Energy of Minas Gerais Co (CIG) 2015 Q3 法說會逐字稿

Good morning, everyone. My name is Antonio Carlos Velez Braga, Cemig's Investor Relations Officer. We'll now start our video webcast, where Cemig's results relative to the third quarter of 2015 with the presence of Dr. Fabiano Maia Pereira, Chief Officer for Finance and IR, Luiz Fernando Rolla, Institutional Relations and Communications Officer and Dr. Leonardo George de Magalhaes, Controller. You may follow this broadcast by calling 55-11-21-88-0155 or 55-11-21-88-0188, and also, on our website, ri.cemig.com.br.

To start our slide presentation, we hand over the floor to our Institutional Relations and Communications Officer, Dr. Luiz Fernando Rolla.

Good morning to all of you on behalf of Mauro Borges, our CEO, I would like to thank you for attending this teleconference to disclose our results for the third quarter 2015. Unfortunately due to a busy agenda, our CEO cannot be together with us at this moment and we, together with my colleagues, Dr. Magalhaes and others, will conduct our presentation. We tried to fit into the slides all the information that we deemed of interest to the investors and analysts. We'll proceed to the presentation that should take some 30 minutes and then we'll open up for Q&A, upon which we may available to you for clarifying any doubts you might have. Our presentation, as usual it's comprises and initial phase when we talk about the highlights of our quarter and then specifically talking about the financial results 2015. In our first slide, we have the most relevant indicators, net revenue, EBITDA, net profit, we could see that we had a very good performance as compared to third semester or third quarter 2014. In 2014, we had some very relevant impacts, mainly arising from the negative equity from Santo Antonio equity accounting. But even so in 2015, we had a very good performance, in line with what we had programmed for the results of this year.

We have some other highlights, especially in generation, our action, our suit regarding Jaguara and Sao Simao plants, we filed a suit at the Federal Supreme Court of Brazil about protecting our rights in face of the decisions taken by the STJ. You know that there is an auction scheduled for November, 25, we'll talk about that a little more.

Distribution, also the contract for renewal of distributors' concessions was approved by our Mayor and forwarded to the Ministry and we'll be soon signing the new contract, it's just a matter of some rights (inaudible) proceedings that we should still wait for and then we'll sign this contract by the end of the year. It's very relevant because growth of concession for February 2016 was impacting our debt a little bit. Also, we have recognition from the market, we will highlight that a farther on.

Beginning by generation, we have already applied for the provisional remedy regarding the Jaguara Hydroelectric Plant at the Supreme Court. We had this dispatch from the Chief Justice, Mr. Dias Toffoli and there is a call for a settlement, excess additional settlement and it's an invitation to hold reconciliation hearing and in our view, this is a good way to go. As for auctions of the plants, we are focused on the auction involving those plants we already operate, it will take place in November 25, we're ready to make to an offer within the expectations of the federal government as to benefit.

ANEEL, about distribution, it has recommended to the Mining and Energy Ministry, the extension of concessions so that the issue haven't been overcome. The new concession contracts have conditional efficiency levels from distributors; we are very comfortable about the fact that we should meet the quality and sustainability requirements. Yes, we have stimulated various times over the years of our capacity to deliver and to meet the ANEEL requirements. And even in the more conservative scenarios, we feel that we are in full position to deliver and to (inaudible) placed by ANEEL by 2020, we should easily pass them. As for concession then, we'll have this renewal by the end of this year and from then on, we'll follow making necessary investments to meet the indicators and the requirements as for quality and financial economic requirements so that we can be approved for extension. We anticipate no problems to meet such requirements.

Another important recognitions to us, once again, we were recognized by the markets as for our financial statements and this time, we shown especially brightly among the listed companies, we've got the 2015 Transparency Trophy, Dr. Leonardo is the Manager -- he is the controller and he is the man behind this and please tell us what this plants or this price means?

