Engie Brasil Energia SA

BOVESPA:EGIE3

Earnings Call Transcript 2024-Q1

[Adriana Wagner, executive]

[Interpreted] Good morning, everybody. We are beginning the results of video conference for the first quarter ‘24 for Engie Energy. I am Adriana Wagner, the IR Manager for the company, and I would like to make some announcements. [Operator Instructions] Please remember that this event is being recorded. The presentation is available at our site ng.com.br/ir. We have the presentation, the results release and the income statement, everything that has been filed at the [ VM ]. You will find details of our financial operations, the ESG advances in the presentation of new projects, among other relevant information. Before proceeding, please recall that the forward-looking statements made during this conference referring to the company's business prospects should be dealt with as forecast that depend on the macroeconomic situation of the country, of the electrical sector, besides other factors. They are, therefore, subject to change. Journalists who wish to pose questions can do so through e-mail, sending them to the press release group from the company. Now to present the results for the first quarter '24 for Engie ,we have Eduardo Takamori, CFO and IRO; and Rafael Bósio, the Manager for Investor Relations. I now turn the floor over to Eduardo Takamori. You may proceed.

[Eduardo Takamori, executive]

[Interpreted] Well, thank you, [ Adriana ]. Thank you all for your participation. If you could confirm how many we are?

[Adriana Wagner, executive]

[Interpreted] There's 117 of us.

[Eduardo Takamori, executive]

