Centrais Eletricas Brasileiras SA - Eletrobras (EBR) 2021 Q3 法說會逐字稿

Ladies and gentlemen, thank you for waiting.

Welcome to the video conference of the third quarter of Eletrobras.

I would like to introduce the team of Eletrobras.

We have present with us, Mr. Rodrigo Limp, President of Eletrobras; Elvira Presta, Financial Director; and Ms. Camila Gualda, Risk and Compliance; and Mr. Pedro de Jatobá, Generation President.

This video conference is being recorded and will be made available on the RI (sic) [IR] website of the company where we have the presentation available.

I would point out that those who need simultaneous interpreting.

We have this on the icon interpretation on the lower portion of the screen, choose your language, Portuguese or English.

If you choose English, you can silence the audio -- the original audio by muting it.

(Operator Instructions)

I would like to point out that declarations and statements here in terms of perspectives of business of the company, projections, goals and operational and financial goals are based upon the premises of the company as well as information currently available to the company.

Future considerations are not guarantee or assurance of development because they account for risks and uncertainties and therefore, circumstances that may not -- or not happen.

Operational and general situations may influence the results influenced in these future considerations.

Now I'd like to pass the floor to Mr. Rodrigo Limp, President of Eletrobras.

Mr. Limp, floor is yours.

Good afternoon.

Good afternoon all.

Welcome to our conference -- video conference this time, with the presentation of the results of the third quarter of 2021.

We have here 4 of our directors: myself; Ms. Elvira, compliance; Camila; Mr. Jatoba, generation.

And we have the pleasure to have you here exchanging information about the results of the company on this quarter.

So that we have this starting, I'll talk about the main highlights: financial, operational and corporate.

The results and the shares will be further commented by the financial Board.

So we're doing the beginning of all our results presentation meetings.

We have a general context.

We checked the load compared to the previous year.

We had in 2021 a load that was above last year, and we kept on going, regaining strength closer now in the summertime with increasing consumption was more higher temperatures.

This year, nevertheless, we haven't yet started the high temperatures period.

GSF and PLD in the last conference that we brought up this pieces of information.

In June, we have expectation to have a GSF that would be very low compared to the previous period due to the hydro crisis.

GSFs were very low, results of the scarceness of water in the sector leading on to a greater thermal generation and a reduction of our hydroelectrical generation and expectation that with Sinop -- final before.

The price of liquidation of differences and the short-term PLDs in the third quarter, it was in the upper threshold, ceiling values.

In the fourth quarter, we see a reduction, but it's still with a scenario of a lot of attention given to the hydro situation in Brazil, even though it is more comfortable than it was some months ago, mainly a result of the actions taken by the government in terms of the more availability of offers of thermal sources, measures allowed for better storage of water in the reservoir, especially in the hydraulics side.

The rational use of energy, Eletrobras has its contribution through Procel that we are responsible for, and we aim to incentivize the rational use of energy.

Next slide.

In a few numbers, the performance of generation so far in 2021, we see how we have a participation, very relevant in the generation of energy in Brazil in the quarter, 30% of the whole consumption of energy in the country.

And then we have, in the lower portion, the energetic balance.

Upper -- in the upper portion, we have the physical parts, and then we have the effect in the lower portion comparing '20 to 2021.

Revenue, ACL and the short-term market, a result of PLD elevations and commercialization trading adopted by Eletrobras.

During this month of scarceness of water, the company had good price, good results in the trading of energy.

More relevant information that we have the attention.

When we compare the energy balancement and our quotas per plant, we see participation shares in revenue.

And we see there is a displacement between quotas around 45% in energy balance and production.

And in the financials, we have a participation that is much lower, 1.08 billion compared to 6.5 billion.

That was actually about generation.

Next slide, please.

The main pieces of data in terms of performance of transmissions.

We have an increasing performance since 2016 with a kind of imbalancing between 99.96 to 99.93.

You see there is this variation here compared back to 2016 transmission lines.

Now transformers, we had availability that was 99.8%, one of the highest in the last years, that the systemic robustness, 67.7.

Cutoff point for load was -- which is very good.

1.96% is the variable share.

1.3% in the whole quarter or trimester.

Here, we have the main financial highlights that were published the other day at the end of the day.

Net revenue, plus 50% with the illustration of the strong performance of the company.

EBITDA, up 3.2, up to 5.5 in the third quarter compared to the previous quarter.

And net revenue, BRL 965 million, a decrease of 66% of the previous year.

As we commented and we will comment on further on, it's been strongly impacted for the fact that we have compulsory loans.