Good morning to all of you, it's a source of pride to Cemig even given very uncertain scenario before us. We -- our pleasure to expand our disclosure about the data of the Company and we are really reflecting very neatly what our operations have been reducing uncertainty among investments -- investors, rather. And this recognition is important because it involves the Companhia and other institutions and this effort of our Company to be ever more transparent and being selected as the top in Brazil, that was very good to all of us.

Yes, excellent and please convey my congratulations to your team. All of them who have dedicated themselves so strongly to obtain these results. Also, Fabiano would tell us about the shortlisting of our Company for the IASC Consumer Satisfaction Index 2015, also consumer recognition in terms of quality provided by Cemig to consumers. Precisely, we have got this prize, actually we were shortlisted for the prize and this other prize was for consumer satisfaction. And you know very well, and if you want to [know very] exactly how this works, well, this prize is done through a website and it is being the consumer protection and it records surveys conducted among consumers that have somehow made use of that site to solve any pending issues with several companies in various segments. And we were elected within the power sector as having the best performance before these consumers. This is the second time Cemig has taken part of it and the recognition comes very timely because we are signing our distribution contract, those recognition, in addition to ANEEL's IASC, this spontaneous selection by the consumer through the site, that's pretty much a knowledge as a champion of consumer rights.

Having done this first stage, we'll go now for some figures relative to the third quarter. Following the normal sequence, first with the consolidated net revenue going up 26%, with a huge impact constituted by tariff price, with a substantial adjustment this year, not only the yearly adjustment, but also the extraordinary tariff adjustments and tariff flags we had, as you see pretty significant reduction in consumption, but even so 26% growth in consolidated net revenue, especially the distributors were responsible for this growth.

These adjustments were authorized in the sense of making up for the revenues of the distributor in face of the several expenses incurred with regard to energy cost and the risks, hydrological risks that the Company now take as part of the expenses. There is of course brought some relief to the distributors because they were using their own cash to finance such expenses and now we can divert this cash to our investments.

Power consumption over the period, the third quarter 2015 as compared to the same period 2014 in our distributor dropped significantly 3.2%, followed by mostly the industrial, not so much from the residential side of it, 0.7%, because the category of consumers that suffered most impact from the increases, tariff increases, the first semester was very -- the performance was very good, so that contributed to the slighter -- lower reduction, you can see residential 1.9% in the ninth month and industrial 6.8%. The good news here in the slide is that despite the increase in tariff, we haven't so far envisaged any increase in default at this point. Yes, because the charge is already full, it's been applied fully on the deals, consumer deals and default are just like the history, historical levels, virtually no effect, this is very positive and it protects our cash flow. The distributor's cash flow, we had the reduction in power consumption by the families who are more efficient use of energy without that implying any further default in the Company. The consumers sort of adjusted to the consumption within their budgets.

Of course, operational issues, the main cause of operational expenses of 32% plus was the bought energy highlighted in a very impressive way in our graph, you could see BRL751 million increase in expenses related to purchase for resale. This is regardless of the tariff flags and extraordinary readjustments, this has been compensated or made up for in some other means, like Leo can explain to us, but it is very relevant to see this cost, unfortunately it burdens our consumers. Yes, it's -- in this light you can see that our controlled costs behave below inflation, which reflects the efforts of the Company to reduce its cost. But the non-controllable cost for the fourth quarter last year, we included CVA and this year, we have BRL1 billion plus recorded as CVA in association with the tariff adjustments. If you allow me, it will be good to comment on in this climate of uncertainty in the public services, the (inaudible) liquidation, Cemig was able to win on an injunction protecting its revenues that would be otherwise be very highly impacted. Even so, the Company was pretty much conservative in recording its revenues, would have included the benefits arriving from the GSF figures here are the actual figures, we'll see how it goes and how the effect of liquidation will happen.

