Companhia Paranaense de Energia (ELPC) 2020 Q4 法說會逐字稿

Good afternoon. Thank you for waiting, and welcome to Companhia Paranaense de Energia - COPEL conference call to discuss the results of the fourth quarter of 2020. (Operator Instructions)

Before proceeding, we would like to clarify that forward-looking statements that might be made during this call in relation to Copel's business perspectives, operating and financial projections and targets are beliefs and assumptions of the company's management as well as information currently available. Forward-looking statements are no guarantee of performance. They involve risks, uncertainties and assumptions as they refer to future events, and therefore, they depend on circumstances that may or may not occur. General economic conditions, industry conditions and other operating factors may affect the future performance of Copel and may lead to results that differ materially from those expressed in such forward-looking statements.

We have the participation in this call of Mr. Daniel Slaviero, CEO of the company; Mr. Adriano Rudek de Moura, CFO and Investor Relations Officer. The presentation that will be made by Copel's management may be followed at the company's website, ri.copel.com.

Now we would like to give the floor to Mr. Daniel Slaviero, CEO of the company.

Good afternoon, everybody. Thank you very much for participating in our call, and we hope you are all well and enjoying good health. We know how challenging the year of 2020 was marked by the dissemination of an extremely serious pandemic. And unfortunately, right now, we are living in the workspace, both in Paraná and Brazil. For now, in Paraná, we were -- we had an implacable drought and extremely climatic events. And in spite of all that, it is with pleasure that we present the best results of the company in 2020, an EBITDA of BRL 5.5 billion, net income of BRL 3.9 billion. And in these figures, we are not including the sale of Copel Telecom, neither the GSF.

I would like to highlight that this result is not -- was not by chance. It comes from the impeccable execution of our strategic plan. And even without the extraordinary effects of the PIS and COFINS, we have the third consecutive year with the best results in the company. And this just increases our responsibility to continue with this agenda to create value for the company.

On the other hand, of course, we must mention that we must be compassionate to the people who are living the anguish of the pandemic, be it because of somebody in the family or a friend is in a critical state of health or be it because of their professional activities or the company having problems because of limitations because of the pandemic. And in this sense, Copel donated BRL 5 million for the purchase of tests for health professionals in Paraná in July and will be donating an additional BRL 1 million to purchase ventilators. And we are sure that the our highest contribution for Paraná and for Brazil is to continue with our operations in a constant and safe manner, always looking after the health of our professionals. I know it sounds like a cliche, but nobody in Brazil can be saved without electricity.

Having said that, I would like to go to the next slide. And it is with great pleasure and pride that we say that we did what we promised, which was a technical, independent dividend policy and considering all financial factors of the company. And even more important than that, we implemented it. And based on the results of the company and parameters of this policy, we will be paying out 65% of our net income. This represents a spectacular amount of BRL 2.5 billion in dividends to be paid to our shareholders. BRL 1.5 billion were approved yesterday by our Board as interim dividends, and the difference depends on the final approval in April by our general meeting. And this gives us a dividend yield of about 13%, which is very clearly how attractive our shares are.

The implementation of this dividend policy together with the improvements in governance that were recently approved by our shareholders' meeting and especially the issue of the investment committee shows that Copel learned from the past mistakes.

In 2010, we lived a similar situation in terms of leverage, and we were not very prudent in capital allocation at the time. And this time, I reinforce our commitment on the part of this management, a commitment to the predictability in dividend payouts and rigorous discipline in capital allocation.

Next slide. I have just mentioned that on March 11, our shareholders approved unanimously a broad reform of our bylaws, and our governance went to the next level. And I consider this as a legacy that this management leads for Copel that will last even when we are no longer here. And I especially would like to mention the guarantee of the clause that mandates the full application of tariff adjustments ratified by ANEEL that cannot be altered or excluded without the approval by most of the shareholders who hold preferred shares. This, ladies and gentlemen, in the application of adjustments nevermore will be an issue within Copel.

I would like to mention that the 50% increase in the number of minority shareholder representatives from 2 to 3 C decide the creation, as you can see on the slide, of 3 statutory committees, investment, innovation, sustainable development, in order to help the Board in the political guidelines and the main themes related to people and to ESG and also the minorities committee. We have a split of our shares in the proportion of 1 to 10. And yesterday, we also approved our UNITs program, and Moura will be getting -- giving you details about that.

