Companhia Paranaense de Energia (ELPC) 2016 Q4 法說會逐字稿

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  • Operator

  • Good morning, and thank you for standing by.

  • Welcome to Companhia Paranaense de Energia - Copel earnings call to discuss the results of the fourth quarter of 2016.

  • (Operator Instructions)

  • Before proceeding, we should mention that forward-looking statements that might be made during this conference call related to Copel business outlooks, projections, operating and financial projections are based on the recent assumptions of the company's management and on information currently available to the company.

  • Forward-looking statements are no guarantee of performance.

  • They involve risks, uncertainties and assumptions because they relate to future events and therefore, depend on circumstances that may or may not occur.

  • General economic conditions, industry conditions and other operating factors may also affect the future results of Copel and could cause results to differ materially from those expressed in such forward-looking statements.

  • With us today in this conference call: Mr. Antônio Sergio De Souza Guetter, CEO of Copel; Mr. Luiz Eduardo de Veiga Sebastiani, CFO and IR Officer; Mr. Gilberto Mendes Fernandes, Chief Corporate Management Officer; Mr. Fabio Malina Losso, Chief Governance, Risk and Compliance Officer; Mr. Sergio Luiz Lamy, CEO of Copel Geração e Transmissão; Mr. Ricardo Goldani Dosso, CEO of Copel Renováveis; Mr. Adir Hannouche, CEO of Copel Telecomunicações; and Mr. Franklin Kelly Miguel, CEO of Copel Comercialização.

  • The presentation will be delivered by Copel's management and may be followed on the company's website at www.copel.com/ir.

  • Now I will turn the call over to Mr. Luiz Eduardo da Veiga Sebastiani, CFO and IR Officer of the company.

  • Please, Mr. Sebastiani, the floor is yours.

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • Good morning, and welcome to the conference call for 2016 results.

  • Thank you for being with us today, and thank you, Executives, here and other professionals that aren't with us.

  • I am glad to start by introducing our new CEO, Antônio Sergio De Souza Guetter, Engr.

  • Guetter, as our Copel colleagues call him.

  • Sergio started in Copel after being approved in the Civil Service exam in 1987.

  • And along the 4-year trajectory in the company, his professional background includes several technical and management positions, and I highlight a few of them: Fundação Copel de Previdência e Assistência Social, CEO of Copel Renováveis; CFO and IR Officer of Copel; and recently, CEO of Copel Distribuição, when he was able to follow all business regulatory challenges and the success on the fourth tariff review cycle.

  • At the time, our distribution company doubled its net remuneration basis, an important step to business perpetuity.

  • Therefore, I now turn the floor to our CEO for his initial remarks.

  • Guetter, welcome.

  • Antônio Sergio De Souza Guetter - CEO

  • Thank you very much, Sebastiani.

  • Thank you all colleagues here from Copel.

  • Good morning, everyone.

  • Before anything else, I would like to thank you, Vianna, for the work he has done and he's leaving us today.

  • And also, I'd like to thank all the executives that have worked with us.

  • And also, on behalf of Copel, I want to congratulate Mr. Vianna for being appointed CEO of Itaipu Binacional, which I consider to be a great achievement for Copel and Paraná.

  • Once he is renowned Paraná in the domestic electric industry, and I am sure he will be great in managing the company and I hope we have important partnerships and such.

  • I have accepted Governor Beto Richa's invitation with a commitment to keeping Copel in the excellent growth pace, always focusing on projects with the right profitability in order to maximize the company value.

  • We will aim more efficiency and greater sustainability without losing sight, of course, of our well-known quality.

  • And also, we are concentrating on safety.

  • We'll keep on working with ethics, and this is a commitment strengthened by the development of our governance, risk and compliance area, which includes leading further the company's management.

  • And this is an area that I have structuring in 2015.

  • Our challenges are not limited to running the company facing such goals.

  • Brazil is going through complex times.

  • The country's political and economic instability in 2016 resulted in difficult state for the domestic production industry and there are low levels of energy consumption in general.

  • That scenario brought major challenges upon the energy industry and Copel, and we are going to discuss that along the presentation.

  • And despite of an adverse environment, we have invested BRL 3.6 billion in 2016, a record amount for us.

  • Out of the total, around BRL 600 million paid grant bonus related to the third year concession of Parigot de Souza HPP, a landmark for Paraná's Energia.