[Interpreted] Well, thank you all for your participation. Before beginning the presentation. I would like to speak about Rio Grande do Sul. Engie has been present there for 25 years since our privatization. We are deeply connected to the state. We offer our solidarity to the families, the people affected as well as the companies in the region. Unfortunately, the problem is not over. There is a forecast for more rainfalls. And of course, they will require a great deal of help. On our part, the message to them is that Engie as well as other companies of the group are acting directly to work on a campaign where we're going to ask our associates to offer resources as this is an emergency period and we will be continuing to contribute until this emergency is over. So we're asking each and every one of you to please also do your part, help not only the official authorities of the scale, but also ask your partners, friends and communities to do the same. It is important for everybody to do the same, not only feel solidarity, but truly help.Regarding our assets, we are in the state since 1998. We began with [indiscernible] and other assets, which we no longer have. They have been disinvested or otherwise, but we also have resources that are on the border between Rio Grande do Sul and Santa Catarina. None of our assets have been impacted or presents risk at this moment. Of course, they are under observation. Passo Fundo that could have easily been affected, did have some problems during the week. It required special attention, but nothing that requires extraordinary actions. We're simply carrying out a very close observation with a focus on the reservoir to ensure the security of people in the entire region. I reinforce, therefore, that each person should do their part to reduce or minimize this terrible impact. Very well, we will go on through the highlights of the first quarter. And before I refer to these highlights, I would like to mention that the first quarter tends to be somewhat calmer for everybody compared to the rest of the year. But this quarter reflects a [ mono ] of transition in Engie Energy. I would like to underscore this now, why? Now we did the closing of the partial sale of our stake in TAG -- we sold 15%. We remain with 17.5% of the share capital, as you can see to the left. This happened in January. And all of the results of the first quarter will be impacted by the results, the proceeds of the sale of TAG and also because of the lower contribution of the asset. And you will see that this expense throughout the presentation. A second relevant part was the acquisition of Juazeiro, São Pedro, Sol do Futuro, Sertão Solar and Lar do Sol, 5 photovoltaic complexes. The closing was done at the end of the quarter in March. And so the results are still not very evident, and you will see the results evolving through the coming quarters. But the energy is in line with our strategy for growth. In the third part, the Fitch ratings reaffirming the long-term national rating of AAA. Of course, it is very propitious. It enables us to resolve our debt in a very competitive way, reducing the cost of capital. And of course, we have benefited from this through time. And the fourth is simply to communicate to you the AGM approval of the distribution of mandatory and complementary dividends for the year 2023 in the amount of BRL 994.5 million, almost BRL 1 billion. These shares will be traded ex-dividend as of May 7, and payment will be carried out at the end of July. In the next slide, we already see the economic financial impacts of the events that we have just mentioned. The EBITDA had a jump of BRL 2 million to BRL 3.16 million. You can observe that an expressive part of that part, 53% came from the net result of the partial disinvestments of TAG, BRL 1.35 million referring to that net results. Now when we remove this result of disinvestment, we see a drop of 12% in our adjusted EBITDA. It's not really the adjusted EBITDA because you will observe that we still require the IFRS adjustment, the cost of transmission adjustments. But if we think only of the exclusive impact of TAG, -- this is the drop that we see, 12%. Another reason for the reduction of EBITDA quarter-on-quarter is the exit of Pampa Sul. This was sold out in the second half of last year. And of course, this will impact our EBITDA. If we add both of these, you will see that a great part of this negative variation of 12% can be justified by these 2 movements. We did have other movements, the higher result of the CEE, the trading company, but we can thus mainly characterize this variation of EBITDA because of TAG and the sale of [ Passo ] [indiscernible] we practically doubled our net revenues. Now we had BRL 891 million, which is an expressive profit for the quarter, higher than the profit, almost twofold of BRL 793 million for the quarter. But of course, if you assess that from the yearly viewpoint, it will tend to be lower, more relative. And this will not continue on as it is a non-recurrent element, and it helps us in the net revenue, the net income, the proceeds of that sale enable us to deliver our capex, which was truly expressive, as you will see further on. In net income, we had the contribution of EBITDA of BRL 249 million, as you can observe below to the right of the presentation. And this was integrally neutralized by a very positive financial result, minus financial costs. 80% of our debt is indexed to the IPCA, and when the IPCA tends to get weaker or below in the semester of '23, you end up having financial costs. And a more expressive cash [ production ] during the quarter because of the proceeds of TAG that were used merely at the end of the quarter when we took on the Atlas acquisition. In the next slide, you can already see our ESG KPIs strongly influenced in the top left, as you can see by the total emissions and emissions intensity, both of which have been drastically reduced because of the exit of Pampa Sul in our portfolio. These are Scope 3 emissions. We have done our homework. We have worked with Scope 1, Scope 2 as well. And in fact, we can now work with education, convincing and monitoring of our entire chain of supply. We have -- in terms of health and safety, we had a very good evolution. Our frequency rate used to be 0.4. It has dropped to 0.05, an expressive drop. With health and safety among our associates at the top once again, the percentage of women in the workforce was an evolution. And I think this has been perceived throughout the quarters as you may have observed. Our group of women went from 26.9%, reaching almost 30% throughout the 4 quarters that we're showing you here and the percentage of women and leaders, their positions went from 23% to almost 28%, of course, an extremely satisfactory result in our strategy here.In the bottom chart, investments in innovation with a reduction [indiscernible] because of the disinvestment of Pampa Sul in our portfolio. We continue to invest in research and development very strongly. We're investing in social responsibility that shows a significant growth of 2.0% to 2.5% in the last few quarters. And in terms of people engaged community relationship programs, more than 14,000 and some people who are working in partnership with us. For the end of the ESG highlights, we would like to recommend that you all visit our sustainability report 2023. The excellent work -- it's an important management tool for rendering accountability to stakeholders. We're working with a global reporting initiative, GRI, and the Bureau Veritas assurance. You can access our sustainability report that is on our slide as well. Very well. Rafael will speak about our energy sales at this point.