Our new bylaw establishes the adherence to Level 2 of B3 corporate governance. I would like to mention that the migration to Level 2 is conditioned to the realization of the public offer on the part of the majority shareholder. And particularly, I consider very important this migration because it represents one additional step in our journey of governance improvement and also tag-along.

I would also like to highlight that the Board yesterday approved the carbon neutrality plan with the objective of contributing to the commitments established in the Paris Agreement worldwide. And here, Copel up to 2030, we commit ourselves to neutralize GHG issues in order -- for the assets on which we have the operating control. I think it's a very important point not only for the sector, but for the country.

And one last point that I would like to highlight is the fact that we approved an investment policy for Copel, which had been decided by the recently established committee for investment and innovation. And this policy gives guidelines and defines criteria that will serve to guide us for capital allocation of Copel, our priority, our investments in Copel distribution due to our historic prudent use of funds and to the regulatory WACC. But we will also be considering new opportunities with emphasis on brownfield and renewables and transmissions and operations that might bring return to our shareholders and that may add value for the company.

Next slide, please. All these matters and many others will be dealt with in detail during our Copel Day on March 24. It will be a great event with the participation of the whole top management of the company, including our Chairman and message from the main shareholders. Myself, with all the -- our new business, everybody will be there. And it will be a great opportunity for us to show you the new Copel for the new times. I would like to invite you all to participate online on March 24 from 8:30 to 11 Brasilia time.

And to end my participation, I would like to mention a few points about the fourth quarter that should be mentioned, that are worth mentioning. We had in December another vision -- significant program for voluntary redundancy. And all in all, over 2020, we reduced 480 people. And we started the outsourcing of our call center. In the last 3 years, about 1,600 people left the company, which means about 20%, 6% last year alone. And today, we have a little bit less than 6,700 people.

Copel GeT, as usual, delivered sound results. But I would like to highlight the fact that UEGA -- highlight UEGA that operated practically during the whole fourth quarter, producing and selling 564 gigawatts and reaching an EBITDA of over BRL 93 million in the period. And in 2018, it didn't have 1 day of generation. And it is in a new phase and with a lot of contribution. And we are preparing ourselves to go to the auctions and tapping into the opportunities that appeared, especially the capacity auction.

Copel Distribution reached an impressive 16.3% of regulatory EBITDA, an unthinkable level years ago; whereas Copel Mercado Livre delivered a growth of almost 50% in the volume of electricity sold. And we have another auction in April for incentivized energy long term in order to tap into this window of benefit from these sources. That bylaw will go into March '22.

And to conclude, the signing of Copel Telecom was in January, and the process is currently being evaluated by CADE and Anatel. We estimate the closing of this operation for July this year when we will be receiving the BRL 2.4 billion from the sale, and we will be posting these figures to our balance sheet.

Now I would like to give the floor to Moura so that he may talk about the results of the quarter and the year.

Thank you, Daniel. Good afternoon, everybody. I also thank you very much for your participation in our call, and I hope everybody is as well as possible. And I would like to start by saying that the end of this quarter was no trivial matter. And it will be remembered as a very special quarter, I would even say a historical quarter for everybody in Copel.

Besides the exceptional results that you have already seen, as you can see on Page 9, I would like to highlight the fact that we were able to advance in relevant aspects of our strategy that Daniel has referred to, important advances that more and more consolidate Copel as one of the biggest players in the Brazilian electricity sector. This is one ambition. And it is being a reference, a benchmark in the Brazilian electricity area. And I'm sure that these advancements are really paving the way in which the challenges will be bigger and bigger, of course, but I am sure that our whole team, our 6,677 people are totally committed in this mission.

Going to the results. I believe that you can see BRL 1.5 billion EBITDA, on the same comparison better. Adjusted net income, BRL 1.2 billion, more than double in the same period and the best results in our history of Copel for the third consecutive year. In the year, the adjusted EBITDA of BRL 5 billion, as was said, 20% better. And the idea is not to repeat the figures that you are familiar with, but I would like to remind you that these results -- in these results, we are not considering the Telecom results. And according to the accounting criteria, especially the CPC 31, they were classified as discontinued operations as of the third quarter.