  • It's in the coast of Paraná.

  • So consolidating the right decision of not anticipating the concession renewal of that asset in 2012.

  • With that, (inaudible) construction works have advanced in our Colíder HPP.

  • We're resuming work in Baixo Iguaçu, invested BRL 720 million in construction of Cutia Wind Farm Complex in Rio Grande do Norte.

  • In the Transmission segment, we have concluded important work with over 2,700 kilometers of transmission lines.

  • We had 6 projects totaling an increase of BRL 198 million in RAPs -- in Copel RAPs.

  • In the beginning of 2017, we energized Realeza Sul substation and the transmission line connecting it to Foz do Chopim substation in the southeast of Paraná.

  • This project happened 50 days ahead of the date established by ANEEL, adding BRL 7 million to our RAP.

  • A few about the transmission segment.

  • In 2016, we had developments on the RBSE indemnification.

  • As you already know, the Ministry of Mines and Energy has determined the incorporation of RBSE in the regulatory remuneration basis, the restatement of asset values since 2012 and payment of indemnification by RAP starting on 2017 tariff profits.

  • On February of 2017, ANEEL recently issued Technical Note 23, establishing procedures and criteria to pay first indemnification.

  • And based on the same parameters, we remeasured the assets related to the RBSE, allowing us to post BRL 809 million to the revenue from the power grid used for 2016.

  • It is worth noting that the indemnification will be received for a period of 8 years as of July '17 and that ANEEL has not ratified Copel's final report.

  • Therefore, figures posted are based on this administration best estimate.

  • Another highlight was the creation of Copel Comercialização, a company focused on the energy commercialization for the free market, especially dedicated to the retail market, having as a backup to the energy to be generated by Copel GeT as agreed in a contract signed by the subsidiaries.

  • In the Telecommunications segment, we have consolidated Copel Telecom as one of the main players of broadband in Paraná with record sales every month, providing the fastest Internet in the country.

  • Our grid has over 29,000 kilometers of optic fiber, and it reaches all 399 municipalities in the state of Paraná.

  • As you can see on Slide 4, in the distribution segment, our quality indicators show a significant performance.

  • Our ELC, equivalent length of interruption per customer, was 10.82 and EFC (sic) [FEC] 7.23.

  • These figures represent respectively an increase of 21.13% vis-à-vis 2015 and allow Copel to (inaudible) to be well positioned in order to meet required indicators to hold the concession.

  • Really, this is an amazing result, very good.

  • Nevertheless, and despite of constant improvements in quality, the economic downturn is still affecting the results of the distribution segment.

  • In 2016, consumption of the grid market, which includes captive market and all free consumers in Paraná State, have dropped 2%, a revenue loss of BRL 90 million.

  • And despite of the impact in consumption, the economic crisis has also caused delinquency rates to increase, especially in the beginning of 2016 when it reached 2% of total sales.

  • Along the year, we worked to bring down delinquency and help to buy tariff reduction.

  • 2016 ended at the rate of 1.6%, same level at the beginning of 2015, although a little over Copel's historic figures.

  • Still, 2016 closed with allowance for doubtful debt at BRL 161 million, BRL 123 million, above the tariff coverage estimated for the year.

  • I also would like to address the modernization that we have done in Copel distribution networks.

  • We installed automatic equipment, top equipment that improved quality and now to reduce costs.

  • And also, that opens the possibility to offer new and nonregulated services connected to the distribution network.

  • All of that happened because we have a survey of employee satisfaction, although we have significantly reduced our headcount in our PMSO.

  • Finally, we should stress that the company, following the best accounting practices, reviewed the recoverable value of its assets by applying impairment tests, which resulted in the recording of BRL 582 million in loss provision for 2016, especially because of CapEx increase for projects under construction, low probability to start up Araucária TPP this year and working area for gas sales by Compagas.

  • Very well, I think I should say that we have management that is aiming for excellence and financial discipline.

  • That's what we are trying to bring to you.

  • Now I would turn the floor to our CFO and IR Officer, Luiz Eduardo da Veiga Sebastiani, who will comment further on our results.

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • Thank you very much, CEO Guetter.

  • Now turning to Slide 5. Operating revenue was down 4% in the fourth quarter of 2016 vis-à-vis 4Q '15, amounting to BRL 3.4 billion.