Now recurring effects that represent the strong operational performance of the company and the improvement of the roll-up by 45%, EBITDA set by -- up by 70%, and the net revenue up by 69%.

And that meant EBITDA, we are still ongoing with low indebtment.

We were at 1 as a level.

Now it's -- we are at 0.9 net revenue compared to EBITDA.

Our next slide, our main highlights of the quarter.

It was a trimester that was very moved.

A lot was dealt with during this point, a few deposit devices, the accountabilzation of reprofilements approved by ANEEL.

For this rate cycle, this accounting RBSE added BRL 4.8 billion in the results of this quarter, GSF, the ending of the granting of the terms of extension of granting of the mechanisms of the plant of reallocation of energy, MRE.

We had 2 stages and just ending the granting of the terms actually reflect on the NIM on the impact in number of BRL 4.2 billion plus in the consolidated results of the company.

AIC, result of this quarter is still coming out of the privatization of some distributors, concessionaires.

Eletrobras will receive the lump sum of BRL 150 million.

Nevertheless, it can be paid up to 60 months according to the Selic rate.

The reversion of impairments, we had a lump sum of BRL 454 million.

And then we -- our accounting here the reversion of BRL 265 million of the plant of UTE Santa Cruz and UHE Batalha.

The law #14,182, 182 million, so in the financial results starting in the end here, concerning negative impact, minus BRL 340 million.

Selic was replaced by IPCA over credits of inefficiency.

Resolution CNPE 15/21, a negative impact of BRL 432 million.

The first negative impact, let's comment on it.

This is the most relevant of them, the compulsory loan with a provision of minus BRL 9.1 billion.

We'll have opportunity during Q&A for more details.

This review was realized considering the recent history of provisioning of the company, especially 2021.

In the last quarters, we were constantly going for compulsory loans that encouraged the company for a revision of these compulsory loans.

We had a technical analysis based upon the jurisprudential analysis and unfavorable reports from 2021.

8.9 million -- it was actually BRL 8.9 billion that ended up in minus BRL 9.1 billion, One out of those undergoing revision, was had to do with the prescription of the period of grace, the reflection of how we deal with that, that was remote, but it's like -- most likely to happen, and it's one item that is highly impacting.

Compulsory loans-wise, the alteration of the time landmark.

So here, we are considering the diverging records of the company based upon reports that were granted actually, BRL 2.2 billion in average.

Furthermore, the results, we had the unfavorable judgment of the case [Roma] in -- with a favorable decision upon further discussion.

Conversion and action should be the period of that decision and not payment that reinforces the thesis of the company.

Other negative impacts.

We had the contingencies of shafts.

The reclassification of risk and law cases, minus BRL 657 million.

And then we had the credit -- current credit taken on by the holding in the process of de-statization of the distribution of energy, a minus BRL 340 million.

CNPE 15/21 with a negative result of minus BRL 432 million.

Next slide, please.

The corporate highlights with great satisfaction, we are awarded the award and in fact, it -- which is about transparency.

Typical 25 years that first time, Eletrobras was awarded this, and it's the results of the financial board and their actions.

Capitalization wise, we have in this quarter, ENBpar Decree 10,171 -- 10,791 And then we had Resolution CPPI 203/21.

We are talking here added value for the 22 plants of the company that were affected by Law 14,182, even not being in quotas will be extended like Tucurui as one of the power plants.

BBE 203, establishing the main point of the modeling of de-statization of Eletrobras.

And we have important resolution of CNPE, establishing guidelines for the definition of the price of energy of what has been generated by Angra 3, not only for making viable, the conclusion of Angra 3, but for the separation of eletronuclear, Itaipu, companies that will start being controlled by ENBpar.

One more slide, please.

This is a time line for the capitalization with some of the milestones reached, the presidential sanction in July, the deliberation of CNPE with the total value established at BRL 52.9 billion, BRL 29.7 billion CDE, BRL 23.2 billion in grant.

BRL 2.9 billion out of the BRL 52 billion referring to credit of inefficiency of CCC, as per Law 14,182.

September, we had creation of ENBpar, the controller of Itaipu.

In October, we had PPI based upon the studies of modeling by BNDES, CNPE, premises for Angra 3, November 21, the hiring of the banking industry reps, checking out the banks that will be representing and banks that will be part of the offering.

We have the accounting general office waiting -- we are awaiting the granting TCU, the accounting general office is still working on the last milestone that is assessed with Itaipu and the nuclear milestone.

Now PPI and more documents we have after the deliberation of the accounting general office, we have the generation of documents with new resolutions by PPI and new resolutions of PPA.