Besides here in the adjusted results, we do not have the PIS and COFINS results. And the DIS EBITDA represented BRL 810 million; and the net income, representing BRL 1.2 billion. So they were excluded from these results. So Daniel has already said that we do not have the impact of the Telecom sale. That will be recognized in 2021 as soon as we conclude the selling process and the GSF. And based on our projections, the impact of the GSF, also based on the calculations by the CCEE, they will exceed BRL 1.3 billion, the gross value. So this would be an impact on the EBITDA.

And we are waiting for the conclusion of the ratification on the part of ANEEL so that we may evaluate all the impacts on our results. But anyway, this is very relevant and this should have a positive impact on our 2021 results at some point in time. So let's wait for ANEEL.

Before going to the next page and talking about the improvement of our business -- per business, I would like to mention 3 pillars, 3 factors that improved our net income for the year besides the EBITDA. I don't know whether you saw this, but there was a significant impact, first, because the net debt is much lower. We were able to reduce it by BRL 1.8 billion approximately compared to last year. And net debt is BRL 6.4 billion. So this helped reduce the financial results and also the reduction of the interest rates that had a positive impact on this account.

And the second important item is the fact that there was a relevant improvement here. I would like to make everybody comfortable because our delinquency is under control. We are tracking this very closely. The delinquency levels in 2020 closed slightly higher than the average of last year. Just to give an idea, in 2019, it was 1.22; and this year, 1.37. And I would like to remind you that it is calculated based on 365 days. This means that it is no problem. So we -- this is very concentrated between 30 and 60 days. So there is no concern whatsoever for the time being.

And another impact on the financial results was the transfer of the CRC interest -- index by the IGP-DI , 165. If we add all that, the improvement was over BRL 120 million. And there was an improvement in deferred taxes as well because of the distribution of the interest on equity, which is part of the dividend policy.

And now going to the next page. What really makes us proud in terms of our results is that it was conquered in the most adverse year ever that we have ever faced. So with huge uncertainties in the political, sanitary and economic arenas, and in spite of all that, we are delivering an outstanding result.

Now Page 10. I would like to mention that we improved all our businesses. GeT was mentioned by Daniel already with a very positive impact of the UEGA, which helped a lot. UEGA alone made a contribution of over BRL 100 million with the dispatch in the last quarter, practically. But we also increased the remuneration of the transmission assets besides the remuneration of the transmission contract that were revised during the year.

And I would like to mention the additional results due to the advancements of our projects, and we are already recognizing something more from Santa Genebra. And lastly, we have been reaping a very good benefit from our energy allocation strategy. In the last quarter, it was very similar to 2019 in the same period, but the PLD or the spot price had an increase of about 30%. So in these, 48% increase, as has already been said, vis-à-vis last year, 16% efficiency. And I would like to remind you that 2 years ago, it was negative 19% and it went to positive 16%. So it's a huge increase.

And of course, there was also an impact of the growth of the grid market, especially in the last quarter because of the recovery in the consumption of energy. And 1.8 still negative but much higher than the average of Brazilian consumption. We are consuming more than the average of other states. And a significant reduction in the management cost of over 10%, including the nonrecurring events.

In Telecom, the results are very good. We had a significant reduction on third-party costs and services. We had a positive effect with the lower deactivation of clients or disconnection of clients and very relevant. And in the free market, the Mercado Livre, it is becoming a relevant business for Copel, over BRL 2 billion sales, 73% increase in revenues with a margin similar to the best commercialization companies in Brazil. Improvements in all areas.

Now let's go to Slide #11. I don't want to waste time here, but I would like to highlight that the main nonrecurring impact was the PIS and COFINS. And our net income compared to last year, 90% higher in the year at 30% of EBITDA compared to last year.

Let's go to Page #12 now. Here, I would like to mention a few KPIs, some have already been mentioned by Daniel. But the message is that we did our homework. And as soon as we had the first signs what could be coming in our direction around February last year when we started to imagine the size of the crisis. And we drafted a very aggressive contingency plan that preserves, first and foremost, the safety of people, the continuity of our business and the regulatory aspects, but the major focus also on cash generation. And this plan continues to be monitored. The situation still requires a lot of caution, and Copel is more sound than ever to continue to face all the problems that we believe will still come away. It will be a very challenging year, but we are ready and prepared. We will carry out everything that we must do to preserve our soundness. But we'll continue with our medium and long-term strategy, guaranteeing our sustainable businesses in the medium and the long run.