Even considering the effect of GSF, we were very conservative in accounting for our revenues given the default of the (inaudible) revenues. The message is that as the market regulates itself, we understand that there is no reason for concern of write off anything that's been recorded as the scenario normalizes, we can expect even an additional revenue because of this conservative position right now. Yes, excellent, you really mentioned -- touched a very important point. We have some topics still to be decided upon into the upcoming months, especially regarding GSF. We have some pending issues relative to the 688 provisional measure by the government. There will be some developments arising from this in the fourth quarter; some decisions are still to be taken as for provisional measures and provisional remedies.

Also, provisions for loss of investments in this semester relative to (inaudible) that's sequence of the provision we have made in the other semester. Any news about this, Fabiano?

Yes, with regards to this provision, there was this -- rather than fact that the puts was exercised (inaudible). We're negotiating right now and assessing for potential projects both for Light and for other partners that participate with us in, how should I say, at (inaudible).

Yes, this is a relevant topic and we will of course proceed to restructuring as a function of the maturity of the agreement that was made with the four investors. As we said, we are already making a move towards this transition in a way so as to preserve our top quality in managing Light within the private sphere.

We had some additional provisions for Santo Antonio, very small amount in the third quarter as a function of the GSF. That's the main concern of Santo Antonio. EBITDA grew almost 27% as compared to 2014, we're now nearing the lower limits of our guidance and we will meet our guidance this year for sure. It's just a matter of projection. Very simply what will happen in the fourth quarter in our assumption is that we'll really meet it in the fourth quarter.

Net profit as a function of those impacts regarding Santo Antonio, it grew substantially with BRL167 million in the third quarter. Considering all the impacts commented upon, if we compare the accumulated figures was to have an 8% plus increase from last year.

The generation system really gave the most contribution to the profits of the Company. This is a continuous effort in the management of the Company to maximize results, especially on the part of our Financial Director in order -- dealing with our debt that's part of fundamental -- parts of our strategy that extension that is. So invite you now to make your comments about the slide.

What we do have for 2015, we have already rolled on all the maturing debt, what we still have to do is just a small number of coupons, we'll proceeds to pay them. 2016, most of the maturity that's indicated in the slides relates to Cemig D, mostly related to the topic you raised, Fernando, the length of decision about extensional concession that brought difficulties to Cemig D, but now we are in a position to proceed with it and to extent that making it much longer it is today.

As for the cost of debt, as the interest rates in Brazil have grown, this had of course an impact on the debt profile of Cemig and we are working towards having perfect conditions to cover all these debts. Yes, our revenues are indexed to the IPCA and the generation and distributor alike. So the net profile of the debt is higher than the [related] figure, 4.5%, which for us, it's very good considering the context and our leverage is very good too, in view of our articles of incorporation.

As you mentioned, within the short term, we'll draw away with the remaining debt. It's been very much reduced, BRL5 million, it has reached BRL5 million and you can see that our profile is extremely positive. But in the case of the distributor, as I mentioned it's a special case because in some way we have financed the consumers somehow through the CVA and this increases the volume of debt that we have accrued. Coupled with the fact that consumers were fearful of the concession contracts that was upcoming and there was this adjustment in the short-term, we have a lot of room for elongating this debt into the upcoming years so as to improve substantially the financial expenses of our distributor. Leverage is still high, our EBITDA hasn't recovered fully as it should be expected. Also in our investments program, we had now executing 63% of our investments program of the Company altogether, you see the values in reais for the year so far and we'll meet all we've planned for 2015, we'll reach BRL2,200 million, most of the investments have been made in transmission, and we still have one quarter to be meeting all the commitments. You can see the amount is pretty much relevant.