In case we have new values in terms of renting, previously approved PPI will reflect that CNPE decision and other changes identified by BNDES in the studies.

As of those milestones, we'll have the process of instruction of the proposal of administration, the governance structure, the technical areas council and administration and the extraordinary assembly with 30 days as a minimum period.

And then we have the assembly with the decisions of the shareholders, with the decision upon the adhesion or not to the process.

And then we'll have the Comptroller General Office.

And the offer as a whole, after those milestones, we have follow-on based upon the data of the fourth quarter, therefore, annual.

By having that information, we'll have the information with 134 days as of the base date that is December that would have made as the limit date for the report on the annual report.

Until May would be the limit, but we could actually have more interesting windows of time to -- in the market to do so, April, for instance.

That is the time line as it is as of now for the capitalization, and then we'll have the opportunity to clarify doubts about the results that we have had, and we are actually accomplishing in this capitalization process.

Next slide.

ESG in partnership with BNDES, we have the energy compact, the decarbonization of the matrix, electrical matrix systems isolated in the Amazon, replacing the generation of diesel oil by clean energy.

It's very important to Brazil, especially for the Amazon region.

Global Alliance for Sustainable Energy, Eletrobras as one of the founding members CGT Electro, the first mission of the Eletrobras companies who have green bonds related to transmission projects in the BRL 185 million.

The availability of the sustainability channel specialized in the requests related to ESG, the selection of 6 initiatives for organizational development, entrepreneurship and open renewable utility.

And we have the reaffirmation of the commitment of Eletrobras with the UN objectives.

Eletrobras is among the companies that are most transparent in this area according to the study of GRE (sic) [GRI] in Brazil, as per their studies.

And in this quarter, we have 3 calls for biddings with 52 projects: cultural, sports-related and social environmental in the order of BRL 17 million involved in all companies controlled by the group.

Those were the ESG highlights.

And then on that note, I end the general data -- pieces of data, and then we pass on to the next slide.

I would like to pass on the floor to the Director, Elvira, talking about the financial development performance of the third quarter.

Hi, everyone.

Let's carry on with our presentation.

With a little more detail, financial ones that have been presented in a more executive way in the beginning of the presentation.

Let's start with our [DREF, the trial] quarter.

As per our standard, this first column is actually abide by the numbers that were reported upon according to IFRS.

And the second part the, green one, recurring are the ones that we exclude -- are excluded of the extraordinary effects in the quarter so that we can evaluate the results of the company based upon recurring basis.

We have had a growth in revenue in this third quarter.

We had verified that starting to happen in the previous quarter.

Generation and transmission both increased, and then we'll have more details in contracts with more details.

In the beginning of the presentation, we mentioned rates increase PLD, the strategy to always have part of the energy not hired or contracted, outsourced in a free environment.

We had BRL 1.4 billion that is related to the financial share of the contract.

That is very concerning and important.

Furnas, one of our subsidiaries, has also played a very important role.

The revenue was very positive.

PMSO, operational expenses -- personnel, material, services and others, we'll explain in more detail, 4%.

And in recurring basis, we had a stable number in this quarter.

Personnel, we'll see in more detail ahead.

We had an effect of our collective agreement that impacted this quarter.

Cost and operational expenses.

We see a difference that is more significant based upon IFRS and recurring basis.

Here, we have GSF in the solution.

If you look up on the -- under IFRS, we had positive operational expenses because here we have the record of the effect of the BRL 4.2 billion that were out of the GSF -- came out of the GSF extending the concession of the assets limited to the 7-year period, and that cuts down on expenses based upon IFRS.

That is positive after all.

Under recurring, we exclude that effect despite being positive because it's not recurring.

President Limp mentioned that our main operational aspects were the compulsory loans around BRL 9 billion.

That's why on the right-hand side, we take -- we discard that for not being recurring.

Shareholders, we had a positive result.

Some events with very important numbers.

North Energy with a GSF back as well.

And another line that I would like to point out, regulatory guidelines.

And in recurring basis, we exploit that.

Nevertheless, RBSE -- the remeasuring of RBSE is economic and not cash flow-based.

Cash flow has to do with reprofiling.

That's why under IFRS, it's seen as positive.

But in recurring, we exclude that.

That's why EBITDA, it's the same for the IFRS or recurring because the negative effect due to compulsory loans was almost the same in the adjustment of the -- due to the agreements under GSF.

Financial results.

We had exchange rates oscillating.

Bonds in October, we had a residual debt, BRL 960 million after the payment of October in a recurring basis and BRL 3.6 million.

Next slide, please, where we detailed the gross revenue.

The main effects, the gross effect doesn't have so many nonrecurring effects.