[Rafael José Caron Bósio, executive]

[Interpreted] Our commercial strategy, very good. We have some good news coming from the commercial area. As always, our commercial strategy is working with the gradual sale of our commercial capacity in that quest for more favorable prices and windows of opportunity. And this is precisely what happened in the fourth quarter '23 and in the first quarter, ‘24 when we had greater price volatility, we were able to contract a significant volume of future energy for the years ‘26, ‘27, '28. We have attempted to speed up the sale of those positions. If you compare the figures, we have reported a de-contracting in the last quarter. You will observe that there has been this acceleration as of the third quarter. For example, in uncontracted energy till '28 at the third quarter of '23, we went from 41% to 30% now in the first quarter ‘24. We also identified good drop, positive drops for the years of ‘27 and others. And this shows that in truth, we are putting this strategy in practice. We're attempting to capture these moments of greater sales in the market as happened in the fourth quarter of '23, first quarter of this year, and this values our portfolio. All of this, thanks to that flexibility adopted of not being forced to contract because you have a long position during a specific period. Another point I would like to highlight, if you look at the graph to the left, the graph already consider the assets of Atlas that have begun to be part of our portfolio as of March of this year. And we have a better breakdown of our energy balance in the attachment on slide 35, where you can clearly identify that from the years '24 to '29, we have carried out average sales of 160 megawatts month, a very relevant factor for the quarter. Next slide, please [indiscernible]. We show you once again that we're still capturing those clients that are migrating from the regulated environment to the free contracting environment. We had a very good representation this quarter. Since the first quarter, the smaller customers connected to high power, began to have that possibility of migrating. We had almost 47% in the annual comparison. It's important because in portfolio, these clients will become loyal, they will generate value and with a potentially lower cost of capturing these customers, it's better to capture the migration now than to have to do it later and take them from another player in the market. In the next slide, we begin to speak about expansion. We update you on the progress of the implementation of new products. The first is the Santo Agostinho Wind Complex. This slide is something that you will see for the last time in the presentation because Santo Agostinho is fully operational. It's at 99.6% progress, only two aero generators are still not operational. They had incidents with their blades, but this will be made regular during the second quarter. And so we consider the Santo Agostinho Wind Complexes being fully operational.Next slide, we also identified strides in the implementation of [indiscernible] in the fourth quarter ‘23, the event. The progress was 31%. We're now at 45%. So we're moving along within the financial and physical schedule with the estimates that in the third quarter of '24, we will begin operations. You can see in the picture, the first wind turbines that have had their assembly concluded as expected. And we have the goal, the expectation that the full delivery will be reached until the end of the coming year. We also see this in the next slide with the [indiscernible] photovoltaic complex. it should be concluded the coming year with the beginning of operations in the fourth quarter of this year. We have two large projects that are being simultaneously implemented with coming into delivery simultaneously. As we saw with ASU, there is a significant advance in the fourth quarter. When it comes to implementation activities, we had 18.6% progress at present. We were at 8% in the fourth quarter. So everything going on track and as planned, enabling us to add this installed capacity of renewable sources in our portfolio. Next slide, please, [indiscernible]. Here, we go on to transmission, another slide that will appear for the last time in the presentation. [indiscernible] that in July will attain commercial operation. It's an operation of the substation side to side with our transmission system of [indiscernible] that has been in full operation since February of last year. Now to continue in transmission in the next slide, we're speaking of a more relevant project, the Asa Branca transmission of energy. We were successful in the auction in July of last year. We obtained the prior licenses in the first quarter of this year, and we continue with a forecast of anticipating the coming into delivery by at least 24 months, which will leverage the return on this project. Next slide, we continue to observe excellent operational results from the Jirau hydroelectric plant. The Engie Group has a stake of 44%. At this point, it's not a stake of Engie Energy, and we're still awaiting for opportunities to -- for the transfer of this asset from the controller to ourselves, but there have been no novelties on that front since we convert the last time on the fourth quarter '23 results call very well. This is the last slide for the expansion. We have made some changes on this slide to end the session with what is something of a summary to the left. A list of the projects that are still under construction, Santo Agostinho, [indiscernible] and Asa Branca and to the right, projects under development that are in our portfolio and are awaiting better commercial conditions specifically to then undergo the construction. These projects are not under construction contrary to what you see to the left. And that it is important to have a consistent portfolio, and commercial conditions could be resumed very quickly, and we have to be ready to leverage the return of these projects. Very well with this, I would like to end this session on expansion, and I return the floor to Eduardo Takamori.