  • And that was especially because of a 31% decrease in the electricity sales revenue that can be explained by an average drop of 13% in tariffs in June.

  • Also, because of the fourth tariff review cycle for Copel Distribuição, a decrease of 13% of the captive market with the migration of customers to the free market.

  • Revenue for electricity sales totaled BRL 681 million and increased 10%, showing a higher [CTEE] revenue because of Copel Distribuição over-contracting, which sold remaining energy in the short-term market.

  • Revenue from the use of the power grid grew 23%, thanks in part of the increase, so a result of the fourth tariff review cycle for Copel Distribuição and the 17% increase in Copel GeT's RAP vis-à-vis 4Q '15 as a result of the start-up of new transmission assets and the adjustment of contracts for inflation in the period.

  • Other operating revenues, including Telecom, gas distribution and others, posted a growth of 21%, a 32% increase in Copel Telecom revenue, thanks to the client base expansion.

  • Now posting of the fair value of the distribution concessions.

  • Indemnified assets dropped to 39%, reflecting the lower financial asset balance due to concession agreement renewal in December of '15.

  • About this, a detailed explanation.

  • In the 4Q '15, the company reviewed its main accounting policy and reclassified from financial revenue to operating revenue the fair value of the distribution concessions' indemnified assets.

  • That reclassification stems from the understanding that the infrastructure built by the product distribution service concessionaire should be based on the new replacement value, which aims to adjust operating cash flow of the unamortized investments that will be indemnified at the end of the concession agreement.

  • On Slide 6, costs and operating expenses totaling in BRL 3.4 billion in 4Q '16, 36% higher than the same period of 2015, mainly because of BRL 604 million in provisions and reversals.

  • Of those, BRL 567 million refer to impairment of gas generation and distribution assets, as explained by our CEO, and other [BRL 52] million related to [ADD].

  • Cost with the electricity purchase amounted BRL 1.3 billion, up 24% vis-à-vis the same period of 2015, reflecting a higher hydrologic deficit in 4Q '16 and comparison base effect with the posting of BRL 135 million recovered from the cost of energy purchased with the renegotiation of GSF in 4Q '15.

  • Charges for grid use were down 38%, thanks to lower costs with system service charges because of lower thermal dispatch out of the order of merit.

  • Managerial costs were up 4% in 4Q '16, reflecting an increase of 8.7% with personnel, partially offset by lower costs with outsourced services.

  • Turning to Slide 7. Our EBITDA was 78% lower than the amount recorded in 4Q '15, amounting BRL 254 million in the fourth quarter of '16, with a margin of 7% on the operating revenue.

  • The drop is a result of the recording of BRL 567 million in impairments of gas generation and distribution assets and of a 2% decrease in the grid market of Copel Distribuição.

  • In 2016, cash generation for Copel GeT accounted for 75% of the consolidated EBITDA.

  • Copel Distribuição and Copel Telecom accounted for 4% each, and other companies in the group added 17%, main contribution coming from Elejor.

  • On Slide 8, consolidated net income for Copel.

  • In the fourth quarter, the company's result was negative in BRL 110 million vis-à-vis net income of BRL 403 million posted in the same period of '15.

  • NOIs in the subsidiaries' results, we see that Copel Geração and Distribuição closed the quarter with a loss of BRL 144 million.

  • Copel Distribuição posted net income of BRL 71 million and Copel Telecom net income of around BRL 20 million.

  • For 2016, the company posted net income of BRL 948 million and net margin of 7.2%.

  • Very well, these were our highlights.

  • We are now available for your questions.

  • Thank you very much.

  • Operator

  • (Operator Instructions) Our first question is from Mr. Caio from Brasil Plural.

  • Caio M. Carvalhal - Analyst

  • My question -- actually, I have 2 questions.

  • First, I would like to focus on Araucária.

  • We have seen that Araucária has not been dispatched in 2016.

  • It did have a relevant impact in the prior year.

  • We see that it's around [BRL 240].

  • That was significant, but it is still much lower than the marginal cost prereview of the parameters that we are working on.

  • So we have that amount prereview for regulatory parameters.

  • And I would like to understand what is the expectation for Araucária's dispatch if you see possibilities of Araucária being dispatched out of the order of merit.