And our last side, that's the most relevant for financial management. As you can see, we pursued a series of actions, a series of actions to protect our cash, resulting a very positive status, BRL2.7 billion total cash available, CVA accounts for great deal of that. Yes, the situation we have here is given the scenario we had early in 2015, when we could see that it will not be a very smooth year for the Company. We took decisions along the year so as to protect the cash of the Company, we're still doing that and we still have a long work ahead of us to keep giving the tranquility to our investors and to the management of the Company itself so far as an expanding cash is made available to the Company. The focus of our concerns here is, especially the performance of distributer, given the renewal of the concession, we still have some homework to do in terms of operational expenses of the distributor, we are doing in it, we have taken some initiatives soon to be opened to the market, to disclose to the market so as to adjust the situation of the distributor to the cash flow as available to it.

In transmission, we also proceeded to a very deep adjustment given the concession -- that expanded a concession contract for -- since 2012. And we consider some -- or some aspects of 2016, we are taking care of that, we are entering the New Year with this positive sector to preempt any possible problem that may come up in 2016.

These were the slides we had to prepare and show to you about the performance and results of the third quarter. Now we open for questions and answers.

Okay.

Ladies and gentlemen, we now initiate the session for questions and answers. (Operator Instruction) Macos Severine, JP Morgan.

Two questions, first I'd like to know well, Cemig's new situation today, the major point here involves lowering leverage and more operational good performance. What could we expect in terms of improvement in efficiency and operational performance? When do you intend to reach these new levels? The holding, profit-sharing has been mentioned, any further reduction could be expected, at least initially? And as for unleveraging the selling of assets, or what other ways do you envisage to achieve this reduction in leverage that I think is very important?

Another doubt about your stock holding positions, what could it be required in terms of equity into the next semester? Santo Antonio, Belo Monte, and more recently, in (inaudible) was checking for the shares. I see that the expectation for revenues had a gap of BRL550 million, have recycle -- shareholders being summoned to cover that gap. If we consider that the plants like Jaguara, Sao Simao and others in the portfolio, this is still an open issue, but if we take this a base line scenario, those level would increase very much, should we sell assets or improve operational performance?

Another important point would be the compensation for these assets. Are you negotiating with ANEEL and what expectations do you have for compensation of these assets? These are my questions.

Of course these are wide array of things, we would have to rewind our presentation, but let's try to be brief and address your issues. First, about the operational efficiency improvement, as Fabiano mentioned, as a function of concession contracts renewals, we must have a plan now to meet the targets that this new concession agreement over the next five years. This involves some economic, financial issues. We have approached two things, both leverage and operational expenses, improvement of the performance in this case is very relevant indeed because these two things will enable us to meet comfortably the target by set by ANEEL. We also have several other initiatives, we are adding new initiatives even and in the process of defining together with our Board of Directors, they haven't reached a final approval of the new measures, but it should happen by December, as April budget for 2016, we must have some additional information to give you by then. We have many initiatives being taken towards reducing controllable expenses. We cannot open up at this point, we cannot disclose what initiatives are these, but I think all of the negotiations with our Board and this, as I said, should be cleared by the end of the year.

There is one point that's already clear that it is that we should seek the focus on those sectors that represent higher added-value to Cemig, this is the guideline for our works -- the work we have been developing. A stronger focus on those segments that mean higher added-value, yes, on improvements of performance of each employee of Cemig to the effect of improving performance and reducing the need for subcontracting or outsourcing services.

As for reduction of leverage, that's for Cemig D, we can also include that theme of compensations there. Substantial reduction of leverage in both companies, we and GT, we must consider these reductions to be happening. We are still negotiating with the ministry and ANEEL so as to set the criteria for calculating those compensation. We trust these values will be relevant and will help us reduce our leverage. In addition, we are reducing our debt by payments to the maturity dates.

With regard to compensation Severine asked, and two things should be made clear, two compensations are involved. The one involving the plans that we're return to that's the focus of the action of the 25 and this will be -- all sorts of the necessary documents will be given to ANEEL for making accounts.

As for the plants under litigation, it's a little premature to talk about compensation, but if and when this comes to happen within the timeframe scenario that Severine mentioned, and we'll have a better view. Also, all the conditions set by ANEEL as for the existing transmission system, this amounts to some BRL1 billion. This is well ahead BRL1.2 billion and the criteria for compensation is still to be defined. And we believe that soon this will be solved by the ministry.