[Eduardo Takamori, executive]

[Interpreted] Thank you. We're going to now speak about the financial results, the evolution of [ ROI and EROI ], a reduction of 32.5% to 28.3% in ROI for the first quarter. ROIC also with a slight reduction of 20% to 18% natural because of the higher leverage of the company, something that was expected to the right of the slide. We go back to our recent background of investments, reaching BRL 28.5 billion, enabling us to go from a sub leverage. We are now at 2.3x, and we will reinforce this further ahead half of our capacity and with room for investment in our plant. And we have carried out a very -- well, here in the pie chart -- our company was a 100% energy generation, but we have found new flows. We have diversified our portfolio. You will see that this pie chart will return with those ranges of this 20% in the coming years. Of course, we're working with renewable asset going into [indiscernible] and also Atlas, which will change these pies and maintain the diversification. Now all of the blend of the portfolio enables us to have quite a bit of forecast ability when it comes to adjusted EBITDA and much more in the next slide. We're looking at the net operating revenue change, a reduction of BRL 2.9 million from the last quarter to BRL 2.6 million this quarter and the top line, a strong influence because of the lack of contribution, of course, of Pampa Sul. In the second part, the hydro situation, which has helped us with our strategy, helping to offset the frustration in generation by our wind mills that were suffering along with everybody else. We were able to absorb this problem in a way that was somewhat less painful than our peers in the market. In trading, minus BRL 47 million, a reduction of revenue in [ trading ], but this does not present any specific contract indication. We did have a reduction of contribution of BRL 73 million because of the remuneration of contracts and construction of assets. We did not receive a contribution from construction that was still taking place in the first quarter of last year of BRL 3 million, and that is why we have the consequent reduction, nothing atypical or outside of what would have been expected. In the next slide, simply a [ way ] to reach the EBITDA, the result of equity income and we'd like to present the results of TAG in this quarter. We went from BRL 2.2 billion and a total profit of EUR 841 million. As we presently have a lower stake in TAG, this will also lead to a reduced EBITDA. The specific contribution was BRL 600 and some million this quarter, [ BRL 162 million ]. Very well, here is our EBITDA change. Now this slide has several columns. Perhaps we will reduce the number of columns in the future, but it does help us to share our story this quarter. EBITDA without any adjustment to reflect the effective situation of the country, BRL 2.06 billion in the first quarter '23. It jumped to BRL 3.165 billion this quarter, but [ BRL 162 billion ], of course, are the proceeds from the sale, the sale of TAG, our stake in TAG. Now if we look at this without the TAG operation, we have a variation of BRL 2.6 billion to BRL 1.18 billion, a reduction of 2%, as I had mentioned. And then we work with the IFRS adjustments for transmission for shareholders, and we can focus on the central column that went from BRL 1.825 billion to BRL 1.79 billion, a variation of BRL 156 million, equivalent to a reduction of 8%. This BRL 150 million can be justified by the disinvestment in Pampa. As mentioned, in the central bars, we have 116. We bought less energy from third parties, a reduction in portfolio. The third bar, although we were very successful in contracting, this was done at a slightly lower sales price. So we have a lower number of sales. Technically, the fourth bar is an operation, a higher result at the [ CCEE ] influenced by our strategy that offsets our generation of the wind assets and I highlight charges and royalties. Basically, here, we have the entry of the Atlas assets into our portfolio. And when you bring in new assets, of course, you have additional cost to pay for, which is expected for and a higher payment royalties