  • And how do you see that operation of the parameter that should happen starting on May for Araucária?

  • My second question, if you allow me, is more of an update.

  • We see that there is a greater impact in the migration of captive consumer to free consumer in the fourth quarter of '16.

  • Can you tell us how that is going in the first quarter of '17?

  • Is it still at the same pace or not?

  • These are my 2 questions.

  • Antônio Sergio De Souza Guetter - CEO

  • Thank you, Caio.

  • I will turn the floor to Sergio Lamy, CEO of Copel Geração e Transmissão.

  • Sergio Lamy

  • About Araucária HPP, we are following up and close all the perspective for the energy scenario in 2017.

  • And the scenario is deteriorating.

  • It's (inaudible) a lot.

  • We have a very discouraging expectation for wind energy for 2017.

  • It should be low.

  • So our expectation is that this recent scenario will cause the possibility of dispatching Araucária even if it is out of the order of merit still in 2017.

  • And the second question about the migration from the captive market to the free market.

  • Franklin Kelly Miguel

  • This is Franklin, CEO of Copel Energia and Copel Comercialização.

  • Yes, in fact, the migration for this year is much lower than last year's, and that is explained by what (inaudible) has said.

  • The consumers were migrating because the energy is still more expensive.

  • And so the consumers that are migrating now in 2017, they are migrating because they decided to do it in '16, but most consumers should stay in the captive market.

  • Operator

  • Your next question is from Lilyanna Yang from HSBC.

  • Lilyanna Yang - Analyst

  • I have a question about the impairment in the generation assets, especially in Cutia Wind Farm.

  • If you can tell us more -- how much that comes from CapEx, how much of that comes from discount and what do you expect in terms of returns in these projects?

  • And (inaudible) I also would like to know what is Copel's strategy - Copel'S priority for this year for cash use.

  • You [said] the BRL 2 billion for CapEx in the year, not including possible new auctions or new acquisitions.

  • So what can we expect there?

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • Lily, this is Sebastiani.

  • I will turn to Adriano, our Accounting Superintendent, that will comment on your first question about the impairment.

  • Adriano Fedalto

  • About our impairment, as you mentioned then, our wind farms, 2 major events that had us recording the impairment.

  • As you mentioned, it was CapEx increase and the discount rates.

  • I believe that the major event was CapEx increase.

  • We did have generators' investment that represents 70% to 80% of the provisions amount, and the discount rate also impact and correspond to that 20% difference.

  • These are the 2 major events that happened in 2016.

  • I am sure that amount impacts our return expectation, but this is something that could had have an important impact in the company.

  • So now, Lily, I will turn the floor to Sergio Guetter to talk about investment perspectives for this year and also to talk about transmission aligned in transmission investments that will happen.

  • Antônio Sergio De Souza Guetter - CEO

  • Thank you very much, Lily, and it's nice talking to you again.

  • We are reviewing and analyzing investment possibilities, and we will review our portfolio.

  • And we'll try to focus on Paraná's investments or those that have synergy -- or investments we already have, so especially investments for transmission auctions that will happen here in Paraná.

  • And these probably will happen next year -- I'm sorry, will happen next month and I think that's what we have right ahead.

  • But we want to strengthen our footprint in Paraná.

  • We want to review our portfolio, focusing on strengthening our sale gains here to have investments close by in the state.

  • Lilyanna Yang - Analyst

  • Can you tell me if you have a focus on cost reduction, whether in the holding or in the distributor, where there is low discipline level?

  • Antônio Sergio De Souza Guetter - CEO

  • Yes.

  • We have started in the distribution company because it was pressed for cost reduction.

  • We have identified any issues and worked with the cost reduction management investing in new technologies.

  • And also, we're going to see Voluntary Redundancy Programs and we intend to expand that to the whole group.

  • So as I said in the beginning of the presentation, maybe this is one of the pillars for a strict management cost-wise.

  • Operator

  • The next question is from Ms. Carolina Carneiro, Banco Santander.

  • Maria Carolina Carneiro - Head of Utilities

  • I just would like to have an extra explanation on cost performance.

  • Copel performance in this quarter was a little bit lower.

  • But even then, we are talking about BRL 100 million of EBITDA in the quarter and comparing that to the regulatory EBITDA potential for Copel, we do have a significant gap.