So let's focus on the blue bars, BRL 8.2 billion on the third quarter to BRL 11.7 billion in this ongoing quarter.

In terms of generation, we had supply -- new contracts with suppliers, quotas that were corrected, increase of operations in free environment, PLD transmission.

We have the review of the rates that includes the KE and most recently, BRL 1 billion out of the IPCA and the construction revenue as well.

Therefore, 38% in recurring basis, BRL 3.2 billion in the revenue.

Here, we see that in more detail on the revenue out of generation.

Here in the upper portion -- upper-hand side, GSF and PLD compared to the third quarter of 2020 and 2021 due to the higher prices, PLD very close to the [Chile].

And then we have to your left-hand side, the -- in a nutshell, the main contracts regulated and free environment volume, average price in revenue.

In the regulated environment, we had an increase that was expressed at BRL 206 to BRL 275 to this year, 17% increase in the revenue.

To your left, we have highlights Eletronorte, BRL 130 million.

Furnas, due to Santa Cruz, plus BRL 118 million.

The quota is just the inflation adjustments, an effect of more or less 3%.

And nuclear quota last year at this point, the nuclear power plant had downtime due to fuel.

We are working on a normal basis compared to a lower base from last year.

In the free environment, we have an expressive change in the average prices from BRL 140 to BRL 190, almost 40% and the liquidation in the short term of PLD bilateral contracts.

We have some cases that aren't more relevant.

Eletronorte, for instance, with a lot of energy being retraded in the free environment.

Next slide.

PMSO; operational, personnel, services and others.

To your left where you have what was under -- is under IFRS, and I'll focus on the right-hand side recurring.

The number was aligned with the same period of last year, but there are compensation among the personnel, for instance.

We had an increase of 6% that reflects the collective agreement, 6.76%.

We have Chesf.

We have liabilities.

In terms of actuarial liability, Chesf has been able to accelerate CapEx.

Chesf and Eletronorte, the reduction of PLR that have been provisioned upon the total, but it was actually lower than expected and services that we have an increase of BRL 450 million to BRL 513 million.

We have distinct effects here, but the most relevant actually was Eletronuclear.

We had downtime in Angra 2. And we had to account for this maintenance services, reduction of 32%.

The main point being we have losses, liabilities that weren't actually accomplished as expected in terms of legal cases.

Operational provisions compared to the same quarter of last year, we have BRL 9.3 billion now.

The most impacting point is the compulsory loan.

Two main groups here, interest and the reflection of those upon and then the time line in terms of unfavorable legal decisions, outcomes and the impact upon the company.

In the third line, we had a reduction compared to last year, but BRL 375 million is predominantly subsidiary shares that had a detailed review with the reclassification of some risks and the updating of some processes with IGPM as an index.

And the positive effect, the reversion of the legal action, Chesf actually had some negotiations decided that actually allowed to have this better outcomes.

This permit and long term, we had some reversions that are highlighted here on the right-hand side that is positive.

And for ANEEL CCC, we had to do some provision, BRL 9.3 billion of provisional assets.

The next slide, we have the graph that actually points out how EBITDA was, IFRS last year's quarter compared to this third quarter.

The value is actually -- compensated values were very similar in terms of the re-mensuration of RBSE and the hydrologic measurement of -- risk measurement.

That's why in recurring terms EBITDA was almost the same that was reported on IFRS.

When we are comparing 2020 BRL 2.2 million to BRL 3.6 million, 45% comes from revenue increase.

The shareholders BRL 550 million, an increased GSF in North Energy, BRL 105 million operational costs.

A lot of relation to dispatch of Santa Cruz, buying energy -- importing energy from Uruguay, increasing costs, but energy as well.

PMSO recurring basis aligned and provisions.

When we take the effect of the nonrecurring, we have around BRL 200 million in increase of provisions.

Getting to this total amount in the re-mensuration of the hydrologic impact, Eletronorte has the effect of Tucurui mainly.

The evolution of the net revenue.

BRL 2.1 billion going on to BRL 3.6 billion this year, 6% to 9% an increase.

EBITDA, 66% of this variation.

We have some variation of the financial results that has to do with the exchange rate.

We had the dollar increasing and the effect of the revenue taxes.

Now very close to the end.

We have 2 slides.

So we have the financial discipline.

As we always present, we have our goal to be below 2.5-fold -- minus 2.5-fold, almost in the same point as the last year at the same point.

EBITDA, increasing as we see in the graph below here recurring basis, based upon 12 months, BRL 20 million.

And then we have the gross debt, BRL 48 billion, BRL 12 billion in the short run and BRL 36 billion in the long run.