because of the performance of our assets. You can take a look at the transmission bar, another additional BRL 37 million. Because of the entry of assets, we have a higher rep. And this is what we are observing here. And then the equity income from tax with a comparative reduction vis-a-vis the former quarter, which fully justifies these variations, a negative variation compared to other quarters. Next slide, please. We're finally getting to the net income change as presented in the first slide. It went from BRL 882 million to BRL 1.684 billion. More than half of that profit from the quarter is due to TAG. If we observe this [indiscernible] TAG sales, a reduction of 10% in our net income strongly influenced by the variation of EBITDA neutralized by a very positive financial results in the quarter, as we explained at the beginning. In this next slide, we show you our [ indebtedness ] balanced debt. We have gone back to the levels of 2022. The end of the year, we had a net debt over EBITDA of 2.1x. Now this figure increased to 2.3x. And we remind you that throughout that period, we went from BRL 21 billion to BRL 22 billion of net debt. Now we now have the Atlas assets, and we're in the process of leveraging to be able to face our capex schedule, not only for this year but for the year 2025. So we have BRL 5.2 billion for cash and equivalents, quite equivalent to what we had in the past. We had a higher cash and equivalents between the period of receiving the revenues from TAG at the beginning of the quarter and the payment of Atlas, which happened at the end of the quarter. And so you will see this higher cash burn and part of this cash will be consumed during the year, of course, through investment. In the next slide, our debt profile and composition quite compatible with our cash generation. No specific highlight in terms of our profile. It's simply worthwhile highlighting that the average debt term is quite long of 7.5 years. We also have a debt with the national development bank, the BNDES, which is of great help. And our cost of our net debt tends to be ever more pegged to the IPCA. So, very gradually, we're denominating our debt principally in the IPCA and the nominal cost of debt of 9.2% per year. In the next slide, and in line with what we have mentioned in the last quarters, our investment volume is quite robust this year, well, almost BRL 10 billion. And part of this has already materialized as you may have observed in the last communicate that we carried out, BRL 2.5 billion from this amount of BRL 9.5 billion, BRL 7.2 billion. 9.6 billion minus 2.4 billion gives us 7.2 billion. Of the 7.2 billion, part of this has already been addressed in the first quarter. So our disbursement profile, our investment profile is fully on track as expected. And it is fully compatible with our partial sale of TAG and our -- the debt that we took in the fourth quarter totaling BRL 2.5 billion as well with the debentures that we issued at the end of the year. Now with these 2 elements, the sale of TAG and the issuance of debentures, we will be able to address practically 50% of our commitments with capex. Now we will go to the market more times the year, more than had been expected. We do have room for leveraging as you were able to observe a few slides – again, so we're resorting to the market again to maximize our capital structure. In the next slide, our dividend, you'll see the last 10 years. And you can see that we have paid out a 100% of the dividend. Dividends tend to be at the level of 6%, 7%, 8%. They did hit 8% in 2022, a reduction to 5.7%. And we continue to maintain a level very close to 6%, paying out 55%. It's natural, therefore, that this year, in the coming year, we will continue to prefer to maintain part of the profit of the dividends in-house to be able to carry out our investments and to maximize our capital structure. Well, we know that shareholders prefer to receive dividends, but we will have a better custody of it in-house instead of paying it out in [indiscernible] wholly. I believe that it was the last slide of the presentation and we can now go on to the question-and-answer session.