  • So I would like to better understand what is that additional strategy?

  • What is the target to drop costs in Copel and try to close this gap?

  • Even considering the improvement we have seen, the PMSO in the distributor looks higher but lower than inflation.

  • So I would like to understand how the company is going to try to close this gap, which means the real EBITDA and the regulatory EBITDA.

  • Antônio Sergio De Souza Guetter - CEO

  • Carol, we came up with a plan of 5 years so that we can meet our regulatory levels.

  • We have already started having the results of this plan, which encompass cost reduction.

  • But the main view in here of we're not reaching our target, was really delinquencies, especially because of higher price of energy.

  • So our ADD was higher and also judicial litigation, the market dropped.

  • So these were the main [reasons].

  • But in terms of personnel, we did have a significant reduction of headcount.

  • We did not hire anyone, and we had a reduction of 200 people in our headcount.

  • So we do want to work with outsourced services and (inaudible).

  • We had to analyze this year in the right track and this is something for the long term, and I am sure that we are on the right track.

  • We also worked rigorously in our ADD to break it down.

  • But unfortunately, we did have a few companies that -- broke large companies that really caught us by surprise.

  • But I believe that everything that could happen on the bad side has already happened.

  • We are restructuring ourselves for ADDs and delinquencies as well as with the litigations, and I believe now we will go back to the right track.

  • Operator

  • (Operator Instructions) Next question from Mr. [Gabriel Simon], Itau BBA.

  • Pedro Manfredini

  • This is Pedro Manfredini from BBA.

  • I have a quick question about new growth opportunities.

  • We will have an auction of the 24th with (inaudible) and Paraná, and I would like to understand what is your mindset for this next auction and a few other transition opportunities that might come up along the year.

  • Can we have an idea of the size if Copel is coming in?

  • What is the potential investment?

  • Are you looking for a partner or not and also analyzing renewables opportunity?

  • We have seen that in the prior year, you have grown with M&A in renewables.

  • And I would say that this is not over.

  • You probably have something ahead for renewables and M&As, and I would like to know if your balance sheet will be able to absorb all these opportunities for growth that you might be envisioning.

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • I will turn your question to Sergio -- I'm sorry, to Sergio Guetter.

  • Antônio Sergio De Souza Guetter - CEO

  • About the auctions, yes, we are considering the possibilities of going into some of them as partners.

  • And obviously, only if they have a good perspective for us.

  • We believe that this is a good possibility.

  • But once again, as I said, we will be working with financial discipline.

  • We are going to do the math.

  • But it seems that we do have a few good investments ahead to take part on.

  • And about M&A, we are considering it, so we have a lot of it.

  • I'm just arriving, the company is considering the possibilities maybe for the second half of the year.

  • We might have something new next year.

  • Let's wait for the right moment.

  • Operator

  • Our next question is from Mr. [Caio Lombardi], Bradesco.

  • Unidentified Analyst

  • My question is also about investment program.

  • I would like to know about leverage that has reached 3.1x of EBITDA, and your covenant is 3.5x.

  • So what do you have in mind there?

  • In terms of leverage, is that a limit or could it reach the covenant figure?

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • Yes.

  • In fact, we are paying close attention to that, and we did pay attention to that throughout 2016.

  • We are very little below the covenant, so the asset management of Copel is always reviewed.

  • Our CEO Guetter is already seeing that perspective of allowing asset management and some actions that could be very important for the cash of the company and also for the company's indicators in terms of liquidity.

  • Also, we have actions that we haven't started in our prior management, with our former CEO Vianna and now stressed by Guetter to drop costs to have efficient management in the company.

  • We have a lot of challenges to be met.

  • But once again, we are paying close attention to that topic.

  • And we know that this year, we will be betting on a drop of those indicators.

  • This is on a workday every day in the financial area.

  • And obviously, we are working with all subsidiaries, and we are working on revenue and expenses and also to increase the efficiency of our company without losing focus on quality, which is an important brand here for Paraná.

  • But we will go deeper on that financial management to drop costs and increase revenue.

  • Operator

  • Next question from Mr. Miguel Rodrigues from Morgan Stanley.

  • Miguel F. Rodrigues - Equity Analyst

  • Going back to Araucária, what is the situation of the gas contract?

  • And depending on the situation, how do you foresee the possibility of success this year?