As for equity demand relative to stock holding, Belo Monte does not require so much investment and it will go operational in February next year. So it will start generating revenues, which will substantially reduce the need for equity on the part of the insurers. It's good to remember that the volume of funds from BNDES is very relevant within this context and this reduces even further the need for equity in Belo Monte. As for Hanover, the agreements that we are setting with Cemex is precisely aimed at (inaudible) Hanover to go on developing their wind power potential to 1,500 megawatts are already been contracted and these investments will be conducted in a way such as we have negotiated with (inaudible). Another partner that we now have with the financial capacity to shoulder any possible investments that might be required by Hanover.

I believe we addressed all your questions, Mr. Severine. As for sale of assets, we have no plans for that, no, nothing of concrete. Of course any good proposals we'll carefully look at for sure.

As for asset selling, we did it through Light and stockholding to Hanover with Light, helped reduce indebtedness. But in a general way, the assets that we operate are relevant and they contribute to our results as you can see in our presentation. I believe we responded to everything.

Yes, I made the question about of selling of assets because there was news disclosed recently involving Light, but I'm satisfied and thank you.

Thank you.

Kaique Vasconcellos, Citigroup.

Two questions. First about rolling of the debt and the difficulties associated to concession of distribution. What can we expect in terms of the debt rolling into the next years? And the second question, you'll be part of the auction in the coming 25, what will your position in this process?

Thank you, Kaique for you questions, Fabiano is answering. With regards to the distribution, we maintain continuous contact and talks with the banks. We are doing that in advance so that we can roll on the debt into the next year, and if possible this year so that we could enter 2016 with half our debt already rolled up. With regard to the financing of our stock ownership at the auction, we're still talking, we haven't reached a final model of precisely how to look like. We'll have further conversations and by the end of this week, we should have wrap that up.

Paulo Ferreira, Bradesco.

I have a quick question about leverage, Cemig has been notified about the (inaudible) and my doubt is that this should have an impact on 2016 and the leverage of Cemig. My question is, how do you assess the amount of loss related to that and do you resort an independent assessment agency or how do you make this account?

The agreement we have with Parati -- aside Parati, is the (inaudible) fund, it's goes through the payment of dividends of CDI plus 0.9, that's what we aim at delivering and the value of the period is what has been invested already as we constituted the funds, BRL1 billion. We're now negotiating with new investors on these -- investors, would you add anything, Fabiano?

Just to say that the question is -- relative to our criteria for provisions for loss, we are very conservative in these calculations, it's important to say that this accounts uses our cash flow and a fair amount and we'd compare that to the foot-value point CDI plus 0.9 and this is seen as a loss. This is a very conservative approach and that's how we'll proceed to compound any provision for losses for next year and expect to have negotiations that will resolve these issues.

Just to add that we've been talking with some investors and in principal, the outlook is pretty much favorable to the sense of reaching a solution even much before maturity guidelines. So we'll have good news about that next year and that's what I expect.

And this is a fact indeed that must be considered, our expectation is that with the negotiations underway, we have no impact in the sense of the need for new cash injections by Cemig, which would imply in buying shares, buying stock, which is not our objective. But as for the payment of dividends relative to Light, there are expectations in selling assets of Hanover by Light. This will substantially improve the indebtedness of Light and we'll be in position of paying the required dividends with a very good level of performance in 2016 until maturity of the (inaudible).

(Operator Instructions) Vinicius Canheu, Credit Suisse.

Three questions, very straight forward. First about Jaguara and Sao Simao, you said that Sao Simao will be dealt with 15 of September. I'd like to know the figures about EBITDA and profit, results in general for the quarter in the (inaudible) plants.

Many questions were made about leverage, but I would like also to know whether the distribution of Cemig capital expansion, is parts of the plan given the level of indebtedness of the Company.