Liquid indebtment in the order of BRL 19.106 million.

Our net has to do with what we still have to receive.

To your right lower portion, some important points.

The payment of the residual of the refinancing of bonds of 2021, that was paid up on the end of October, $646 million.

The value in Portuguese was BRL 3.5 billion.

BRL 852 million to get from Angra 3 and AFAC.

We had a very relevant AFAC, an agreement with Eletronorte with El Paso with a reversion that generated further BRL 100 million.

The third installment was paid recently.

And at this point, the value is pointed out here in this slide.

CapEx-wise, it's been very challenging between the planned and the outcome.

For many reasons, we have been accelerating in different trimesters and quarters.

We are in the second quarter, almost BRL 180 million.

In the third quarter, we had -- we are in the order of BRL 1 billion.

We are currently compared to -- in the order of 50% in terms of growth.

We have to point out Angra 3 power plant.

We have a bidding for the retake in some of the construction work, the release of AFAC.

We had to postpone a few decisions for not having the authorization of the regulatory body for the stoppage or downtime that would be necessary.

And we didn't need further infusion of cash, which is positive.

On that note, I'd like to end the second part of the presentation, then we can start the Q&A session.

On that note, thank you.

(Operator Instructions) Our first question is by Mr. Andre Sampaio, sell side analyst from Santander.

We have 2 questions.

First of all, I would like to understand the discussion on the compulsory loans.

The main question to us here is in the level of -- how conservative you were?

How much do you understand do you see that actually BRL 9 billion as expected?

When we look at what was discrete in '20 half till now, we are talking about a remote that was lower than this BRL 9 billion.

So we can see what happened with the remote, and then we would have a position and loans that is more conservative.

We have questions from investors here in terms of release of guarantees for the participation of listed companies, [Qualt], for instance.

I think that is the company I'm most doubtful about.

Thank you, Andre, for the question.

First of all, talking about the compulsory loans, I would say that conservative-wise we have -- and how conservative we have been.

We have had provisions of BRL 400 million, BRL 300 million, BRL 500 million, so we had a technical review based upon the development of the jurisprudence and the most recent decisions and granting and results of reports.

For these processes of the compulsory loans, there were changes.

And according to our perception, the most -- the best prognosis of risk for them is that they are likely, which is different from not agreeing with our basis.

We'll still work upon -- still rely upon our basis.

But from a law standpoint, we had to bet on the best possible standpoint.

The evolution of the jurisprudence recently in the last trimesters or quarters.

That is the best perception of the company in terms of risk prognosis in terms of our partners for compulsory.

We did our homework, and we've been successful so far, and we'll keep on doing so our risk prognosis is that it's likely and it fits better within this item.

Now the replacement of the warranties.

This is a process that we have as a strategic guideline from our Board so that we have an analysis for the -- in the case of an alienation of them, but it's a very diffused process in many regions.

And there is always the unexpected time line.

We never know how long it will take for the decision to be made legally speaking or many other unexpected aspects we might have as it's not always as timely as one would like.

The second question that is most -- more direct, Elvira?

Shares and warranties, we have a table 17.4.

And Qualt, the company that you asked about, we made a lot of advancement.

We have 25 to 26 blocks.

It's -- this number was 100% in the past.

Mr. Limp was right.

This is still a focus.

There is a decision of a Board of Directors that takes into consideration the alienation, but it's a very slow process because it's always depending upon the company.

We are organized in this basis.

We are checking things with the banks, what process are guaranteed.

We had petitions for the replacement of these warranties, and this is what has been happening.

And that depends upon the courts actually granting.

With the pandemic, we have a lot being done remotely in a lot of legal work that is physical, that depends upon physical files have not been digitalized.

Therefore, they cannot keep up with them online.

26% is still blocked, but we are still working on it.

If I could follow-up concerning the compulsory.

The doubt that I still have is the other processes we had in the 20th December, BRL 17.5 billion plus BRL 9 billion now.

We had BRL 11 billion of the Roma risk and BRL 8 billion in the remote.

How can we imagine currently in terms of remote and possible?

Would we have any relevant aspect in this aspect or remote would be BRL 8 billion?

Remote-wise, we had 5 -- BRL 5.2 billion.

That was the likely interest and the reflection of those.

So we still have aspects related to subsidiaries.

And If I may add, please -- just to add here, we have provisions added, we had BRL 7.2 billion that was from remote.

According with the global analysis of the provision of risk.

So there was a modernization of the remote to likely.

The other value, BRL 2.1 billion was the move of a specific parameter.