As some topics have already been mentioned by Daniel, I would like to mention that the BRL 2.5 billion payout approved yesterday, BRL 1.5 billion -- BRL 1.2 billion will be paid on April 30 because of our cash flow. And very soon, we will be publicizing the schedule. We have -- well, our intent is to do at least 2 price every single year. As soon as we have everything defined, we want to give the biggest visibility to our shareholders, and we will be informing you.

So let's go to our next slide. Very quickly, I would like to highlight that the new dividend policy that has already been mentioned quite often. Besides all the aspects of governance and predictability and transparency, I would like to highlight 2 pillars, 2 important pillars here. The continuity of our businesses, that is to say preserving the financial conditions of the company to have sustainability in our businesses, a very important pillar. And also the use of the adequate capital structure in other opportunities.

We have already mentioned that our reference is no longer 2.7 -- well, it's 2.7, this is the limit. This is the cap. We do not want to exceed it. And today, we have a long way to go to get there. We have 1.3 in order to get to 2.7 in leverage, and we have a long way to go. But the dividend policy, together with the investment policy that we have just approved, I'm sure that they will be the instrument for us to be able to follow this path.

So these are the 2 pillars that I wanted to highlight. We have already talked about it, but it is important to have an idea of our capital and capital structure.

And now going to the last slide of my part. Yesterday, we approved the UNIT plan, a more detailed plan. It had already been approved in our General Shareholders' Meeting. But the only thing new about it is a minimum adherence that we are placing this condition, so that this program makes sense in order to improve the liquidity for our shareholders and to have a free float of 60%, considering all the shares, except the controlling shareholders' shares. So we have to reach this minimum, otherwise, the program does not make sense.

And one last remark about this program are the conversion windows that start next Monday, on the 22nd, including -- and this goes up to April 20 inclusive. And this happens in Brazil and the United States and in Spain as well.

On my part, I believe this is it. And I think it is important to leave some time for our shareholders and our analysts to ask questions. So I would like now to give the floor for the Q&A. Okay. Let's go to the questions now.

(Operator Instructions) Our first question comes from Marcelo Sá from Bank Itaú.

Congratulations for the results. I have a few questions. The first one had to do with some adjustments in the EBITDA and one of them has to do with the PLR. I would like to know why you carried this out. And I understand that it was higher, but you adjusted part of that. So what is the criteria? And why did you do that?

Thank you very much, Marcelo. Thank you for participating in our call and for the excellent question. The PLR or the total PLR is a reflex of the numbers realized, BRL 420 million. And it was reclassified by us in 2 points because BRL 171 million is what we posted in the adjustment, and the other one is extraordinary because there was a distortion here in the state. And it has already been corrected over last year. One was a state law that establishes that the PLR should be isonomic or the same amount for all the employees, regardless of their function, of their position. And this law was revoked by the legislative assembly in December last year.

And the second was a decree of 2007, and that pegged the PLR to the dividends. And it was corrected. And there are 2 points here and one is the sale of assets because this should not be considered for the basis of the PLR, which is only logical, but it was not like that. And second, because this has nothing to do with the operating results of the company.

But there were these distortions. And since last year, they no longer occur. So the question is excellent. And the figure is very big, of course. But it has this characteristic of having these distortions that happened over last year for everybody, in fact, because it had to do with meritocracy, which has to do with the results of the year.

So whatever is extraordinary should not be included. It was not our view. But we agree with this view that extraordinary should not be included in the base for the PLR, neither for the short-term incentives.

And the other question. In January, when you announced the changes in governance and dividends, it was very far from the price that the stake could sell. And now in the last month, it was 20%, and maybe now it is closer to the book value that would be listed. So could you tell us about the timing for the sale? Is it going to be in the long run? Or is it a price that could be used for selling by the BNDES? And what about the migration to Level 2? Do you believe it could be done without the sale of the stakes?

Another excellent question, Marcelo. Thank you. Firstly, now talking about after the split from 1 to 10. Now the book value today is BRL 7.30. So we're pretty close to this process. And the government assumption, the amount that the government intends to sell is not known by ourselves. But a public declaration of the Ministry or Secretary of Finance is that they don't intend to use the full room for 2 reasons.

Firstly, they believe the share will appreciate once they have this move by the state and BNDES. And secondly, they don't want to leave much room for the company. They want to leave room for primary offerings in another moment.

So when it comes to migration to Level 2, it is really tied and conditioned to that. If we don't achieve or reach the minimum price and if the offer is not settled by the state, no other change, no other evolution in governance is related to that.