[Adriana Wagner, executive]

[Interpreted] We thank you, Taka and Rafael. We will now go on to the question-and-answer session. [Operator Instructions] Our first question comes from Fillipe Andrade, an analyst from Itaú [indiscernible]. He has 2 questions. First, up to this point, which has been the performance of the wind assets of the company in generation and which has been the price dynamic of prices for the longer term, ‘25, '26? We saw that the company sold relevant volume in ‘27 going forward. If you could share more details in terms of the average price of those transactions?

[Eduardo Takamori, executive]

[Interpreted] Excellent question, Fillipe. I will answer the first part. You answer the second [indiscernible]. Now the performance of wind assets was very much in line with the market. We had a combination of external factors. Yes, we did face frustration. Our assets generated 30% below expectations. And the accrued value, we had new assets coming into operation like Santo Agostinho, we had 20% less in terms of wind generation. We did feel that, and I go back to what I said before, despite that impact on the part of our wind assets, we did have synergy on the part of our electroenergy and a good allocation of energy, which proved to be very timely at that specific moment. We were able to show the resilience of our portfolio through the –

[Rafael José Caron Bósio, executive]

[Interpreted] Now Taka, simply to complement this, if you look at the previous quarters, we were performing better than our peers in wind generation. We have a concentration of our parks in the hinterlands of Bahia where the winds were still performing as expected. That did not happen in the first quarter. There was heavy rainfall in the Northeast throughout the entire region despite having a somewhat different profile and most of our assets are not on the coast of the Northeast. We were not able to come out untouched by this seasonal low wind. Now the wonder of having a diversified portfolio is that in electrical generation and in the allocation of these assets, we were able to mitigate our drop. The results at the CEE were still superior vis-a-vis last year. Isn't that correct? Yes, well put. Now when it comes to prices, you know that we cannot disclose our sales prices, especially in the free market in the regulated market. You can see this in the attachment of the presentation. But in the free markets, there is a confidentiality clause not to disclose these amounts. It could compromise our sales strategy vis-a-vis competitors and clients. Now if we look at what the quarter was like and the CID curve at the end of March, the price of incentivized energy reached BRL 190, conventional energy, a 150 prices. This is the reference that we can offer you. We were at a level very close to that, but we cannot poorly disclose our amount. And Adriana, I am anticipating the next question from [ Soza ], who has asked for more details on price. But we do have our hands tied somewhat, and this is a reference we can offer you. What do you think Takamori?

[Eduardo Takamori, executive]

[Interpreted] I'm sorry I were thinking of something, a characteristic that you mentioned that we take the most of the opportunity of having higher prices in the fourth quarter. Last year, we accelerated the sales of '27, ‘28. This will be complemented during our quarter. And well, we can't think about average costs or prices for 2026. Now volatility is the new method of the Brazilian energy matrix. The situation is very different from the past, where we had greater clarity of the price in coming months because of the present day situation, we have an excess of supply and expressive excess. But if we have more or less rainfall, greater or lesser demand and solar and wind energy generation, we could have a better price at the end of the year. In fact, it's no longer a floor as we imagine that the -- in mid last year, that doesn't exist anymore and it depends on the frustration or [ postgation ] of the coming periods, all generators are giving a price to this risk and we have to not only see which will be the probable value, but which will be the dispersion and the probability of occurrence of this scenario. And it seems that until last year, the generators, the entire market thought that the probability of occurring this would be contained within the history of the last decades. What we have perceived is that because of climate change and the price of our matrix, this can go beyond the limit we observed last year, the ENA, more extreme scenarios than we had last year. And naturally, this means we will have an aversion to risk. And if you have risk aversion, the situation will be completely different from the past. Simply to justify what apparently seems to be the erratic movement of the market in the last quarter or overly conservative movement, this should have a new reading and should be understood as a new perception of what could evolve in the future.

[Adriana Wagner, executive]

[Interpreted] Perhaps this is not well understood and simply to clarify this. Our next question comes from [ Joe Fagundes ] from Bradesco. The question is, we have seen significant strides since 2023 on the part of the OMF park to restrict solar parks. Now some of the assets of Engie were impacted because of the documents of the ONS. Which is your vision of these assets for the first quarter and the rest of the year 2024?