And third, about the auction. This financing model designed by the end of the (inaudible) you said, but are you going to participate in any consortium like Santo Antonio, do you negotiate any stockholding -- stock ownership over time in Cemig and consortium? Are you planning to participate any way via consortiums?

Let's try to respond -- to address each point separately. With regard to accounting of Sao Simao, as we are still seeing this uncertainty above this injections at the [CCE], it's likely unadjusted, we were most (technical difficulty) and I have no means to show you the accounts of Sao Simao. We've made provisions in the sense of avoiding any surprises and there's no specific number for Sao Simao, this is part of our wider figures.

As for the auctions, there is this part we should make very clear that there are several lots and we start biding at the auction, and now has not disclosed the participants and it's a matter of strategy also, you should not disclose all the strategy for participation at the auction. If things happen, I'll expect it next week.

Next question, about distribution, the debt require more injections, capital injections by Cemig, we have conducted work in the sense of setting Cemig (inaudible) into this new concession agreement. And for me it's a little premature to advance our strategy because this is going to be brought to the Board of the Company, it would not be prudent to disclose this in advance. Sorry. Thank you, Vinicius.

[Marcelo Savio].

I have a question about distribution. In this quarter that was higher than the second quarter despite the strong drop in consumption. I would like to understand this. And also I would like to understand whether we should have in the course -- in the fourth quarter similar result as the third or should expect a better result?

I was discussing with Luiz about that, about Cemig D, the fundamental point was the work started since the beginning of this year. The results are already showing to that effect.

Just -- you say that the difference in EBITDA from the second and third quarter? If I look here, the second quarter, [1,003] in [Q65], is this improvement associated to cost expenses -- cutting expenses or is it not recurrent?

The CVA is not recurrent but the value I can convey to you later on.

As for the (inaudible) theoretically, CVA would have been -- for everyone to take it on a recurrent basis, that's the aim of my question.

Marcelo, I apologize, but I would have to go deeper into this result as you have informed and we have to inform you later on.

Also for the generation of fourth quarter, should expect something better or like the third? Well, many things cannot be just guessed for the fourth quarter, we'll have adjustments too in the fourth quarter and we still don't know the impact of GSF and the exchange rate impact because we buy energy from Itaipu in dollars. We have -- we can't at this point predict the results of the fourth quarter, we'll still have to wait and see the closure and of course level -- as usual competence, we do that. Yes, I should remind you that fourth quarter, we won't have this (inaudible) revenues. It's the quarter regimen and there is also the entire issue that involves the liquidation of CCE, let's see how it stands and injunctions, how they will end up so that we can see a better idea of the performance and the results of fourth quarter, liquidation of CCE will be very important in that definition.

And also the approval of the provisional measure, no doubt we shouldn't forget that important detail. 688, provisional measure 688 is being -- is about to be approved by our President or the President of Brazil in the upcoming weeks. We cannot foresee what will happen in the fourth quarter, but our guidance should be met, as we said, within the interval that we have announced in May. One point within that interval, well, as Fabiano said, that we'll have to wait and see how it develops. Are there developments in new things, the level of uncertainty is unfortunately still high and we'll risk to incurring some lack of precision if we try to guess figures for you. So thank you.

Pedro Manfredini, Itau BBA.

Three questions. I have some echo in your return of questions, it's hard to hear at points, but my three questions are about costs. I would like to have some details on what you have been doing and what should be done in 2016 as part of your cost reduction programs, especially in distribution next year?

My second question, going for generation, we see prospects for growth in this auction for 2012, November 25, you mentioned Allianz Energy and a partnership with Vale, and we see that highly leveraged. Is this weaker over growth in generation, Cemig, will it be done via Allianz, given the scenario?

And the last question, we have seen questions about your vision for prices next year. Spot prices coming down, I would like have an idea, we have a very -- a lot of information on the back -- the rear mirror, but I would like to see what are you expecting precisely for 2016 onwards?