But like I said before in my opening remarks, I believe it would be very healthy to the company and to shareholders in general if Copel could migrate to Level 2 because it's another step in this journey to improve governance and also bring in tag-along to our shareholders.

So answering the second part of your question about BNDES. A public statement by Cabral, he said that he intends to have BNDES offering with Copel over the first half of the year. BTG is the bank that will be leading, and it's interacting with us already. And this is also part of not only showing results, but also sharing our track record and the possibilities to leverage and generate value. We're very happy because Copel will come back to capital markets since 1997. That's when we had the offer. So we see that as an opportunity.

And now what about conditions? How does BNDES intend to do that, if it's directly or in blocks? We don't have information. But with the joint book runners and BTG, maybe we have conditions to the company and to the market in order to make it happen in the first half of 2021.

The next question is from Maira Maldonado with XP.

First of all, I would like to congratulate you for the earnings results and for the progress in the agenda in ESG. So what is the agenda for 2021 in terms of additional cost efficiency, portfolio management, additional sale of a new asset and also about investments?

Maira, great question. Regarding costs, I don't want to sound as cliche, but costs are something that you cut down when it grows again. It's a permanent agenda. Of the 480 people that we mentioned, 169 are from call center, and they have a phased operation. So that's something that Max is leading. And we want to get to this hybrid model and 100% outsourced in the future like utilities companies already do. So it's an outlier. So that's a potential opportunity to lower costs.

We also have share service center. They are being implemented and improved. And we also have a couple of other processes that were mapped by BTG with a task force compared to the best companies in the industry and the best practices. So here, we have a plan to cost reduction and efficiency, and they are tied to short-term goals, short-term incentives. So they are tied to this cost reduction.

So we still see this agenda with room for improvement. We still see some important areas to lower costs, particularly considering engineering and outsourcing. We've been following it up very closely, and we can see that most efficient companies can do that with top quality and lower costs.

As for the portfolio, it is in our agenda, the divestment of Compagas. And we also intend to make it happen, I would say, this year, even though the schedule is slightly tight. And it depends on the granting power to give us conditions for renewal. We'll need something around 180 to 210 days after the execution of the concession renewal process at Compagas, which is being discussed and drafted by the granting power in order to make the offer happen.

51% divestment. Now there are 2 points here. First, the approval of the gas bill, and it's going to drive the market. And it will take some regulations, but we understand this law is positive to open the market and to appreciate these assets. And secondly, we have Gaspetro divestment. We are aware of Petrobras' change of control, and they show that Petrobras has a significant share. So that's a process that is within the scope.

And the last reaction, we are also revising the portfolio. That's a constant agenda. Our intention is to talk to our partners, 50% plus 1 of the shares to check whether there is any increase in consolidations and Santa Genebra and other assets that might grab the interest of the other party. And we also have to consider Foz, Bateias. This is the jewel of the crown, 1.6 gig, and with our expectation to perform it by 2021.

But undoubtedly, this is going to take a little bit more -- a little bit longer, owing to GSF. Adriano mentioned this figure. When you go slightly above BRL 1.3 billion, you have an extension of the term for about 1 year -- slightly more than 1 year, in addition to other things. So this concession would expire -- instead of September 2023, it would be by September or October 2024. We're just about to conclude CCEE calculation. But because BRL 450 million is generated as EBITDA per year, we expect to use the maximum of this asset. But regardless of being 2021, '22 or '23, we want to have the best solution, which is to sell the control of 50.1 in order not to run the risk of a bidding process and losing the asset.

I'm sorry, I think it was a long answer. But I guess, that's a very important agenda to be addressed during Copel Day, and it's also the agenda of our investment committee. And Bertol was just reminding me that there will be 2 auctions: 1 in June, a minus 3, minus 4 and minus 5 and also transmission by the end of the year with assets that are very much in sync with the company. And we will dive deep into the process.

The next question is from Flavia Sounis with Goldman Sachs.

Actually, I have 2 questions. First thing, I want to know about the progress of your sale for energy in the free market. Any significant sale this quarter? Could you give us more color in terms of debt line, terms and tariffs?

The second question is about wind operations. Could you give us the result of the wind operations this quarter? Any kind of improvement owing to wind output or costs?