  • And also, what do you expect for Paraná this year?

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • I will turn the floor to Sergio Lamy, CEO of Copel Geração e Transmissão.

  • Sergio Lamy

  • About Araucária, we are negotiating.

  • We have not decided yet not renew the contract that we have last year with Petrobras.

  • And because this would entail to a very high of amount in terms of generation, so we are setting a possibility of working with Compagas at a lower rate, a lower value.

  • And we are also negotiating a new gas contract with Petrobras in a way that we can get greater competitiveness for this year.

  • But I believe that the dispatch out of the order of merit will be relevant in 2017 so that we can deal with these unfavorable conditions in the energy market.

  • And Miguel, about your second question, in our balance sheet, that relation of Copel with the state of Paraná government and the contract of ELC, we do have the state involved and that the state is paying the interest of that renewal process, and now we are awaiting the state to bring back to effectiveness.

  • If that does not happen, we will go back to the same terms of the contract, but there is no delinquency identified in the process.

  • But because, as I said, they have been paying interest and this is an important asset that Copel has with the (inaudible), and they are also an important revenue source.

  • Operator

  • (Operator Instructions) Our next question is from Ms. [Luisa Krau], Banco (inaudible).

  • Unidentified Analyst

  • I would like to know Copel distribution contracting for 2016 and perspective for '17 and regulatory EBITDA after the fourth cycle of tariff review of the company.

  • Luiz Eduardo da Veiga Sebastiani - Chief Financial & IR Officer and Member of the Executive Board

  • Luisa, on the contracting of 2016, I would turn the floor to [Mr.

  • Acacia], our assistant engineer, for your question.

  • Unidentified Company Representative

  • About the over-contracting, this is a matter that is being faced by all distributing companies.

  • Because of what already has been explained, the migration of consumers from -- to the free markets also caused by the economic recession the country went through in 2016.

  • And the perspective there, it has to do with the regulatory discussion and how these contracts will be taken in higher than what was regulatory estimated and part of that is from the distribution company.

  • And fourth quarter for Copel Distribuição, you can see that there is a reaction, and it seems to be a reaction to the economic situation of the country and a good perspective and the results of the fourth quarter of the distribution company.

  • And that places us in a comfortable position because the situation should be mitigated in the beginning of 2017.

  • This is our expectation.

  • And about your second question, can your repeat it, please?

  • Unidentified Analyst

  • After the fourth cycle of tariff review, you had an increase in the regulatory EBITDA.

  • So what was the amount to find for the regulatory EBITDA in the company?

  • Antônio Sergio De Souza Guetter - CEO

  • I would turn the floor to Adriano.

  • Unidentified Analyst

  • And the level of the contracting, can you inform us on that?

  • Adriano Fedalto

  • Maybe 2% higher than the limits of our contracting, but all mechanisms that ANEEL is placing should eliminate the problem.

  • We do not consider that a problem.

  • Don't think this is a problem.

  • And about the EBITDA, we will have BRL 1 million more in the remuneration base.

  • Operator

  • Next question from Mr. [Andres Plato] from [AT2] Investments.

  • Unidentified Analyst

  • What is your forecast for profits in 2017?

  • Antônio Sergio De Souza Guetter - CEO

  • We have a crystal ball here that we are just opening.

  • Please bear with us.

  • We don't have that type of forecast.

  • We can't even say anything but we expect that the market improves.

  • We do have signs of economic recovery in the country, and I'm sure that the worst is over.

  • We also have signs of improvements in the electric segment regulatory issues that in the past that have unbalanced our industry.

  • But -- and we believe that we have good perspective.

  • But of course, the amount, we can't say anything about it.

  • Operator

  • (Operator Instructions) There are no further questions.

  • I would like to turn the floor to the company's management for their final remarks.

  • Antônio Sergio De Souza Guetter - CEO

  • Very well.

  • Thank you very much for your questions, for participating in this conference call.

  • We are always available to address your questions.

  • Our team of Investor Relations also is available so that we are glowingly transparent.

  • I feel very honored to be here with you.

  • I am sure that we will have great challenges, but together...

  • (technical difficulty)

  • Operator

  • The conference call for the results of the fourth quarter of 2016 of Copel is concluded.

  • Thank you all for your participation, and have a nice day.