There was an alteration of the milestone, an anticipation so that we could actually work on the share.

And in the past, we had the controverse installment when we had a report when it was granted as unfavorable by the judge.

We had to appeal, nevertheless, many a time a judge in the first instance was actually set out the directions for a payment for providing a time for the company to make payments, and sometimes it was too short.

And that's why we didn't have to review that the adding of BRL 2.1 billion is not an alteration of a parameter per se, but an anticipation of the milestone of the controverse installment so that we are more prepared to have the possibility to pay the controverse installment.

Upon anticipating that milestone not only reports during liquidation but sentences out of the process of acknowledgment that is sometimes contrary to the thesis of the company.

The company understands that it's more -- based upon that, we see the processes that are being provisioned.

And you see that if we have to check for the provisioning of that milestone.

Remotely speaking, we have interest.

We have a lower installment, lower than BRL 2.1 billion.

So this is the order that the company uses to use what can be paid and should be paid in the first place.

Understanding that they can consider page first, the installment concerning interest, and it's always about what's less burdening.

So it's always a point of decision, so that's why it remains on remote.

And this trimester here, we have credits of companies that were incorporated, not mentioned by the authors of the initial petitions, but that have to be executed along the process.

We have credits in the order of BRL 2 billion, BRL 7.5 billion was what we had in the past.

Bonds to the bearer, we have bonds to the bearer in remote more than we expected.

In remote altogether, we had BRL 2 billion.

And then we have the reflection of possible application of interest post assembly in the -- as in the case Roma that's considered impossible and credits for credits and subsidiaries and branches that have to be taken into consideration, even though they are not in the initial petition, the opening petition.

Those amounts are considered possible and impossible.

[Homoplus], especially the part concerning the branches and subsidiaries, BRL 15 million and likely with the addition of the provision, BRL 26 billion.

This is what the company can estimate actually from what they can foresee in terms of compulsory loans.

Just adding to that.

I think Paula added a lot of details of that in terms of the compulsory loans.

We have legal decisions that differ from our expectations.

But I think that the latest review in this last quarter will allow for the mitigation of future provisions.

We cannot ascertain that there will not be provision in the future, but we can mitigate that risk with new provisions for being now more adherence to the effective jurisprudence observed by the company in the court of law.

Next question, Carolina Carneiro, Credit Suisse.

I would like to change to capitalization.

You passed on updating of the main dates and the next steps.

If you could -- actually, I would like to explore 2 further points.

Firstly, you maintained with a date estimated in November, the Comptroller General Office, CDE and granting.

We have seen out there in the media this news about the fact that this decision actually may not be, as a matter of fact, in effect.

In this new time line, this new schedule of yours, do you foresee maybe a revision of value?

And I'd like to understand what main points or what other points if you could share, could take lead on to a delay in this new schedule?

Rodrigo, you mentioned that this is more a deadline than a fixed date.

I would like to ask what other events may cause a delay of this estimated deadline?

There is a lot of news about the decisions of the Comptroller General Office.

And since the beginning of the process, we have been keeping up with the Comptroller General Office.

With the reporting minister of Eletrobras, we are up to date aligned with the ministry of energy.

We've been talking to all 9 ministers, the Board of Eletrobras, Camilla, Elvira were part of the discussions in our perception within the Comptroller General Office.

We had an analysis of the superintendency of infrastructure and energy generation, [Sinfra] with an analysis, with a proposal of forwarding the reporting officer forward that to the Comptroller General Office.

There is a report on that.

And then it's back to the reporting minister that is actually deciding on the direction of their vote.

So it depends upon how we act and interact with the ministers and the -- how we see and how the court of law sees and does due diligence.

All that is happening, adjustments and the improvements are part of the due diligence.

So I believe we are within the normalcy in terms of period.

You mentioned November, we are in the second part of November, but it shouldn't be a main problem.

If we go over to 2020, we can see a review of our schedule.

We have -- so we have seen things that have to do with the government that has been leading the negotiations with the court of law.

The privatization was that point, a kind of get carried out of other factors that make us -- it's the process that is rather complex.

For the quarter, we have positive and negative aspects.

The closing of -- and annual results is always more complex.

It requires operational much more complex from our teams.

SBS, colligated subsidiaries and based upon that, we'll have to be very radical and very sticking to our original schedule.

As per plan, after the decisions of CGU, the Comptroller General Office, CGO, CNPE will depend upon main decisions, decisions of BNDES.

Another item that we have monitored is the legal actions.

We have had many legal actions on many level.

We have a task force coordinated by the Comptroller General Office to avoid that.

Legal actions may cause deviation in our processes.