Of course these issues are extremely relevant, unfortunately they involve a high degree of uncertainty too. What we can advance is that initiatives for cost reduction as implemented from the beginning of this year, we of course, we focus on the reduction of expenses that could be more immediately cut down, more focused on outsourced services, materials, process and operational improvements, benefits from investments made in the past. As for automation, that improves good deal the performance of our system. You can just look at our quality indicators, all these initiatives have been accounted for in the first semester or first quarter. In addition, we have several other initiatives already mentioned today. They are to be approved by our Board and shall be implemented very effective measures. We will learn of them as soon as we have our approval from the Board. And this will -- or these initiatives will very much improve cash flow in our distribution. Several initiatives will be announced very shortly.

As for generation, the context of pricing of energy has been pretty volatile given the uncertainties, we have talked about, the sequence of injunction and the problems associated with the GSF have brought a lot of oscillation to the power price. At times you -- reasonable prices, the government sales is incorporated as part of its vision and uncertainties for the upcoming projects, prices for November 25, the basic process already at a very interesting level.

Some other points are being considered, but this gives you an idea of the future price. If you take as a reference these prices, this is what the market will be applying in non-regulated contracts and in the near future. So we depend a lot on the rainfall of the summer months so that we can have an idea, better idea of the stock prices in 2016 given in precision in our metallurgical forecast, we have no clear -- not a very clear vision of the need for using thermal plants and other cost in operation. This has a very relevant impact on the prices that the market will be applying. But if we take as a reference the prices in the 25 November auction, then it wouldn't be too far from that. Would you like to add anything, any contribution, Fabiano?

Well, the crucial point here is that if we look at the spot prices, that depends a lot on the rainfall and we are just beginning the rainy season. If you look at other aspects, volatility is much lesser than that which has involved in the spot prices.

Just to add to my question, as for the vehicle of growth in generation, should it be expected to be Cemig GT or via perhaps (inaudible)?

Well, specifically, in this auction, we will do is via Cemig GT, that Allianz is the vehicle for growth in the generation sector, according to our proposal to seek growth beyond what's been derived from joint participation of Vale and Cemig. As you said, the leverage is very low in that case and it opens up lot of room for growth in its portfolio of possibilities, they have already identified a few possibilities and as they start happening, we'll disclose it together with Allianz.

Vinicius Canheu, Credit Suisse.

One more question. I would like to know if you could say anything in advance about impacts that Cemig could have as a result of the San Marco disaster, some of the plant in generation might have impact, could you comment on that?

This issue is still being assessed, this disaster in Mariana recently, this is a major force majeure impact, we cannot mitigate it right now due to its dimension. We are directly negotiating with the [OMS[ and [QTE] possible impacts may derive if they have to stop those plants. But so as to assess the real impact on our processes, it is still pretty much too early to say, most of the impact is on Allianz properly, and not precisely Cemig D because these plants are being run by Allianz already.

We'll now close our Q&A session. I would like to hand over the floor to Luiz Fernando Rolla for his final comments. Dr. Luiz Fernando, please?

Once again on behalf of our CEO, Mauro Borges, we'd like to thank you all for attending. The principle to us is to treat all the issues pertaining to Cemig with full transparency, we expect to have answered just to your satisfaction, exception made to Marcelo, we are still to provide him information. We should reiterate the trust Cemig has on its strategy to keep its focus on automation of its processes whereas to provide simple (inaudible) to shareholders, positive results that can meet the expectations of our wider community and fully meeting the targets set by our regulatory body. Cemig proceeds forward our plans for growth. As we described in our presentation, we trust the results will be highly positive. Any final words?

No, thank you. Let's just wrap it up. That's it, there's nothing else to. So thank you for your attendance and have a nice afternoon.

So the webcast of the results of Cemig for the third quarter 2015 is now closed. We thank you all for participation and have a nice afternoon.