Flavia, thank you for your question. Let me break your question into 2. First about selling in free market and then the wind operations. So in the free market, what we see today is aligned to lower our synergy that is not contracted. This always work in GeT and Copel Comercialização and Copel free market. We lowered the percentage of contracted energy around 80%. Starting this year, it is around 90% already, nearly 91% actually.

And then we see that as an opportunity, first, to provide more assurance of the resources that will be generated by the company. And secondly, these amounts -- we always search for something around BRL 190 or BRL 200 as one of our goals. We cannot tell this as our goal. It's more strategic. But we're always trying to go for that range and optimizing a strategy that is conservative in terms of purchase and sale, but it's also a protection against GSF risk.

So I would say our goal is decontracting lower than 15% and contracting above 85% and always pursuing opportunities. Like in the first quarter, we had opportunities. The price went down slightly, but we expect to have more in the second half of the year or by year-end to have an upturn in prices because the rainy season is coming to an end. And we can see in many reservoirs in the Southeast or up North without coming back to historical levels. Down South, it is over 60% already, but we still have other basins.

With regards to the wind operations, Moura, over to you.

Flavia, what I can say right now is that today, this is consolidated at GeT. Operations are basically stable. The good news is that today, we no longer have impairment of these companies. We had a disbursement and cash generation for the future. There's a call for impairment, but I think Bertol has additional information to share.

Right. The wind operations generated BRL 360 million EBITDA in 2020. We highlight the full start-up of the wind farm of Cutia. So today, we have all the wind farms up and running, generating EBITDA around nearly BRL 360 million as we did last year. So these are the conditions of the wind farms. If we break down by farms -- well, we consolidated the summation of all wind farms.

Just to conclude, Flavia, we have a benefit here because we have the second greatest cluster, and the investment policy addresses synergy after Paraná and Rio Grande do Norte. Rio Grande do Norte has some advantages owing to the wind performance and characteristics. We don't expect our price to affect that specific region to the north of Rio Grande do Norte because they have capacity factor with good winds over the day, unlike other regions that have better winds early in the morning.

So just to conclude, of the BRL 369 million EBITDA, generated BRL 51 million profit total. And owing to this performance, the future price of energy not affect impairment of the wind farms, BRL 139 million reversal. So no impairment in these farms. So positive signs for cash generation.

If I may have a follow-up question, would you mind disclosing the EBITDA margin that you tend to have in the farms? In the past, it was slightly below the market. So I'd like to have an idea of the current status.

Thank you. This is strategic information, Flavia, and we cannot disclose. But I can tell you that the margin in the market is above 70%, and we are in line or even above the market in this process of margin in wind and renewable assets.

(Operator Instructions) We have a question by chat, [Bruno Marquez]. He talked about the goal of having a leverage of 2.7. He wants to know if it's dividends, investments and maybe telecom. Is it a chance -- is there a chance to go down even more?

[Bruno], thank you for the question, for your message. So that's a goal and that's a reference point we have, but it's more to the mid and long run. Chances are, we'll manage to have some predictability. It's no use just doing a big extraordinary payment at once for the dividend payout policy and come close to the margin, firstly, because that would eat up nearly all our ability to invest in new projects.

And secondly, one of our goals is allowing investments to have some predictability. We want to be a company with average payout around 50%. It's our top range, and our studies see that as good practice. So we're building this up. We've been building that up for the next couple of years. But that's something that we don't intend to do in the very short run. Like I said, it's no use having a hiccup and then having no margin at all. You'll be better off with a constant, steady growth in the mid to long run that can be predictable.

Now if within 5 years, this has to be a long or within this range. Otherwise, we are going to use the dividend payout policy. It's more powerful instrument, not the only one, it's a powerful instrument to use. So the fact that we don't have GSF in the sale for 2021 is a sign of this good year, an outstanding year for Copel in 2021 and to our shareholders in general.

Lilyanna with HSBC.

Adding to this, while we wait for Lilyanna, just to conclude, the last part of the question made by [Bruno]. This process with governance, discipline and allocation is critical because we also want to work on our EBITDA. If you have Telecom around 200 plus 100 Compagas, if you don't work on that again, like I said, in an organized, structured manner with governance in the mid run, you'll become a lower base of distribution. We like and we are proud of our numbers for this year. So we want this to be steady and perennial.

The next question is from Lilyanna Yang with HSBC.