So all these points are under control, nevertheless may come into effect and into the equation if they change from what we are expecting.

And they are not only a point of Eletrobras, but PPI, Eletrobras and ministries that are related to that.

The capitalization is to happen as soon as possible by May, maybe happen in April, as I mentioned.

Our next question is [Adriano] from [PSBB].

I have some questions.

Let me start with this one of the capitalization.

Just to make it clear, you believe this first stage that is the -- that you believe that the granting is still this year, but the legal bodies actually are to go on recess from the 7th to the 17th of January or the end of December to the beginning of January.

So what would happen in terms of the schedule, if you foresee that?

What you foresaw in terms of the provisions, does it affect the next stage along the Comptroller General Office in terms of the results of the third trimester.

And if there -- that update of the results of the first around the provisions may cause.

And I have another question on provisions that are not very clear whether this increasing the provisions if there was a fact that was generative or whether that was a matter of fact is a problem or whether the winning in the case Roma let you want to review that.

So that is my question.

If -- especially if this winning in the case -- legal case, Roman, Andre mentioned minor shareholders.

We have 2 questions.

As soon as you alienate 26% -- if you unlock the remaining 26%, if you can alienate the offering or if the TRPL is in a way similar to Qualt, I think there's a lot in this question.

If I haven't been at all clear, please let me know.

Thank you, Giuliano.

And now I have taken note of the questions so that I don't forget.

GCU, as I mentioned, the Comptroller General Office, the reporting officer has been part of many similar process.

And I think that favors the analysis and the treating of that process.

I have an expectation that is good in terms of a good outcome in terms of the court of law still in 2021.

I'm still not sure if this is the last session.

I think the last session might be on the 8th, not on the 7th.

We have that expectation.

And the second agreement will naturally in 2022.

Well, I wouldn't be able to tell whether it would be in January.

January, I don't think it will be done because given the complexity, the need of analysis by different legal bodies and the Comptroller General Office, it might affect our schedule, therefore.

And how that impacts, as we can see in the resolution of the PPE.

There is a definition of a minimum price that comes out of evaluation of Petrobras that considers the liabilities of the company.

So it should consider that.

It should consider not only the compulsories for all and for the calculation of the minimum price, not only for the company but for the Comptroller General Office.

Compulsory credit, as I mentioned, I have all the recent decisions.

We haven't had the relevant decisions in 2021 that would have mensurated us to make those actions.

We had an important provision in July, superior court of Supreme Court.

Other than that, we have the growing analysis of provisions for the fact that had those provisions to happen in the Roma case -- Paula, please let me know if I'm wrong.

The fact that we have a positive decision, it doesn't change things immediately because those values weren't provisioned for.

They are within possible, but they are not within the likely.

We don't believe we will have more unfavorable situations that would change the provisions.

The expectation currently is not to -- these provisions are okay as they are not within the likely.

The TRPL, so Elvira would like to comment on that or other questions.

I had a problem in the connection.

I didn't hear the last question.

I only heard up to case -- the legal case Roma, Giuliano.

Qualt, if that -- as soon as you unblock the 26% deal aim to sell them and the TRPL, how is it?

The decision on what to make with Qualt and many others is much related to the process that we currently, as a state-owned company, we have to follow.

We do not have the same flexibility that we will have after the capitalization.

There are some predictions that we need to have a motivation for the alienation.

We have approved that the proposed value has to be fair.

It could be an OPA if one of these companies actually that we have -- we are minor shareholders, we can think of an OPA.

As a state-owned company, the process is lower, and another situation will be after the capitalization in all of them.

We have worked to work on deliberation of these actions that are given in guarantee -- in warranty.

And all these companies in our core business, we do not have the intention of alienating.

So further on, we'll study that with our admin Board.

A technical question.

If the minimum rate referendum -- referended by the Comptroller General Office, will it be a limit in the operation?

The capitalization can't happen below the minimum price.

Yes.

Yes, that's precisely that.

If it's below the minimum price, the operation doesn't happen.

Our next question comes from Marcelo from Itau.

I have a question about the Attorney General Office and were question the fact of the granting going to above BRL 10 million.

I'm trying to understand what is the role of the company in the questioning of a request by the Comptroller General Office.

Is there time to review that?

We have to counter arguments.

The rates -- if rates may be too high now that rainfalls are changing, so I wonder what will happen if they are not abided by the premises.

GCU, the Comptroller General Office, is the decision to up to the CNPE that has the prerogative to make this final decisions.

If it is a final decision, it has to be incorporated.

There could be some level of appeal anyway.

A recommendation is wise.

The government actually will have the last word in case of the criteria that should be considered for rates.

