in the revenue, which helped us to have a realized EBITDA or actual EBITDA that was higher than the regulatory EBITDA. So we are BRL 124 million higher than the regulatory EBITDA of BRL 621 million. In terms of debt, we have a very comfortable debt profile here in terms of maturities, vis-à-vis our cash. We have no -- we ended the first quarter with cash of BRL 6.181 billion. And with maturities up to the end of the year of BRL 823 million; next year, BRL 1.2 billion; 2023, BRL 816 million; we are very comfortable in the short term, expect for 2024. That's when we have the maturity for our Eurobond. This is a huge loan.

And as Leonardo mentioned, we are working -- actually, we are planning to have a liability management for this bond in the midterm. The debt cost increased a little bit because of the CDI increase. As you know, part of our debt is linked to the CDI. So there was a slight increase. And here, the leverage, as I mentioned, we have a leverage that is very comfortable. So total net debt over EBITDA is 1.1x. That is a very good level. And total net debt over equity plus total net debt of 24.6%, a very comfortable average level.

Finally, before turning to our Q&A, I would like to talk about our cash flow. Our cash by the end of 2020, as you know, was already very robust, BRL 5.8 billion. We generated cash, operating cash of BRL 943 million. We had here reimbursements to consumers of credits of PIS and Pasep, and those who are already in last year's tariffs, BRL 178 million. We paid loans and financings that were due in the first quarter of BRL 1.3 billion. We do not have any fundings, as you know. We also had the sale of light, as you know. We do not have any additional shares or stock at light. And we also had BRL 366 million in investments, so we want from a cash of BRL 5.8 billion cash by the end of last year to BRL 6.181 billion by the end of the first quarter.

Leonardo, would you like to talk about the management's priorities?

Yes, Vélez. Very briefly. We always like to show this slide because it summarizes the main company's initiatives that will add value. Some of them are already met, some are partially met, others are ongoing, and they are part of our agenda. So it's very important to stress that because some of these initiatives, for instance, the post-retirement programs, we mentioned in Cemig Day that in the short term, we would start the process of negotiations with the unions. And we -- this already started. We started negotiations about the health care plan. We are looking for restructuring of the plan, reducing our actuarial risk and also expenses recorded in our balance sheet.

So negotiations are ongoing. And we can expect that in the short-term that we'll have negotiations about the pension plan. These initiatives are on our agenda. They are part of our daily activities. And we understand that this year, in 2021, we will continue working so that we can work on all of them. We know all of them are very important for our strategic planning, for everything that we have discussed with our market initiatives that we understand that we're important to add value to the company. They involve debt management, operating efficiency and other structural topics that involve the retailer energy trading as well.

So thank you very much. And as Vélez mentioned, we will now open for the Q&A session. Is that right, Vélez?

Exactly.

(Operator Instructions)

Our first question is from Arthur Pereira from Bank of America.

I have a question about the distribution results. The line where you talk about reimbursement of PIS and Cofins' credits to consumers, you did post that in the revenue of Cemig D. And then we see the same amount in your cash flow. So my question is that if there's BRL 178 million have affected the EBITDA of the distributing company?

Actually, the effects that involve the reimbursement of these amounts, they do not have any effect on the results. What happens is that our tariff was reduced in BRL 700 million that we included in the tariff review to return to consumers. But as we return these amounts to consumers, these are just accounting adjustments. Our regulatory revenue for our concession contract was not affected because of the BRL 700 million that we are returning on the tariffs.

So in summary, this BRL 178 million does not affect the EBITDA. The EBITDA that you see is the regulatory EBITDA. According to the concession contract, this a only a cash effect where we return into the tariff. That is, we collect a little bit less in the tariff. But on the other side, we are reducing our liability with consumers because we have that -- to share that we have to return to them regarding those 10 years.

(Operator Instructions) Next question is from Andre Sampaio, Santander.

I just have a follow-up on the prior question. I would like to understand considering your answer to him, if we were to work on the results of the distributing company as a whole, the expectation from now on so that we can have an idea. Are we going to have efficiency? Or there is something that we cannot foresee in the future? Like you don't think that this is going to last in the future?

I don't know if Reynaldo wants to mention, to talk about this? Andre, thank you for your question. Andre, the guidance was published or disclosed more or less 2 weeks ago. In this guidance, the base of our strategic planning is continuity of the operating efficiency of the company; reduction of nontechnical losses and improvement in our collection plans, in our collection program; reducing the PDD. And with based on all these initiatives of the company, we published the guidance for Cemig Distribution, which is where we had an EBITDA for this year of between BRL 2.544 billion and to BRL 2.518 billion (sic) [BRL 2.581 billion.] And we understand that this quarter was BRL 155 million, close to BRL 670 million. We are maintaining our expectation to meet that guidance, obviously, considering this range, BRL 2.544 billion to BRL 2.581 billion, because of our market's expectations and our measures also for efficiency, operating efficiency. I don't know if I addressed your question, but our guidance, I think, is a good base here for what we expect in terms of 2021.

Just adding to that, whenever we disclose a number, the OpEx of this all is going to be lower than the regulatory OpEx we have published, and a plan with improvement of efficiency, and this does not include post-retirement. Everything that we might have in terms of positive results in the negotiations of post-retirement are not considered in these projections.

(Operator Instructions)

If there are no further questions, we turn the floor back to the company's management for the final remarks.

Very well. Thank you all very much for being here with us. I will see you in the next quarter in our next call. Take care. Thank you.

Good afternoon, everyone. Thank you.

Thank you, all, very much.

Thank you. The conference call for Cemig has ended. Thank you all very much for your participation, and have a nice afternoon.

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