[Eduardo Takamori, executive]

[Interpreted] Well, historically, we have followed up on our assets. And yes, we have seen the entry of new assets, such as the Atlas operations. We are monitoring the expectation for those new assets. These are solar assets. And in the region, we had wind assets that were somewhat different, and we do see a very good performance of these projects, and we're assessing that for the future. And we have good expectations for the year 2024. But yes, they were more affected in the recent past. We remind you that we have just taken on these assets. We're still digesting the information if this can be said, and we remind you, Taka that to have a diversified portfolio with different sources, the ability to have a more seasonal energy in a differentiated way will serve as protection at moments where we have low generation. If this were not the case, we would have to go to the market to purchase energy to comply with our contracts. Thank you.

[Adriana Wagner, executive]

[Interpreted] A complement of Andre Sampaio from Santander regarding the question that was asked, which is the expectation of curtailment in the long term for renewable energy?

[Eduardo Takamori, executive]

[Interpreted] Very good question. Our vision here for some time already is that this curtailment is here to stay. We imagine this would be due only to the restrictions for transmission in the Northeast. But for some time, we have come to realize that it's not only an issue of retransmission but the capacity of the load to absorb the solar and wind energy, especially solar energy. We're speaking here not only a centralized solar and wind energy, we have an expressive amount that entered our system in the last years, perhaps in a hyperbolic fashion. Because of the subsidies we have tried to warn on this distribution policy. But unfortunately, we're not successful. So this curtailment, especially in solar energy is the direct impact of these policies that have remained for more time that they should have. And even in the medium term, we will continue to achieve this containment on weekends when the load tends to be lower. So it's here to stay for some years. And we remind you that this information, this perception had already been expressed by the teams during the acquisition of Atlas and the investment in solar energy. We've had this perception for some time already.

[Adriana Wagner, executive]

[Interpreted] The next question comes from Henrique Peretti, an analyst at JPMorgan regarding the greenfield projects that are awaiting better market conditions. What are you waiting for to start up with the projects? The perception is that price will continue to fluctuate on an annual base.

[Eduardo Takamori, executive]

[Interpreted] Henrique, I think it's all a matter of priority. If you follow up on our operation, we are about to implement several projects. We're releveraging the company. And of course, it would not be the right time to increase our exposure of uncontracted energy. We do have other priorities. So this year, the focus is to deliver [indiscernible] in accordance with the capex and the quality of the programs that we have, and this will guarantee the acceptance of our shareholders. We do monitor M&A opportunities in the market constantly. If anything interesting comes in, we have an eye on this, but we do want to create value and respect the minimum return, our indebtedness profile. So we tend to act somewhat more on the state side instead of making higher investments at this point. Henrique, we're part of a global group that has that audacious goal of getting to 30 gigawatts of renewable energy. Engie is already making its contribution through Santo Agostinho [indiscernible]. We have no strategic need to delve into a greenfield project at this moment. Of course, if there is an opportunity of uncontracted energy, we will observe it and perhaps think of carrying out a project in the short term. For the rest, we continue with our mission of working with a 100% renewable energy with good quality and contracting this with greater ease to bring in income and leave some energy for the timely opportunities. But to summarize, this is not the time to begin working on a new front

[Adriana Wagner, executive]

[Interpreted] Well, thank you. At this point, we would like to end the list of questions. We reinforce that the IR team of the company is at your entire disposal should you have further questions. I would like to return the floor to Rafael and Takamori for their closing remarks.

[Eduardo Takamori, executive]

[Interpreted] Well, thank you. Thank you. I reinforce what Adriana said. The IR area is at your entire disposal, should you have more questions. Once again, thank you for your attendance. We reached more than 215 participants during the call. Thank you for your interest, for your attendance and for those who connected in the middle of the call. What I said first was to contribute directly towards minimizing the impacts of the tragedy of the severe flooding in Rio Grande do Sul. There are several official channels to do this. And we should act with our close groups, our friends and companies and also attempt to contribute to minimize the problem. Please take [ sides ] and act now.

[Adriana Wagner, executive]

[Interpreted] Well, thank you, the Engie Brazil Energy video conference ends here. We would like to thank all of you for your attendance. Have a very good afternoon.