And what was foresaw in the documentation and was recognized by the press, it was that an increase in the grant of the -- it was -- the media actually was based upon a number of BRL 5 billion on top of what would be deliberated by the CNPE.

Whether that will happen or not or will the ministry will get involved in order to make that final decision?

For the decision of the assembly, the price of the granting is a data -- a piece of data.

It's up to the company to show how advantageous that is to the process or not, and the final decision is of the shareholder.

Excluding the government, the government within that, whether they are going to do that, the destatization, now the Comptroller General Office has been discussing with the ministry and the company.

And we are not a part that can -- a party that can actually question directly what is -- there is a final decision made.

I don't know whether I've made myself clear, Marcelo.

I think it is clear, but I'd like to double check on the understanding of some aspects.

One it's a recommendation, this CNPE may or not to follow if it is as recommendation.

Hardly a person from CNPE would go against the Comptroller General Office.

That decision would be made by the shareholder in assembly or not.

But there shouldn't be after a formal decision by the Comptroller General Office.

There wouldn't be further room for questioning, as we have mentioned.

Is there a possibility of a minister that might not be directly involved in the process -- require a review, for instance, given it is a theme of high complexity?

I don't know whether all ministers, I don't know if I may be corrected here.

I don't know whether all minsters would be able to have the knowledge and the background to be able to question that, a decision at that level.

As you mentioned, if the Comptroller General Office promote that recommendation, if they understand it is pertinent, they will abide by that.

So otherwise, they won't.

But if they do not abide by, they have actually to go to provide proper -- I was just questioning if every minister has the grounds actually to require a review.

It's very similar to the -- what ANEEL adopts.

The Minister may bring a new position, but they can discuss with all other ministers and the technical areas of the different departments of the government administration, they may do so.

I think there is that possibility, but our way to try to mitigate that is trying to discuss openly with all ministers.

Our next question, Pedro Manfredini, Goldman Sachs.

I had asked the questions through the chat here, but I will repeat.

The fiscal credits from the compulsory loan, how is it done?

What is the activation of that credit?

If you have that credit, I believe you will do so and how it is done?

We see plus BRL 9 billion.

We see the tax credit that is generated here.

If it is actually generated in the payment of that or whether that is different?

And the second question would be dividend-wise.

The offer going up to May with the Eletrobras generates a lot of cash flow and offer, whether there will be an expectation in terms of free offer and the review of the policy for dividends that have been adopted by the company.

Compulsory loans, the holding actually, they are Eletrobras holding, not subsidiaries.

We cannot activate those credits because we have to have a taxable projection.

In practical terms, we cannot use those credits.

That only can be done later on, but we are now only doing the provision for that.

We are evaluating alternatives to have additional revenue for the holdings to have a taxable alternative so that we can activate those credits.

Currently, we cannot use them.

And your second question concerning dividends.

Currently, we do not have that expectation to have a new payment.

We maintain our policy of 25%.

That has been done.

That can be reassessed.

We are concerned in terms of our obligations post capitalization.

The CNPE decision may go through adjustments, the decisions of the court.

There are decisions that we want to make for the future.

So we're still analyzing cautiously additional dividends to what would be 25% that would be our policy.

The activation of the credit, if you, as of today, would have some sort of revenue on the holding, creating a trade within the holding, do you have any idea how much could be activated here depending on how much you could actually create in terms of revenue?

But let's suppose that the holding was being responsible for the markup of the company, what would be the notional?

Something in the order of BRL 9 billion.

We do not have much of a notion, so it's important to question that.

Our next question comes from [Ricardo Goaldo] from [Macro].

Probably there is a question here.

I'd like to understand the data for May 14 for capitalization.

If it doesn't happen, so what could happen or when could it happen?

14th of May is the limit date first to have the operation considering the results of the fourth quarter, which is the date that stands for the 134th day after the last exercise.

And if we do not do that by May 14, we'll have the first quarter of 2022.

That would be taking the operation probably to the end of June, with the idea of accomplishing that fully by the beginning of June.

And I see that there is -- that he was able to get on now.

The mic actually is locked that he cannot hear -- he can hear us.

That question was the last question of this Q&A round.

The floor is -- Mr. Rodrigo Limp's, the floor is yours.

Thank you all.

I'd like to thank the participation of all.

We had a participation that was very numerous.

It shows the interest for the company, which is very satisfactory, and we are available to you to our area of RE, you can clarify further questions.

Thank you all for your time and your -- the attention given.

At this point, the conference is adjourned.

We thank you all for your time and attention, and have a great afternoon.

Good afternoon all.

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