For the last 3 years, under your management has proved to be outstanding. Congratulations. Now investments are still allocation some discount in Copel vis-à-vis private companies. And you made a lot of strides when it comes to governance. But do you believe there is any other point for improvement, maybe in the bylaws or committees in terms of enhancing governance even more and try to remove this discount vis-à-vis private companies in general?

And the second question, if I may. You just mentioned this goal of carbon neutrality for 2030. Could you tell us more about how you intend to achieve that? I think it's pretty much related to what you mentioned that investments not only in distribution, but now focusing on renewables. How fast, how quick do you want to make it happen? Closer to 2030? By the end or the beginning of 2030? And still about generation in Brazil, how do you see the need of Brazil to grow more in gas and maybe try to offset the problem of hydrological deficiency? And could you also give us some guidance about GSF? I'm sorry, long questions.

Great because we optimize our time. Thank you, Lilyanna. I understand this is a collective effort by the management, but also this very qualified workforce, the 6,700 employees.

With regards to the discount with state-owned companies, I understand this lack of trust as reasonable, I know it exists, on behalf of investors. Our intention is to decouple from this by showing our history. You have to walk the talk. We really want the market to see consistency quarter-over-quarter, year-over-year, consistent actions.

So I believe, like you said, in 2 years and a couple of months, we've been consistent in our speech, walking the talk and also going in the direction we believe to be the right one.

The last short-term barrier has to do with capital allocation. Investments, the auctions, we are part of, if they happen and when they happen, and I hope they happen soon, we want to show in practice that governance improvement and processes will bring practical results. For the moment, all we ask the market and investors and analysts is to use the benefit of doubt, and we'll keep on trying to improve performance at Copel. Even though it's a state-owned company, we can be efficient. We can be diligent. We can make progress in governance. And like I said, regardless of Daniel or Moura being here or if different people are here, it will grow as a whole. So that's for the first part of your question.

The second part has to do with carbon neutrality. Our idea, Copel has been doing everything in the GHG protocol, working on the inventory for many years with a very good track record. And we want to have offsetting measures for the fleet and other systems.

In our portfolio, we still have a small plant. We are going to have a coal-fired retrofit, slightly less than 20 mega. So we can -- we have to go through an appraisal study to divest the error. And as we can see in the media, other companies are doing the same, are considering the same. No judgment of merit here. But considering the guidelines made by our Board of Directors, we hope we can achieve that prior to 2030. But we're not going to use the full track. We want to have all the regulations being compliant, so we can do it as quickly as possible. More specifically for the disposal study for this asset is not part of our strategy of portfolio, but we do that in a very thorough manner because we know the impacts this plant had in the region.

And lastly, gas. That is a transition matrix. Think about all European countries and even the U.S., gas is a stability factor. And despite of that, think about what happened in Texas and California. So we believe it makes no sense anymore to have 2 giga -- 2.2 giga of diesel, thermal energy generation. It was necessary for a while, but it doesn't fit the current agenda for ESG and environment. So that's inexorable for the Brazilian energy matrix as a whole to have gas in a structured manner.

If we consider pre-salt, we'll be watching that very carefully and check potential opportunities down the road. Bertol -- Daniel put it very well, the expected expansion. 2030 launched in (inaudible) with the Minister of Mines and Energy, Bento Albuquerque and Jair Bolsonaro It was very clear that the 10-year horizon expectation to expand energy supply for gas generation is very big. We need to have energy security, safety at the base and, like you said, a big reduction to expand in hydropower plants and a significant arrival of renewals into the Brazilian energy matrix.

So keeping our eyes open. We want to find a structural solution for UEGA in both -- in auctions, like Daniel said, and also new ventures, gas-fired, considering the whole infrastructure and with the new gas law for gas distribution purposes.

There are no further questions from participants. So now we give the floor back to the company's management for the final remarks.

I believe we had a significant number of investors and analysts, and this shows the interest of the market in Copel. We firmly believe in our leverage, agenda, value generation, capital discipline and improvement of governance. We're very excited. And the technical delivery, regardless of the dividend payout policy, is a very significant number, showing that we are part of the agenda. And we learn from experiences from the past, and now we want to have an agenda that will add a lot of value not only to our shareholders, but also stakeholders in general.

So thank you very much, and we'll keep on doing our job, delivering impeccably our strategic plan. Thank you very much, ladies and gentlemen. Have a good day.

Ladies and gentlemen, this concludes Copel's conference call. Thank you very much.

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